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Customer acquisition at Abhyudaya Co-operative Bank Ltd

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DOI: 10.1108/EEMCS-07-2013-0140

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 Emerald Emerging Markets Case Studies
Customer acquisition at Abhyudaya Co-operative Bank Ltd
Dhananjay Bapat
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To cite this document:
Dhananjay Bapat , (2014),"Customer acquisition at Abhyudaya Co-operative Bank Ltd", Emerald Emerging Markets Case
Studies, Vol. 4 Iss 4 pp. 1 - 22
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Dhananjay Bapat, Asha Naik, (2013),"Customer centricity for growth – Yes Bank experience", Emerald Emerging Markets
Case Studies, Vol. 3 Iss 2 pp. 1-23
D. Bannister, A.P. Brown, B. Dormand, (1980),"The Effectiveness of the Major Clearing Banks in Attracting New Accounts: A
Case Study", Managerial Finance, Vol. 5 Iss 3 pp. 277-285
Arthur Meidan, (1983),"Distribution of Bank Services and Branch Location", International Journal of Physical Distribution
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 Customer acquisition at Abhyudaya
Co-operative Bank Ltd
Dhananjay Bapat
Dhananjay Bapat is a
Assistant Professor
based at Strategic
Planning, Marketing and
Control, National Institute
Downloaded by Dr Dhannajay Bapat At 11:25 14 October 2014 (PT)
of Bank Management,
Pune, India.
Received 21 July 2013
Revised 17 February 2014
Accepted 6 March 2014
Disclaimer. This case is written
solely for educational
purposes and is not intended
to represent successful or
unsuccessful managerial
decision making. The author/s
may have disguised names;
financial and other
recognisable information to
protect confidentiality.
DOI 10.1108/EEMCS-07-2013-0140
It was a special moment when the Abhyudaya Bank, a co-operative bank whose head
office was in the K.K. Tower in Mumbai, decided to open its 101st branch on 27 June 2011
at Diva. It was decided that the Abhyudaya Bank would open its new branch on the
outskirts of Mumbai city since Mumbai has very high density of branches of public sector,
private sector, co-operative and foreign banks. Although the concentration of banks was
very high in Mumbai and its suburbs, it was observed that banks had a limited presence in
the outskirts. Diva is on outskirts of Mumbai city in the Thane district and has an estimated
population of 0.15 million with very few branches of public sector and private sector banks
within its borders. The bank had employees who resided in and around the area but
working in other branches. The bank and its Chief General Manager Mr Rajeev D. Gangal
set itself the audacious target to open its new branch and beat the earlier records set by
the Marve Link Road and Jogeshwari branches by opening 5,000 accounts within the first
two months of the branch opening.
Urban co-operative banks
The co-operative movement in India was first launched in the field of credit for agriculture.
The major development of co-operatives occurred when the government of India
passed the Co-operative Credit Societies Act in 1904 and have since been able to mobilise
savings from middle and low income groups. Primary co-operative banks are located in
semi-urban, urban and metro areas and are referred to as urban co-operative banks. These
banks have been traditionally credit oriented and centred around localities, communities,
workplace groups or specific occupations such as traders. Their major credit clients tend
to be from the economically weaker sections, such as small borrowers and business
houses.
Co-operative societies are governed by the principles of co-operation, democratic
decision-making, mutual assistance and open membership. The first state Co-operative
Societies Act, passed by the Government of Bombay in 1925, served two objectives: first,
it gave size and shape to the co-operative; second, it was a pacesetter for co-operative
activities, which support self-help and mutual aid.
Recognising the important role of urban co-operative banks in the financial system, the
Reserve Bank of India decided that co-operative banks with paid up share capital and
reserves of INR1,000,000 or more were to be classified under the Banking Regulation Act
of 1949. Their registration and management were governed by state governments as per
the provisions of respective state and various committees were formed which dealt with
broadening the scope of activities, prescribed redefining viability norms and ushering in an
era of better professional standards by aligning the urban banking movement with
commercial banks. Some of the banks showed excellent growth in size and volume of
VOL. 4 NO. 4 2014, pp. 1-22, © Emerald Group Publishing Limited, ISSN 2045-0621 EMERALD EMERGING MARKETS CASE STUDIES PAGE 1
 business handled. However, others were constrained by bad financial health and as a
result various measures were initiated to improve the financial health of the co-operative
sector. The majority of urban co-operative banks in India are located in the states of
Maharashtra, Karnataka, Gujarat and Tamil Nadu[1][2].
Structure of co-operative credit institutions in India is shown below (Figure 1).
The total number of urban co-operatives stood at 1,618. It was observed that there was a
steady rise in the number of financially stronger urban co-operative banks (UCBs) and a
decline in the number of financially weaker UCBs between 2005 and 2011[3][4].
Following the Vision Document of 2005 by the Reserve Bank of India, urban co-operative
banks were classified into Tiers 1 and 2 based on their deposit base and a differentiated
regulating treatment[5]. Tier-wise distribution of UCBs is presented in Tables I and II.
Various financial indicators for co-operative banks are shown in Table III, and key ratios for
UCBs are presented in Table IV.

Figure 1 Structure of co-operative banks in India

Multi-state (25)
Scheduled
(52) Single state (27)
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UCB
(1,618)
Credit Multi-state (18)
co-operatives Non-scheduled
(96,149) (1,566)
Single state (1,548)

SC.ARDB (20)

Long-term (717)
Rural PCARDBs (697)
co-operatives
(94,531)
STCB (31) – DCCB (370)
Short-term (93,814)
PAC (93,413)
Source: Reserve Bank of India

Table I Distribution of assets on the basis of tier 1 and tier 2

Number of banks Deposit Advances
Tier type Number % of total Amount % to total Amount % to total

Tier I 1,234 76.3 410 17.2 260 16.5

Tier II 384 23.7 1,976 82.8 1,320 83.5
1,618 100.0 2,385 100.0 1,580 100.0
Source: Compiled by author from information available from Reserve Bank of India

Table II Assets composition

Tier type Amount % of total

Tier I 527 17.4

Tier II 2,506 82.6
All 3,033 100.0
Source: Compiled by author from information available from Reserve Bank of India

PAGE 2 EMERALD EMERGING MARKETS CASE STUDIES VOL. 4 NO. 4 2014

 Table III Financial indicators for urban co-operative banks for financial year
April 2011-March 2012
Serial number Liabilities Rate of growth (in %) INR billion

1 Capital growth 16 73
2 Reserves 2.7 270
3 Deposits 12.6 2,385
4 Borrowings ⫺18.7 36
5 Other liabilities 17.3 269
6 Cash 26.1 30
7 Balance with bank 8.7 263
8 Investments 3.5 880
9 Loans and advances 15.8 1,580
10 Total income 25.9 281
11 Total expenditure 24.9 230
12 Net profits 26.1 78
Source: Compiled by author from information available from Reserve Bank of India

Table IV Key financial ratios for urban co-operative banks for March 2012
Serial number Ratios In %

1 Return on assets 1.0

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2 Return on equity 8.4

3 Net interest margin 3.3
4 Gross NPA 7
5 Net NPA 2
Source: Compiled by author from information available from Reserve Bank of India

Porter model for competitive strategy

Strategy explains how an organisation, faced with competition, will achieve superior
performance. One of the important dimensions of a strategy is the company’s relative
position within its industry. Strategic positioning reflects choices a company makes about
the kind of value it will create and how that value will be created. Different strategies have
been pursued by various companies. For example, Jack Welch, the CEO of General
Electric, was keen to be the number one or two ranking in market share. According to
Porter, “A good competitive strategy will result in sustainably superior performance.”
Business competition is about the struggle for profits and profits are the function of price
and cost.
For banks: the profit equation is as follows:
Profits ⫽ (interest income ⫹ other income)
⫺ (interest expenses ⫺ operating expenses)
Michael Porter, based on the links between the industry structure and profitability,
suggested the following model (Figure 2).
A segment is unattractive if it already has numerous, strong or aggressive competitors. If
competition stakes are high, it will lead to frequent price wars and new product
introductions. The most attractive segment is one in which entry barriers are high and exit
barriers are low. A segment is unattractive when there are actual or potential substitutes for
the product. A segment is unattractive if buyers possess strong bargaining power or if the
company’s suppliers have the power to increase the prices or control the quantity.

Customer acquisition for a new branch

Customer acquisition refers to the process and procedure to locate, qualify and secure new
customers. While not undermining the importance of customer retention, customer
acquisition is the driver for growth of a bank. Any new branch needs to focus on the

VOL. 4 NO. 4 2014 EMERALD EMERGING MARKETS CASE STUDIES PAGE 3

 Figure 2 Porter model

Threat of new

entrants

Bargaining power Rivalry Bargaining

suppliers among power of buyers
exisng
competors

Threat of substute
products or services
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Source: Porter (2008)

customer acquisition process. The optimal amount of effort for a customer acquisition
process depends on bank’s ability to attract customers, the cost associated with
acquisition process, the repurchase frequency of a customer and the opportunity to
acquire versus retain customers. There are differences in acquisition processes with
different industries. A customer of a bank is characterised by the higher duration of their
banks dealing. Once a customer makes a commitment, they are firmly committed despite
many banking customers thinking there is the option of making an exit decision. As a result,
banks, particularly new branches, should focus a larger share of effort and expenditure on
acquisition as it is evidence that, once a branch has been able to attract a high numbers
of new customers, it is able to secure and deliver excellent business. Once the higher
number of customers is acquired, banks benefit by a higher probability of customers which
can evolve into a higher retention level. An effective acquisition process helps the branch
reach the breakeven point in less time. Some of the progressive banks expect branches to
break even within a year of their launch.
There is a growing importance attached to customer acquisition because, even banks with
high retention rates, tend to lose customers to competitors. In certain banking situations, it
may happen that a customer does not shift to a competitor, but instead may become
dormant or inactive in their dealings with their present bank. Therefore, banks need to focus
on acquiring new customers.
Managing customer acquisition is a key challenge for new branch. Past experience
suggests that a new branch could open just 100 customer accounts within the first month
of a branch launch. There is a scope for the improvement of the customer acquisition
process with an aim to improve prospect conversion rates, enhance wallet share, reduce
the cost of acquisition and ensure higher number of acquisitions.

Abhyudaya Bank
A dedicated group of social workers and labour movement activists, imbued with the spirit
of service to the cause of mill workers, other industrial and hitherto neglected economically
weaker sections of society, established the Abhyudaya Co-operative Credit Society Ltd. in
1964, with a modest share capital of just INR5,000. Most of the branches of the bank were

PAGE 4 EMERALD EMERGING MARKETS CASE STUDIES VOL. 4 NO. 4 2014

 surrounded by low income industrial labour and middle-class people. In a short period,
Abhyudaya Co-operative Credit Society got converted into an urban co-operative bank,
and in June 1965 the Abhyudaya Co-operative Bank Ltd. was established with the motto of
“Prosperity through Co-operation”[6][7].
It was in September 1988 when the bank was conferred with Scheduled Bank status by the
Reserve Bank of India. Over a span of 49 years, it became one of the leading urban
co-operative banks in the country with branches in Metropolitan Mumbai, Navi Mumbai,
Pune, Thane, Raigad, Nagpur, Nashik, Nanded, Kankavali and Aurangabad in the
Maharashtra state, Vadodara and Ahmedabad in the Gujarat state and Udupi and
Mangalore in the Karnataka state. On 11 January 2007, the bank was registered as a
Multi-State Co-operative Bank by the Central Registrar in New Delhi. The area of operation
of the bank was confined to three states – Maharashtra, Gujarat and Karnataka. The bank
further proposes to extend its area of operation to other states and the merger of Shree
Krishna Sahakari Bank Ltd., Vadodara, in the Gujarat state, Janatha Co-op. Bank Ltd.,
Udupi, in the Karnataka state and Manek Chowk Co-operative Bank Ltd., Ahmedabad, in
the Gujarat state has been effected recently[8]. For the Financial year 2013-2014, the bank
set a target of achieving a business mix of INR158,000 million.
As of 31 March 2013, the bank had 0.151 million members and ⬎ 1.666 million depositors.
During the financial year 2012-2013 to 31 March 2013, the bank achieved substantial
growth in all perspectives reflecting an overall growth of 20.64 per cent in business mix and
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the total business mix of the bank has reached over INR131,452 million. The bank’s
deposits have reached INR80,364 million with a growth of 23.27 per cent while advances
reached INR51088.3 million with a growth of 16.70 per cent. The bank has maintained a
ratio of current accounts and savings accounts (CASA) deposits to total deposits as high
as 31.79 per cent. CASA is considered to be the source of low-cost deposits for banks as
the bank pays less interest to savings and current accounts when compared to the interest
on fixed or term deposits. The strength of the bank is reflected in the fact that it’s paid up
capital and reserves have amounted to INR9274.40 million and investments are in the
region of INR34,280 million. As on 31 March 2013, the net profit of the bank after tax/
provision stood at INR912.2 million. The statutory auditors have continuously awarded
class “A” rating to the bank.
The bank has successfully implemented Core Banking Solution (CBS) technology which
enables the bank to offer any branch banking service to the customers. The CBS allowed
bank customers to perform a number of services, including making cash transactions and
transferring funds, from any branch and also use Automated Teller Machines (ATMs)
installed at any branch for cash withdrawals, statement of accounts and balance enquiries.
As a result, banks get customers and account information on a real-time basis and the
Reserve Bank of India has conferred licenses to open offsite ATMs. The bank also provides
all types of foreign exchange and money transfer services such as MoneyGram, Xpress
Money and Western Union and offers tele-banking, mobile banking and Internet banking
services to customers. The bank has also adopted and implemented other RBI schemes
such as RTGS, ECS, NEFT and Speed Clearing and has taken Corporate Agency of LIC of
India, a leading life insurance company and The New India Assurance Co. Ltd., a leading
insurance company in non-life insurance space, and facilitates to offer various life
insurance and non-life insurance policies to its customers.
Out of 105 branches, as of 31 March 2013, 24 branches were working in double shifts,
rendering 11 hours service to the customers and 39 branches open on Sundays providing
services seven days a week to millions of customers which indicates the bank’s focus
towards customer service. In addition, the bank’s customers are free to use more than
111,000 ATMs through BANCS and National Financial Switch (NFS) networks. In three
branches, namely, Vashi, Dadar and New Panvel, “Franking” facility has been made
available to the general public. The bank also offers demat, a PAN card distribution facility,
initial public offering distribution and online tax payment services throughout its network of

VOL. 4 NO. 4 2014 EMERALD EMERGING MARKETS CASE STUDIES PAGE 5

 branches and has introduced billing software service modules for housing societies for
generating periodical maintenance receipts[9].
The bank has its own fully equipped staff training college at its Vashi premises, whereby the
talent of the staff members and officials are coached to make them more prepared and
competitive to face the challenges in the banking sector.
According to Mr V. S. Morye, the Managing Director of the Abhyudaya Bank:
With the expanding horizons, continuous developments and competition, the bank proposes to
become full-fledged financial service provider, fulfilling requirements of customers and other
stakeholders by providing all allied services, as permitted by the regulatory authorities. The
bank has adopted advanced technology for providing faster and convenient services to clients.
These major long-term proposals will enable the bank to increase its market share and better
fulfillment of expectations of all the stakeholders.

Role of the planning and marketing department at the Abhyudaya Co-operative

Bank Ltd
Planning, organising, controlling and directing are four important functions required for
ensuring the success and growth of any bank. As a part of the strategic planning, on Bank’s
Foundation day, held on 25 June 2012, the bank published a vision document for 2020,
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whereby a business achievement target of INR500,000 million up to year 2020 was fixed.
For enhancing the brand image of the bank, new promotional media such as branding on
local trains, bus panels, product advertisements on FM radio and television, rickshaw
hoods, kiosks and hoardings at prominent places were selected.
During the year bank participated in and sponsored, in addition to many local events,
various mega events, including Lakshya 2020 arranged by Marathi Vyavsayik Udyojak
Vyapari Mitra Mandal, MAHATECH 2012, an industrial exhibition, Global Kokan, organised
by Konkan Bhumi Pratisthan. The bank co-sponsored “Co-operative Conference on 97th
Constitutional Amendment” organised by Maharashtra Urban Co-operative Banks’
Federation at Balgandharva Rang Mandir in Pune.
To attract new business schemes such as loans for professionals, doctors and house repair
loan schemes with easy terms and very attractive rates of interest were introduced.
Considering the demand and cut-throat competition in the market, margin on gold
ornaments was reduced for gold loans and rates of interest on vehicles and housing loans
were made competitive.
As per the Reserve Bank of India directives aimed at providing basic banking services
at affordable costs, new basic saving bank account schemes were introduced and
were instrumental in achieving the objective of financial inclusion where every citizen is
connected to formal financial system. To attract the younger generation, Zero Balance
SBYOUTH scheme was modified by providing ATM facilities for 18-to-25-year olds.
To give fillip to CASA deposits, the concept of cluster approach of marketing was
introduced by framing groups of branches and CASA deposit mobilisation drives were
arranged twice during 2012, from April to June and from November to December. To
develop effective marketing skills, training was offered to 119 staff members of various
branches with the aim of forming marketing teams at branches themselves.
To provide a facility of direct cash transfer subsidy declared by various central and state
government authorities, the bank has obtained approval from Central Plan Scheme
Monitoring System (CPSMS) and a member of National Payment Corporation of India
(NPCI) for an AADHAR Bridge Payment Solution and now offers saving accounts for
existing and new customers that can be linked to the AADHAR card for directly crediting
subsidies such as Liquefied Petroleum Gas (LPG) subsidy, scholarships for students,

PAGE 6 EMERALD EMERGING MARKETS CASE STUDIES VOL. 4 NO. 4 2014

 salary of government and semi-government employees and various occasional subsidies
declared by central and state government authorities. The above system is approved by
Unique Identification Authorities (UIDAI).
The organisation setup of the Planning and Marketing Department is shown below
(Figure 3).

Marketing strategy for new branch opening

The bank has applied its new innovative marketing strategy with the support of its
employees to market their products at the time of opening of new branches during the past
three financial years. The bank adapted the following practices:
 Before selecting premises and opening a branch, the bank conducts a detailed study
of the command area. This study comprises of the number of other bank branches and
their duty hours, the number of housing societies, business establishments and the
nature of business activities carried out and a composition of the population in the area.
The following figure shows the example of how the bank uses various maps in the
command area for its potential mapping exercise (Figure 4).
 A strategy is formulated through proper planning by accessing the geographical data
of that location through Google Maps (as shown above), surveying the area and then
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subdividing the location into various customer segments. This helps in devising an
appropriate marketing strategy for various customer segments.
 If the location of the proposed new branch to be opened is close to other branches of
the bank, different teams of 100 staff members residing within a radius of 8-10 km are
formed. These employees include those who reside in the area but work in a different
branch of the bank. Each team consists of five to eight staff members and one leader
and the area to be covered by the marketing plan is divided as per the groups and is
allotted for marketing purposes.

Figure 3 Organisational setup of the Planning and Marketing Department

Chief General Manager

Assistant General Manager

Planning and Markeng
Department

Senior Manager Manager

Third Party Products Planning and Markeng
Department

Management Trainee Management Trainee

Staff Staff

Source: Company documents

VOL. 4 NO. 4 2014 EMERALD EMERGING MARKETS CASE STUDIES PAGE 7

 Figure 4
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PAGE 8 EMERALD EMERGING MARKETS CASE STUDIES VOL. 4 NO. 4 2014

 Figure 4 (Continued)
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VOL. 4 NO. 4 2014 EMERALD EMERGING MARKETS CASE STUDIES PAGE 9

 Figure 4 (Continued)
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PAGE 10 EMERALD EMERGING MARKETS CASE STUDIES VOL. 4 NO. 4 2014

  If the proposed new branch to be opened is located in a remote area where no staff
members reside nearby, then a group of 10-15 selected staff members are sent to that
area 15 days prior to the inauguration day for door-to-door marketing of the products,
and each team is given a target of a specific number of CASA deposit accounts to be
opened and other products to be marketed.
 Marketing efforts consist of meeting with co-operative housing society’s office bearers,
respected social and political activists from that area and prominent persons of the
business community and local schools including college office bearers, and
campaigning at prominent and busy places in the area to encourage them to open their
accounts in the new branch.
 During a branch opening, the branch invariably invites various shareholders of the bank
staying in the vicinity of the new location and the bank makes requests for support
during the marketing campaign by giving references as this helps in generating further
leads for the marketing campaign. The following figure depicts the marketing campaign
carried out by the bank (Plate 1).

Branch opening at the Diva branch

Mr PR Sawant received the transfer order to be relocated as Branch Manager for the new
bank branch at Diva 10 days before its opening. Mr Sawant was very excited to create a
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landmark and make the branch, not just visible, but well-known to the general public. A
strategy meeting was convened and chaired by Mr Rajeev. D. Gangal, Chief General
Manager of the Bank and invitations were extended to about 80 employees who resided in
Thane and Dombivli areas which is about 10 km from the Diva branch. The agenda of the
meeting was to motivate the members and set the team for a grand opening of the 101th
branch of the bank. During the meeting, 10-12 territories were identified and employees
were mapped for the territories based on their knowledge of the area. The meeting
energised the employees to create a milestone in the bank and for the banking industry in
India.
It is observed that in Mumbai, the suburban rail system serving the Mumbai Metropolitan
Region carries more than 7.24 million passengers daily and is considered to have the
highest passenger density when compared to any other urban railway system in the world.
Some of the passengers spent more than four hours commuting through the system to and

Plate 1

VOL. 4 NO. 4 2014 EMERALD EMERGING MARKETS CASE STUDIES PAGE 11

 from work[10][11]. It is likely that an employee may work more than 20 km away from their
residence.
Customer acquisition becomes easy when a known person gives a referral to a new
customer. A known person has an adequate knowledge of the targeted customers, the
environment and the appropriate solutions to the customers. It is generally observed that
cold calls do not yield significant success and, in particular for banking products, word of
mouth can make a huge difference. According to Mr Sawant:
Banks need to utilize the employees who have connections to their residential area even though
they work in different branches away from their residence. It helps in designing appropriate
marketing strategy.

The proposed branch was located at just five minutes from the railway station. Other banks
located in the area included the Thane Jilha Madhyavarti Sahakari and Bhartiya Janata
Sahakari banks. The branch manager undertook the area inspection of the command area
and made a comprehensive survey of the area which had residents from low and middle
income groups and small business establishments. The objective was to classify the area
into various zones, develop a rapport with the residents and assess the financial solutions
for various customer segments. Based on the feedback from the prospects, it was felt that
gold loans would generate higher demand than housing loans. Moreover, gold loans could
cover a higher number of prospects and customers could benefit from instantly receiving
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cash by pledging gold or gold ornaments.

Maps were extensively used for the marketing campaign and 12 territories were identified
and respective territory leaders were nominated based on their potential and
resourcefulness. Individual teams consisted of 5 to 10 group members, and in each
territory, arrangements were instructed to build a rapport with the local residents and three
to four employees were deployed to a marketing point that was set-up with a big
promotional umbrella, tables, chairs and promotional leaflets. Each team was given the task
to contact every resident within their allotted territory and inform them about the opening of
the bank branch. As a result of this effort, on the day of the branch opening, 5,245 new
customer accounts were opened.
With the strong connection made with the customers, the new branch could generate a
high percentage (70 per cent) of low-cost deposits, referred to as CASA accounts. This
proportion was almost double of the average CASA ratio the branch could use it to instil
savings habits among the residents. During the initial period, traditionally the head of the
family opened the primary bank account but once this had been established the branch
pursued with the women and other members of the family to open their own bank accounts.
During the initial period, the branch focused on deposits. For advances, a branch needs to
have a deep understanding of customers who have a risk profile. The branch initially
installed the ATM for cash withdrawal and other value-added services and the benefits of
using the ATM were instilled among the residents. The usage of alternate channels helps
in reducing the cost and also provides customer convenience. The focus on the ATM
strategy led to a higher number of hits (550 hits per day) and, as the ATM was conveniently
located, customers from other banks also utilised the service which resulted in additional
revenue of INR15 per customer. There were about 350 customers from other banks who
utilised the service of ATM of Abhyudaya Bank and more than 25 per cent of all customers
utilised the ATMs.
Mr Sawant focused on massive publicity through banners and hoardings at select
locations. Based on traffic routes and public attention, the branch identified 45 banners
including five which were strategically placed at the railway station. Communication to
prospective and existing customers was regularly generated through handbill inserts in the
local newspapers. In addition, advertisements were also placed on the local cable
television network. The branch performance is shown in Table EI.

PAGE 12 EMERALD EMERGING MARKETS CASE STUDIES VOL. 4 NO. 4 2014

 Some of the qualitative reflections are as follows:

(1) Leadership team

 The bank is keen to increase its market share and better fulfillment of expectations
of all the stakeholders.
 If you provide the direction and motivate to the team members, you can achieve
the impossible.
 Strategies need to be a game changer.
 There is always a possibility to compete with targets and achievements.
(2) Planning and marketing department
 Branches need to perform potential area analysis on the basis of scientific tools,
careful design, close understanding of market segments and active participation
of employees.
 The success of a marketing campaign needs support of top management, careful
planning and seamless execution.
(3) Branch manager/officials
The success of the branch performance very much depends on an effective
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branch launch and excellent customer service thereafter.

 With the involvement of other officials, feeling of unity could be generated.
 Detailed potential mapping helped in close understanding of the Branch
Command area.
(4) Customers
 The employees of the branch showed a customer centric attitude before the
branch was launched.
 It was first time that a bank came directly to customer doorsteps.
 Opening of a new account was very easy.
 The branch was keen to offer gold loans at competitive interest.

Setting the target for bank

It was a record for the bank that this milestone was achieved with the support of all the
employees who were associated with the branch and the local residences as well. At
Abhyudaya Co-operative Bank, the location of new branches is decided by the
Planning and Development Department in consultation with the Human Resources
Department. The bank has stated its vision to achieve INR500,000 million in its business
mix for the year 2020. The bank set up a target of INR158,000 million business in the
year 2013-2014 with a business breakup of INR97,000 million deposits and INR61,000
million advances.

Notes
1. Reserve Bank of India, Annual Report, 2011-2012.
2. Reserve Bank of India, Annual Report, 2012-2013.
3. Reserve Bank of India, Annual Report, 2009-2010.
4. Reserve Bank of India, Annual Report, 2010-2011.
5. Available at: http://rbidocs.rbi.org.in/rbiadmin/scripts/PublicationsView.aspx?id⫽14630 (accessed 21
May 2013).

VOL. 4 NO. 4 2014 EMERALD EMERGING MARKETS CASE STUDIES PAGE 13

 6. Abhyudaya Bank, Annual Report, 2009-10.
7. Abhyudaya Bank, Annual Report, 2010-2011.
8. Abhyudaya Bank, Annual Report, 2012-2013.
Keywords:
9. Abhyudaya Bank, Annual Report, 2011-2012.
Customer acquisition,
Branch, 10. Available at: http://en.wikipedia.org/wiki/Mumbai_Suburban_Railway (accessed 21 May 2013).
Opening of a branch 11. Available at: http://en.wikipedia.org/wiki/Mumbai_Suburban_Railway (accessed 21 May 2013).

Further reading
Porter, M.E (1980), Competitive Strategy: Techniques for Analyzing Industries and Competitors, Free
Press, New York, NY.

Porter, M.E (1985a), Competitive Advantage: Creating and Sustaining Superior Performance, Free
Press, New York, NY.

Porter, M.E (1985b), “Technology and competitive advantage”, Journal of Business Strategy, Vol. 5
No. 3, pp. 60-77.

Porter, M.E. (2008), “The five competitive sources that shape strategy”, Harvard Business Review,
January 2009, pp. 78-98.

Exhibit 1
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Table EI Performance of the Diva branch

27 June 2011 31 March 2012 31 March 2013

Current account (number) 103 225 283

Amount in current A/c (INR million) 0.471 1.157 20.02
Saving A/c (number) 5,095 8,773 11,622
Amount in savings A/c (INR million) 5.30 14.8 221.4
Term deposit A/c (number) 669 1,604 1,756
Amount in term deposit (INR million) 12.33 59.95 100.87
No. of lockers (number) 13 48 91
No. of advance (number) 290 667
Advance amount (INR million) 27.1 62.5
Profit/(loss) (INR million) (5.4) 2.6
Source: Company documents

About the author

Dhananjay Bapat is an Assistant Professor at the National Institute of Bank Management
(NIBM), Pune, India. He holds a PhD in Marketing from Sardar Patel University, Vallabh
Vidyanagar, Gujarat. He conducts executive training programmes at the NIBM for national
and international participants in the area of bank marketing, card payment systems,
marketing strategy for retail banking and marketing of retail electronic payment products.
He has published articles in reputed journals such as ISB-Ivey Case Study, Global Business
Review, International Journal of Rural Management, International Journal of Business
Performance Management, Vision–The Journal of Business Perspective, South Asian
Journal of Management, ICFAI Journal of Brand Management and Indian Banker. He has
worked with reputed corporate groups like GCMMF (AMUL) and Crompton Greaves. His
areas of interest include Brand Management, Bank Strategy and Bank Marketing. He has
published papers in conferences in India and the USA. Dhananjay Bapat can be contacted
at: dhananjay@nibmindia.org

PAGE 14 EMERALD EMERGING MARKETS CASE STUDIES VOL. 4 NO. 4 2014

 Abstract
Title – Customer acquisition at Abhyudaya Co-operative Bank Ltd.
Subject area – Marketing, Banking.
Study level/applicability – Post Graduate Programme, MBA, BBA.
Case overview – On 27 June 2011, Abhyudaya Bank, a leading urban cooperative bank, opened its
101 new branch at Diva, which is on the outskirts of Mumbai city in India. Diva area is populated but has
less number of bank branches. The bank planned to surpass its earlier record of customer acquisition
in branches which were newly opened at Marve Link Road and Jogeshwari in Mumbai. According to Mr
Morye, Managing Director, Abhyudaya Bank, “With the expanding horizons, continuous developments
and competition, the bank proposes to become full-fledged financial service provider, fulfilling
requirements of customers and other stakeholders by providing all allied services, as permitted by the
regulatory authorities. The Bank has adopted advanced technology for providing faster and convenient
services to clients. These major long term proposals will enable the bank to increase its market share
and better fulfillment of expectations of all the stakeholders.” The case introduces the structure of urban
cooperative banks of which Abhyudaya Cooperative Bank is a part. The case provides the key
highlights of the bank and discusses the catalyst role of planning and marketing department for
branches to achieve its target and how the bank implemented unique and differentiated strategy
involving employees of the banks. Employees form an important asset for banks, and banks need to
utilize their potential in creating long-term and sustainable relationships with customers. The case
examines how the branch can benefit from detail area-wise planning capturing the potential. Branch
area planning is a unique exercise covering the branch potential analysis and a new branch manager
must utilize it for acquiring higher number of customers. Regardless of the branching, a bank seeking
to expand its branch operations faces a number of important decisions. As the area develops, a bank
branch decides to take up appropriate strategy with an objective to move its base of operations to
Downloaded by Dr Dhannajay Bapat At 11:25 14 October 2014 (PT)

attract new customers in a new area and thereafter maintain its existing ones.
Expected learning outcomes – The case is suitable for students pursuing a post-graduate course in
bank marketing, banking postgraduate and MBA course in strategic management and marketing
management. The case presents an opportunity to assess the strategy adopted by the bank for new
branch launch and evolving role by a marketing function in a bank.
Supplementary materials – Teaching Notes are available for educators only. Please contact your
library to gain login details or email support@emeraldinsight.com to request teaching notes.

PAGE 22 EMERALD EMERGING MARKETS CASE STUDIES VOL. 4 NO. 4 2014

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