Summer Training Project Report on :

Customer Satisfaction In Banking Sector

A SUMMER TRAINING REPORT SUBMITTED TO KANPUR INSTITUTE OF

TECHNOLOGY, KANPUR
IN PARTIAL FULFILMENT OF THE REQUIREMENT
FOR THE DEGREE OF Master

of Business Administration

MBA
Under Guidance

By
Radhika Singh
(1316570043)

Kanpur Institute of Technology

A-1, UPSIDC Industrial Area, Rooma, Kanpur- 208001.

Certificate from Company

Certificate from College

This is to certify that the Summer Training Report entitled ...(Title of the
report).submitted by.(your name)in partial
fulfillment of the requirement for the award of degree MBA to Kanpur Institute of Technology,
GBTU is a record of the candidates own work carried out by him/ her under my supervision.
The matter embodied in this dissertation is original and has not been submitted for the award of
any other degree.

Signature: HOD/ Dean/ Director

Signature:
Name of Supervisor
Date:

Declaration

ACKNOWLEDGEMENTS

I would like to acknowledge the able guidance of our esteemed Head of Department. This
work is an outcome of an unparallel support that I have received from my Summer
Training Guide Mr./Ms./Mrs. I found this opportunity to show my
gratitude to themIt would never have been possible to complete this study without the
infrastructural support of the Institute.This study bears testimony to the active
encouragement and guidance of a host of friends and well-wishers.

(Signature)
Radhika Singh
1316570043

Preface
The growth in the Indian Banking Industry has been more qualitative than quantitative and it is
expected to remain the same in the coming years. Based on the projections made in the "India
Vision 2020" prepared by the Planning Commission and the Draft 10th Plan, the report forecasts
that the pace of expansion in the balance-sheets of banks is likely to decelerate.
The total assets of all scheduled commercial banks by end-March 2010 is estimated at `
40,90,000 crores. That will comprise about 65 per cent of GDP at current market prices as
compared to 67 per cent in 2002-03. Bank assets are expected to grow at an annual composite
rate of 13.4 per cent during the rest of the decade as against the growth rate of 16.7 per cent that
existed between 1994-95 and 2002-03. It is expected that there will be large additions to the
capital

base

and

reserves

on

the

liability

side.

The Indian Banking Industry can be categorized into non-scheduled banks and scheduled banks.
Scheduled banks constitute of commercial banks and co-operative banks. There are about 67,000
branches of Scheduled banks spread across India. As far as the present scenario is concerned the
Banking Industry in India is going through a transitional phase.The Public Sector Banks(PSBs),
which are the base of the Banking sector in India account for more than 78 per cent of the total
banking industry assets. Unfortunately they are burdened with excessive Non Performing assets
(NPAs), massive manpower and lack of modern technology. On the other hand the Private Sector
Banks are making tremendous progress. They are leaders in Internet banking, mobile banking,
phone banking, ATMs. As far as foreign banks are concerned they are likely to succeed in the
Indian

Banking

Industry.

In the Indian Banking Industry some of the Private Sector and foreign Banks operating are IDBI
Bank, ING Vyasa Bank, Dena bank, HDFC, ICICI BANK , Axis bank and more than 20 banks
as well as more than 20 foreign banks too operating in India , which create a big mess and
competition among banking sectors, Here it will be necessary for bank to maintain customer base
and satisfaction level for their survival , hence it is necessary to keep up their fast fair and
friendly operation to maintain customer base and continual of accounts.
In this my research work I am trying to understand those factors which attract and satisfy
customer

for

keep

continue

with

same

bank.

TABLE OF CONTENTS:
PART - 1
Company Certificate ..................

College Certificate ii
Declaration ....
Acknowledgement. iv
Preface...

PART 2
Introduction to the Topic
Overview of the Industry
Objectives of the Study
Research Methodology
Data Analysis & Interpretation
Findings
Conclusions
Limitations of the Study
Recommendations & Suggestions
Bibliography
Appendix [Questionnaire]
Abbreviations

iii

INTRODUCTION
With the potential to become the fifth largest banking industry in the world by 2020 and third
largest by 2025 according to KPMG-CII report, Indias banking and financial sector is expanding
rapidly. The Indian Banking industry is currently worth Rs.81 trillion (US $ 1.31 trillion) and
banks are now utilizing the latest technologies like internet and mobile devices to carry out
transactions and communicate with the masses.
The Indian banking sector consists of 26 public sector banks, 20 private sector banks and 43
foreign banks along with 61 regional rural banks (RRBs) and more than 90,000 credit
cooperatives.
The new millennium has brought with it challenges and opportunities in various fields of
economic activities including banking. Indian banking, which was operating in a highly
comfortable environment till the beginning of the 1990s, has been pushed into the choppy water
of intense competition. The modern banking activity is marked by itineraries into un-chartered
horizons mingled with risks and heavy competition. Immediately after nationalization, the Public
Sector Banks spread their branches to remote areas at a rapid pace Their main objective was to
act on behalf of the government to fulfill economic obligations towards the common man. They
acted over enthusiastically in penetrating into far-flung and remote corners of the country. The
social responsibility that was entrusted upon the Public sector Banks digresses them from the
profit motive. On the other hand private and foreign banks did not make such moves. Instead,
they pursued profit making as the objective for their operations.

Factors promoting growth of Banking and Financial Services

The Banking Laws (Amendment) Bill that was passed by the Parliament in 2012 allowed the
Reserve Bank of India (RBI) to make final guidelines on issuing new bank licenses. Moreover,
the role of the Indian Government in expanding the banking sector is noteworthy. It is expected
that the new guidelines issued by RBI will curb practices of impish borrowers and streamline the
loan system in the country. In the coming time, India could see a rise in the number of banks in

the country, a shift in the style of operation, which could also evolve by incorporating modern
technology in the industry.
Another emerging trend witnessed by the banking sector is the use of social media platform like
Facebook to attract customers. In September 2013 ICICI bank launched a Facebook bill payment
and fund transfer service called Pockets for customer convenience.
According to a report by Zinnova , a Globalization and Market Expansion firm, IT adoption in
BSFI sector in India, the Information Technology Industry spend in BFSI vertical is expected to
reach USD 3.5 billion by Financial Year 2014. The study also highlighted the growing maturity
of Indian BFSI organizations in IT adoption, as technology is seen as a driver of business value.
Technology firms have great potential to explore in the BFSI sector, which contributes to eight
per cent of India's Gross Domestic Product.
Banking industry is pre-eminently a service oriented industry. For successful survival and
successive growth a bank has to be efficient and effective in utilization of resources and provide
excellent service to the customer. Efficiency of banks is reflected in profitability. Profit provide
cushion to the bank to support its credit risk and withstand any unforeseeable developments. A
profitable banking organization has sufficient resources in its command to finance its growth and
diversification program in future. Since profitability is an index of efficiency a banking
enterprise, a profit making bank can infuse confidence in public at large which is necessary for
its survival and growth.
Productivity is also one of the important measure affecting profitability of a banks In 1992 the
RBI launched banking sector reforms, as per the recommendations made by the Narasimhan
Committee on financial reforms to create a more profitable, efficient and sound banking system.
The reforms opened the banking sector for private players.
Banks are the most significant players in the Indian financial market. They are the biggest
purveyors of credit, and they also attract most of the savings from the population. Dominated by
public sector, the banking industry has so far acted as an efficient partner in the growth and the
development of the country. Driven by the socialist ideologies and the welfare state concept,
public sector banks have long been the supporters of agriculture and other priority sectors. They
act as crucial channels of the government in its efforts to ensure equitable economic
development.

The Indian banking can be broadly categorized into nationalized (government owned), private
banks and specialized banking institutions. The Reserve Bank of India acts a centralized body
monitoring any discrepancies and shortcoming in the system. Since the nationalization of banks
in 1969, the public sector banks or the nationalized banks have acquired a place of prominence
and has since then seen tremendous progress. 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 anew 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 al 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 futuristic and proactive
players capable of meeting the multifarious requirements of the large customers base. Private
Banks have been fast on the uptake and are reorienting their strategies using the internet as a
medium The Internet has emerged as the new and challenging frontier of marketing with the
conventional physical world tenets being just as applicable like in any other marketing medium.
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. Indian nationalized banks (banks owned by the
government) continue to be the major lenders in the economy due to their sheer size and
penetrative networks which assures them high deposit mobilization. The Indian banking can be
broadly categorized into nationalized, private banks and specialized banking institutions.The

Reserve Bank of India acts as a centralized body monitoring any discrepancies and shortcoming
in the system. It is the foremost monitoring body in the Indian financial sector.
The nationalized banks (i.e. government-owned banks) continue to dominate the Indian banking
arena. Industry estimates indicate that out of 274 commercial banks operating in India, 223
banks are in the public sector and 51 are in the private sector. The private sector bank grid also
includes 24 foreign banks that have started their operations here.
The liberalize policy of Government of India permitted entry to private sector in the banking,
the industry has witnessed the entry of nine new generation private banks.

The major

differentiating parameter that distinguishes these banks from all the other banks in the Indian
banking is the level of service that is offered to the customer. Their focus has always centered
around the customer understanding his needs, preempting him and consequently delighting
him with various configurations of benefits and a wide portfolio of products and services.These
banks have generally been established by promoters of repute or by high value domestic
financial institutions.
A strategy that has allowed these banks to concentrate on few reliable high net worth companies
and individuals rather than cater to the mass market. These well-chalked out integrates strategy
plans have allowed most of these banks to deliver superlative levels of personalized services.
With the Reserve Bank of India allowing these banks to operate 70% of their businesses in
urban areas, this statutory requirement has translated into lower deposit mobilization costs and
higher margins relative to public sector banks.

Statement of problems
Customer satisfaction is considered to be the most important factor as it involves the retention of
the customer and creates brand loyalty and also it forms a base for attracting prospective
customers. Typical elements that constitute customer satisfaction are; value added service,
difficulties in tariffs customer care and timely response to customer complaints. This study
attempts to find the customer satisfaction of Kotak Mahindra Bank.

Overview of Bank Industry

Bank:- Is an institute which deals in only money.
The Oxford dictionary defines the Bank as, An establishment for the custody of money, which
it pays out, on a customers order.

Bank:- A bank is a financial intermediary that accepts deposits and channels those deposits into
landings activities , either directly by loaning or indirectly through capital market .
A bank link together customers that have capital deficits and customers with capital surplus. Due
to their importance in the financial system and influence on national economies, banks are highly
regulated in most countries. Most nations have institutionalized a system known as fractional
reserve banking. They are generally subject to minimum capital requirements based on an
international set of capital standards known as Basel Accords.
According to Whitehead,
A Bank is defined as an institution which collects surplus fundsfrom the public, safeguards
them, and makes them available to the trueowner when required and also lends sums be their
true owners to those whoare in need of funds and can provide security.
Banking:- Banking is process to keep money floating or in flow
Banking Company in India has been defined in the Banking Companies act 1949, One which
transacts the business of banking which means theaccepting, for the purpose of lending or
investment of the deposits of moneyfrom the public, repayable on demand, or otherwise and
withdraw able becheque, draft, order or otherwise.
The banking system is an integral subsystem of the financial system. Itrepresents an important
channel of collecting small savings form thehouseholds and lending it to the corporate sector.
The Indian banking system has Reserve Bank of India (RBI) as the apexbody for all matters
relating to the banking system. It is the central Bank ofIndia. It is also known as the Banker to
All Other Banks.

BANKING SERVICES IN INDIA

History
In ancient India there is evidence of loans from the Vedic period (beginning 1750 BC).[2][3] Later
during the Maurya dynasty (321 to 185 BC), an instrument called adesha was in use, which was
an order on a banker desiring him to pay the money of the note to a third person, which
corresponds to the definition of a bill of exchange as we understand it today. During the
Buddhist period, there was considerable use of these instruments. Merchants in large towns gave
letters of credit to one another.[4]
Colonial era
During the period of British rule merchants established the Union Bank of Calcutta in 1829, first
as a private joint stock association, then partnership. Its proprietors were the owners of the earlier
Commercial Bank and the Calcutta Bank, who by mutual consent created Union Bank to replace
these two banks. In 1840 it established an agency at Singapore, and closed the one at Mirzapore
that it had opened in the previous year. Also in 1840 the Bank revealed that it had been the
subject of a fraud by the bank's accountant. Union Bank was incorporated in 1845 but failed in
1848, having been insolvent for some time and having used new money from depositors to pay
its dividends.[5]
The Allahabad Bank, established in 1865 and still functioning today, is the oldest Joint Stock
bank in India, it was not the first though. That honour belongs to the Bank of Upper India, which
was established in 1863, and which survived until 1913, when it failed, with some of its assets
and liabilities being transferred to the Alliance Bank of Shimla.
Foreign banks too started to appear, particularly in Calcutta, in the 1860s. The Comptoir
d'Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay in 1862;
branches in Madras and Pondicherry, then a French possession, followed. HSBC established
itself in Bengal in 1869. Calcutta was the most active trading port in India, mainly due to the
trade of the British Empire, and so became a banking centre.

The first entirely Indian joint stock bank was the Oudh Commercial Bank, established in 1881 in
Faizabad. It failed in 1958. The next was the Punjab National Bank, established in Lahore in
1895, which has survived to the present and is now one of the largest banks in India.
Around the turn of the 20th Century, the Indian economy was passing through a relative period
of stability. Around five decades had elapsed since the Indian Mutiny, and the social, industrial
and other infrastructure had improved. Indians had established small banks, most of which
served particular ethnic and religious communities.
The presidency banks dominated banking in India but there were also some exchange banks and
a number of Indian joint stock banks. All these banks operated in different segments of the
economy. The exchange banks, mostly owned by Europeans, concentrated on financing foreign
trade. Indian joint stock banks were generally under capitalised and lacked the experience and
maturity to compete with the presidency and exchange banks. This segmentation let Lord Curzon
to observe, "In respect of banking it seems we are behind the times. We are like some old
fashioned sailing ship, divided by solid wooden bulkheads into separate and cumbersome
compartments."
The period between 1906 and 1911, saw the establishment of banks inspired by the Swadeshi
movement. The Swadeshi movement inspired local businessmen and political figures to found
banks of and for the Indian community. A number of banks established then have survived to the
present such as Bank of India, Corporation Bank, Indian Bank, Bank of Baroda, Canara Bank
and Central Bank of India.
The fervour of Swadeshi movement lead to establishing of many private banks in Dakshina
Kannada and Udupi district which were unified earlier and known by the name South Canara (
South Kanara ) district. Four nationalized banks started in this district and also a leading private
sector bank. Hence undivided Dakshina Kannada district is known as "Cradle of Indian
Banking".During the First World War (19141918) through the end of the Second World War
(19391945), and two years thereafter until the independence of India were challenging for
Indian banking. The years of the First World War were turbulent, and it took its toll with banks
simply collapsing despite the Indian economy gaining indirect boost due to war-related economic
activities. At least 94 banks in India failed between 1913 and 1918 as indicated in the following
table:

Number

of Authorized

Paid-up

Capital

Capital

( Lakhs)

( Lakhs)

1913 12

274

35

Independence

1914 42

710

109

of

1915 11

56

1916 13

231

1917 9

76

25

1918 7

209

Years banks
that failed
PostThe

partition

1947 adversely
economies of
West Bengal,
banking
months. India's

India

in

impacted

the

Punjab

and

paralysing
activities

for

independence

marked the end of a regime of the Laissez-faire for the Indian banking. The Government of India
initiated measures to play an active role in the economic life of the nation, and the Industrial
Policy Resolution adopted by the government in 1948 envisaged a mixed economy. This resulted
into greater involvement of the state in different segments of the economy including banking and
finance. The major steps to regulate banking included:
1.

The Reserve Bank of India, India's central banking authority, was established in April
1935, but was nationalized on 1 January 1949 under the terms of the Reserve Bank of
India (Transfer to Public Ownership) Act, 1948 (RBI, 2005b).[6]

2.

In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of
India (RBI) "to regulate, control, and inspect the banks in India".

3.

The Banking Regulation Act also provided that no new bank or branch of an existing
bank could be opened without a license from the RBI, and no two banks could have
common directors.

Nationalization in the 1960s

Despite the provisions, control and regulations of the Reserve Bank of India, banks in India
except the State Bank of India (SBI), continued to be owned and operated by private persons. By
the 1960s, the Indian banking industry had become an important tool to facilitate the
development of the Indian economy. At the same time, it had emerged as a large employer, and a
debate had ensued about the nationalization of the banking industry. Indira Gandhi, the then

Prime Minister of India, expressed the intention of the Government of India in the annual
conference of the All India Congress Meeting in a paper entitled "Stray thoughts on Bank
Nationalization."[7] The meeting received the paper with enthusiasm.
Thereafter, her move was swift and sudden. The Government of India issued an ordinance
('Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969') and
nationalized the 14 largest commercial banks with effect from the midnight of 19 July 1969.
These banks contained 85 percent of bank deposits in the country.[7]Jayaprakash Narayan, a
national leader of India, described the step as a "masterstroke of political sagacity." Within two
weeks of the issue of the ordinance, the Parliament passed the Banking Companies (Acquisition
and Transfer of Undertaking) Bill, and it received the presidential approval on 9 August 1969.
A second dose of nationalization of 6 more commercial banks followed in 1980. The stated
reason for the nationalization was to give the government more control of credit delivery. With
the second dose of nationalization, the Government of India controlled around 91% of the
banking business of India. Later on, in the year 1993, the government merged New Bank of India
with Punjab National Bank. It was the only merger between nationalized banks and resulted in
the reduction of the number of nationalized banks from 20 to 19. After this, until the 1990s, the
nationalized banks grew at a pace of around 4%, closer to the average growth rate of the Indian
economy
Liberalization in the 1990s
In the early 1990s, the then government embarked on a policy of liberalization, licensing a small
number of private banks. These came to be known as New Generation tech-savvy banks, and
included Global Trust Bank (the first of such new generation banks to be set up), which later
amalgamated with Oriental Bank of Commerce, UTI Bank (since renamed Axis Bank), ICICI
Bank and HDFC Bank. This move, along with the rapid growth in the economy of India,
revitalised the banking sector in India, which has seen rapid growth with strong contribution
from all the three sectors of banks, namely, government banks, private banks and foreign banks.
The next stage for the Indian banking has been set up with the proposed relaxation in the norms
for foreign direct investment, where all foreign investors in banks may be given voting rights
which could exceed the present cap of 10% at present. It has gone up to 74% with some
restrictions.

The new policy shook the Banking sector in India completely. Bankers, till this time, were used
to the 464 method (borrow at 4%; lend at 6%; go home at 4) of functioning. The new wave
ushered in a modern outlook and tech-savvy methods of working for traditional banks. All this
led to the retail boom in India. People demanded more from their banks and received more.
Current period
All banks which are included in the Second Schedule to the Reserve Bank of India Act, 1934 are
Scheduled Banks. These banks comprise Scheduled Commercial Banks and Scheduled Cooperative Banks. Scheduled Commercial Banks in India are categorized into five different
groups according to their ownership and/or nature of operation. These bank groups are:
1.

State Bank of India and its Associates

2.

Nationalized Banks

3.

Private Sector Banks

4.

Foreign Banks

5.

Regional Rural Banks.

In the bank group-wise classification, IDBI Bank Ltd. is included in Nationalized Banks.
Scheduled Co-operative Banks consist of Scheduled State Co-operative Banks and Scheduled
Urban Cooperative Banks.
With years, banks are also adding services to their customers. The Indian banking industry is
passing through a phase of customers market. The customers have more choices in choosing
their banks. A competition has been established within the banks operating in India.
With stiff competition and advancement of technology, the services provided by banks have
become more easy and convenient. The past days are witness to an hour wait before
withdrawing cash from accounts or a cheque from north of the country being cleared in one
month in the south. The following are the major services provided by the Banks.

BANK ACCOUNT
1. Open bank account - the most common and first service of the banking sector. There are
different types of bank account in Indian banking sector. The bank accounts are as follows:
2. Bank Savings Account - Bank Savings Account can be opened for eligible person / persons
and certain organizations / agencies (as advised by Reserve Bank of India (RBI) from time to
time)
3. Bank Current Account - Bank Current Account can be opened by individuals / partnership
firms / Private and Public Limited Companies / HUFs / Specified Associates / Societies /
Trusts, etc.
4. Bank Term Deposits Account - Bank Term Deposits Account can be opened by individuals
/ partnership firms / Private and Public Limited Companies / HUFs/ Specified Associates /
Societies / Trusts, etc.
5. Bank Account Online - With the advancement of technology, the major banks in the public
and private sector has facilitated their customer to open bank account online. Bank account
online is registered through a PC with an internet connection. The advent in opening an
account.

Types of Banking
1.Retail banking:- Retail banking dealing with individual and small businesses.
2.Business Banking:- Business banking providing services to mid market business .
3.Corporate Banking:- Corporate banking directed at large business entities.
4.Private Banking:- Private banking providing wealth management services to high net worth
individuals and families .
5.Investment Banking:- Investment banking relating to activities on the financial markets .

Forms of Deposits offered by Bank

The most popular form of term deposits are Fixed Deposits , Recurring Deposits and Flexi Fixed
Deposits .

Fixed Deposit:-A fixed deposits is a financial instruments provided by banks which provides
investors with a higher rate of interest than a regular savings account until the given maturity
date . It may or may not require the creation of a separate account . It is known as term deposits
or time deposits in Canada , Australia , Newzeland and the US as a bond in the United Kingdom
. They are consider to be very safe investment .

Recurring Deposit:- Recurring Deposits are special kind of term deposits offered by banks
in which help people with regular incomes to deposits a fixed amount every month into their
recurring deposits account and earn interest at the rate applicable to fixed deposits . It is similar
to making fixed deposits of a certain amount in monthly installment . Thus , recurring deposits
schemes allow customers with an opportunity to build up their savings through regular month
deposits of fixed sum over a fixed period of time .
The Recurring Deposits can be funded by standing instructions which are the instructions by the
customers to the banks to withdraw a certain sum of money from his savings / current account
and credit to the Recurring Deposits every month . Taxation of Recurring Deposits tax deducted
at source is not applicable on RD's . However interest from RD's is not tax free . Income tax is to
be paid on interest earned from a Recurring Deposits at the rate of tax slab of the RD holder .

Flexi fixe deposit:- Flexi Fixed Deposits is a special kind of deposits scheme offered by
banks in India and many countries in the world , which is a combination of demand deposits and
fixed deposits . The depositor is able to enjoy both the liquidity of savings / current accounts as
well as the high returns of fixed deposits .

Insurance :- Insurance is the equitable transfer of the risk of a loss , from one equity to
another in exchange of payment . It is a form of risk management primarily used to hedge against
the risk of a contingent , uncertain loss . Insurance involves pooling funds from many insured
entities to pay for the losses that some may incur . The insured entities are therefore protected
from risk for a free , with the fee being dependent upon the frequency and severity of the event

occurring . In order to be an insurable risk , the risk insurred aganist must meet certain
characteristics insurance as a financial intermediary is a commercial enterprise and a major part
of the financial services industry , but individual entities can also self insurance through saving
money for possible future losses.

Generally banks operation seems effective on the following bases

A. Profitability - its ability to earn income and sustain growth in both short-term and long-term.
A company's degree of profitability is usually based on the income statement, which reports
on the company's results of operations;
B. Solvency - its ability to pay its obligation to creditors and other third parties in the long-term.
C. Liquidity - its ability to maintain positive cash flow, while satisfying immediate obligations;
D. Stability- the firm's ability to remain in business in the long run, without having to sustain

significant losses in the conduct of its business. Assessing a company's stability requires the
use of both the income statement and the balance sheet, as well as other financial and nonfinancial indicators.
Parameters selected for the evaluation of performance of banks are:
1. profitability
2. productivity
Thus we have tried to compare banks on productivity and profitability front.
Productivity has been assessed in terms of : Business per employee and per office, profit per
employee, deposit per employee and per branch.
Profitability has been assessed in terms of :
1 Interest earned ratio = total interest earned/Volume of business*
2 Interest paid ratio

= total interest paid/Volume of business.

3 Operating expense ratio = total expense interest expenses/volume of

*Volume of business = Deposit + Advance

business

Indian Banking Sector

ORIGIN AND EVOLUTION OF INDIAN BANKING
Opinions differ as to the origin of the work "Banking". The word "Bank" is said to be of
Germanic origin, cognate with the French word "Banque" and the Italian word "Banca", both
meaning "bench". It is surmised that the word would have drawn its meaning from the practice of
the Jewish money-changers of Lombardy, a district in North Italy, who in the middle ages used
to do their business sitting on a bench in the market place. Again, the etymological origin of the
word gains further relevance from the derivation of the word "Bankrupt" from the French word
"Banque route" and the Italian word "Banca-rotta" meaning "Broken bench" due probably to the
then prevalent practice of breaking the bench of the money-changer, when he failed.
Banking is different from money-lending but two terms have in practice been taken to convey
the same meaning. Banking has two important functions to perform, one of accepting deposits
and other of lending monies and/or investment of funds. It follows from the above that the rates
of interest allowed on deposits and charged on advances must be known and reasonable. The
money-lender advances money out of his own private wealth, hardly accepts deposits and usually
charges high rates of interest. More often, the rates of interest relate to the needs of the borrower.
Money-lending was practised in all countries including India, much earlier than the recent type
of Banking came on scene.

DEFINATION AS PER BANKING REGULATION ACT 1949

A Bank borrow by accepting deposits of money from the public, the deposits are to be repaid on
demand or after fixed period. They can be withdrawn by the depositors by means of cheque,
draft, order or any other way. A Bank accepts deposits (i.e. borrows) for the purposes of lending
mainly to traders, industrialists and manufacturers and the like as also, for the purposes of
investing in government securities to fulfill statutory obligations. Thus, Banking Regulations
Act, 1949 defines Banking as accepting for the purposes of lending or investment of
deposits of money from the public repayable on demand or otherwise and withdraw able
by cheque, draft , order or otherwise.

By and large, this definition can be satisfactory. As per the provision of the Banking Regulation
Act, every company willing to do banking business must obtain license from the Reserve Bank
for carrying on banking business in India. Besides, all companies carrying on banking business
must use the word bank, banker or banking as per of their names. It may be noted that moneylenders are not bankers.

Basic Concepts of Banking

Banking is different from money lending, but the two terms, usually carry the same significance
to the general public. The money lender, advances money out of his own private wealth, hardly
accepts deposits from general public and usually charges high rate of interest. More often, the
rates of interest relate to the needs of the borrower and at times the rates may be exorbitant. On
the other hand the banking is defined in section 5(b) of the Banking Regulation Act, 1949, as the
acceptance of deposits of money from the public for the purpose of lending or investment. Such
deposits of money from the public are used for the purpose of lending or investment. Such
deposits may be repayable on demand or otherwise and with drawable by cheque, draft order or
otherwise.
Thus a bank must perform two basic and essential functions:
1. Acceptance of deposits and
2. Lending or investment of such deposits.

The deposits may be repayable on demand or a for a period of time as agreed by the banker and
the Customer. In terms of the definition, the banker can accept deposits of money and Not
Anything Further accepting deposits form frolic unapplied that a banker accepts deposits form
anyone who offers money for such purpose Accepting of deposits for lending and investments
have been the original functions of banking but gradually there functions were extended and
others were added from time to time and presently banks perform a number of economic
activities

which

may

affect

all

walks

of

economic

life.

Indian banking sector can be divided mainly into four broad categories namely public sector
banks, old private sector banks, new private sector banks, and foreign banks. The other
categories of banks include co-operative banks and regional rural banks. Since these banks dont
form a substantial chunk of the banking system, we will focus on the first four categories. There
were as many as 222 scheduled commercial banks in India as at the end of Mar 2006.

"Banking sector in India has undergone remarkable changes since the nationalization of 14
major commercial banks in 1969. The geographical and functional coverage of banks has surged
at a rate that is unprecedented in the world. Similarly, services rendered by banks witnessed
major changes after liberalisation of the financial sector carried out from the early 1990s.
Banking system has now transformed itself into a vibrant financial service sector with many
innovative and technology-driven services at their end.

Wider commercial role

The commercial role of banks is not limited to banking, and includes:
1. Issue of banknotes (promissory notes issued by a banker and payable to bearer on
demand)
2. Processing of payments by way of telegraphic transfer, EFTPOS, internet banking or
other means
3. Issuing bank drafts and bank cheques
4. Accepting money on term deposit
5. Lending money by way of overdraft, installment loan or otherwise
6. Providing documentary and standby letters of credit (trade finance), guarantees,
performance bonds, securities underwriting commitments and other forms of off-balance
sheet exposures
7. Safekeeping of documents and other items in safe deposit boxes
8. Currency exchange
9. Acting as a 'financial supermarket' for the sale, distribution or brokerage, with or without
advice, of insurance, unit trusts and similar financial products

Economic functions
The economic functions of banks include:
1. Issue of money- in the form of banknotes and current accounts subject to cheque or payment
at the customer's order. These claims on banks can act as money because they are negotiable
and/or repayable on demand, and hence valued at par. They are effectively transferable by
mere delivery, in the case of banknotes, or by drawing a cheque that the payee may bank or
cash.

2. Netting and settlement of payments banks act as both collection and paying agents for
customers, participating in interbank clearing and settlement systems to collect, present, be
presented with, and pay payment instruments. This enables banks to economize on reserves
held for settlement of payments, since inward and outward payments offset each other. It also
enables the offsetting of payment flows between geographical areas, reducing the cost of
settlement between them.
3. Credit intermediation banks borrow and lend back-to-back on their own account as
middle men
4. Credit quality improvement banks lend money to ordinary commercial and personal
borrowers (ordinary credit quality), but are high quality borrowers. The improvement comes
from diversification of the bank's assets and capital which provides a buffer to absorb losses
without defaulting on its obligations. However, banknotes and deposits are generally
unsecured; if the bank gets into difficulty and pledges assets as security, to raise the funding
it needs to continue to operate, this puts the note holders and depositors in an economically
subordinated position.
5. Maturity transformation banks borrow more on demand debt and short term debt, but
provide more long term loans. In other words, they borrow short and lend long. With a
stronger credit quality than most other borrowers, banks can do this by aggregating issues
(e.g. accepting deposits and issuing banknotes) and redemptions (e.g. withdrawals and
redemptions of banknotes), maintaining reserves of cash, investing in marketable securities
that can be readily converted to cash if needed, and raising replacement funding as needed
from various sources (e.g. wholesale cash markets and securities markets).

Banking in India
Banking in India in the modern sense originated in the last decades of the 18th century. The
first banks were Bank of Hindustan (1770-1829) and The General Bank of India, established
1786 and since defunct.
The largest bank, and the oldest still in existence, is the State Bank of India, which originated in
the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This
was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of
Madras, all three of which were established under charters from the British East India Company.

The three banks merged in 1921 to form the Imperial Bank of India, which, upon India's
independence, became the State Bank of India in 1955. For many years the presidency banks
acted as quasi-central banks, as did their successors, until the Reserve Bank of India was
established in 1935.
In 1969 the Indian government nationalized all the major banks that it did not already own and
these have remained under government ownership. They are run under a structure know as
'profit-making public sector undertaking' (PSU) and are allowed to compete and operate as
commercial banks. The Indian banking sector is made up of four types of banks, as well as the
PSUs and the state banks, they have been joined since the 1990s by new private commercial
banks and a number of foreign banks.
Banking in India was generally fairly mature in terms of supply, product range and reach-even
though reach in rural India and to the poor still remains a challenge. The government has
developed initiatives to address this through the State Bank of India expanding its branch
network and through the National Bank for Agriculture and Rural Development with things like
microfinance.
Indian Banking Industry currently employees 1,175,149 employees and has a total of 109,811
branches in India and 171 branches abroad and manages an aggregate deposit of

67504.54

billion (US$1.1 trillion or 840 billion) and bank credit of 52604.59 billion (US$880 billion or
650 billion). The net profit of the banks operating in India was 1027.51 billion (US$17 billion
or 13 billion) against a turnover of
fiscal year 2012-13.

9148.59 billion (US$150 billion or 110 billion) for the

New private-sector banks

The banks, which came in operation after 1991, with the introduction of economic reforms and
financial sector reforms are called "new private-sector banks". Banking regulation act was then
amended in 1993, which permitted the entry of new private-sector banks in the Indian banking s
sector. However, there were certain criteria set for the establishment of the new private-sector
banks, some of those criteria being: The bank should have a minimum net worth of Rs.200
crores.
1. The promoters holding should be a minimum of 25% of the paid-up capital.
2. Within 3 years of the starting of the operations, the bank should offer shares to public and
their net worth must increased to 1000 crores .
List of the old private-sector banks in India

Name
1. Bank of punjab merged with Centurion Bank to form Centurion Bank of
Punjab in June 2005

Year
established
1943

2. City Union Bank

1904

3. Dhanlaxmi Bank

1927

4. Federal Bank

1931

5. ING Vysya Bank

1930

6. Jammu and Kashmir Bank

1938

7. Karnataka Bank

1924

8. Karur Vysya Bank

1916

9. Lakshmi Vilas Bank

1926

10. Nainital Bank

1922

11. RBL Bank

1943

12. SBI Commercial and international Bank

1955

13. South Indian Bank

1929

14. Tamilnadu Mercantile Bank Limited

1921

15. United Western Bank

1936

16. IDBI Bank Ltd (reverse merged with parent IDBI in 2004 to become IDBI
Bank. Making this public sector bank private)
17. CATHOLIC SYRIAN BANK

1964
1920

List of the new private-sector banks in India

Name
1. Axis Bank (earlier UTI Bank)
2. Bank of Punjab (actually an old generation private bank since it was not
founded under post-1993 new bank licensing regime)
3. Centurion Bank Ltd. (Merged Bank of Punjab in late 2005 to become
Centurion Bank of Punjab, acquired by HDFC Bank Ltd. in 2008)
4. Development Credit Bank (Converted from Co-operative Bank, now DCB
Bank Ltd.)
5. HDFC Bank
6. ICICI Bank (previously ICICI and then both merged;total merger
SCICI+ICICI+ICICI Bank Ltd)

Year
established
1994
1989

1994

1995
1994
1996

7. IndusInd Bank

1994

8. Kotak Mahindra Bank

2003

9. Yes Bank

2005

10. Times Bank (Merged with HDFC Bank Ltd.)

Unknown

11. Global Trust Bank (India) (Merged with Oriental Bank of Commerce)

Unknown

12. Balaji Corporation Bank Limited

2010

Banking In India Reserve Bank of India

Nationalized banks / Public-sector banks
1. Allahabad Bank

12. Indian Bank

2. Andhra Bank

13. Indian Overseas Bank

3. Bank of Baroda

14. Oriental Bank of Commerce

4. Bank of India

15. Punjab National Bank

5. Bank of Maharashtra

16. Punjab & Sind Bank

6. Bhartiya Mahila Bank

17. Syndicate Bank

7. Canara Bank

18. UCO Bank

8. Central Bank of India

19. Union Bank of India

9. Corporation Bank

20. United Bank of India

10. Dena Bank

21. Vijaya Bank

11. IDBI Bank

SBI and associate banks
1. State Bank of India
2. State Bank of Bikaner & Jaipur
3. State Bank of Hyderabad
4. State Bank of Mysore
5. State Bank of Patiala

Cooperative banks
1. Buldhana Urban

6. State Bank of Travancore

7. State Bank of Saurashtra (merged
into SBI in 2008)
8. State Bank of Indore (merged into
SBI in 2010)

5. Pune Peoples Cooperative Bank

2. Cosmos Bank

6. Anyonya Co-operative Bank

3. Saraswat Bank

7. Mahila SEWA Cooperative Bank

4. Shamrao Vithal Co-op. Bank

8. Mahesh Co-operative Bank

Regional rural banks

1. Allahabad UP Gramin Bank
2. Andhra Pradesh Grameena Vikas
Bank

3. Andhra Pragathi Grameena Bank

4. Arunachal Pradesh Rural Bank
5. Aryavart Gramin Bank

6. Assam Gramin Vikash Bank

36. Madhumalti Building Gupte Marg

7. Baitarani Gramya Bank

37. Madhya Bharat Gramin Bank

8. Ballia Etawah Gramin Bank

38. Madhya Bihar Gramin Bank

9. Bangiya Gramin Vikash Bank

39. Mahakaushal Kshetriya Gramin

10. Baroda Gujarat Gramin Bank

Bank

11. Baroda Rajasthan Gramin Bank

40. Maharashtra Gramin Bank

12. Baroda Uttar Pradesh Gramin Bank

41. Malwa Gramin Bank

13. Bihar Kshetriya Gramin Bank

42. Manipur Rural Bank

14. Cauvery Kalpatharu Grameena Bank

43. Marwar Ganganagar Bikaner Gramin

15. Chaitanya Godavari Grameena Bank

Bank

16. Chhattisgarh Gramin Bank

44. Meghalaya Rural Bank

17. Chikmagalur-Kodagu Grameena

45. Mewar Anchalik Gramin Bank

Bank

46. Mizoram Rural Bank

18. Deccan Grameena Bank

47. Nagaland Rural Bank

19. Dena Gujarat Gramin Bank

48. Uttrakhand Gramin Bank[1]

20. Durg-Rajnandgaon Gramin Bank

49. Narmada Malwa Gramin Bank

21. Ellaquai Dehati Bank

50. Neelachal Gramya Bank

22. Gurgaon Gramin Bank

51. Pallavan Grama Bank

23. Hadoti Kshetriya Gramin Bank

52. Pandyan Grama Bank

24. Haryana Gramin Bank

53. Parvatiya Gramin Bank

25. Himachal Gramin Bank

54. Paschim Banga Gramin Bank

26. Jaipur Thar Gramin Bank

55. Pragathi Gramin Bank

27. Jhabua Dhar Kshetriya Gramin Bank

56. Prathama Bank

28. Jharkhand Gramin Bank

57. Puduvai Bharathiar Grama Bank

29. Kalinga Gramya Bank

58. Pune District Central Cooperative

30. Karnataka Vikas Grameena Bank

Bank Ltd.

31. Kashi Gomti Samyut Gramin Bank

59. Punjab Gramin Bank

32. Kerala Gramin Bank

60. Purvanchal Gramin Bank

33. Krishna Grameena Bank

61. Rajasthan Gramin Bank

34. Kshetriya Kisan Gramin Bank

62. Rewa-Sidhi Gramin Bank

35. Langpi Dehangi Rural Bank

63. Rushikulya Gramya Bank

64. Samastipur Kshetriya Gramin Bank

73. Tripura Gramin Bank

65. Saptagiri Grameena Bank

74. Utkal Gramya Bank

66. Sarva UP Gramin Bank

75. Uttar Banga Kshetriya Gramin Bank

67. Satpura Narmada Kshetriya

76. Uttar Bihar Gramin Bank

68. Saurashtra Gramin Bank

77. Vananchal Gramin Bank

69. Sharda Gramin Bank

78. Vidharbha Kshetriya Gramin Bank

70. Shreyas Gramin Bank

79. Visveshvaraya Grameena Bank

71. Surguja Kshetriya Gramin Bank

80. Wainganga Krishna Gramin Bank

72. Sutlej Kshetriya Gramin Bank

Private-sector banks
1. Axis Bank

11. Karnataka Bank

2. Catholic Syrian Bank

12. Karur Vysya Bank

3. City Union Bank

13. Kotak Mahindra Bank

4. Development Credit Bank

14. Lakshmi Vilas Bank

5. Dhanlaxmi Bank

15. Nainital Bank

6. Federal Bank

16. Tamilnadu Mercantile Bank

7. HDFC Bank

17. South Indian Bank

8. ICICI Bank

18. YES Bank

9. IndusInd Bank

19. UP Agro Corporation Ban

10. ING Vysya Bank

Foreign banks operating in India

1. Abu Dhabi Commercial Bank

8. Bank of Tokyo Mitsubishi UFJ

2. Australia and New Zealand Bank

9. Barclays Bank PLC

3. Bank Internasional Indonesia

10. BNP Paribas

4. Bank of America NA

11. Calyon Bank

5. Bank of Bahrain and Kuwait

12. Chinatrust Commercial Bank

6. Bank of Ceylon

13. Citibank N.A.

7. Bank of Nova Scotia (Scotia Bank)

14. Credit Suisse

15. Commonwealth Bank of Australia

23. Mashreq Bank psc

(Recently Launched Retail Services

24. Mizuho Corporate Bank

in Mumbai)

25. Royal Bank of Scotland

16. DBS Bank

26. Shinhan Bank

17. DCB Bank now RHB Bank

27. Socit Gnrale

18. Deutsche Bank AG

28. Sonali Bank

19. FirstRand Bank

29. Standard Chartered Bank

20. HSBC

30. State Bank of Mauritius

21. JPMorgan Chase Bank

31. UBS

22. Krung Thai Bank

32. Woori Bank.

Foreign banks with business in India

Banks with branches in India
1. ABN AMRO Bank N.V. - Royal
Bank of Scotland

16. Citibank
17. DBS Bank

2. Abu Dhabi Commercial Bank

18. Deutsche Bank

3. American Express Bank

19. HSBC (Hongkong & Shanghai

4. Antwerp Diamond Bank

Banking Corporation)

5. Arab Bangladesh Bank

20. JPMorgan Chase Bank

6. Bank International Indonesia

21. Krung Thai Bank

7. Bank of America

22. Mashreq Bank

8. Bank of Bahrain and Kuwait

23. Mizuho Corporate Bank

9. Bank of Ceylon

24. National Australia Bank

10. Bank of Nova Scotia

25. Shinhan Bank

11. Bank of Tokyo Mitsubishi UFJ

26. Socit Gnrale

12. Barclays Bank

27. Sonali Bank

13. BNP Paribas

28. Standard Chartered Bank

14. Calyon Bank

29. UBS

15. Chinatrust Commercial Bank

Interbank networks
1.
2.
3.
4.
5.

BANCS
Cashnet
CashTree
Cirrus
IMPS

6. MITR
7. NFS
8. PLUS
9. RuPay

Related topics
1. Banking Codes and Standards
Board of India
2. ATM usage fees in India
3. De-Materialisation (DEMAT)
4. Foreign Exchange (FOREX)
5. Indian Financial System Code
(IFSC)
6. List of banks in India
Foreign banks with representative offices in India

American Banks

American Express

Bank of New York

Wells Fargo Bank

Northern Trust

Australian Banks

Commonwealth Bank

Westpac Banking Corporation

Austrian Banks

Raiffeisen Zentralbank

Belgian Banks

Fortis Bank

KBC Bank

7. National Electronic Fund

Transfer (NEFT)
8. National Payments Corporation
of India
9. Real Time Gross Settlement
(RTGS)
10. Structured Financial Messaging
System (SFMS)
11. Prepaid Payment Instruments in
India

Canadian Banks

UAE Banks

Credit Industriel et Commercial

Natixis

German Banks

HypoVereinsbank

Commerzbank

Dresdner Bank

DZ Bank AG Deutsche Zentral Genossenschafts Bank

HSH Nordbank

Landesbank Baden-Wrttemberg

Irish Banks

Banca Intesa

Banca di Roma

Banca Sella

Banca Popolare di Verona

Banca Popolare di Vicenza

UBI Banca

Monte dei Paschi di Siena

Sanpaolo IMI

UniCredit

Nepalese Banks
Everest Bank

Portuguese Banks

Depfa Bank

Italian Banks

Emirates Bank International

French Banks

Royal Bank of Canada

Russian Banks

Caixa Geral de Depositos

Vnesheconombank

Promsvyazbank

South African banks

South Korean Banks

Woori Bank

Spanish Banks

Caixabank

Banco de Sabadell

Banco Bilbao Vizcaya Argentaria

Sri Lankan Banks

First Rand Bank

Hatton National Bank

Swiss Banks

Credit Suisse
Zurich Cantonal Bank

Indian banks with business outside India

List of subsidiaries of Indian banks abroad
Name of the Bank
Andhra Bank

Name of the Centre

Dubai, Malaysia

all India bank

Hongkong

AXIS BANK Ltd.

Hongkong, Singapore, Dubai, Sri-Lanka, United

Kingdom

SBI (Canada) Ltd.

Toronto, Vancouver, Mississauga

SBI (Japan) Ltd.

Tokyo, Osaka

SBI (California) Ltd.

Los Angeles, Artesia, San Jose (Silicon Valley)

SBI Finance Inc.

Delaware, U.S.A.

SBI International (Mauritius)

Mauritius (Off-shore Bank)

SBI (INDIA) Ltd.

Shanghai

SBI (Singapore) Ltd.

Singapore

Notes

Bank of Baroda (Uganda) Ltd.

Uganda

Bank of Baroda (Kenya) Ltd.

Kenya

Bank of Baroda (Ghana) Ltd.

Accra, Ghana

Bank of Baroda (U.K.) Nominee Ltd.

London, United Kingdom

Bank of Baroda (Hong Kong) Ltd.

Hong Kong (Converted into Restricted Licensed

Bank)

Bank of India (Japan) Ltd.

Tokyo, Osaka

Bank of India Finance (Kenya) Ltd.

Kenya

Canara Bank

Hongkong, United Kingdom

IOB Properties Pte Ltd.

Singapore

Bank of Baroda (Botswana) Ltd.

Gaborone, Botswana

Bank of Baroda (Guyana) Inc.

Georgetown, Guyana (South America)

ICICI Bank (U.K.) Ltd

London (U.K.)

ICICI Bank (Canada)Ltd

Toronto (Canada)

Bank of Baroda (Tanzania) Ltd.

Tanzania

Bank of Baroda (United Arab Emirate)

Dubai, Abu Dhabi, Ras Al Khaimah, Deira,

Dammam, Salalah, Al Ain

Bank of Baroda

Muscat, Oman

Bank of Baroda

Brussels, Belgium

ICICI Bank Eurasia LLC

Russia

PT Bank Indomonex

Indonesia

Indian Ocean International Bank Ltd.

(IOIB)
Punjab National Bank International
Limited (PNBIL)
Bank of Baroda (Trinidad and Tobago)
Limited

Port Louis, Mauritius

London, United Kingdom

Trinidad & Tobago

PT Bank Swadesi Tbk

Bank of Baroda (Trinidad and Tobago)
Limited

Indonesia
Trinidad & Tobago

Syndicate Bank

United Kingdom

UCO Bank

Hongkong, Singapore

Indian banking driven by structural factors

The Indian banking sector in recent years is driven mainly by structural factors such as corporate
capex cycle, retail loan boom, and infrastructure funding with low incremental defaults. Robust
macroeconomic performance continued to strengthen the financial performance of scheduled
commercial banks (SCBs) in recent years and this trend continued in 2005-06 as well. The
banking sector has been driven by vigorous credit growth during recent years. The heartening
factor was that the credit off take was more broad-based with all the sectors of the economy
going for credit. Housing and retail segments were joined by the demand for credit from
agriculture and industry segment as well. The credit demand was not entirely financed by the
customer deposits as the growth of deposits slowed down marginally in 2005-06. In order to
meet the increased demand for credit, banks increased their dependence to non-deposit resources.
In addition to this, number of banks curtailed their fresh investment in Government securities to
finance the credit demand. The strong credit off take was primarily responsible for the improved

net interest income of many banks. In fact, the strong credit demand was able to more than offset
the impact of sharp decline in non-interest income. Profitability of public sector and new private
sector banks improved, despite hardening of sovereign yields. Asset quality of SCBs has been
improving since the past three years as reflected in the decline in gross non-performing assets in
absolute terms. This is despite the fact that, RBI has asked banks to switch over to the 90-day
delinquency norm with effect from March 2004. With the sharp increase in risk-weighted assets,
many banks shored up their capital by way of new issues.
Banking structure in India

Basel-II norms some breather for banks

In its mid-term review of Annual Policy for FY07, RBI pushed back the deadline for
implementation of Basel II norms. While foreign banks in India and Indian banks operating
abroad are to meet Basel-II norms by March 31, 2008, all other scheduled commercial banks will
have to adhere to these guidelines pertaining to risk provisioning by March 31, 2009. This will
provide banks some more time to put in place appropriate systems so as to ensure full
compliance of Basel II.

Bank operation

Foreign banks eager to enter Indian market

India offers tremendous opportunities for banks in India. This is the reason why a number
of foreign banks are eager to set up shop in India. However, the government is moving
cautiously in opening up the market to foreign banks. The government has set up a roadmap for
the foreign banks to tread on. The roadmap has two phases.

During the first phase between March 05 and March 09, foreign banks may establish a presence
by setting up a wholly-owned subsidiary or conversion of existing branches into a wholly-owned
subsidiary. The second phase is to commence in April 09 after consultation with all stakeholders
in the banking sector. The review is expected to examine issues such as dilution of stake and
permitting mergers/acquisitions of private sector banks in India by a foreign bank. A large
number of foreign banks are queuing up to enter India despite a regulatory iron curtain that is
restricting entry. This is regardless of the fact that most foreign banks seems to be unhappy with
the Reserve Bank of Indias roadmap for liberalization of entry norms for foreign banks
proposed in February 05. Foreign banks wants the government to relax regulations such as
priority sector lending, ownership rules and statutory liquidity requirements, branch licensing,
single borrower limits etc. Foreign banks have targeted India for a variety of reasons. They are

impressed by the pace of reforms, huge market, interest of foreign institutional investors and the
countrys changing image. This is evident from the levels of investment and expansion plans for
the country. Union Bank of Switzerland (UBS) and Australia-based Macquarie Bank are some of
the banks which are interested in India.
Performance of listed banks
Strong growth in Indian economy assisted banks to increase their asset base. Comparison in asset
base indicates that the private sector banks are in better position than the public sector banks in
terms of asset growth. In the private banking space ICICI Bank, HDFC Bank & UTI Bank
showed strong growth in their asset base whereas in the public sector bank Allahabad Bank,
Canara Bank and Bank of Baroda lead the sector. State Bank of India which has the largest asset
base in the country recorded a modest growth of 7.4%.

Since the past few years, customer deposits of banks recorded strong growth. Private sector
banks reported excellent performance as compared to their government owned peers. However,
some of the public sector banks are giving tough competition to their private sector peers. In the

private banking space, ICICI Bank was the leader in customer deposit growth as its deposit grew
by 65.4% followed by HDFC Bank (53.5%) and Kotak Bank (52.7%). In the public sector
banking space, IDBI Bank reported stellar performance as its deposits grew by 72% followed by
Corporation Bank with growth rate of 20.7%. SBI, which is the largest bank in India, reported a
growth of just 3.5%.

Public sector banks dominate the Indian banking system though their market share is
Dwindling
The public sector banks (PSBs) account for a major share of all the banking indicators like
assets, deposits, advances etc. However, the private sector banks, especially new private banks
like ICICI Bank, HDFC Bank and UTI Bank etc. are giving tough competition to their
government owned peers. Public sector banks which comprise State Bank of India group and
other nationalized banks are continuously losing their market share in bank deposits since the
opening up of the banking sector to their private counterparts. According to latest Reserve Bank
of India (RBI) figures, private banks and foreign banks have gained during the year.
Private sector banks operating cost

Foreign banks in India have one of the highest operating expenses to total assets ratio in India at
Scheduled commercial bank- operating expense/total asset
Operating costs are not likely to take a breather for private sector banks as the banks are
aggressively increasing their delivery channels and investing heavily in technology. The new
formats include specialized offices where banks extend low-ticket credit and raise low cost
deposits. High volume growth is likely on the back of higher operating costs. However, we do
not expect any rise in operating cost to income ratio, despite the rapid increase in infrastructure
as we believe that the income is also expected to go up sharply going forward.

ATM Revolution
In Banking sector automated teller machine (ATM) started a big revolution through by
technology , which replaced bank cashiers staff, John Adrian Shepherd-Barron, (23 June 1925
15 May 2010]) was a Scottish inventor, who pioneered the development of the cash machine,
sometimes referred to as the Automated Teller Machine or ATM. Shepherd-Barron joined De La
Rue Instruments in the 1960s and came up with the concept of a self-service machine which
would dispense paper currency with 24/7 availability. This was the Automated Teller Machine
(ATM).[3] The first machine was established outside an Enfield, north London, branch of
Barclays Bank in June 1967

Worlds first talking ATM

The worlds first talking ATM for the blind was an NCR machine unveiled by the Royal Bank of
Canada on October 22, 1997 at a bank branch on the corner of Bank Street and Queen Street in
Ottawa, Ontario. The talking ATM was a result of concerns Chris and Marie Stark, two blind
customers, raised with the bank beginning in 1984. It automated teller machine (ATM) that
provides audible instructions so that persons who cannot read an ATM screen can independently
use the machine.
New startups in Banking and First ATM in India
1. First bank to introduce ATM in India was Hong kong and Shanghai Banking Corporation
(HSBC) in 1987,Mumbai.
2. First India bank Got ISO : Canara Bank
3. First Governor of RBI : Mr. Osborne Smith
4. First Indian governor of RBI : Mr. C D Deshmukh
5. First Bank to Introduce ATM in India : HSBC First Bank to Introduce Cheque system in India

6. Bengal Bank First Bank to introduce Internet Banking

7. ICICI BANK First Bank to introduce Mutual Fund
8. State Bank of India First Bank to introduce Credit Card in India
9. Central Bank of India First Bank Set Up in India
10. Bank of Hindustan in 1770 First Joint Stock Bank of British India
11. State Bank of India First Joint Stock Bank of India
12. Central Bank of India First Bank Set Up in India :
13. Bank of Hindustan in 1770 First Joint Stock Bank of British India
14. State Bank of India First Joint Stock Bank of India
15. Allahabad Bank First Indian Bank started with Indian capital /indigenous Bank of India
16. Punjab National Bank First Regional Rural Bank name Prathama Grameen Bank Was started by :
Syndicate Bank

Talking ATMs in India

In 2012, Public sector leader Union Bank of India unveiled India's first ever Truly Accessible
and Talking ATM in Vastrapur , Ahmedabad, Gujarat on 6 June 2012 for the visually and
physically challenged people. Union bank of India has done pioneered work on Talking ATM in
India. Union Banks Talking ATM model and workflow has set a benchmark. On October 4,
2012 State Bank of India, India's largest Public Sector Bank, launched its first and Real Talking
ATM in New Delhi.[21]
ICICI Bank was the first Indian bank to provide internet banking facility.

Reserve Bank of India (RBI)

Reserve Bank of India (RBI) is the central banking institution of India. It is fully owned by
government of India. RBI controls Indian rupee and all Indian banks. RBI has also control on
inter-bank money transfer in all over India banks through RTGS and NEFT. RBI was established
in April 1, 1935 and nationalized in 1949.
Reserve Bank of India has rights to issue, exchange or destroys currency notes and coins in
India. This bank also maintains all merchant banking account for state and central banks.

Mostly used Banking Services in India

1. ATM
2. Bank Account
3. Credit Card
4. Debit Card
5. Loans
6. Money Transfer
7. Mobile Banking
8. SMS Banking

9.

Net Banking

Automated Teller Machine (ATM)

Hongkong and Shanghai Banking Corporation (HSBC) introduced ATM concept in India first
time in 1987. But now almost every bank provides ATM facilities to their customers. ICICI bank
has most number of ATM centers across India. The other banks UTI, HDFC and IDBI are
leading in providing ATM facilities to their customers. Public Sector Banks are also taking the
installation of ATMs seriously for Indian market. They are either setting up their own ATM
centres or entering into tie-ups with other banks. The Corporation Bank has the second largest
network of ATMs amongst the Public Sector Banks in India.

Bank Account
Banking sector provides different types of bank accounts.
1. Savings Account-As advised by Reserve Bank of India (RBI), Savings Account can be opened
for eligible persons, organizations and agencies
2. Current Account-Current Account can be opened for ,Individuals ,Private and Public Limited
Companies ,Specified Associates, Societies Trusts
3. Term Deposits Account-Bank Term Deposits Account can be opened for Individuals ,Private and
Public Limited Companies ,Specified Associates ,Societies ,Trusts
4. Online Bank Account-As technology is growing day by day, most of the banks are providing
online account management facility to their customers. Customers can access their individual
account on internet from anywhere in world. Online account management facility drastically
reduce time and cost of operation for banks.

Credit Card
Credit is one of the important service that bank provide to the customer. Many banks provides
the various credit card facilities to the customer. In 1950, Credit Card concept has been used in
USA by Diners Club and American Express. Use of magnetic strip in Credit Card is started from
1970. Credit Cards are used to withdraw money or buy a products on credit.
The first card was issued in India by Visa in 1981. And first Gold Card was issued from Visa in
1986. There are many banks issue a Credit Card to customer. But following is the list of leading
banks to issue Credit Card in India.
1. ABN AMRO
2. Bank of Baroda
3. Citi Bank
4. HDFC Bank
5. HSBC Bank
6. ICICI Bank
7. IDBI Bank
8. Standard Chartered Bank
9. State Bank of India

Debit Card
Visually, Debit Card looks like Credit card. But there are major differences between them. We
use our own money when we use Debit Card and not an issuer's money. It works like a personal
cheque. Debit cards are accepted at many locations like grocery stores, retail stores, gasoline
stations and restaurants. In India almost all the banks issue debit card to its account holders.

Loans
Loans-There are many types of loans provided by the bank. Almost all banks provide the
following types of loans Auto / Car Loan ,Education Loan ,Home Loan ,Loan against Shares
,Personal Loan ,Auto Loan, Most of the banks provide car loans. Car loan also termed as Auto
Loan. One can get car loan up to 85% of ex-showroom price of the car with some amount of
processing

fee.

Education Loan-Education Loan is also termed as Student Loan Educational loan is offered to
the students, who are having brilliant academic records, studying at recognized

colleges/universities in India or abroad. Educational loan is generally offered to meet the

expenses on tuition fees, books and other educational related cost.
Home Loan-Home loan is one of the fastest moving financial banking products. Like a car loan,
most of the reputed banks provides home loan up to the 85% of agreement value of a home or
apartment. There are two types of home loans available depends on interest rate. Floating Interest
Rate and Floating Interest Rate. SBI, ICICI HSBC, HDFC, AXIS banks are leading in providing
home

loans.

Loan against shares-Loan against shares is runs on liquid guarantee. It's very easy to get it if one
can have liquid as guarantee against loan.
Personal Loan-Personal loan amount is depends on the profile of person who is applying for the
loan. Usually interest rates are higher for Personal loans.

Money Transfer
Along with debiting and crediting money, banks also provide money transfer facility from
anywhere in the globe. This business is known as remittance business.
Money Transfer to India Few financial institutions and online portals gives money transfer
services to India.
1. Cash2india.com
2. IKobo Money Transfer
3. Money Gram International
4. Money2India
5. Remit2india
6. Samachar Money Transfer
7. Timesofmoney.com
8. Travellers Express
9. Union Money Transfer
10. Wells Fergo International Money Transfer
11. Western Union Money Transfer

Mobile Banking
The Mobile Banking is a revolution in Banking Sectors due to growing technologies and drastic
improvements in communication sectors. Mobile banking is inexpensive to implement compare

to ATM and it reduces implementation cost, operation cost and time as well. Using advanced
mobile and internet connectivity following banking operations are possible
1. Bill payments
2. Check balances
3. Fund transfers

SMS Banking
Similar to the Mobile Banking, SMS Banking operations are carried out using Mobile Phones.
When you do not have WAP enabled mobile phones, you can use SMS banking to avail banking
services.
Following operations can be carried out using SMS banking by sending a text messages.
1. Balance enquiry
2. Bill Payment
3. Cheque book request
4. Cheque payment status
5. Demat - Free Balance Holding
6. Demat - Last two Transactions
7. Last three transactions
8. Statement request

Net Banking
Net banking is the easiest way to avail banking facilities. You can manage your bank account
online

using

computer

Services provided by Net Banking

1. Check Balance
2. Cheque Book Request
3. Demand Draft Request
4. Inquire about cheque status
5. Inquire about Fixed Deposit
6. Inquire about TDS details
7. Pay Bank Credit Card Dues
8. Pay Bills
9. Queries
10. Request for a new Fixed Deposit

and

internet

connection.

11. See Demat Account

12. See Statement
13. Shop Online
14. Statement Request
15. Stop a Cheque
16. Transfer funds between your accounts
17. Transfer funds to a third party
18. Update profile

Other Revolution for Quick transfer of money and cheque clearing

Bank IFSC Code
Indian Financial System Code, a unique code, assigned to each bank. IFSC code is required to
for many banking transactions.
IFSC Code vary from branch to branch with a few similarities for a bank. More detailed
explanation

of

IFSC

code

is

mentioned

on

the

left

side,

If you are a customer of any bank, you should know IFSC code assigned to that bank for your
own benefits
.With the IFSC code you can easily manage your account from any corner of the globe to
transfer fund through various sources. You need to know the IFSC Code for adding beneficiaries.
IFSC code is must to have online fund transfer.

IFSC Code?
Indian Financial System Code, a unique code, assigned to each bank. IFSC code is required to
for many banking transactions. IFSC Code vary from branch to branch with a few similarities for
a bank.
More detailed explanation of IFSC code is mentioned on the left side. If you are a customer of
any bank, you should know IFSC code assigned to that bank for your own benefits. With the
IFSC code you can easily manage your account from any corner of the globe to transfer fund
through various sources. You need to know the IFSC Code for adding beneficiaries. IFSC code
is must to have online fund transfer.

IFSC stands Indian Financial System Code. IFSC is an alpha numeric code which uniquely
identify bank branch in India. IFSC is code used for various payment system within the country.
IFS Code is 11 digit code for a bank branch.

First

characters

represents

bank

code.

For Example: One of the IFSC code for ICICI Bank is ICIC0001206.

First 4 characters ICIC0001206 represents bank code.

The 5th character is a '0' Zero and it's reserved as control character (ICIC0001206)

Remaining last 6 characters used to identity the bank branch. (ICIC0001206)

NEFT (National Electronic Fund Transfer)

NEFT stands for National Electronic Fund Transfer. NEFT is an online national wide fund
transfer system supported by RBI. It is used by an individual, firm and corporate to transfer
payment electronically. NEFT is used for small and medium amount transfer between banks and
accounts. No minimum amount limit for NEFT. NEFT process transfer funds on hourly batches.
In week days there are 11 settlements, starts at 9 A.M and ends at 7 P.M and in Saturday there
are 5 settlements, starts at 9 A.M ends at 1 P.M. Usually the payment will be send to the RBI
within 3 hours when remitting account given request for transaction. The actual time to take
transaction completed depends on beneficiary bank to process the funds.

NEFT Benefits:

Eco-friendly - The total process of NEFT is eco-friendly and drastically reduce paperwork

Economic efficiency - NEFT fund transfer service charge is much less compare to making
transfer by using pay order or demand draft

Secure and efficient - Seamless transfer of funds from one bank to another. During the transaction
there are no chances to occur mistakes and whole operation is highly secure and quick

Risk free - There is no credit and liquidity risks in NEFT payment system. The fund transfer
request is processed and settled in days time.

NEFT service charges

From March 31, 2011 RBI refrain from insisting the service charges to the banks. Banks who are
participating in NEFT fund transfer no need to pay any charges to RBI. There are no charges
from beneficiaries for payment transfer.

Outward transactions - less than 1 lakhs Rs . 5

Outward transactions - 1 lakh to 2 lakhs - Rs. 15

Outward transactions - above 2 lakhs - Rs. 25

RTGS (Real Time Gross Settlement)

RTGS stands for Real Time Gross Settlement. It is a fund transfer system used to transfer money
from one bank to another. This gross basis transfer is a real time transfer system. This system can
performs for large value of transaction, minimum amount can be transferred is Rs.2,00,000.
There is no maximum amount limit for this transaction.

The time taken for receiving funds to beneficiary account in real time when the remitting bank
transferred funds. The remitting customer can receive acknowledgment from RBI when the fund
gets transferred.

The RTGS payment system was launched on 26th, March 2004 by RBI with involving only four
banks. Now there are almost 109 banks in 13750 branches and 508 clearing centers. More than
800 cities are covered for customer transaction.
Benefits of RTGS

Real time fund transfer

Efficiency of economy - Without exposing settlement risk, the payments are ensuring quick and
secure in financial market transactions and major business solution.

Credit risk eliminated - There is no credit and liquidity risks in RTGS payment system. The
beneficiary bank customer can receive payment instantly when the central bank system accepted
request.

RTGS process
The following instructions are used in this structure.

The remitting bank will be send payment instruction to central processers technical operator

The central processor acknowledge the stripping of message and sending original message with
set of instructions like, what amount to be transferred, what is the IFSC code of bank branch,
issuing and receiving banks identification etc. to central bank

The central bank process debit of remitting banks account and credit to beneficiary banks
account. After transaction completed then, sending confirmation to central processor

The central processor re-constructing of payment message with stripped information and send the
message to receiving bank with proper details

RTGS service charges

Inward transactions - Free, no charges

Outward transactions - 2 lakhs to 5 lakhs - Rs. 25

Outward transactions - Above 5 lakhs - Rs. 50

MICR Code Search

MICR stands for Magnetic Ink Character Recognition. MICR Code is a numeric code which
uniquely identifies a bank branch participating in the ECS Credit scheme. MICR code consists of
9 digits e.g 400229128

First 3 digits represent the city (400229128 )

Next 3 digits represent the bank (400229128 )

Last 3 digits represent the branch (400229128)

The MICR Code allotted to a bank branch is printed on the MICR band of cheque leaves issued
by bank branches. in the country. As on November 30, 2010 there are more than 72,000 RTGS
enabled bank branches.
This website is made available to know MICR code for a particular bank branch that you are
interested.
According to the latest data released by National Payments Corporation of India (NPCI), the
total number of ATMs in the country is now 1,04,500 till October 2013.,Of these, 61,500 - or 59
per cent - belong to the public sector banks and State Bank of India Group,
Private sector and foreign banks together have installed 41,800 ATMs, or 40 per cent. The
remaining one per cent or 1,150 ATMs are of small, co-operative or rural banks.

Bank wise Details of ATMs Installed across India

Indian Banks together have an ATM network of 99,218 machines dispensing cash across the
country at end of June-2012. This includes ATM at Banks as well as Non-Bank locations. SBI

leads the pack with 22,469 ATMs followed by Axis Bank with 10,337 ATMs. The difference
between the First and Second is quite large for anyone else to come and fill the gap. Barclays and
American Express do not have any ATMs in India.
The Following chart shows Total Number of ATMs Installed by each and every Bank in India.
Name of Bank

On-site Off-Site Total

State Bank of India

12327

10142

22469

Axis Bank Ltd.

2096

8241

10337

HDFC Bank Ltd.

3905

5804

9709

ICICI Bank Ltd.

3074

6292

9366

Punjab National Bank

3009

3050

6059

Union Bank of India

2209

1930

4139

Canara Bank

1541

1566

3107

Bank of Baroda

1449

681

2130

Central Bank of India

1005

836

1841

Bank of India

876

851

1727

IDBI Ltd.

831

750

1581

Indian Overseas Bank

957

567

1524

State Bank of Hyderabad

1061

358

1419

Oriental Bank of Commerce

950

342

1292

Indian Bank

930

359

1289

Corporation Bank

738

541

1279

Syndicate Bank

1036

205

1241

Andhra Bank

501

562

1063

621

437

1058

Federal Bank Limited

684

358

1042

State Bank of Travancore

667

281

948

UCO Bank

562

354

916

Karur Vysya Bank Ltd

472

406

878

Kotak Mahindra Bank Ltd

338

520

858

State Bank of Patiala

642

215

857

State Bank of Bikaner &

Jaipur

State Bank of Mysore

584

237

821

United Bank of India

320

488

808

Vijaya Bank

596

156

752

IndusInd Bank Ltd

383

352

735

Citibank

58

643

701

South Indian Bank Ltd

545

155

700

Yes Bank Ltd.

255

388

643

Lakshmi Vilas Bank Ltd.

174

388

562

Dena Bank

433

112

545

Jammu & Kashmir Bank

353

175

528

City Union Bank Ltd

246

277

523

Bank of Maharashtra

360

142

502

ING Vysya Bank

234

212

446

Dhanalaxmi Bank Ltd.

172

225

397

Karnataka Bank Ltd.

232

147

379

244

331

175

155

330

Allahabad Bank

207

109

316

Standard Chartered Bank

97

203

300

Catholic Syrian Bank Ltd.

127

57

184

HSBC

69

73

142

RBS (ABN AMRO)

35

88

123

Punjab and Sind Bank

101

17

118

Ratnakar Bank Ltd.

57

44

101

Deutsche Bank

13

53

66

DBS Ltd.

31

36

American Express Bkg. Corp. 0

Barclays Bank

Development Credit Bank Ltd. 87

Tamilnadu Mercantile Bank
Ltd.

CRM in Banking Sector

Relevance of Customer Relationship Management in Banking

Nowadays, many businesses such as banks, insurance companies, and other service providers
realize the importance of Customer Relationship Management (CRM) and its potential to help
them acquire new customers retain existing ones and maximize their lifetime value. At this point,
close relationship with customers will require a strong coordination between IT and marketing
departments to provide a long-term retention of selected customers. This paper deals with the
role of Customer Relationship Management in banking sector and the need for Customer
Relationship Management to increase customer value by using some analytical methods in CRM
applications.
Why customer relationship management in banking? It is big question, Traditionally, few people
changed their banks unless serious problems occurred. Today, financial institutions can no longer

rely on these committed relationships or established marketing techniques to attract and retain
customers. The Internet revolution. Consumers largely select their banks based on how
convenient is the location of bank to their homes or offices.
The pressures of competitive and dynamic markets have contributed to the growth of CRM in the
Financial Services Sector. Analysis suggests that a 5% increase in customer retention can
increase profitability by 35% in banking business, 50% in insurance and brokerage, and 125% in
the consumer credit card market. Private Banks have traditionally viewed themselves as
exceedingly -'Customer Centric' offering what they believe to be highly personalized services to
the High Net Worth Customers.Here it necessary and essential for Banks for its survival - Need
for CRM in the banking industry

A Relationship-based Marketing approach has the following benefits: -

.Over time, retail bank customers tend to increase their holding of the other products from across
the range of financial products /services available.
.Long-term customers are more likely to become a referral source.
.The longer a relationship continues, the better a bank can understand the customer.
.Customers in long-term relationships are more comfortable with the service, the organization,
methods and procedures.
Hence it will be aware of that why any customer leave a bank? as bank is meant only deal in
money borrow and deposition is key feature of banking.

Private banking and CRM

1. Private Banks have traditionally viewed themselves as exceedingly 'Customer Centric' .
2. They believe in the concept of The wealthier the customers, the more demanding they
are.
3. The first step towards successfully winning, of private banking is to understand what
customers wants and needs are.
4. Their prime focus is to create differentiated customer experience

Gale Force CRM for Banking

Key Benefits of Implementing such CRM software for Banking:
1. 360-Degree Client View.
2. Manage Leads & Opportunities.
3. Automate Team- and Role-based Processes.
4. Generate Executive Reports.
5. Regulatory Compliance & Security.
The Analytical Datamart is customer centric and contains the following data:

1. Demographic (age, sex, cultural level, marital status, etc.)

2. Ownership of bank's product/services
3. Product/services usage (balance, transactions, etc.)
4. Global variables : profit, cost, risk, assets, liabilities
5. Relationship with the bank: segment, portfolio, etc
Driven by challenges on competition, rising customer expectation and shrinking margins, banks
have been using technology to reduce cost. Apart from competitive environment, there has been
deregulation as to rate of interest, technology intensive delivery channel like Internet Banking,
Tele Banking, Mobile banking and Automated Teller Machines (ATMs) etc have created a
multiple choice to user of the bank.
The banking business is becoming more and more complex with the changes emanating from the
liberalization and globalization. For a new bank, customer creation is important, but an
established bank it is the retention is much more efficient and cost effective mechanism.

CRM is a sound business strategy to identify the banks most profitable customers and prospects,
and devotes time and attention to expanding account relationships with Banking Industry in India
has undergone a rapid changes followed by a series of fundamental developments. Those
customers through individualized marketing, repricing, discretionary decision making, and
customized service-all delivered through the various sales channels that the bank uses. Under this
case study, a campaign management in a bank is conducted using data mining tasks such as
dependency analysis, cluster profile analysis, concept description, deviation detection, and data
visualization. Crucial business decisions with this campaign are made by extracting valid,
previously unknown and ultimately comprehensible and actionable knowledge from large
databases.
The idea of CRM is that it helps businesses use technology and human resources gain insight
into the behavior of customers and the value of those customers. If it works as hoped, a business
can: provide better customer service, make call centers more efficient, cross sell products more
effectively, help sales staff close deals faster, simplify marketing and sales processes, discover
new customers, and increase customer revenues. It doesn't happen by simply buying software
and installing it. For CRM to be truly effective an organization must first decide what kind of
customer information it is looking for and it must decide what it intends to do with that
information. For example, many financial institutions keep track of customers' life stages in
order to market appropriate banking products like mortgages or IRAs to them at the right time to
fit their needs. Next, the organization must look into all of the different ways information about
customers comes into a business, where and how this data is stored and how it is currently used.
One company, for instance, may interact with customers in a myriad of different ways including
mail campaigns, Web sites, brick-and-mortar stores, call centers, mobile sales force staff and
marketing and advertising efforts. Solid CRM systems link up each of these points. This
collected data flows between operational systems (like sales and inventory systems) and
analytical systems that can help sort through these records for patterns. Company analysts can
then comb through the data to obtain a holistic view of each customer and pinpoint areas where
better services are needed. In CRM projects, following data should be collected to run process
engine: 1) Responses to campaigns, 2) Shipping and fulfillment dates, 3)Sales and purchase data,
4) Account information, 5) Web registration data, 6) Service and support records, 7)
Demographic data, 8) Web sales data.

CRM Development
To be prepared to the changing economic conditions and, in particular, to a rapidly decreasing
inflation rate scenario Garanti Bank has started timely to focus on developing a customer
relationship management (CRM) system.The importance for the bank of managing the
relationships with their customers has been the drive of the joint projects that have been
developed with IBM in the last three years. During the projects a number of crucial technological
and architecture choices have been made to implement the entire process. Realizing the
importance of customer information availability the first of these projects has focused on the
problem of routinely collecting and cleansing data. The project has been undertaken by the bank
with the spirit that has characterized the whole CRM development. The project has promoted a
massive involvement of the branches, namely of the portfolio managers and campaigns have
been launched for popularizing among branch staff the importance of gathering and maintaining
reliable customer data. Another set of methods have been tested for customer not included in
portfolios (pool customers), such as mailing or distributing questionnaires in the branches or
using automatic teller machines (ATM) and the call center. Methods for data checking and
testing have been developed to be routinely employed by the bank's staff. Results obtained are
very good: for portfolio customers data available are respectively 98% for the commercial ones
and 85% for the retail ones. For pool customers availability goes down to 65%: this is a wellknown phenomenon due to the loose relationship with the latter customers.
Most sectors of the banking industry are trying to use CRM techniques to achieve a variety of
outcomes. In the area of strategy, they are trying to:

1. Create a customer-focused organization and infrastructure.

2. Secure customer relationships
3. Maximize customer profitability;
4. Identify sales prospects and opportunities;
5. Support cross and up-selling initiatives;
6. Manage customer value by developing propositions aimed at different customer
segments;
7. Support channel management , pricing and migration.
8. Gaining accurate picture of customer categories.

9. Assess the lifetime value of customers.

10. Understand how to attract and keep the best customers

Low real rates and a sharp rise in bank credit have been at the heart of Indias growth story over
the past three years. Nominal bank credit growth has accelerated from the bottom of 10.7% in
September 2003 to 30.5% currently. The current credit cycle is the longest credit cycle India has
witnessed since the early 1970s. Commercial credit to GDP has increased to 47% as at end-June
2006 from 35% in January 2003. Though it is still lower as compared to East Asia and Pacific
nations with the credit to GDP ratio of around 105%. Credit outstanding has increased by almost
US$190bn to US$380bn over the past three years. The most important point here is the rising
interest rates. Even though there is sharp rise in real interest rates, credit growth would not be
impacted due to higher demand from every sector like corporate, retail and agriculture. With the
banks increasing its deposits rates there will be a relatively higher time deposit growth in the
banking system, which will ensure easy flow of credit to the corporate sector. RBI has been
concerned about the strong credit growth in the retail and real estate sectors.

Over the past three years, only 44% of the incremental credit disbursed flowed to the industrial
and agriculture sectors. In a bid to slow this aggressive credit growth in sectors other than
industry and agriculture, RBI has initiated number of restraining measures which include
increasing risk weightage for commercial real estate-related loans to 150% from 100%, for
housing to 75% from 50% and for consumer loans (unsecured credit and credit cards) to 125%
from 100%. RBI has also increased the mandatory standard loan provisioning in specific sectors
(personal loans, capital market-related loans, residential loans greater than Rs2mn and
commercial real estate loans) to 1% from 0.4%.

Recruitment Trends in BSFI (Banking and Financial Services Industry)Industry

The Banking and Financial Services Industry is expected to recruit about 8.4 million people as
per the growth rate each year. BSFI workforce requirement between 2008 and 2022 is expected
to be about 4.2 million and sector may create up to 20 lakh new jobs in the next 5-10 years.
Advantaged by issuance of new licenses and efforts being made by the RBI and the Government
to expand financial services into rural areas, the hiring trend may further get a boost from the
public sector banks. Since most banking workforce is scheduled to retire in the times to come,
they would be in dire need of fresh talent. According Randstad India, global HR service provider

in India, the banking sector will generate 7-10 lakh jobs in the coming decade and the sector
would be the among top job creators in 2014.
According to Human Resource and Skill Requirements in the Banking, Financial Services &
Insurance Sector (2022) report, apart from the on-rolls employment there is significant
contractual employment across all the above segments through various financial positions such
as Direct Selling Agents (DSAs), Insurance agents, Mutual Fund Advisors, etc.
Challenges in BFSI
The major challenge faced by the Indian Banking and Financial sector is that the level of
financial exclusion in India is alarming and there is an urgent need to find a plausible solution to
the same. The IBABCG survey of banks revealed that the level of confidence in finding
profitable solutions for financial inclusion is not very high. Financial inclusion has solely been
the responsibility of public banks up until now, but by using inclusive growth as one of the
criteria for new licences (new banks have to open 25 per cent of their branches in rural areas);
the RBI will have made the new private sector banks responsible as well. Currently, public sector
banks have more branches than any other bank group in the rural and semi-urban areas.

The banking and insurance industry is challenged by competitive pressures, changes in customer
loyalty, stringent regulatory environment and entry of new players, all of which are pressuring
the organizations to adopt new business models, streamline operations and improve processes.

Road Ahead
An IBA-FICCI-BCG report suggests that Indias gross domestic product (GDP) growth will
make the Indian banking industry the third largest in the world by 2025. According to the report,
the domestic banking industry is set for an exponential growth in coming years with its assets
size poised to touch USD 28,500 billion by the turn of the 2025. With the deposits growing at a
CAGR of 21.2 per cent (in terms of INR) in the period FY 0613, there has been evident growth
in the overall industry.
This growth can be attributed to banks shifting focus to client servicing. Public as well as private
sector banks are underlining the importance of technology infrastructure, in order to improve
customer experience and gain a competitive edge. Utilizing the popularity of internet and mobile

banking, banks are increasingly adopting an integrated approach for assetliability match, credit
and derivatives risk management.

Growth of Banking in India of Scheduled Commercial Banks

Indicators

Number of Commercial Banks

Number of Branches

31 March of
2005

2006 2007

2008

2009

2010

2011

2012

2013

284

218 178

169

166

163

163

169

151

70,373 72,072 74,653 78,787 82,897 88,203 94,019 102,377 109,811

16

16

15

15

15

14

13

13

12

Deposit as percentage to GNP (at factor cost)

62%

64%

69%

73%

77%

78%

78%

78%

79%

Credit Deposit Ratio

63%

70%

74%

75%

74%

74%

76%

79%

79%

Population per Banks (in thousands)

About Organization

Kotak Mahindra Bank is an Indian bank and financial service firm established in 1985. It was
previously known as Kotak Mahindra Finance Limited, a non-banking financial company.
In February 2003, Kotak Mahindra Finance Ltd, the group's flagship company was given the
licence to carry on banking business by the Reserve Bank of India (RBI). Kotak Mahindra
Finance Ltd. is the first company in the Indian banking history to convert to a bank. As of 2011
to October 2013, it has more than 500 branches, over 1,000 ATMs and a consolidated balance
sheet of approx. US$ 2.9 billion.
The Bank has its registered office at Nariman Bhavan, Nariman Point, Mumbai.
History
The company was founded in 1985 by Uday Kotak. In 2004, the company converted to a
commercial bank when it received a license from the Reserve Bank of India, becoming the first
Indian finance company to do so.
In 2005, it made a significant investment when it bought stressed assets from a number of banks,
at full loan value of 10 billion.
Uday Kotak (born 15 March 1959) is an Indian businessman. He is the vice-chairman and
managing director of Kotak Mahindra Bank. He owns a 50% stake in Kotak Mahindra Bank,
which he founded and runs. Forbes estimated his wealth to be $4.1 billion in 2012. In 2006 he
ended a 14 year partnership with Goldman Sachs by acquiring its 25% stake in two subsidiaries

for $72 million.[2] In June 2014, he was named Ernst & Young World Entrepreneur of the Year
2014.

In January 2011, the bank reported a 32% rise in net profit to 1.88 billion for the quarter ended
December 2010 against

1.42 billion the corresponding quarter last year.[3] Kotak Mahindra

bank also reached the top 100 most trusted brands of India in The Brand Trust Report published
by Trust Research Advisory in 2011.

Type

Traded as

Public company
BSE: 500247
NSE: KOTAKBANK

Industry

Financial service

Founded

1985 (as Kotak Mahindra Finance Ltd)

Headquarters

Mumbai, Republic of India

Deposit accounts, Loans, Investment services, Business

Products

banking solutions, Treasury and Fixed income products

etc.

Revenue

109.63 billion (US$1.8 billion)(2011)[1]

Net income

15.69 billion (US$260 million)(2011)

Website

www.kotak.com

Date of Establishment

21-11 1985

Revenue

1462.04 ( USD in Millions )

Market Cap

681425.74781325 ( Rs. in Millions )

Corporate Address

27bkc,C 27, G Block, Bandra Kurla Complex,Bandra

(E)Mumbai-400051, Maharashtra
www.kotak.com

Management Details

Chairperson - Shankar Acharya

MD - Uday Kotak
Directors - Amit Desai, Anand Mahindra, Asim Ghosh,
Bina Chandarana, C Jayaram, Cyril Shroff, Dipak Gupta,
K M Gherda, N P Sarda, Pradeep N Kotak, Prakash Apte,
S Mahendra Dev, Shankar Acharya, Shishir Bajaj, Shivaji
Dam, Sudipto Mundle, Uday Kotak

Business Operation

Bank - Private

Background

Established in 1985, the Kotak Mahindra group has been

one of India's most reputed financial conglomerates. In
February 2003, Kotak Mahindra Finance Ltd, the group's
flagship company was given the license to carry on
banking business by the Reserve Bank of India (RBI).
This approval created banking history since Kotak
Mahindra Finance Ltd. is the first non-banking finance
company in India t

Financials

Total Income - Rs. 101668.26 Million ( year ending

Mar 2014)
Net Profit - Rs. 15025.19 Million ( year ending
Mar 2014)

Company Secretary

Bina Chandarana

Bankers

No Bankers Details in A.R

Auditors

SB Billimoria & Co, SR Batliboi & Co, SR Batliboi &

Co, SR Batliboi & Co, SR Batliboi & Co, SB Billimoria
& Co, SB Billimoria & Co, SB Billimoria & Co, SB
Billimoria & Co, Deloitte Haskins & Sells, CC Chokshi
& Co, VC Shah & Co, VC Shah & Co, CC Chokshi &
Co, VC Shah & Co, CC Chokshi & Co, VC Shah & Co,

CC Chokshi & Co, SB Billimoria & Co

To be the most trusted Global Indian Financial Services brand and the most preferred financial
services employer with focus on creating value.

Key milestones in the company history included;

Yea

Milestone

1986 Kotak Mahindra Finance Limited starts the activity of Bill Discounting
1987 Kotak Mahindra Finance Limited enters the Lease and Hire Purchase market
1990 The Auto Finance division is started
1991

The Investment Banking Division is started. Takes over FICOM, one of India's largest
financial retail marketing networks

1992 Enters the Funds Syndication sector

Brokerage and Distribution businesses incorporated into a separate company - Kotak
1995 Securities. Investment Banking division incorporated into a separate company - Kotak
Mahindra Capital Company
The Auto Finance Business is hived off into a separate company -Kotak Mahindra Prime
Limited (formerly known as Kotak Mahindra Primus Limited). Kotak Mahindra takes a
1996 significant stake in Ford Credit Kotak Mahindra Limited, for financing Ford vehicles. The
launch of Matrix Information Services Limited marks the Group's entry into information
distribution.
1998

Enters the mutual fund market with the launch of Kotak Mahindra Asset Management
Company.

2000 Kotak Mahindra ties up with Old Mutual plc. for the Life Insurance business.
Kotak Securities launches its on-line broking site (now www.kotaksecurities.com).
2000 Commencement of private equity activity through setting up of Kotak Mahindra Venture
Capital Fund.

2001 Matrix sold to Friday Corporation

2001 Launches Insurance Services
2003

Kotak Mahindra Finance Ltd. converts to a commercial bank - the first Indian company to
do so.

2004 Launches India Growth Fund, a private equity fund.

2005

Kotak Group realigns joint venture in Ford Credit; Buys Kotak Mahindra Prime (formerly
known as Kotak Mahindra Primus Limited) and sells Ford credit Mahindra.

2005 Launches a real estate fund

2006

Bought the 25% stake held by Goldman Sachs in Kotak Mahindra Capital Company and
Securities

2008 Launched a Pension Fund under the New Pension System

Kotak Mahindra Bank Ltd. Opened a representative office in Dubai
2009
Entered Ahmedabad Commodity Exchange as anchor investor
2010

2011

Ahmedabad Derivatives and Commodities Exchange, a Kotak anchored enterprise, became

operational as a national commodity exchange.
Kotak Mahindra Bank Ltd entered into a Business Cooperation arrangement with CIMB
Group Sdn Bhd, Malaysia.

The Global Indian Financial Services Brand

Our customers will enjoy the benefits of dealing with a global Indian brand that best understands
their needs and delivers customized pragmatic solutions across multiple platforms.
We will be a world class Indian financial services group. Our technology and best practices will
be bench-marked along international lines while our understanding of customers will be uniquely
Indian.
We will be more than a repository of our customers' savings. We, the group, will be single
window to every financial service in a customer's universe.

The Most Preferred Employer in Financial Services

A culture of empowerment and a spirit of enterprise attracts bright minds with an entrepreneurial
streak to join us and stay with us.
Working with a home grown professionally managed company, which has partnerships with
international leaders, gives our people a perspective that is universal as well as unique.
The Most Trusted Financial Services Company
We will create an ethos of trust across all our constituents. Adhering to high standards of
compliance and corporate governance will be an integral part of building trust.
Value Creation
Value creation rather than size alone will be our business driver. In March 2006, the Reserve
Bank of India allowed Warburg Pincus to increase its stake in Kotak Mahindra Bank (a private
sector bank) to 10%. This is the first time an investor has been allowed to hold more than 5% in
a private sector bank since the RBI announced norms in 2005 that any stake exceeding 5% in the
private sector banks would need to be vetted by them.

Kotak other business (Verticals) Kotak Mahindra is one of India's leading banking and
financial services group, offering a wide range of financial services that encompass every sphere
of life.
1.

Kotak Mahindra Bank Ltd

2.

Kotak Securities Ltd

3.

Kotak Mahindra Capital Company (KMCC)

4.

Kotak Mahindra Prime Ltd (KMPL)

5.

Kotak International Business

6.

Kotak Mahindra Asset Management Company Ltd (KMAMC)

7.

Kotak Private Equity Group (KPEG)

8.

Kotak Realty Fund

Kotak Mahindra Bank Ltd

Kotak Mahindra Bank Ltd is a one stop shop for all banking needs. The bank offers personal
finance solutions of every kind from savings accounts to credit cards, distribution of mutual
funds to life insurance products. Kotak Mahindra Bank offers transaction banking, operates
lending verticals, manages IPOs and provides working capital loans. Kotak has one of the largest
and most respected Wealth Management teams in India, providing the widest range of solutions
to high net worth individuals, entrepreneurs, business families and employed professionals.For
more information, please visit the Kotak Mahindra Bank website Kotak Mahindra Old Mutual
Life Insurance Ltd.

Accounts & Deposits

Savings Accounts
Current Accounts
Term Deposits
Jifi Account
Kotak 3-in-1 Account

KMBL Offer following types banking services

1. Banking
2. Personal
3. NRI Banking
4. SME Banking Privilege
5. Whole sale banking
Personal Banking

Accounts & Deposits.

Loans

Cards

Investments & Insurance

Financial Inclusion

Convenience Banking

NRI Banking

Accounts & Deposits

Transfer Money

Loans

Cards

Investments & Insurance

Convenience Banking

Privy League

Investment and Insurance Products

Personal Banking

Business Banking

Special Services

Financial Planning

Privileges

Locations

Wholesale Banking

Accounts

Funded Products

Non - Funded Products

Treasury Products

Investment Products

Convenience Banking

SME Banking

Accounts

Loans & Overdrafts

Working Capital Finance

Dealer Finance

Trade Services

Convenience Banking

Loans

Home Loans

Personal Loans

Loan Against Property

Loan Against Securities

Gold Loans

Cards

Credit Cards
Credit Card Services
Kotak Offers
Gold Debit Card
Privy League Platinum Debit Card

Convenience Banking

Net Banking
Mobile Banking
Kotak Payment Gateway
Phone Banking
ATM Network

Special Services

Kotak Offers
InstaPay
Shoppe Cash
CPP Card Protection Plan
Kotak Multi Currency World Travel Card

Kotak Mahindra Old Mutual Life Insurance Ltd

Kotak Mahindra Old Mutual Life Insurance Ltd is a 74:26 joint venture between Kotak
Mahindra Bank Ltd., its affiliates and Old Mutual plc. A Company that combines its
international strengths and local advantages to offer its customers a wide range of innovative life
insurance products, helping them take important financial decisions at every stage in life and stay
financially independent. The company covers over 3 million lives and is one of the fastest
growing insurance companies in India. www.kotaklifeinsurance.com

Investments & Insurance

Life Insurance
Mutual Funds
Demat Account
New Pension Scheme

Kotak Securities Ltd

Kotak Securities is one of the largest broking houses in India with a wide geographical reach.
Kotak Securities operations include stock broking and distribution of various financial products
including private and secondary placement of debt, equity and mutual funds.
Kotak Securities operate in five main areas of business:

Stock Broking (retail and institutional)

Depository Services

Portfolio Management Services

Distribution of Mutual Funds

Distribution of Kotak Mahindra Old Mutual Life Insurance Ltd products

Kotak Securities website www.kotaksecurities.com

Kotak Mahindra Capital Company (KMCC)

Kotak Investment Banking (KMCC) is a full-service investment bank in India offering a wide
suite of capital market and advisory solutions to leading domestic and multinational
corporations, banks, financial institutions and government companies.

Our services encompass Equity & Debt Capital Markets, M&A Advisory, Private Equity
Advisory, Restructuring and Recapitalization services, Structured Finance services and
Infrastructure Advisory & Fund Mobilization.
Kotak Investment Banking website www.kmcc.co.in

Kotak Mahindra Prime Ltd (KMPL)

Kotak Mahindra Prime Ltd is among India's largest dedicated passenger vehicle finance
companies. KMPL offers loans for the entire range of passenger cars, multi-utility vehicles and
pre-owned cars. Also on offer are inventory funding and infrastructure funding to car dealers
with strategic arrangements via various car manufacturers in India as their preferred
financier.KMPL website www.carloan.kotak.com

Kotak International Business

Kotak International Business specialises in providing a range of services to overseas customers
seeking to invest in India. For institutions and high net worth individuals outside India, Kotak
International Business offers asset management through a range of offshore funds with specific
advisory and discretionary investment management services.www.investindia.kotak.com

Kotak

Mahindra

(KMAMC)

Asset

Management

Company

Ltd

Kotak Mahindra Asset Management Company offers a

complete bouquet of asset management products and services that are designed to suit the diverse
risk return profiles of each and every type of investor. KMAMC and Kotak Mahindra Bank are
the sponsors of Kotak Mahindra Pension Fund Ltd, which has been appointed as one of six fund
managers to manage pension funds under the New Pension Scheme (NPS).

Kotak Private Equity Group (KPEG)

Kotak Private Equity Group helps nurture emerging businesses and mid-size enterprises to
evolve into tomorrow's industry leaders. With a proven track record of helping build companies,
KPEG also offers expertise with a combination of equity capital, strategic support and value
added services. What differentiates KPEG is not merely funding companies, but also having a
close involvement in their growth as board members, advisors, strategists and fund-raisers.
KPEG website www.privateequityfund.kotak.com

Kotak Realty Fund

Kotak Realty Fund deals with equity investments covering sectors such as hotels, IT parks,
residential townships, shopping centres, industrial real estate, health care, retail, education and
property management. The investment focus here is on development projects and enterprise level
investments, both in real estate intensive businesses.
Kotak Realty Fund website www.realtyfund.kotak.com

Kotak Mahindra Group - Senior Management

Get acquainted with the Board of Directors at the Kotak Mahindra Group and meet some of the
most knowledgeable and recognised names in the financial world.

Mr. Uday S. KotakExecutive Vice Chairman and Managing Director

Mr. Uday Kotak, is the Executive Vice-Chairman and Managing Director of the Bank, and its
principal founder and promoter. Mr. Kotak is an alumnus of Jamnalal Bajaj Institute of
Management Studies.
In 1985, when he was still in his early twenties, Mr Kotak thought of setting up a bank when
private Indian banks were not even seen in the game. First Kotak Capital Management Finance

Ltd (which later became Kotak Mahindra Finance Ltd), and then with Kotak Mahindra Finance
Ltd, Kotak became the first non-banking finance company in India's corporate history to be
converted into a bank. Over the years, Kotak Mahindra Group grew into several areas like stock
broking and investment banking to car finance, life insurance and mutual funds.
Among the many awards to Mr Kotak's credit are the CNBC TV18 Innovator of the Year Award
in 2006 and the Ernst & Young Entrepreneur of the Year Award in 2003. He was featured as one
of the Global Leaders for Tomorrow at the World Economic Forum's annual meet at Davos in
1996. He was also featured among the Top Financial Leaders for the 21st Century by Euromoney
magazine. He was named as CNBC TV18 India Business Leader of the Year 2008 and as the
most valued CEO by businessworld in 2010.

Mr. C. JayaramJoint Managing Director

Mr. C. Jayaram, is a Joint Managing Director of the Bank and is currently in charge of the
Wealth Management Business of the Kotak Group. An alumnus of IIM Kolkata, he has been
with the Kotak Group since 1990 and member of the Kotak board in October 1999. He also
oversees the international subsidiaries and the alternate asset management business of the group.
He is the Director of the Financial Planning Standards Board, India. He has varied experience of
over 25 years in many areas of finance and business, has built numerous businesses for the
Group and was CEO of Kotak Securities Ltd. An avid player and follower of tennis, he also has a
keen interest in psephology.

Mr. Dipak GuptaJoint Managing Director

An electronics engineer and an alumnus of IIM Ahmedabad, Mr. Gupta has been with the Kotak
Group since 1992 and joined the board in October 1999.

He heads commercial banking, retail asset businesses and looks after group HR function. Early
on, he headed the finance function and was instrumental in the joint venture between Kotak
Mahindra and Ford Credit International. He was the first CEO of the resulting entity, Kotak
Mahindra Primus Ltd.

Kotak Investor Relation

Our Board of Directors

Dr. Shankar Acharya Non-Executive

Mr. Dipak Gupta

Chairman

Joint Managing Director

Mr. Uday Kotak

Executive Vice-Chairman and
Managing Director

Mr. C. Jayaram
Joint Managing Director

Awards
At Kotak Mahindra Group we take a client-centric view and constantly innovate to provide you
with the best of services and infrastructure. We have regularly received accolades that stand
testimony to our success in this endeavour. Some of our recent achievements are:

Investment Banking
Banking
Insurance
Securities

Investment Banking Awards

1. Finance Asia-Best Investment Bank in India, 2010
2. Best Equity House in India, 2010
3. Best Broker in India, 2010
4. Asia money-Best Domestic Equity House, 2010
5. Best Local Brokerage in the Asia money Brokers Poll 2010
6. Global Finance-Best Investment Bank in India, 2010
7. Euro money Real Estate Poll-Best Bank for Equity Finance in India, 2010
8. Asset Asian Awards-Best Domestic Investment Bank, 2010
9. Finance Asia Country Awards for Achievement-Best Investment Bank in India, 2006, 2007,
2008, 2009 & 2010
10. Best Equity House in India, 2008 & 2010
11. Asia money Best Domestic Bank Awards
12. Best Domestic Equity House, 2008, 2009 & 2010
13. IFR Asia-India Equity House of the Year, 2008
14. Global Finance-Best Investment Bank in India, 2008, 2009 & 2010
15. Asset Asian Awards-Best Domestic Investment Bank, 2006, 2007, 2008 & 2009

Banking Awards
1. ICAI Award-Excellence in Financial Reporting under Category 1 - Banking Sector for the year
ending 31st March, 2010
2. Asiamoney-Best Local Cash Management Bank 2010
3. IDG India-Kotak won the CIO 100 'The Agile 100' award 2010

4. IDRBT-Banking Technology Excellence Awards Best Bank Award in IT Framework and

Governance Among Other Banks' - 2009
5. Banking Technology Award for IT Governance and Value Delivery, 2008
6. IR Global Rankings-Best Corporate Governance Practices - Ranked among the top 5 companies
in Asia Pacific, 2009
7. FinanceAsia-Best Private Bank in India, for Wealth Management business, 2009
8. Kotak Royal Signature Credit Card-Was chosen "Product of the Year" in a survey conducted by
Nielsen in 2009
9. IBA Banking Technology Awards-Best Customer Relationship Achievement - Winner 2008 &
2009
10. Best overall winner, 2007-Best IT Team of the Year, 4 years in a row from 2006 to 2009
11. Best IT Security Policies & Practices, 2007
12. Euromoney-Best Private Banking Services (overall), 2009
13. Emerson Uptime Champion Awards-Technology Senate Emerson Uptime Championship Award
in the BFSI category, 2008

Insurance Awards
1. Outlook Money.-Kotak Platinum Advantage Plan - Ranked 1st in Type II ULIP category, 2008
2. Kotak Long Life Wealth Plus Plans - Ranked 4th in the Type I ULIPs category

Securities Awards
1. FinanceAsia-Best Broker in India - 2010
2. CNBC Financial Advisor Awards-Best Performing Equity Broker, 2008 & 2009
3. Asiamoney Brokers Poll-Best Local Brokerage, 2006, 2007, 2008 & 2009
4. Best Analyst in India Sanjeev Prasad, 2005, 2006, 2007, 2008 & 2009
5. FinanceAsia Country Awards for Achievement-Best Broker in India, 2006, 2009 & 2010
6. Thomson Extel Surveys Awards-India's Leading Equity House, 2007
7. SuperBrands Council of India-Business Superbrand India, 2008

Competitor
Company
HDFC Bank
ICICI Bank
Axis Bank
Kotak Mahindra
Bank
Indusind Bank
Yes Bank
ING Vysya Bank
Federal Bank
Centurion Bk of
Punj
Karur Vysya
Bank
South Indian
Bank
City Union Bank
Bank of Raj
Standard
Chartered
Karnataka Bank
DCB Bank
Lakshmi Vilas
Bank
Dhanlaxmi Bank
United Western
Bank Ltd
Global Trust
Bank

Sales
(Rs.Million)
411355.34
NA
306411.55

Current Change
Price
(%)
832.00
-0.43
1451.40
-0.52
1953.50
-0.60

P/E
Market 52-Week
Ratio Cap.(Rs.Million) High/Low
23.74
2012863.35 861/528
17.19
1686889.75 1590/759
14.90
926604.89 1990/764

87671.15

894.70

1.18

45.35

681425.75

972/588

82535.34
99813.52
52052.19
69460.81

540.05
540.00
622.80
124.75

-0.10
-0.25
-0.22
-0.36

19.04
13.89
18.02
12.77

284475.32
224768.09
118550.06
107096.00

587/318
588/216
723/406
136/44

12685.30

41.40

0.00

52.93

78932.68

43/41

42424.29

478.10

-0.30

11.98

51449.49

510/298

NA

32.85

0.46

8.67

44015.96

35/19

21887.50
13594.89

76.10
212.10

0.20
0.00

11.88
0.00

41221.12
34222.35

79/38
214/207

90834.94

0.00

0.00

0.94

27804.00

133/108

41888.28
11282.59

132.10
83.90

-0.86
1.39

8.07
13.54

25106.80
20733.08

151/69
88/38

17605.48

109.80

2.81

17.47

10419.48

112/58

13079.99

52.20

-0.19

0.00

6586.38

61/24

4866.15

25.90

0.00

0.00

1392.59

0/0

5395.97

1.17

0.00

0.00

NA

0/0

Our Corporate Identity

The symbol of Kotak Mahindra Group is the 'Ka', of distinctly Indian origin; while its curves
form the universal 'infinity' sign, thus reflecting our uniquely global Indian personality.

The symbol of the infinite Ka reflects our global Indian personality. The Ka is uniquely Indian
while its curve forms the infinity sign, which is universal. One of the basic tenets of economists
is that man's needs are unlimited. The infinite Ka symbolises that we have infinite number of
ways to meet those needs.

Corporate Responsibility
Kotak Mahindra views Corporate Social Responsibility as an investment in society and in its
own future. Kotak uses the power of its human and financial capital to help in transforming
communities into vibrant, desirable places for people to live.

Community investment and development

1. Sustainability-An integral part of all Kotak Mahindra Group activities is to be consistently
responsible to shareholders, clients, employees, society and the environment.
2. Economic Development-By helping people achieve their financial goals, Kotak strengthens
the fabric of communities and helps them overcome unemployment and poverty to help them
shape their future.
3. Doing My Bit-A growing number of employees are committed to civic leadership and
responsibility with the support and encouragement of the Kotak Group. A number of
employees have been involved in strengthening communities through voluntary work,
payroll giving and management inputs.
For any CSR related queries, please contact:
Group CSR
Kotak Mahindra Bank Ltd
Tel. Board +91 22 6720 6720
Email: cr@kotak.com

Customer Service

Welcome to Kotak Bank Customer Service!

We are committed to serve you better and meet all your banking needs. You can find important
information here on how to contact us, file grievance, download forms, explore offers & deals,
tools & utilities, and resolve queries with FAQs.

Call Us
Call our Customer Contact Center on 1800 102 6022 pan India 24-hour# toll free**

Call Us

Abroad-Helpline Numbers -91 22

6600 6022

AUSTRALIA - 001180044990000,

NRI Customers and Kotak Multi Currency

HONG KONG - 00180044990000,

World Travel Card customers can call the

U. K. - 0080044990000,

CANADA - 18557684020,

SINGAPORE-8001013054

Banking-Helpline Numbers -1800

102 6022
Credit Card-Helpline Numbers -1800
102 6022

following respective toll free numbers for

each country:
USA - 1855 365 6767,
Email Us

Get in touch with us through email on service.bank@kotak.com

Email Us--Customer Service Center

Kotak Mahindra
Bankservice.bank@kotak.com

Kotak Credit Cardservice.cards@kotak.com

Kotak Life Insurancelifeexpert@kotak.com

clientservicedesk@kotak.com

Kotak Securitiesservice.securities@kotak.com

Kotak Car Financeservice.carfinance@kotak.com

Kotak SME

Banking -customerfirst@kotak.com

Registered Office
27 BKC, C 27, G Block,
Bandra Kurla Complex,
Bandra (E), Mumbai - 400 051

Write to Us
Registered Office
Kotak Mahindra Bank

Customer Service Centre

Registered Office
27 BKC, C 27, G Block,
Bandra Kurla Complex,
Bandra (E), Mumbai - 400 051

24 Hour Customer Care Toll Free: 1800 102

6022
Email: service.bank@kotak.com
To locate our nearest Branches click here
Letter: P.O. Box: 16344, Mumbai - 400013
To report any security related issues, frauds
or vulnerabilities with regards to Kotak
Mahindra Bank systems and services, please
email us at: itsecurity.bank@kotak.com

Kotak Life Insurance

Registered Office

Customer Service Centre

Kotak Mahindra Old Mutual Life Insurance

Ltd.
4th Floor, Vinay Bhavya Complex,
159 A, CST Road,
Kalina, Santacruz East,
Mumbai: 400 098.
Tel : +91 022 6599 3626
Fax : +91 022 6672 6254
Email : lifeexpert@kotak.com

Kotak Mahindra Old Mutual Life Insurance

Ltd.
Kotak Infiniti, 21, Infinity Park, 5th Floor,
Zone II,
Off Western Express Highway,
General A K Vaidya Marg,
Malad [E], Mumbai - 400 097
Toll Free : 1800 209 8800
clientservicedesk@kotak.com

SMS Banking

SMS Banking is available for registered customers only.

SMS Banking
1. SMS Banking is available for registered customers only.
2. Get latest updates on your account balance, salary credits, large debits, large credits,
holding value and much more.
3. Simply send an SMS to 9971056767 or 5676788 to get the details for following
updates:

Banking Accounts
Request

Information

MESSAGE FORMAT

EXAMPLE
BAL 1234

Gives you the balance for

BAL(space)Last 4 digits
Balance Inquiry the specified account
Where 1234 is the last
of Account Number
number.
4 digits of your
account number
TXN 1234
Gives you the last three
Last 3
TXN (space)Last 4 digits
transactions in the
Where 1234 is the last
Transactions
of Account Number
specified account.
4 digits your Account
Number
STMT 1234
Last 3 months Gives you the Last 3
STMT(space)Last 4 digits
statement on
months E-statement on the
Where 1234 is the last
of Account Number
email
registered email id.
4 digits your Account
Number
STMT 1234 JAN
Statement on
Gives you the E-Statement STMT(space)Last 4 digits
email for a
for a particular month in of Account
Where 1234 is the last
particular month
the current financial year Number(space)First 3
4 digits your account
in the current
on the registered email id. letters of the month
number,JAN First 3
financial year
letters of the month
STMT 1234 FEB13
STMT(space)last 4 digits
SEP13
of Account Number
(space) for Start period.
Where 1234 is the last
Gives you the E-Statement First 3 letters of the
Statement on
4 digits your account
for a particular period of month followed by last 2
email for any
number FEB13
any year on the registered digits of the year (space)
particular period
SEP13 to check the
email id.
for End Period. First 3
statement on email of
letters of the month
your this account
followed by last 2 digits
from February 2013
of the year
till September 2013
CHQSTATUS 1234
000512
CHQSTATUS(space)Last
Gives you the Cheque
Cheque Status
4 digits of Account
Status Whether it is Paid
Where 1234 is the last
Inquiry
Number(space) 6 digit
or Unpaid.
4 digits your account
cheque no
number and 000512 is
complete cheque

number

New Cheque
Book Request

Mobile App
Download

New Cheque book will be

generated and dispatched
at the preferred registered
CHQBOOK 1234
address. Cheque book
CHQBOOK(space)Last 4
charges, if any, would be
Where 1234 is the last
digits of Account Number
applicable as per charge
4 digits your account
schedule. For charges
number
kindly refer charge
schedule.
Helps you to download
mobile banking
MOBILE
MOBILE
application

Interbank Mobile Payment Service (IMPS)

To generate an
MMID(Mobile
Mobile Money Money
Identifier
Identifier)- a 7
(MMID)
digit code issued
Generation/Retrie by participating
val
banks to their
customers for
availing IMPS.
To cancel
MMID
MMID(Mobile
Cancellation for Money
an account
Identifier)for an
account

MMID 1234
MMID(space) Last 4 digits
Where 1234 is the last 4
of Account Number.
digits of your account
number.

MMIDREVOKE 1234567
MMIDREVOKE(space) 7
digit MMID of your
Where 1234567 is the 7
account
digit MMID of your account
MMIDCANCEL

To cancel
MMID
MMID(Mobile
Cancellation for
MMIDCANCEL
Money Identifier)
all accounts
for all accounts

MMID
Reinstation

To
MMIDREINST(space) 7
revive/reinstate
digit MMID of your
MMID for a
account
particular account

Blank/no account number

mentioned means MMID
for all accounts shall be
cancelled
MMIDREINST(space)123
4567
Where 1234567 is the 7
digit MMID of your account
OTP 1234567 1010

Helps you to
OTP generation- authenticate/valid OTP(space)(MMID)(space)
IMPS MIP
ate a merchant Last 4 digits of Customer where 1010 is the last 4
transaction
Induced Payment Relationship Number
digits of Customer
for an IMPS txn
Relationship Number.

Investment Accounts
MFACCT 1010
Know Your
Account No.

Holding Value

Gives you the Account

MFACCT(space)Last
number of your Investment 4 digits of Customer Where 1010 is the Last
A/c.
Relationship Number 4 digits of Customer
Relationship Number
MFBAL 1010
Gives you the details of
MFBAL(space)Last 4
your holding Value in
digits of Customer
Where 1010 is the Last
Investment A/c.
Relationship Number 4 digits of Customer
Relationship Number

Demat Accounts

Know Your
Account No.

Gives you the Account

number of your Demat
A/c.

Holding Value

Gives you the details of

your holding Value in
Demat A/c.

DPACCT 1007
DPACCT(space)Last 4
digits of Customer
Where 1007 is the Last
Relationship Number 4 digits of Customer
Relationship Number
DPBAL 1007
DPBAL(space)Last 4
digits of Customer
Where 1007 is the Last
Relationship Number 4 digits of Customer
Relationship Number

Locator
Gives information of all
Know the nearest Kotak ATM addresses
ATM(space)6 digit
ATM
(both offsite and branch) as postal code
per postal code provided
Gives information of all
Know the nearest
BRANCH(space)6
Kotak Branch addresses as
Branch
digit postal code
per postal code provided

ATM 400001
Where 400001 is your
6 digit postal code
BRANCH 400001
Where 400001 is your
6 digit postal code

PIN Regeneration

Net Banking

Gives a confirmed receipt

of your Net Banking
NETPIN(space)Last 4
Password generation that is digits of Customer
sent to your registered
Relationship Number
mailing address.

NETPIN 1234
Where 1234 is the last
4 digits your account
number

Phone Banking

Debit Card

Gives a confirmed receipt

PHONEPIN 1234
of your Phone Banknig
PHONEPIN(space)Last
Password generation that is 4 digits of Customer Where 1234 is the last
sent to your registered
Relationship Number 4 digits of Customer
mailing address.
Relationship Number
Gives a confirmed receipt
DEBITPIN 5678
of your Debit Card
DEBITPIN(space)Last
Password generation that is 4 digits of Debit Card Where 5678 is the last
sent to your registered
Number
4 digits of your Debit
mailing address.
Card Number

SME Banking
SMS us and we will call you back

SERV (space) CRN Number

Debit Cards
POSACT 5678
Activation of
Helps to activate debit card POSACT(space)Last 4
Debit Card for use
to be used at merchant
digits of Debit Card Where 5678 is the last
at Merchant
establishments
Number
4 digits of your Debit
Establishments
Card Number

Credit Cards
To Know
Your current
amount due
Your amount due
as per last
statement
Your last three
transactions
Your last payment
received
Your total spends
this month
Your available
credit balance
Your credit card
application status

Your SMS
Kotak's Reply
CCBAL < Last 4 digits of
Total outstanding on Kotak Card XX1234 on
your Kotak Credit Card
31-Jan-2012 18:45 is Rs. 10000.00
Number >
CCDUE < Last 4 digits of Total Due on Kotak Card XX1234 is Rs.
your Kotak Credit Card 10000.00, Min amt Rs. 1000.00, due by 17Number >
Feb-2012.
Last 3 transaction on Kotak Card XX1234
CCTXN < Last 4 digits of
a) 06-Jan-12 Rs. 407.00 DR
your Kotak Credit Card
b) 07-Jan-12 Rs. 867.00 DR
Number >
c) 25-Jan-12 Rs. 900.00 DR
CCPYMT < Last 4 digits
Payment of Rs. 8000.00 received on 14-Febof your Kotak Credit Card
2012, subject to realisation.
Number >
CCSPND < Last 4 digits
The total retail spends on your Kotak Card in
of your Kotak Credit Card
the current bill is Rs. 10000.00
Number >
CCAVBL < Last 4 digits Total outstanding on Card No XX1234 on 31of your Kotak Credit Card Jan-2012 is Rs. 10000.00. Avbl Cash limit is
Number >
Rs. 4000.00. Avbl cr Limit is Rs. 20000.00
You will receive an SMS with details
CCAPP < your 13 digit
depending on whether your application is
Application Number >
approved, declined or in process.

Purpose of Study
As the Banking services becomes very speedy and consumer looking forward services on
arms length distance , he/she expected services within seconds and sharing their account and
investment related information quickly on their gadget, In this competitive edge ,it will be
prior responsibility of bank operation to satisfy consumer need

and maintained the

communication faster
This study of customer satisfaction helps in identifying the various factors related to the
satisfaction of the customer through which a company can establish loyal customers and
retains its growth by prospective customers
Measuring customer satisfactions becomes very essential for the company to be effective and
efficient by adopting various related measures and forming a suitable marketing strategy.

Objective of study
a)

Primary objective of the study is to analyses the customer value and satisfaction of
Kotak Mahindra Bank.

b) To identify the problems with Kotak Mahindra banks services.

c)

To find out the customer expectation and preferences from Bank service.
Introduction.

RESEARCH METHODOLOGY
Research refers to find out new.

Research design
Since the researcher made an attempt to measure the various contributing factors of customer
satisfaction & their association with selected socio-demographic variables a descriptive
research design was adopted.

Data collection method

Primary data

Secondary Data

The primary data collection has been undertaken through Personal Interview, and
Questionnaire.

Primary data Questionnaire/Telephonic interaction/Survey based data collection from Kotak

Mahindra Bank account holder database or visiting in Bank branch ..

Secondary data Kotak bank data ,Bank Industry profile ,details are collected from journals.
Websites, books and magazines.

The Secondary data collection would be gathered through journals, books and
through internet.

Sampling

Universe Account holder of Kotak Mahindra bank, The Mall

Sample size of 100

Sample area Bank branch , The mall

The sampling adopted for people survey is convenient sampling. The people are surveyed on
a convenient basis at Kanpur, to know their and satisfaction level. The study is conducted
based on Questionnaire through personal interaction with the customer on their satisfaction
level.

Research Approach
According to their objective, type of research adopted is based on the, convenient sampling
method through Questionnaire survey based study of Bank account holders.

Personal Interview
Respondents being just 100 in numbers, personal interview to

make the study more

effective customer were net in person and were asked questions and questionnaires were
duty filled.

Questionnaire method
A detailed questionnaire was prepared on the basis of customer value and
satisfaction done in mind to come out with the effective solutions, Data was collected
from various sources like reference book and also from various employees in the
organization.
The questionnaire consists of the following
Personal data
1. Influencing factors that opt for Kotak Mahindra Bank
2. Problem with Specific banking service
3. Customer relation management
4. Other choice of services
5. Suggestion for improving the services

Statistical Method & Tools Used

Tabular representation Percentage Pie chart bar diagram and chi-Square test was applied .

Limitation of study
The study is subjected to the following limitations:
1. The survey is based on the sample size of 100 employees.
2. Time constant .
3. Secondary data figure last 5 years.
4. Since customer value and satisfaction is a psychological concept the answer may
depend upon time, moods and mentality of the customer.
5. Presence of sampling errors.
6. The study could have been made more elaborate, but if was confided to

limited number of

respondents due to constraints.

7. Customer value and satisfaction is a highly sensitive topic and many of

the respondents were not honest with their answer and noticed to be reluctant
to openly voice their problem, in spite of being assured that the response would
be highly confidential.

DATA ANALYSIS AND INTERPRETATION

1. Age description

Age factor
Series1

Series2

36 to 50
years , 46

26 to 35
years , 32
Above 51
years , 16
18 to 25
years , 6
6%
18 to 25 years

18 to 25 years
6
6%

46%

32%
26 to 35 years

26 to 35 years
32
32%

36 to 50 years

36 to 50 years
46
46%

Interpretation:
36 to 50 years people use banks accounts facility.

16%
Above 51 years

Above 51 years
16
16%

Total
100
100%

2. What is your monthly income?

Monthly Income
<20000

20001-25000

25001-40000

4%
19%

>400000

Others

16%
8%

53%

<20000
16
16%

20001-25000
8
8%

25001-40000
52
52%

Interpretation:
Upto 52% have monthly income is lies
between 25000- 40000 and less than 18%
people have 400000 income.

>400000
18
18%

Others Total
4
100
4%
100%

3. Which kind of bank account you have?

Type of Bank Account

17%

0%

35%

Current a/c
Saving a/c
NRI a/c
Privileged a/c

48%

Current a/c

Saving a/c

NRI a/c

Privileged a/c

Total

35

48

17

100

35%

48%

17%

100%

Interpretation:
48% have prefer savings account and 35% people prefer current account and 17% privileged
account.

4. How much transaction you make in a month?

Transaction in a month
Series2

Total
>8
8
4
2

Series1

100%

100
35%

35
0

0
44%

44
21%

2
21
21%

21

4
44
44%

8
0
0

>8
35
35%

Total
100
100%

Interpretations:
In the analysis the researchers found that 44% transactions are made in a month.

5. Which kind of bank you preferred most?

Most preferred account

Cooperative bank
11%

Public sector
27%

Foreign bank
6%

Private sector
56%

Public sector
27
27%

Private sector
56
56%

Foreign bank
6
6%

Cooperative bank
11
11%

Total
100
100%

Interpretations:
Mostly 56% prefer private sectors banks and 27% people prefer public sectors banks and
17% prefer others banks .

6. Why do you use this sector bank?(Rank it)

Easy location,
28, 14%

Good
atmospher
Near to e, 6, 3%
you home,
13, 6%

Total, 100, 50%

Good staff, 22,

11%

Easy location
Near to you home
Good atmosphere
Good staff
Less rush
Quick response
Total

Less rush, 12, 6%

Quick response,
19, 10%

Easy
location
28
28%

Near to you
home
13
13%

Good
atmosphere
6
6%

Good
staff
22
22%

Less
rush
12
12%

Quick
response
19
19%

Total
100
100%

Interpretations:
28% prefer banks for easy location and 22% prefer for good staff and 19% prefer for quick
response .

7. Ever you face any problem from banks?

Faced problem
Series1

Series2

Yes, 56
No, 44

56%

44%

Yes

Yes
56
56%

No

No
44
44%

Total
100
100%

Interpretations:
56% people have face the banks accounts and 44% people have satisfy from banking
services.

8. If yes, which kind of problem?

Types of Problem Faced

Total

Total, 100
No proper
grievances handling
, 12

No proper grievances handling

No proper CRM

No proper CRM, 9

Lot of rush

Lot of rush, 22
Inefficient staff,
17

Inefficient staff

No proper
information, 24

No proper information

Delayed work

Delayed work, 16
0

Delayed work

No proper
information

Series2

2%

24%

Series1

16

24

20
Inefficient
staff

40

60

80

100

120

9%

No proper
grievances
handling
12%

100%

12

100

Lot of rush

No proper
CRM

17%

22%

17

22

Total

Interpretations:
24% people have face the problem of lack of information about banking schemes and
deposits schemes.

9. The banking facilities of kotak Mahindra bank that you have used at
least once in month.

Service used
45
40

Branch, 39
Net banking ,
30

35
30
25
20

Phone banking,
11

15

ATM, 14
SMS banking, 6

10
5
0
Branch

Phone banking

ATM
Series1

Net banking

SMS banking

Series2

Branch

Phone banking

ATM

Net banking

SMS banking

Total

39

11

14

30

100

39%

11%

14%

30%

6%

100%

Interpretations:
In the analysis 39% use branch facility and 30% people use the net banking services and 11%
people use phone banking services.

10. The appropriate option that would best describe your experience
with kotak Mahindra bank.

Best Experience with Kotak Bank

120

100

100

Axis Title

80

60

40

38
27
17

20

9
0

Branch

Phone
banking

ATM

Net banking

SMS banking

Total

Series2

38%

9%

17%

27%

9%

100%

Series1

38

17

27

100

Interpretation:
38% people give response and describe the experiences related to branch and 17% people
share the experience related to ATM and 27% people share Net Banking services.

11. Has kotak Mahindra bank addressed all your financial need to your
satisfaction?

Kotak Bank fulfill need

Series1, Yes,
44, 44%
Series1, No,
56, 56%

Yes
No

Yes
44
44%

Interpretations:
In the analysis upto 44% people are
satisfies with the banking services and
56% people are not satisfy with the
services.

No
56
56%

Total
100
100%

12. If no, you would also want ..

Wants response from Kotak Bank

Quick
response , 45
Inefficient
staff, 33

Product
knowledge,
22

Product knowledge

Quick response

Inefficient staff

Product knowledge

22

Quick response

45

Inefficient staff

33

Interpretation:
In the analysis 45% people wants quick response from kotak Mahindra bank and 22% prefer
product knowledge from banks.

13. Based on your overall experience with kotak Mahindra bank, would you
recommend us to your friends, colleagues and relatives?

Chart Title
Series1

Series2

53%

Yes, 53

47%

No, 47
Yes

No

Yes

No

Total

53

47

100

53%

47%

100%

Interpretation:
In the analysis 53% people wants to recommend to friends , colleagues and relatives and 47%
people are not recommend to another person.

FINDING
In private sector banks, customers expectation is get smooth and speedy services, individual
attention understanding the specific needs of the customers are lower switching over other
bank.

In mean time of research there is big part of age 26 to 50 years contribute 78% and major
account holders, above 51 are 16% and below 25 years are only 6% belongs to student and
job seekers.

Ref. to monthly income there are 52% respondent who have income between 25000 to
40000/- per month 18% belongs to having income above than 40000/- pm , 24% below
25000/- income per month , rest having 4% only.

Public Sector banks is rated 26% than 56% private Kotak Mahindra bank , due to easy
location and efficient staff, private banks are well interactive with their customers perception
of customer retention management practices in private sectors banks is more effective than
public sector bank.

CONCLUSION
The study says that most of the customers are satisfied by the service provided by the Kotak
Mahindra Bank. The dissatisfaction is mainly due to Quick response, Inefficient staff, Product
knowledge ,delay in the slow process and procedure to solve the problems and new rules and

regulation regarding banking.

If there are steps taken to resolve the problem the retention of customer will be more and this
will satisfy most of the customers increasing value of the service

Since the process of liberalization and reform of the financial in the financial sector were
introduced in 1991, banking sector has undergone major transformation. The underlying
objectives of the reform were to make the banking system more competitive, productive and
profitable. As per the IBA report Banking Industry Vision 2020 there would be greater
presence of international players in the Indian Financial system and some of the Indian banks
would become international players in the coming years. The key to success in the
competitive environment is increased productivity and profitability through retention of
existing customer and add on more customers. Indian banks especially the public sector
banks and the old private sector banks are lagging far behind their competitors in terms of
both productivity and profitability with the exception of the State bank of India and its
associates. The other public sector banks and old private sector banks need to go for the
major transformation program for increase their productivity and profitability. We suggest a
three point program reduce overstaffing, increase efficient staff also make effective digital
made services as SMS , Internet ,phone banking with effective ATM operation ,open branch
in rural areas increased use of technology for improved products and services for the same.

Limitation of study
The study is subjected to the following limitations:
1. The survey is based on the sample size of 100 employees.
2. Time constant .
3. Secondary data figure last 5 years.
4. Since customer value and satisfaction is a psychological concept the answer may
depend upon time, moods and mentality of the customer.
5. Presence of sampling errors.
6. The study could have been made more elaborate, but if was confided to

limited number of

respondents due to constraints.

7. Customer value and satisfaction is a highly sensitive topic and many of

the respondents were not honest with their answer and noticed to be reluctant
to openly voice their problem, in spite of being assured that the response would
be highly confidential.

Suggestions
The customers perception of service quality is lower in private sector banks. So it is
suggested that private sector banks may take steps to improve their service quality, strategies,
customer interaction management strategies customer retention management strategies.
Today, many businesses such as banks, insurance companies, and other service providers
realize the importance of Customer Relationship Management (CRM) and its potential to
help them acquire new customers retain existing ones and maximize their lifetime value. At
this point, close relationship with customers will require a strong coordination between IT
and marketing departments to provide a long-term retention of selected customers. This paper
deals with the role of Customer Relationship Management in banking sector and the need for
Customer Relationship Management to increase customer value by using some analytical
methods in CRM applications.

The present study provides some guidelines for customer relationship management
satisfied customers are loyal customer, their retention rate is much higher and so is their
overall profitability for the bank. CRM offers the most holistic route for banks to enhance
customer relationships. Banks can enhance customer retention, profitability and loyalty and
get an increased share of banks from their customers. Banks need to embrace CRM as a
principle and adopt a strategy for managing customer relationships that effectively addresses
three key areas, customers, processes and technology. Finally banks should take actions such
as recognition and delegation of work, freedom to handle customers grievances and
managements approval to take decision according to the situations.

BIBLIOGRAPHY
BOOKS
1. R.M.Shrivastava Management of Indian Financial Institution 2008
2. V.K.Bhalla Management of Financial Services- IV revision edition.
3. Database on Indian banking-2003-04 IBA Bulletin.
4. Profitability and Productivity in Indian Banks Manni Mittal, Aruna Dhade IBA
Bulletin.
5. Pandey I.M. Financial Management, Vikas Publishing House.
6. KOTLER PHILIP -Marketing Management
7. KOTHARI.C.R-Research Methodology
WEBSITE:

1. www.google.com
2. www.rbi.org
3. www.eurozone.com
4.
5.
6.
7.
8.

http://info.shine.com/list-of-banking-financial-services-companies/8.html

http://en.wikipedia.org/wiki/Private-sector_banks_in_India
http://www.rbi.org.in/scripts/chro_1968.aspx
http://en.wikipedia.org/wiki/List_of_banks_in_India
Menafn.com/updates/research_ center/global/equity_ Val.

9. http://freepress.in/business/bank/total-atms-installed-operational-across-indiabankwise-details/ August 19, 2012

10. BT Online Bureau Mumbai Last Updated: November 14, 2012 | 00:00 IST
11. http://blog.customereffective.com/.a/6a00e54fb34b6f8833017c341b7d7a970b-pi
12. http://www.rbi.org.in/scripts/PublicationsView.aspx?id=15440

ANNEXURE
QUESTIONNAIRE
Obj.of survey: Assessment about Customer satisfaction of Kotak Mahindra
bank about their services
NAME...............................................
MALE/FEMALE.................................
1.Age description
A. 18 to 25 years

C. 26 to 35 years

B. 36 to 50 years

D. Above 51 years

2. What is your monthly income?

A. <20000

C. 25001-40000

B. 20001-25000

D. >400000

3. Which kind of bank account you have?

A. Current a/c

C. NRI a/c

B. Saving a/c

D. Privileged a/c

4. How much transaction you make in a month?

A. 2

C. 8

B. 4

D. Above 8

5. Which kind of bank you preferred most?

A. Public sector

C. Foreign bank

B. Private sector

D. Cooperative bank

6. Why do you use this sector bank?(Rank it)

A. Easy location

D. Good staff

B. Near to you home

E. Less rush

C. Good atmosphere

F. Quick response

7. Ever you face any problem from banks?

A. Yes

B. No

8. If yes, which kind of problem?

A. Delayed work

E. No proper CRM

B. No proper information

F. No proper grievances

C. Inefficient staff

handling

D. Lot of rush
9. The banking facilities of kotak Mahindra bank that you have used at least
once in month :
A. Branch

D. Net banking

B. Phone banking

E. SMS banking

C. ATM
10. The appropriate option that would best describe your experience with
kotak Mahindra bank:
A. Branch

D. Net banking

B. Phone banking

E. SMS banking

C. ATM
11. Has kotak Mahindra bank addressed all your financial need to your
satisfaction?
A. Yes

B. No

12. If no, you would also want ..

13. Based on your overall experience with kotak Mahindra bank, would you
recommend us to your friends, colleagues and relatives?
A. Yes

Respondent

B. No

Sign

Abbreviations
FII-

Foreign

Institutional

MF-

Mutual

BPO-

Process

Outsourcing

Fixed

OTC-

SWOT

Fund

Business

FD-

SEBI

Investment

Over

Securities

Strength,

GDP Gross Domestic Product

and

Weakness,

Deposit

the

Exchange

counter

Board

Opportunity,

of

and

India

Threats