Divya report

187
A PROJECT REPORT ON “STUDY THE IMPACT OF CRM ON CUSTOMERS OF BANKS OF JAIPUR CITY” (Submitted in the partial fulfillment of course for the award of The degree of Master of Business Administration) Submitted to: Submitted By: Miss. Jaya Pareek Divya Sharma Mrs. Nidhi Tak PSOM, DMS
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Transcript of Divya report

Page 1: Divya report

A PROJECT REPORT

ON

“STUDY THE IMPACT OF CRM ON CUSTOMERS OF BANKS OF JAIPUR CITY”

(Submitted in the partial fulfillment of course for the award of

The degree of Master of Business Administration)

Submitted to: Submitted By:

Miss. Jaya Pareek Divya Sharma

Mrs. Nidhi Tak PSOM, DMS

PART- II

POORNIMA SCHOOL OF MANAGEMENT

ISI-2, RIICO Institutional Area, Goner Road, Sitapura, Jaipur.

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CERTIFICATE

Poornima School of Management

This is to certify that Miss Divya Sharma student of MBA 4th semester from Poornima

school of management, Jaipur had completed its project report on the topic of “STUDY

THE IMPACT OF CRM ON CUSTOMERS OF BANKS OF JAIPUR CITY” under the

supervision of miss Jaya pareek faculty member DMS PGC.

To best of my knowledge report is original and has not been copied or submitted

anywhere else. It is an independent work done by him.

Dr. Vandana sharma

Director, PSOM

DMS, PGC

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Declaration

Hereby I declare that the project report entitled “STUDY THE IMPACT OF CRM ON

CUSTOMERS OF BANKS OF JAIPUR CITY” submitted for the degree of MBA is my

original work and the project report has not formed the basis for the award of any

diploma, degree, associated ship, fellowship or similar other title. It has been not

submitted to any other university or institution for the award of any degree or diploma.

Name

Divya Sharma MBA 2nd year 4th sem

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PREFACE

The title of this study is “STUDY THE IMPACT OF CRM ON CUSTOMERS OF BANKS

OF JAIPUR CITY” This study shows that in current market why various banks are using

CRM activities, because overall goals of banks are to find, attract, and win new clients,

nurture and retain those the company already has, entice former clients back into the

fold, and reduce the costs of marketing and client service. This research is related to

basicly banks of Jaipur, specially HDFC and ICICI bank. The objective of this study is to

bring insight and deeper understanding into the objectives, strategies and the expected

benefits of CRM initiatives by organizations particularly service companies like banks

and to understand consumer psyche about CRM in banking area.

Method which used in this study is exploratory and source of data collection is both

secondary and primery data collections which are collect by the questionnaire, internet,

various types of newspapers, magazines and other books related to topic written by

various author. This study will show impact on customers of various CRM activities.

There are many limitation arise while study and prepare this research like The area of

study was Jaipur so it cannot be generalized to other cities and Time Period of the

project was not sufficient to study all the factors in deep. Key elements which consider

in this study are satisfaction of customers, use of technology in banks, types of CRM

activities etc. There are not so much data available on this topic which is his limitation of

this report. At last it is concluded that Technical solutions deployed by banks today are

flexible, user-friendly and meant to facilitate specific workflow and requirements in

implementation processes. In order to simplify lives, banks have begun to

implement end-to-end technologies through all departments with the intention of

removing human error from processes. Previously existing manual environments could

not have been adequate for future visions, growth plans and strategies.

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ACKNOWLEDGEMENT

I express my sincere thanks to the project guide Ms. Savita Panwar and Ms. Jaya

Pareek ,and Mrs. Nidhi Tak faculty, Department of Management Studies, Poornima

Group of Colleges, Jaipur, for guiding me right from the inception till the successful

completion of the project. I sincerely acknowledge both for extending the valuable

guidance, support for literature, critical\ review of project and the report but above all,

the moral support she\had provided to me during all stages of this project study.

I would also like to thanks Mr. R. K. Agarwal and all the supporting staff of Department

of Management Studies, Poornima Group of Colleges, Jaipur for their help and

cooperation throughout the project.

Divya Sharma

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EXECUTIVE SUMMARY

“Customer relationship management (CRM) is a widely-implemented strategy for

managing a company’s interactions with customers, clients and sales prospects. It

involves using technology to organize, automate, and synchronize business processes

principally sales activities, but also those for marketing, customer service, and

technical.”

Most CRM initiatives begin with a strategic need to manage the process of handling

customer related information more effectively. For beginners it could simply mean better

lead management capabilities or sales pipeline visibility. However, as organizations

mature in their CRM initiatives, they begin to look at CRM as tool to acquire strategic

differentiators.

The objective of this study to find out that how the expected benefits of CRM can

initiatives by organizations be described, to find out positive impact on the overall

performance of the organization in the long run, to get more knowledge about CRM in

banking sector, to understand consumer psyche about CRM in banking area, to analyze

that how CRM works as a link between banks and customers. The study might be

limited by some factors like the primary data collected in form of questionnaires and

interview might have Inherent limitation of biasness and casual response, due to

competitive advantage banks don’t disclose their policies in public, banking sector is

very big and not full covered in limited time, many people were not serious while filling

the Questionnaires, the sample size is very short.

This research concluded that Technical solutions deployed by banks today are flexible,

user-friendly and meant to facilitate specific workflow and requirements in

implementation processes. In order to simplify lives, banks have begun to

implement end-to-end technologies through all departments with the intention of

removing human error from processes. Previously existing manual environments could

not have been adequate for future visions, growth plans and strategies.

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INDEX

S.NO CONTENT PAGE NO.

1.Introduction to industry 1-60

2. Introduction to organization 61-104

3. Research methodology 105-110

3.1. Title of study

3.2. Duration of the project

3.3. Objective of the project

3.4. Type of research

3.5. Sample size , method of selecting sample

3.6. Scope of study

3.7. Limitation of study

4. Analysis and interpretation 111-121

5. Facts and finding 122-122

6. SWOT analysis 123-126

7. Conclusion 127-127

8. Recommendation/ suggestion 128-129

9. Appendix 130-132

10. Bibliography 133-135

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INTRODUCTION OF INDUSTRY

A bank is a financial intermediary that accepts deposits and channels those deposits

into lending activities, either directly or through capital markets. A bank connects

customers with capital deficits to customers with capital surpluses.

The banking section will navigate through all the aspects of the Banking System in

India. It will discuss upon the matters with the birth of the banking concept in the country

to new players adding their names in the industry in coming few years.

The banker of all banks, Reserve Bank of India (RBI), the Indian Banks Association

(IBA) and top 20 banks like IDBI, HSBC, ICICI, ABN AMRO, etc. has been well defined

under three separate heads with one page dedicated to each bank. However, in the

introduction part of the entire banking cosmos, the past has been well explained under

three different heads namely:

History of Banking in India

Nationalization of Banks in India

Scheduled Commercial Banks in India

The first deals with the history part since the dawn of banking system in India.

Government took major step in the 1969 to put the banking sector into systems and it

nationalized 14 private banks in the mentioned year. This has been elaborated in

Nationalization of Banks in India. The last but not the least explains about the

scheduled and unscheduled banks in India. Section 42(6)(a) of RBI Act 1934 lays down

the condition of scheduled commercial banks. The description along with a list of

scheduled commercial banks is given on this page. 

Page 9: Divya report

History of Banking in India

Banking in India originated in the last decades of the 18th century. The first banks

were The General Bank of India, which started in 1786, and Bank of Hindustan, which

started in 1790; both are now defunct. The oldest bank in existence in India 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. For many years

the Presidency banks acted as quasi-central banks, as did their successors. The three

banks merged in 1921 to form the Imperial Bank of India, which, upon India's

independence, became the State Bank of India.

Indian merchants in Calcutta established the Union Bank in 1839, but it failed in 1848

as a consequence of the economic crisis of 1848-49. The Allahabad Bank, established

in 1865 and still functioning today, is the oldest Joint Stock bank in India.(Joint Stock

Bank: A company that issues stock and requires shareholders to be held liable for the

company's debt) It was not the first though. That honor 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 Simla.

When the American Civil War stopped the supply of cotton to Lancashire from

the Confederate States, promoters opened banks to finance trading in Indian cotton.

With large exposure to speculative ventures, most of the banks opened in India during

that period failed. The depositors lost money and lost interest in keeping deposits with

banks. Subsequently, banking in India remained the exclusive domain of Europeans for

next several decades until the beginning of the 20th century.

Foreign banks too started to arrive, particularly in Calcutta, in the 1860s. The Comptoire

d'Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay in

1862; branches in Madrasand Puducherry, then a French colony,

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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 center.

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

capitalized 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 nationalised banks started in this

district and also a leading private sector bank. Hence undivided Dakshina Kannada

district is known as "Cradle of Indian Banking".

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During the First World War (1914-1918) through the end of the Second World

War (1939-1945), 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:

YearsNumber of banks

that failed

Authorized capital

(Rs. Lakhs)

Paid-up Capital

(Rs. Lakhs)

1913 12 274 35

1914 42 710 109

1915 11 56 5

1916 13 231 4

1917 9 76 25

1918 7 209 1

Post-Independence

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The partition of India in 1947 adversely impacted the economies of Punjab and West

Bengal, paralyzing banking activities for months. India's 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:

The Reserve Bank of India, India's central banking authority, was nationalized on

January 1, 1949 under the terms of the Reserve Bank of India (Transfer to Public

Ownership) Act, 1948 (RBI, 2005b).[Reference www.rbi.org.in]

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."

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

Banks Nationalization in India: Newspaper Clipping, Times of India, July, 20, 1969

Despite the provisions, control and regulations of Reserve Bank of India, banks in India

except the State Bank of India or SBI, continued to be owned and operated by private

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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, 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." The meeting received the

paper with enthusiasm.

Thereafter, her move was swift and sudden. The Government of India issued an

ordinance and nationalised the 14 largest commercial banks with effect from the

midnight of July 19, 1969. 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 early 1990s, the then Narsimha Rao 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, Axis Bank(earlier as UTI Bank), ICICI Bankand HDFC Bank. This move,

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along with the rapid growth in the economy of India, revitalized 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 4-6-4 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 not just demanded more

from their banks but also received more.

Currently (2007), banking in India is generally fairly mature in terms of supply, product

range and reach-even though reach in rural India still remains a challenge for the

private sector and foreign banks. In terms of quality of assets and capital adequacy,

Indian banks are considered to have clean, strong and transparent balance sheets

relative to other banks in comparable economies in its region. The Reserve Bank of

India is an autonomous body, with minimal pressure from the government. The stated

policy of the Bank on the Indian Rupee is to manage volatility but without any fixed

exchange rate-and this has mostly been true.

With the growth in the Indian economy expected to be strong for quite some time-

especially in its services sector-the demand for banking services, especially retail

banking, mortgages and investment services are expected to be strong. One may also

expect M&As, takeovers, and asset sales.

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.

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In recent years critics have charged that the non-government owned banks are too

aggressive in their loan recovery efforts in connection with housing, vehicle and

personal loans. There are press reports that the banks' loan recovery efforts have

driven defaulting borrowers to suicide.

The Indian Banking industry, which is governed by the Banking Regulation Act of India,

1949 can be broadly classified into two major categories, non-scheduled banks and

scheduled banks. Scheduled banks comprise commercial banks and the co-operative

banks. In terms of ownership, commercial banks can be further grouped into

nationalized banks, the State Bank of India and its group banks, regional rural banks

and private sector banks (the old/ new domestic and foreign). These banks have over

67,000 branches spread across the country.

The first phase of financial reforms resulted in the nationalization of 14 major banks in

1969 and resulted in a shift from Class banking to Mass banking. This in turn resulted in

a significant growth in the geographical coverage of banks. Every bank had to earmark

a minimum percentage of their loan portfolio to sectors identified as “priority sectors”.

The manufacturing sector also grew during the 1970s in protected environs and the

banking sector was a critical source. The next wave of reforms saw the nationalization

of 6 more commercial banks in 1980. Since then the number of scheduled commercial

banks increased four-fold and the number of bank branches increased eight-fold.

After the second phase of financial sector reforms and liberalization of the sector in the

early nineties, the Public Sector Banks (PSB) s found it extremely difficult to compete

with the new private sector banks and the foreign banks. The new private sector banks

first made their appearance after the guidelines permitting them were issued in January

1993. Eight new private sector banks are presently in operation. These banks due to

their late start have access to state-of-the-art technology, which in turn helps them to

save on manpower costs and provide better services.

During the year 2000, the State Bank Of India (SBI) and its 7 associates accounted for

a 25 percent share in deposits and 28.1 percent share in credit. The 20 nationalized

banks accounted for 53.2 percent of the deposits and 47.5 percent of credit during the

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same period. The share of foreign banks (numbering 42), regional rural banks and other

scheduled commercial banks accounted for 5.7 percent, 3.9 percent and 12.2 percent

respectively in deposits and 8.41 percent, 3.14 percent and 12.85 percent respectively

in credit during the year 2000.

Current Scenario

The industry is currently in a transition phase. On the one hand, the PSBs, which are

the mainstay of the Indian Banking system are in the process of shedding their flab in

terms of excessive manpower, excessive non Performing Assets (Npas) and excessive

governmental equity, while on the other hand the private sector banks are consolidating

themselves through mergers and acquisitions. 

PSBs, which currently account for more than 78 percent of total banking industry assets

are saddled with NPAs (a mind-boggling Rs 830 billion in 2000), falling revenues from

traditional sources, lack of modern technology and a massive workforce while the new

private sector banks are forging ahead and rewriting the traditional banking business

model by way of their sheer innovation and service. The PSBs are of course currently

working out challenging strategies even as 20 percent of their massive employee

strength has dwindled in the wake of the successful Voluntary Retirement Schemes

(VRS) schemes.

The private players however cannot match the PSB’s great reach, great size and

access to low cost deposits. Therefore one of the means for them to combat the PSBs

has been through the merger and acquisition (M& A) route. Over the last two years, the

industry has witnessed several such instances. For instance, Hdfc Bank’s merger with

Times Bank Icici Bank’s acquisition of ITC Classic, Anagram Finance and Bank of

Madura. Centurion Bank, Indusind Bank, Bank of Punjab, Vysya Bank are said to be on

the lookout. The UTI bank- Global Trust Bank merger however opened a pandora’s box

and brought about the realization that all was not well in the functioning of many of the

private sector banks.

Page 17: Divya report

Private sector Banks have pioneered internet banking, phone banking, anywhere

banking, mobile banking, debit cards, Automatic Teller Machines (ATMs) and combined

various other services and integrated them into the mainstream banking arena, while

the PSBs are still grappling with disgruntled employees in the aftermath of successful

VRS schemes. Also, following India’s commitment to the W To agreement in respect of

the services sector, foreign banks, including both new and the existing ones, have been

permitted to open up to 12 branches a year with effect from 1998-99 as against the

earlier stipulation of 8 branches.

Talks of government diluting their equity from 51 percent to 33 percent in November

2000 has also opened up a new opportunity for the takeover of even the PSBs. The FDI

rules being more rationalized in Q1FY02 may also pave the way for foreign banks

taking the M& A route to acquire willing Indian partners.

Meanwhile the economic and corporate sector slowdown has led to an increasing

number of banks focusing on the retail segment. Many of them are also entering the

new vistas of Insurance. Banks with their phenomenal reach and a regular interface

with the retail investor are the best placed to enter into the insurance sector. Banks in

India have been allowed to provide fee-based insurance services without risk

participation, invest in an insurance company for providing infrastructure and services

support and set up of a separate joint-venture insurance company with risk

participation.

Aggregate Performance of the Banking Industry

Aggregate deposits of scheduled commercial banks increased at a compounded annual

average growth rate (Cagr) of 17.8 percent during 1969-99, while bank credit expanded

at a Cagr of 16.3 percent per annum. Banks’ investments in government and other

approved securities recorded a Cagr of 18.8 percent per annum during the same

period.

In FY01 the economic slowdown resulted in a Gross Domestic Product (GDP) growth of

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only 6.0 percent as against the previous year’s 6.4 percent. The WPI Index (a measure

of inflation) increased by 7.1 percent as against 3.3 percent in FY00. Similarly, money

supply (M3) grew by around 16.2 percent as against 14.6 percent a year ago.

The growth in aggregate deposits of the scheduled commercial banks at 15.4 percent in

FY01 percent was lower than that of 19.3 percent in the previous year, while the growth

in credit by SCBs slowed down to 15.6 percent in FY01 against 23 percent a year ago. 

The industrial slowdown also affected the earnings of listed banks. The net profits of 20

listed banks dropped by 34.43 percent in the quarter ended March 2001. Net profits

grew by 40.75 percent in the first quarter of 2000-2001, but dropped to 4.56 percent in

the fourth quarter of 2000-2001. 

On the Capital Adequacy Ratio (CAR) front while most banks managed to fulfill the

norms, it was a feat achieved with its own share of difficulties. The CAR, which at

present is 9.0 percent, is likely to be hiked to 12.0 percent by the year 2004 based on

the Basle Committee recommendations. Any bank that wishes to grow its assets needs

to also shore up its capital at the same time so that its capital as a percentage of the

risk-weighted assets is maintained at the stipulated rate. While the IPO route was a

much-fancied one in the early ‘90s, the current scenario doesn’t look too attractive for

bank majors.

Consequently, banks have been forced to explore other avenues to shore up their

capital base. While some are wooing foreign partners to add to the capital others are

employing the M& A route. Many are also going in for right issues at prices considerably

lower than the market prices to woo the investors. 

Interest Rate Scene

The two years, post the East Asian crises in 1997-98 saw a climb in the global interest

rates. It was only in the later half of FY01 that the US Fed cut interest rates. India has

however remained more or less insulated. The past 2 years in our country was

characterized by a mounting intention of the Reserve Bank Of India (RBI) to steadily

reduce interest rates resulting in a narrowing differential between global and domestic

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rates.

The RBI has been affecting bank rate and CRR cuts at regular intervals to improve

liquidity and reduce rates. The only exception was in July 2000 when the RBI increased

the Cash Reserve Ratio (CRR) to stem the fall in the rupee against the dollar. The

steady fall in the interest rates resulted in squeezed margins for the banks in general.

Governmental Policy

After the first phase and second phase of financial reforms, in the 1980s commercial

banks began to function in a highly regulated environment, with administered interest

rate structure, quantitative restrictions on credit flows, high reserve requirements and

reservation of a significant proportion of lendable resources for the priority and the

government sectors. The restrictive regulatory norms led to the credit rationing for the

private sector and the interest rate controls led to the unproductive use of credit and low

levels of investment and growth. The resultant ‘financial repression’ led to decline in

productivity and efficiency and erosion of profitability of the banking sector in general.

This was when the need to develop a sound commercial banking system was felt. This

was worked out mainly with the help of the recommendations of the Committee on the

Financial System (Chairman: Shri M. Narasimham), 1991. The resultant financial sector

reforms called for interest rate flexibility for banks, reduction in reserve requirements,

and a number of structural measures. Interest rates have thus been steadily

deregulated in the past few years with banks being free to fix their Prime Lending

Rates(PLRs) and deposit rates for most banking products. Credit market reforms

included introduction of new instruments of credit, changes in the credit delivery system

and integration of functional roles of diverse players, such as, banks, financial

institutions and non-banking financial companies (Nbfcs). Domestic Private Sector

Banks were allowed to be set up, PSBs were allowed to access the markets to shore up

their Cars.

Implications of Some Recent Policy Measures

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The allowing of PSBs to shed manpower and dilution of equity are moves that will lend

greater autonomy to the industry. In order to lend more depth to the capital markets the

RBI had in November 2000 also changed the capital market exposure norms from 5

percent of bank’s incremental deposits of the previous year to 5 percent of the bank’s

total domestic credit in the previous year. But this move did not have the desired effect,

as in, while most banks kept away almost completely from the capital markets, a few

private sector banks went overboard and exceeded limits and indulged in dubious stock

market deals. The chances of seeing banks making a comeback to the stock markets

are therefore quite unlikely in the near future.

The move to increase Foreign Direct Investment FDI limits to 49 percent from 20

percent during the first quarter of this fiscal came as a welcome announcement to

foreign players wanting to get a foot hold in the Indian Markets by investing in willing

Indian partners who are starved of networth to meet CAR norms. Ceiling for FII

investment in companies was also increased from 24.0 percent to 49.0 percent and

have been included within the ambit of FDI investment.

The abolishment of interest tax of 2.0 percent in budget 2001-02 will help banks pass

on the benefit to the borrowers on new loans leading to reduced costs and easier

lending rates. Banks will also benefit on the existing loans wherever the interest tax cost

element has already been built into the terms of the loan. The reduction of interest rates

on various small savings schemes from 11 percent to 9.5 percent in Budget 2001-02

was a much awaited move for the banking industry and in keeping with the reducing

interest rate scenario, however the small investor is not very happy with the move.

Some of the not so good measures however like reducing the limit for tax deducted at

source (TDS) on interest income from deposits to Rs 2,500 from the earlier level of Rs

10,000, in Budget 2001-02, had met with disapproval from the banking fraternity who

feared that the move would prove counterproductive and lead to increased

fragmentation of deposits, increased volumes and transaction costs. The limit was

thankfully partially restored to Rs 5000 at the time of passing the Finance Bill in the

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Parliament.

April 2001-Credit Policy Implications

The rationalization of export credit norms in will bestow greater operational flexibility on

banks, and also reduce the borrowing costs for exporters. Thus this move could trigger

exports growth in the future. Banks can also hope to earn increased revenue with the

interest paid by RBI on CRR balances being increased from 4.0 percent to 6.0 percent.

The stock market scam brought out the unholy nexus between the Cooperative banks

and stockbrokers. In order to usher in greater prudence in their operations, the RBI has

barred Urban Cooperative Banks from financing the stock market operations and is also

in the process of setting up of a new apex supervisory body for them. Meanwhile the

foreign banks have a bone to pick with the RBI. The RBI had announced that forex

loans are not to be calculated as a part of Tier-1 Capital for drawing up exposure limits

to companies effective 1 April 2002. This will force foreign banks either to infuse fresh

capital to maintain the capital adequacy ratio (CAR) or pare their asset base. Further,

the RBI has also sought to keep foreign competition away from the nascent net banking

segment in India by allowing only Indian banks with a local physical presence, to offer

Internet banking.

Crystal Gazing

On the macro economic front, GDP is expected to grow by 6.0 to 6.5 percent while the

projected expansion in broad money (M3) for 2001-02 is about 14.5 percent. Credit and

deposits are both expected to grow by 15-16 percent in FY02. India's foreign exchange

reserves should reach US$50.0 billion in FY02 and the Indian rupee should hold steady.

The interest rates are likely to remain stable this fiscal based on an expected downward

trend in inflation rate, sluggish pace of non-oil imports and likelihood of declining global

interest rates. The domestic banking industry is forecasted to witness a higher degree

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of mergers and acquisitions in the future. Banks are likely to opt for the universal

banking approach with a stronger retail approach. Technology and superior customer

service will continue to be the imperatives for success in this industry.

Public Sector banks that imbibe new concepts in banking, turn tech savvy, leaner and

meaner post VRS and obtain more autonomy by keeping governmental stake to the

minimum can succeed in effectively taking on the private sector banks by virtue of their

sheer size. Weaker PSU banks are unlikely to survive in the long run. Consequently,

they are likely to be either acquired by stronger players or will be forced to look out for

other strategies to infuse greater capital and optimize their operations.

Foreign banks are likely to succeed in their niche markets and be the innovators in

terms of technology introduction in the domestic scenario. The outlook for the private

sector banks indeed looks to be more promising vis-à-vis other banks. While their

focused operations, lower but more productive employee force etc will stand them good,

possible acquisitions of PSU banks will definitely give them the much needed scale of

operations and access to lower cost of funds. These banks will continue to be the early

technology adopters in the industry, thus increasing their efficiencies. Also, they have

been amongst the first movers in the lucrative insurance segment. Already, banks such

as Icici Bank and Hdfc Bank have forged alliances with Prudential Life and Standard

Life respectively. This is one segment that is likely to witness a greater deal of action in

the future. In the near term, the low interest rate scenario is likely to affect the spreads

of majors. This is likely to result in a greater focus on better asset-liability management

procedures. Consequently, only banks that strive hard to increase their share of fee-

based revenues are likely to do better in the future. 

Without a sound and effective banking system in India it cannot have a healthy

economy. The banking system of India should not only be hassle free but it should be

able to meet new challenges posed by the technology and any other external and

internal factors.

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For the past three decades India's banking system has several outstanding

achievements to its credit. The most striking is its extensive reach. It is no longer

confined to only metropolitans or cosmopolitans in India. In fact, Indian banking system

has reached even to the remote corners of the country. This is one of the main reasons

of India's growth process. The government's regular policy for Indian bank since 1969

has paid rich dividends with the nationalization of 14 major private banks of India.

Not long ago, an account holder had to wait for hours at the bank counters for getting a

draft or for withdrawing his own money. Today, he has a choice. Gone are days when

the most efficient bank transferred money from one branch to other in two days. Now it

is simple as instant messaging or dials a pizza. Money has become the order of the

day.

The first bank in India, though conservative, was established in 1786. From 1786 till

today, the journey of Indian Banking System can be segregated into three distinct

phases. They are as mentioned below:

Early phase from 1786 to 1969 of Indian Banks

Nationalization of Indian Banks and up to 1991 prior to Indian banking sector

Reforms.

New phase of Indian Banking System with the advent of Indian Financial &

Banking Sector Reforms after 1991.

To make this write-up more explanatory, I prefix the scenario as Phase I, Phase II and

Phase III.

Phase I

The General Bank of India was set up in the year 1786. Next came Bank of Hindustan

and Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of

Bombay (1840) and Bank of Madras (1843) as independent units and called it

Presidency Banks. These three banks were amalgamated in 1920 and Imperial Bank of

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India was established which started as private shareholders banks, mostly Europeans

shareholders.

In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab

National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and

1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank,

and Bank of Mysore were set up. Reserve Bank of India came in 1935.

During the first phase the growth was very slow and banks also experienced periodic

failures between 1913 and 1948. There were approximately 1100 banks, mostly small.

To streamline the functioning and activities of commercial banks, the Government of

India came up with The Banking Companies Act, 1949 which was later changed to

Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965).

Reserve Bank of India was vested with extensive powers for the supervision of banking

in India as the Central Banking Authority.

During those days public has lesser confidence in the banks. As an aftermath deposit

mobilization was slow. Abreast of it the savings bank facility provided by the Postal

department was comparatively safer. Moreover, funds were largely given to traders.

Phase II

Government took major steps in this Indian Banking Sector Reform after independence.

In 1955, it nationalized Imperial Bank of India with extensive banking facilities on a large

scale especially in rural and semi-urban areas. It formed State Bank of India to act as

the principal agent of RBI and to handle banking transactions of the Union and State

Governments all over the country.

Seven banks forming subsidiary of State Bank of India was nationalized in 1960 on 19th

July, 1969, major process of nationalization was carried out. It was the effort of the then

Prime Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country

were nationalized.

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Second phase of nationalization Indian Banking Sector Reform was carried out in 1980

with seven more banks. This step brought 80% of the banking segment in India under

Government ownership. 

The following are the steps taken by the Government of India to Regulate Banking

Institutions in the Country:

1949: Enactment of Banking Regulation Act.

1955: Nationalization of State Bank of India.

1959: Nationalization of SBI subsidiaries.

1961: Insurance cover extended to deposits.

1969: Nationalization of 14 major banks.

1971: Creation of credit guarantee corporation.

1975: Creation of regional rural banks.

1980: Nationalization of seven banks with deposits over 200 crore.

After the nationalization of banks, the branches of the public sector bank India rose to

approximately 800% in deposits and advances took a huge jump by 11,000%. Banking

in the sunshine of Government ownership gave the public implicit faith and immense

confidence about the sustainability of these institutions.

Phase III

This phase has introduced many more products and facilities in the banking sector in its

reforms measure. In 1991, under the chairmanship of M Narasimham, a committee was

set up by his name which worked for the liberalization of banking practices.

The country is flooded with foreign banks and their ATM stations. Efforts are being put

to give a satisfactory service to customers. Phone banking and net banking is

introduced. The entire system became more convenient and swift. Time is given more

importance than money.

The financial system of India has shown a great deal of resilience. It is sheltered from

any crisis triggered by any external macroeconomics shock as other East Asian

Page 26: Divya report

Countries suffered. This is all due to a flexible exchange rate regime, the foreign

reserves are high, the capital account is not yet fully convertible, and banks and their

customers have limited foreign exchange exposure.

Nationalization of Banks in India

The nationalization of banks in India took place in 1969 by Mrs. Indira Gandhi the then

prime minister. It nationalized 14 banks then. These banks were mostly owned by

businessmen and even managed by them. 

Central Bank of India

Bank of Maharashtra

Dena Bank

Punjab National Bank

Syndicate Bank

Canara Bank

Indian Bank

Indian Overseas Bank

Bank of Baroda

Union Bank

Allahabad Bank

United Bank of India

UCO Bank

Bank of India

Before the steps of nationalization of Indian banks, only State Bank of India (SBI) was

nationalized. It took place in July 1955 under the SBI Act of 1955. Nationalization of

Seven State Banks of India (formed subsidiary) took place on 19th July, 1960.

The State Bank of India is India's largest commercial bank and is ranked one of the top

five banks worldwide. It serves 90 million customers through a network of 9,000

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branches and it offers -- either directly or through subsidiaries -- a wide range of

banking services. 

The second phase of nationalization of Indian banks took place in the year 1980. Seven

more banks were nationalized with deposits over 200 crores. Till this year,

approximately 80% of the banking segment in India was under Government ownership. 

After the nationalization of banks in India, the branches of the public sector banks rose

to approximately 800% in deposits and advances took a huge jump by 11,000%.

1955: Nationalization of State Bank of India.

1959: Nationalization of SBI subsidiaries.

1969: Nationalization of 14 major banks.

1980: Nationalization of seven banks with deposits over 200 crores.

Banks in India

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In India the banks are being segregated in different groups. Each group has their own

benefits and limitations in operating in India. Each has their own dedicated target

market. Few of them only work in rural sector while others in both rural as well as urban.

Many even are only catering in cities. Some are of Indian origin and some are foreign

players.

All these details and many more is discussed over here. The banks and its relation with

the customers, their mode of operation, the names of banks under different groups and

other such useful information are talked about.

One more section has been taken note of is the upcoming foreign banks in India. The

RBI has shown certain interest to involve more of foreign banks than the existing one

recently. This step has paved a way for few more foreign banks to start business in

India.

Page 29: Divya report

ABN-AMRO Bank

American Express Bank

Andhra Bank

Allahabad Bank

Axis Bank (Earlier UTI Bank)

Bank of Baroda

Bank of India

Bank of Maharastra

Bank of Punjab

Bank of Rajasthan

Bank of Ceylon

BNP Paribas Bank

Canara Bank

Catholic Syrian Bank

Central Bank of India

Centurion Bank

Citi Bank

City Union Bank

Corporation Bank

Dena Bank

Deutsche Bank

Development Credit Bank

Federal Bank

HDFC Bank

HSBC

ICICI Bank

IDBI Bank

Indian Bank

Indian Overseas Bank

IndusInd Bank

ING Vysya Bank

Jammu & Kashmir Bank

JPMorgan Chase Bank

Karnataka Bank

Karur Vysya Bank

Laxmi Vilas Bank

Oriental Bank of Commerce

Punjab National Bank

South Indian Bank

Standard Chartered Bank

State Bank of India (SBI)

State Bank of Bikaner & Jaipur

State Bank of Hyderabad

State Bank of Indore

State Bank of Saurastra

State Bank of Travancore

Syndicate Bank

Taib Bank

UCO Bank

Union Bank of India

United Bank of India

United Western Bank

Vijaya Bank

Kotak Mahindra Bank

Yes Bank

Scheduled Commercial Banks In India

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The commercial banking structure in India consists of:

Scheduled Commercial Banks in India

Unscheduled Banks in India

Scheduled Banks in India constitute those banks which have been included in the

Second Schedule of Reserve Bank of India(RBI) Act, 1934. RBI in turn includes only

those banks in this schedule which satisfy the criteria laid down vide section 42 (6) (a)

of the Act.

As on 30th June, 1999, there were 300 scheduled banks in India having a total network

of 64,918 branches. The scheduled commercial banks in India comprise of State bank

of India and its associates (8), nationalized banks (19), foreign banks (45), private

Sector banks (32), co-operative banks and regional rural banks.

"Scheduled banks in India" means the State Bank of India constituted under the State

Bank of India Act, 1955 (23 of 1955), a subsidiary bank as defined in the State Bank of

India (Subsidiary Banks) Act, 1959 (38 of 1959), a corresponding new bank constituted

under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings)

Act, 1970 (5 of 1970), or under section 3 of the Banking Companies (Acquisition and

Transfer of Undertakings) Act, 1980 (40 of 1980), or any other bank being a bank

included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934),

but does not include a co-operative bank". 

"Non-scheduled bank in India" means a banking company as defined in clause (c) of

section 5 of the Banking Regulation Act, 1949 (10 of 1949), which is not a scheduled

bank". 

The following are the Scheduled Banks in India (Public Sector):

State Bank of India

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State Bank of Bikaner and Jaipur

State Bank of Hyderabad

State Bank of Indore

State Bank of Mysore

State Bank of Saurashtra

State Bank of Travancore

Andhra Bank

Allahabad Bank

Bank of Baroda

Bank of India

Bank of Maharashtra

Canara Bank

Central Bank of India

Corporation Bank

Dena Bank

Indian Overseas Bank

Indian Bank

Oriental Bank of Commerce

Punjab National Bank

Punjab and Sind Bank

Syndicate Bank

Union Bank of India

United Bank of India

UCO Bank

Vijaya Bank

The following are the Scheduled Banks in India (Private Sector):

ING Vysya Bank Ltd

Axis Bank Ltd

Indusind Bank Ltd

Page 32: Divya report

ICICI Bank Ltd

South Indian Bank

HDFC Bank Ltd

Centurion Bank Ltd

Bank of Punjab Ltd

IDBI Bank Ltd

Jammu & Kashmir Bank Ltd.

Banking services in India

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.

This section of banking deals with the latest discovery in the banking instruments along

with the polished version of their old systems. 

Financial and Banking Sector Reforms

The last decade witnessed the maturity of India's financial markets. Since 1991, every

governments of India took major steps in reforming the financial sector of the country.

The important achievements in the following fields are discussed under separate

heads: 

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Financial markets

Regulators

The banking system

Non-banking finance companies

The capital market

Mutual funds

Overall approach to reforms

Deregulation of banking system

Capital market developments

Consolidation imperative

Now let us discuss each segment separately.

Financial Markets

In the last decade, Private Sector Institutions played an important role. They grew

rapidly in commercial banking and asset management business. With the openings

in the insurance sector for these institutions, they started making debt in the market.

Competition among financial intermediaries gradually helped the interest rates to

decline. Deregulation added to it. The real interest rate was maintained. The

borrowers did not pay high price while depositors had incentives to save. It was

something between the nominal rate of interest and the expected rate of inflation. 

Regulators

The Finance Ministry continuously formulated major policies in the field of financial

sector of the country. The Government accepted the important role of regulators.

The Reserve Bank of India (RBI) has become more independant. Securities and

Exchange Board of India (SEBI) and the Insurance Regulatory and Development

Authority (IRDA) became important institutions. Opinions are also there that there

should be a super-regulator for the financial services sector instead of multiplicity of

Page 34: Divya report

regulators.

The banking system

Almost 80% of the business is still controlled by Public Sector Banks (PSBs). PSBs

are still dominating the commercial banking system. Shares of the leading PSBs are

already listed on the stock exchanges.

The RBI has given licences to new private sector banks as part of the liberalisation

process. The RBI has also been granting licences to industrial houses. Many banks

are successfully running in the retail and consumer segments but are yet to deliver

services to industrial finance, retail trade, small business and agricultural finance.

The PSBs will play an important role in the industry due to its number of branches

and foreign banks facing the constrait of limited number of branches. Hence, in

order to achieve an efficient banking system, the onus is on the Government to

encourage the PSBs to be run on professional lines.

Development finance institutions

FIs's access to SLR funds reduced. Now they have to approach the capital market

for debt and equity funds. Convertibility clause no longer obligatory for assistance to

corporate sanctioned by term-lending institutions. Capital adequacy norms extended

to financial institutions. DFIs such as IDBI and ICICI have entered other segments of

financial services such as commercial banking, asset management and insurance

through separate ventures. The move to universal banking has started.

Non-banking finance companies

In the case of new NBFCs seeking registration with the RBI, the requirement of

minimum net owned funds, has been raised to Rs.2 crores Until recently, the money

Page 35: Divya report

market in India was narrow and circumscribed by tight regulations over interest rates

and participants. The secondary market was underdeveloped and lacked liquidity.

Several measures have been initiated and include new money market instruments,

strengthening of existing instruments and setting up of the Discount and Finance

House of India (DFHI). 

The RBI conducts its sales of dated securities and treasury bills through its open

market operations (OMO) window. Primary dealers bid for these securities and also

trade in them. The DFHI is the principal agency for developing a secondary market

for money market instruments and Government of India treasury bills. The RBI has

introduced a liquidity adjustment facility (LAF) in which liquidity is injected through

reverse repo auctions and liquidity is sucked out through repo auctions. 

On account of the substantial issue of government debt, the gilt- edged market

occupies an important position in the financial set- up. The Securities Trading

Corporation of India (STCI), which started operations in June 1994 has a mandate to

develop the secondary market in government securities. 

Long-term debt market: The development of a long-term debt market is crucial to the

financing of infrastructure. After bringing some order to the equity market, the SEBI

has now decided to concentrate on the development of the debt market. Stamp duty

is being withdrawn at the time of dematerialization of debt instruments in order to

encourage paperless trading. 

The capital market 

The number of shareholders in India is estimated at 25 million. However, only an

estimated two lakh persons actively trade in stocks. There has been a dramatic

improvement in the country's stock market trading infrastructure during the last few

years. Expectations are that India will be an attractive emerging market with

tremendous potential. Unfortunately, during recent times the stock markets have

Page 36: Divya report

been constrained by some unsavory developments, which has led to retail investors

deserting the stock markets. 

Mutual funds

 The mutual funds industry is now regulated under the SEBI (Mutual Funds)

Regulations, 1996 and amendments thereto. With the issuance of SEBI guidelines,

the industry had a framework for the establishment of many more players, both

Indian and foreign players. 

The Unit Trust of India remains easily the biggest mutual fund controlling a corpus of

nearly Rs.70,000 crores, but its share is going down. The biggest shock to the

mutual fund industry during recent times was the insecurity generated in the minds

of investors regarding the US 64 scheme. With the growth in the securities markets

and tax advantages granted for investment in mutual fund units, mutual funds

started becoming popular. The foreign owned AMCs are the ones which are now

setting the pace for the industry. They are introducing new products, setting new

standards of customer service, improving disclosure standards and experimenting

with new types of distribution. 

The insurance industry is the latest to be thrown open to competition from the

private sector including foreign players. Foreign companies can only enter joint

ventures with Indian companies, with participation restricted to 26 per cent of equity.

It is too early to conclude whether the erstwhile public sector monopolies will

successfully be able to face up to the competition posed by the new players, but it

can be expected that the customer will gain from improved service. 

The new players will need to bring in innovative products as well as fresh ideas on

marketing and distribution, in order to improve the low per capita insurance

coverage. Good regulation will, of course, be essential. 

Overall approach to reforms

Page 37: Divya report

The last ten years have seen major improvements in the working of various financial

market participants. The government and the regulatory authorities have followed a

step-by-step approach, not a big bang one. The entry of foreign players has assisted

in the introduction of international practices and systems. Technology developments

have improved customer service. Some gaps however remain (for example: lack of

an inter-bank interest rate benchmark, an active corporate debt market and a

developed derivatives market). On the whole, the cumulative effect of the

developments since 1991 has been quite encouraging. An indication of the strength

of the reformed Indian financial system can be seen from the way India was not

affected by the Southeast Asian crisis. 

However, financial liberalization alone will not ensure stable economic growth. Some

tough decisions still need to be taken. Without fiscal control, financial stability cannot

be ensured. The fate of the Fiscal Responsibility Bill remains unknown and high

fiscal deficits continue. In the case of financial institutions, the political and legal

structures hve to ensure that borrowers repay on time the loans they have taken.

The phenomenon of rich industrialists and bankrupt companies continues. Further,

frauds cannot be totally prevented, even with the best of regulation. However,

punishment has to follow crime, which is often not the case in India. 

Deregulation of banking system

Prudential norms were introduced for income recognition, asset classification,

provisioning for delinquent loans and for capital adequacy. In order to reach the

stipulated capital adequacy norms, substantial capital were provided by the

Government to PSBs. Government pre-emption of banks' resources through

statutory liquidity ratio (SLR) and cash reserve ratio (CRR) brought down in steps.

Interest rates on the deposits and lending sides almost entirely were deregulated. 

New private sector banks allowed to promote and encourage competition. PSBs

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were encouraged to approach the public for raising resources. Recovery of debts

due to banks and the Financial Institutions Act, 1993 was passed, and special

recovery tribunals set up to facilitate quicker recovery of loan arrears. 

Bank lending norms liberalized and a loan system to ensure better control over

credit introduced. Banks asked to set up asset liability management (ALM) systems.

RBI guidelines issued for risk management systems in banks encompassing credit,

market and operational risks. A credit information bureau being established to

identify bad risks. Derivative products such as forward rate agreements (FRAs) and

interest rate swaps (IRSs) introduced. 

Capital market developments 

The Capital Issues (Control) Act, 1947, repealed, office of the Controller of Capital

Issues was abolished and the initial share pricing were decontrolled. SEBI, the

capital market regulator was established in 1992. 

Foreign institutional investors (FIIs) were allowed to invest in Indian capital markets

after registration with the SEBI. Indian companies were permitted to access

international capital markets through euro issues. 

The National Stock Exchange (NSE), with nationwide stock trading and electronic

display, clearing and settlement facilities was established. Several local stock

exchanges changed over from floor based trading to screen based trading. 

Private mutual funds permitted

The Depositories Act had given a legal framework for the establishment of

depositories to record ownership deals in book entry form. Dematerialization of

stocks encouraged paperless trading. Companies were required to disclose all

material facts and specific risk factors associated with their projects while making

public issues. 

Page 39: Divya report

To reduce the cost of issue, underwriting by the issuer were made optional, subject

to conditions. The practice of making preferential allotment of shares at prices

unrelated to the prevailing market prices stopped and fresh guidelines were issued

by SEBI.

SEBI reconstituted governing boards of the stock exchanges, introduced capital

adequacy norms for brokers, and made rules for making client or broker relationship

more transparent which included separation of client and broker accounts.

Buyback of shares allowed

The SEBI started insisting on greater corporate disclosures. Steps were taken to

improve corporate governance based on the report of a committee. 

SEBI issued detailed employee stock option scheme and employee stock purchase

scheme for listed companies. 

Standard denomination for equity shares of Rs. 10 and Rs. 100 were abolished.

Companies given the freedom to issue dematerialized shares in any denomination. 

Derivatives trading starts with index options and futures. A system of rolling

settlements introduced. SEBI empowered to register and regulate venture capital

funds. 

The SEBI (Credit Rating Agencies) Regulations, 1999 issued for regulating new

credit rating agencies as well as introducing a code of conduct for all credit rating

agencies operating in India. 

Consolidation imperative 

Another aspect of the financial sector reforms in India is the consolidation of existing

institutions which is especially applicable to the commercial banks. In India the

banks are in huge quantity. First, there is no need for 27 PSBs with branches all

over India. A number of them can be merged. The merger of Punjab National Bank

Page 40: Divya report

and New Bank of India was a difficult one, but the situation is different now. No one

expected so many employees to take voluntary retirement from PSBs, which at one

time were much sought after jobs. Private sector banks will be self consolidated

while co-operative and rural banks will be encouraged for consolidation, and anyway

play only a niche role. 

In the case of insurance, the Life Insurance Corporation of India is a behemoth,

while the four public sector general insurance companies will probably move

towards consolidation with a bit of nudging. The UTI is yet again a big institution,

even though facing difficult times, and most other public sector players are already

exiting the mutual fund business. There are a number of small mutual fund players

in the private sector, but the business being comparatively new for the private

players, it will take some time.

We finally come to convergence in the financial sector, the new buzzword

internationally. Hi-tech and the need to meet increasing consumer needs is

encouraging convergence, even though it has not always been a success till date. In

India organizations such as IDBI, ICICI, HDFC and SBI are already trying to offer

various services to the customer under one umbrella. This phenomenon is expected

to grow rapidly in the coming years. Where mergers may not be possible, alliances

between organizations may be effective. Various forms of banc assurance are being

introduced, with the RBI having already come out with detailed guidelines for entry

of banks into insurance. The LIC has bought into Corporation Bank in order to

spread its insurance distribution network. Both banks and insurance companies

have started entering the asset management business, as there is a great deal of

synergy among these businesses. The pensions market is expected to open up

fresh opportunities for insurance companies and mutual funds. 

It is not possible to play the role of the Oracle of Delphi when a vast nation like India

is involved. However, a few trends are evident, and the coming decade should be as

interesting as the last one. 

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Reserve Bank of India (RBI)

Reserve Bank of India (RBI) is the central bank of the country and is different from

Central Bank of India. 

The central bank of the country is the Reserve Bank of India (RBI). It was established in

April 1935 with a share capital of Rs. 5 crores on the basis of the recommendations of

the Hilton Young Commission. The share capital was divided into shares of Rs. 100

each fully paid which was entirely owned by private shareholders in the beginning. The

Government held shares of nominal value of Rs. 2, 20,000.

Reserve Bank of India was nationalized in the year 1949. The general superintendence

and direction of the Bank is entrusted to Central Board of Directors of 20 members, the

Governor and four Deputy Governors, one Government official from the Ministry of

Finance, ten nominated Directors by the Government to give representation to

important elements in the economic life of the country, and four nominated Directors by

the Central Government to represent the four local Boards with the headquarters at

Mumbai, Kolkata, Chennai and New Delhi. Local Boards consist of five members each

Central Government appointed for a term of four years to represent territorial and

economic interests and the interests of co-operative and indigenous banks.

The Reserve Bank of India Act, 1934 was commenced on April 1, 1935. The Act, 1934

(II of 1934) provides the statutory basis of the functioning of the Bank.

The Bank was constituted for the need of following:

To regulate the issue of banknotes

To maintain reserves with a view to securing monetary stability and

To operate the credit and currency system of the country to its advantage.

Functions of Reserve Bank of India 

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The Reserve Bank of India Act of 1934 entrust all the important functions of a central

bank the Reserve Bank of India.

Bank of Issue

Under Section 22 of the Reserve Bank of India Act, the Bank has the sole right to issue

bank notes of all denominations. The distribution of one rupee notes and coins and

small coins all over the country is undertaken by the Reserve Bank as agent of the

Government. The Reserve Bank has a separate Issue Department which is entrusted

with the issue of currency notes. The assets and liabilities of the Issue Department are

kept separate from those of the Banking Department. Originally, the assets of the Issue

Department were to consist of not less than two-fifths of gold coin, gold bullion or

sterling securities provided the amount of gold was not less than Rs. 40 crores in value.

The remaining three-fifths of the assets might be held in rupee coins, Government of

India rupee securities, eligible bills of exchange and promissory notes payable in India.

Due to the exigencies of the Second World War and the post-was period, these

provisions were considerably modified. Since 1957, the Reserve Bank of India is

required to maintain gold and foreign exchange reserves of Ra. 200 crores, of which at

least Rs. 115 crores should be in gold. The system as it exists today is known as the

minimum reserve system.

 

Banker to Government

The second important function of the Reserve Bank of India is to act as Government

banker, agent and adviser. The Reserve Bank is agent of Central Government and of all

State Governments in India excepting that of Jammu and Kashmir. The Reserve Bank

has the obligation to transact Government business, via. to keep the cash balances as

deposits free of interest, to receive and to make payments on behalf of the Government

and to carry out their exchange remittances and other banking operations. The Reserve

Page 43: Divya report

Bank of India helps the Government - both the Union and the States to float new loans

and to manage public debt. The Bank makes ways and means advances to the

Governments for 90 days. It makes loans and advances to the States and local

authorities. It acts as adviser to the Government on all monetary and banking matters.

Bankers' Bank and Lender of the Last Resort

The Reserve Bank of India acts as the bankers' bank. According to the provisions of the

Banking Companies Act of 1949, every scheduled bank was required to maintain with

the Reserve Bank a cash balance equivalent to 5% of its demand liabilities and 2 per

cent of its time liabilities in India. By an amendment of 1962, the distinction between

demand and time liabilities was abolished and banks have been asked to keep cash

reserves equal to 3 per cent of their aggregate deposit liabilities. The minimum cash

requirements can be changed by the Reserve Bank of India.

The scheduled banks can borrow from the Reserve Bank of India on the basis of

eligible securities or get financial accommodation in times of need or stringency by

rediscounting bills of exchange. Since commercial banks can always expect the

Reserve Bank of India to come to their help in times of banking crisis the Reserve Bank

becomes not only the banker's bank but also the lender of the last resort.

Controller of Credit

The Reserve Bank of India is the controller of credit i.e. it has the power to influence the

volume of credit created by banks in India. It can do so through changing the Bank rate

or through open market operations. According to the Banking Regulation Act of 1949,

the Reserve Bank of India can ask any particular bank or the whole banking system not

to lend to particular groups or persons on the basis of certain types of securities. Since

1956, selective controls of credit are increasingly being used by the Reserve Bank.

The Reserve Bank of India is armed with many more powers to control the Indian

money market. Every bank has to get a license from the Reserve Bank of India to do

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banking business within India, the license can be cancelled by the Reserve Bank of

certain stipulated conditions are not fulfilled. Every bank will have to get the permission

of the Reserve Bank before it can open a new branch. Each scheduled bank must send

a weekly return to the Reserve Bank showing, in detail, its assets and liabilities. This

power of the Bank to call for information is also intended to give it effective control of the

credit system. The Reserve Bank has also the power to inspect the accounts of any

commercial bank. 

As supreme banking authority in the country, the Reserve Bank of India, therefore, has

the following powers:

(a) It holds the cash reserves of all the scheduled banks. 

(b) It controls the credit operations of banks through quantitative and qualitative

controls. 

(c) It controls the banking system through the system of licensing, inspection and calling

for information. 

(d) It acts as the lender of the last resort by providing rediscount facilities to scheduled

banks.

Custodian of Foreign Reserves

The Reserve Bank of India has the responsibility to maintain the official rate of

exchange. According to the Reserve Bank of India Act of 1934, the Bank was required

to buy and sell at fixed rates any amount of sterling in lots of not less than Rs. 10,000.

The rate of exchange fixed was Re. 1 = sh. 6d. Since 1935 the Bank was able to

maintain the exchange rate fixed at lsh.6d. though there were periods of extreme

pressure in favor of or against the rupee. After India became a member of the

International Monetary Fund in 1946, the Reserve Bank has the responsibility of

maintaining fixed exchange rates with all other member countries of the I.M.F.

Besides maintaining the rate of exchange of the rupee, the Reserve Bank has to act as

the custodian of India's reserve of international currencies. The vast sterling balances

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were acquired and managed by the Bank. Further, the RBI has the responsibility of

administering the exchange controls of the country.

Supervisory functions

In addition to its traditional central banking functions, the Reserve bank has certain non-

monetary functions of the nature of supervision of banks and promotion of sound

banking in India. The Reserve Bank Act, 1934, and the Banking Regulation Act, 1949

have given the RBI wide powers of supervision and control over commercial and co-

operative banks, relating to licensing and establishments, branch expansion, liquidity of

their assets, management and methods of working, amalgamation, reconstruction, and

liquidation. The RBI is authorized to carry out periodical inspections of the banks and to

call for returns and necessary information from them. The nationalization of 14 major

Indian scheduled banks in July 1969 has imposed new responsibilities on the RBI for

directing the growth of banking and credit policies towards more rapid development of

the economy and realization of certain desired social objectives. The supervisory

functions of the RBI have helped a great deal in improving the standard of banking in

India to develop on sound lines and to improve the methods of their operation.

Promotional functions

With economic growth assuming a new urgency since Independence, the range of the

Reserve Bank's functions has steadily widened. The Bank now performs a variety of

developmental and promotional functions, which, at one time, were regarded as outside

the normal scope of central banking. The Reserve Bank was asked to promote banking

habit, extend banking facilities to rural and semi-urban areas, and establish and

promote new specialized financing agencies. Accordingly, the Reserve Bank has

helped in the setting up of the IFCI and the SFC; it set up the Deposit Insurance

Corporation in 1962, the Unit Trust of India in 1964, the Industrial Development Bank of

India also in 1964, the Agricultural Refinance Corporation of India in 1963 and the

Industrial Reconstruction Corporation of India in 1972. These institutions were set up

directly or indirectly by the Reserve Bank to promote saving habit and to mobilize

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savings, and to provide industrial finance as well as agricultural finance. As far back as

1935, the Reserve Bank of India set up the Agricultural Credit Department to provide

agricultural credit. But only since 1951 the Bank's role in this field has become

extremely important. The Bank has developed the co-operative credit movement to

encourage saving, to eliminate moneylenders from the villages and to route its short

term credit to agriculture. The RBI has set up the Agricultural Refinance and

Development Corporation to provide long-term finance to farmers.

Classification of RBIs functions

The monetary functions also known as the central banking functions of the RBI are

related to control and regulation of money and credit, i.e., issue of currency, control of

bank credit, control of foreign exchange operations, banker to the Government and to

the money market. Monetary functions of the RBI are significant as they control and

regulate the volume of money and credit in the country.

Equally important, however, are the non-monetary functions of the RBI in the context of

India's economic backwardness. The supervisory function of the RBI may be regarded

as a non-monetary function (though many consider this a monetary function). The

promotion of sound banking in India is an important goal of the RBI, the RBI has been

given wide and drastic powers, under the Banking Regulation Act of 1949 - these

powers relate to licensing of banks, branch expansion, liquidity of their assets,

management and methods of working, inspection, amalgamation, reconstruction and

liquidation. Under the RBI's supervision and inspection, the working of banks has

greatly improved. Commercial banks have developed into financially and operationally

sound and viable units. The RBI's powers of supervision have now been extended to

non-banking financial intermediaries. Since independence, particularly after its

nationalisation 1949, the RBI has followed the promotional functions vigorously and has

been responsible for strong financial support to industrial and agricultural development

in the country.

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RESERVE BANK OF INDIA ADDRESS

Reserve Bank of India,

Central Office,

Shaheed Bhagat Singh Road,

Mumbai - 400 001. Website of Reserve Bank of India -www.rbi.org.in

Top Banks in India

With the advancement of technology and the birth of competition, banks are in the race

of becoming the best in the country. With an eye upon customer satisfaction policy they

are providing best of the best services with the minimum hazards.

Banks like ABN AMRO introduced banking with a coffee. It made a tie-up with one of

the best coffee bar in the country, Barista and remained open till late evening for

customers with a setup of a coffee bar in the premises. 

Few banks have introduced world ATM card to make travelers across the globe more

safe and secure. What else. Internet and Phone Banking is the call of the day for banks.

In this race towards the best, we have selected top 20 banks in the country from all

segment. It is not the ranking of banks but only for general information about the top

banks in India. 

Indian Banks Association (IBA)

The Indian Banks Association (IBA) was formed on the 26th September, 1946 with 22

members. Today IBA has more than 156 members comprising of Public Sector banks,

Private Sector banks, Foreign banks having offices in India, Urban Co-operative banks,

Developmental financial institutions, Federations, merchant banks, mutual funds,

housing finance corporations, etc.

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The functioning of IBA

To promote sound and progressive banking principles and practices.

To render assistance and to provide common services to members.

To organize co-ordination and co-operation on procedural, legal, technical,

administrative and professional matters.

To collect, classify and circulate statistical and other information.

To pool together expertise towards common purposes such as reduction in

costs, increase in efficiency, productivity and improve systems, procedures and

banking practices.

To project good public image of banking through publicity and public relations.

To encourage sports and cultural activities among bank employees.

The Organizational Structure of IBA

The Managing Committee manages the affairs, business and funds of IBA. The

managing Committee is elected by the Ordinary members of the Association, and is the

highest management and policy making body of the Association.

The Chairman of the Association heads upon the working of the Association. He

provides guidelines to the Association. The administrative head of IBA is the Chief

Executive of IBA. He is also the Secretary to the Managing Committee. He leads a team

of executives, officers and other staff members.

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Channels

Banks offer many different channels to access their banking and other services:

ATM is a machine that dispenses cash and sometimes takes deposits without the

need for a human bank teller. Some ATMs provide additional services.

A branch is a retail location

Call center

Mail: most banks accept check deposits via mail and use mail to communicate to

their customers, e.g. by sending out statements

Mobile banking is a method of using one's mobile phone to conduct banking

transactions

Online banking is a term used for performing transactions, payments etc. over the

Internet

Relationship Managers, mostly for private banking or business banking, often

visiting customers at their homes or businesses

Telephone banking is a service which allows its customers to perform transactions

over the telephone without speaking to a human

Video banking is a term used for performing banking transactions or professional

banking consultations via a remote video and audio connection. Video banking can

be performed via purpose built banking transaction machines (similar to an

Automated teller machine), or via a videoconference enabled bank branch.

Products and Services of bank

Retail

Business loan

Cheque account

Credit card

Home loan

Insurance advisor

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Mutual fund

Personal loan

Savings account

Wholesale

Capital raising (Equity / Debt / Hybrids)

Mezzanine finance

Project finance

Revolving credit

Risk management (FX, interest rates, commodities, derivatives)

Term loan

Types of banks

Banks' activities can be divided into retail banking, dealing directly with individuals and

small businesses; business banking, providing services to mid-market business;

corporate banking, directed at large business entities; private banking, providing wealth

management services to high net worth individuals and families; and investment

banking, relating to activities on the financial markets. Most banks are profit-making,

private enterprises. However, some are owned by government, or are non-profit

organizations.

Types of retail banks

Commercial bank: the term used for a normal bank to distinguish it from an

investment bank. After the Great Depression, the U.S. Congress required that banks

only engage in banking activities, whereas investment banks were limited to capital

market activities. Since the two no longer have to be under separate ownership,

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some use the term "commercial bank" to refer to a bank or a division of a bank that

mostly deals with deposits and loans from corporations or large businesses.

Community banks: locally operated financial institutions that empower employees to

make local decisions to serve their customers and the partners.

Community development banks: regulated banks that provide financial services and

credit to under-served markets or populations.

Credit unions: not-for-profit cooperatives owned by the depositors and often offering

rates more favorable than for-profit banks. Typically, membership is restricted to

employees of a particular company, residents of a defined neighborhood, members

of a certain labor union or religious organizations, and their immediate families.

Postal savings banks: savings banks associated with national postal systems.

Private banks: banks that manage the assets of high net worth individuals.

Historically a minimum of USD 1 million was required to open an account, however,

over the last years many private banks have lowered their entry hurdles to USD

250,000 for private investors.[citation needed]

Offshore banks: banks located in jurisdictions with low taxation and regulation. Many

offshore banks are essentially private banks.

Savings bank: in Europe, savings banks took their roots in the 19th or sometimes

even in the 18th century. Their original objective was to provide easily accessible

savings products to all strata of the population. In some countries, savings banks

were created on public initiative; in others, socially committed individuals created

foundations to put in place the necessary infrastructure. Nowadays, European

savings banks have kept their focus on retail banking: payments, savings products,

credits and insurances for individuals or small and medium-sized enterprises. Apart

from this retail focus, they also differ from commercial banks by their broadly

decentralized distribution network, providing local and regional outreach—and by

their socially responsible approach to business and society.

Building societies and Landesbanks: institutions that conduct retail banking.

Ethical banks: banks that prioritize the transparency of all operations and make only

what they consider to be socially-responsible investments.

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A Direct or Internet-Only bank is a banking operation without any physical bank

branches, conceived and implemented wholly with networked computers.

Types of investment banks

Investment banks "underwrite" (guarantee the sale of) stock and bond issues, trade

for their own accounts, make markets, and advise corporations on capital

market activities such as mergers and acquisitions.

Merchant banks were traditionally banks which engaged in trade finance. The

modern definition, however, refers to banks which provide capital to firms in the form

of shares rather than loans. Unlike venture capital firms, they tend not to invest in

new companies.

Both combined

Universal banks, more commonly known as financial services companies, engage in

several of these activities. These big banks are very diversified groups that, among

other services, also distribute insurance— hence the term bancassurance,

a portmanteau word combining "banque or bank" and "assurance", signifying that

both banking and insurance are provided by the same corporate entity.

Other types of banks

Central banks are normally government-owned and charged with quasi-regulatory

responsibilities, such as supervising commercial banks, or controlling the

cash interest rate. They generally provide liquidity to the banking system and act as

the lender of last resort in event of a crisis.

Islamic banks adhere to the concepts of Islamic law. This form of banking revolves

around several well-established principles based on Islamic canons. All banking

activities must avoid interest, a concept that is forbidden in Islam. Instead, the bank

earns profit (markup) and fees on the financing facilities that it extends to customers.

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INTRODUCTION OF CRM

CRM, or Customer relationship management, is a number of strategies and

technologies that are used to build stronger relationships between companies and their

customers. A company will store information that is related to their customers, and they

will spend time analyzing it so that it can be used for this purpose. Some of the methods

connected with CRM are automated, and the purpose of this is to create marketing

strategies which are targeted towards specific customers. The strategies used will be

dependent on the information that is contained within the system. Customer relationship

management is only used by corporations, and they will focus on maintaining a strong

relationship with their clients.

There are a number of reasons why CRM has become so important in the last 10 years.

The competition in the global market has become highly competitive, and it has

become easier for customers to switch companies if they are not happy with the service

they receive. One of the primary goals of CRM is to maintain clients. When it is used

effectively, a company will be able to build a relationship with their customers that can

last a lifetime. Customer relationship management tools will generally come in the for of

software. Each software program may vary in the way it approaches CRM. It is

important to realize that CRM is more than just a technology.

Customer relationship management could be better defined as being a

methodology, an approach that a company will use to achieve their goals. It should be

directly connected to the philosophy of the company. It must guide all of its policies, and

it must be an important part of customer service and marketing. If this is not done, the

CRM system will become a failure. There are a number of things the ideal CRM syste

should have. It should allow the company to find the factors that interest their customers

the most. A company must realize that it is impossible for them to succeed if they do not

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cater to the desires and needs of their customers. Customer relationship management

is a powerful system that will allow them to do this.

It is also important for the CRM system to foster a philosophy that is oriented towards

the customers. While this may sound like on sense, there are a sizeable number of

companies that have failed to do it, and their businesses suffered as a result. With

CRM, the customer is always right, and they are the most important factor in the

success of the company. It is also important for the company to use measures that are

dependent on their customers. This will greatly tip the odds of success in their favor.

While CRM should not be viewed as a technology, it is important to realize that there

are end to end processes that must be created so that customers can be properly

served. In many cases, these processes will use computers and software.

Customer support is directly connected to CRM. If a company fails to provide quality

customer support, they have also failed with their CRM system. When a customer

makes complaints, they must be handled quickly and efficiently. The company should

also seek to make sure those mistakes are not repeated. When sales are made, they

should be tracked so that the company can analyze the m fro m various

aspects. It is also important to understand the architecture of Customer relationship

management.

The architecture of CRM can be broken down into three categories, and these are

collaborative, operational, and analytical. The collaborative aspect of CRM deals with

unication between companies and their clients. The operational aspect of

the architecture deals with the concept of making certain processes automated. The

analytical aspect of CRM architecture deals with analyzing customer information and

using if for business intelligence purposes. Each one of these elements are critical for

the success of a CRM system. A company must learn how to use all three properly,

and when they do this proficiently, they will be able to build strong customer

relationships and ensure their profits for a long period of time. As more businesses

continue to compete on a global level, it will become more important for them to use

successful Customer relationship management techniques.

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MEANING OF CRM

Customer Relationship Management is the establishment, development,

maintenance and optimization of long-ter m mutually valuable relationships

between consumers and the organizations. Successful customer relationship

management focuses on understanding the needs and desires of the customers and is

achieved by placing these needs at the heart of the business by integrating them with

the organization's strategy, people, technology and business processes.

At the heart of a perfect CRM strategy is the creation of mutual value for all the parties

involved in the business process. It is about creating a sustainable competitive

advantage by being the best at understanding, uncaring, and delivering, and

developing existing customer relationships in addition to creating and

keeping new customers.

DEFINITION OF CRM

“Customer Relationship Management (CRM) is a co-ordinate approach to the selling

process allowing the various operational, customer contact and sales

promotional functions of an organization to function as a whole.”

INTRODUCTION OF CRM IN BANKS

Today, customers have more power in deciding their bank of choice.

Consequently, keeping existing customers, as well as attracting new ones, is a critical

concern for banks. Customer satisfaction is an important variable in evaluation and

control in a bank marketing management. Poor customer satisfaction will lead to

a decline in customer loyalty, and given the extended offerings from the competitors,

customers can easily switch banks. Banks need to leverage effectively on their

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customer relationships and make better use of customer information across the

institution.

Competition in the financial services industry has intensified in recent years, owing to

events such as technology changes and financial industry deregulation.

Conventional banking distribution has been gradually supplemented by the emerging

use of electronic banking. Many bank customers prefer using ATMs or a website rather

than visiting a branch, while technology has also reduced barriers to entry for new

customers.

CRM--A POWERFUL TOOL

CRM is a powerful management tool that can be used to exploit sales potential

and maximize the value of the customer to the bank. Generally, CRM integrates various

components of a business such as sales, marketing, IT and accounting. This strategy

may not increase a business's profit today or tomorrow, but it will add customer loyalty

to the business.

In the long term, CRM produces continuous scrutiny of the bank's business relationship

with the customer, thereby increasing the value of the Customer’s business. Although

CRM is known to be a relatively new method in managing customer loyalty, it has been

used previously by retail businesses for many years.

The core objective of modern CRM methodology is to help businesses to use

technology and human resources to gain a better view of customer behavior. With this,

a business can hope to achieve better customer service, make call centres more

efficient, cross-sell products more effectively, simplify marketing and sales processes,

identify new customers and increase customer revenues.

As an example, banks may keep track of a customer's life stages in order to market

appropriate banking products, such as mortgages or credit cards to their customers at

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the appropriate time. The next stage is to look into the different methods customers'

information are gathered, where and how this data is stored and how it is currently

being used. For instance, banks

may interact with customers in a countless ways via mails, emails, call centres,

marketing and advertising. The collected data may flow between operational systems

(such as sales and stock systems) and analytical systems that can help sort through

these records to identify patterns. Business analysts can then browse through the data

to obtain an in- depth view of each customer and identify areas where better services

are required.

CRM AND BANKS

One of the banks' greatest assets is their knowledge of their customers. Banks

can use this asset and turn it into key competitive advantage by retaining those

customers who represent the highest lifetime value and profitability. Banks can develop

customer relationships across a broad spectrum of touch points such as at bank

branches, kiosks, ATMs, internet, electronic banking and call centres.

CRM is not a new phenomenon in the industry. Over the years, banks have

invested heavily in CRM, especially in developing call centres, which, in the past, were

designed to improve the process of inbound calls. In future, call centres will evolve to

encompass more than just cost reduction and improved efficiency. According to Gartner

Group, more than 80 per cent of all US banks will develop their call centres as

alternative delivery channels and revenue centres, to be used for the delivery of

existing products and services.But to be successful, a bank needs more than the ability

to handle customer service calls. It needs a comprehensive CRM strategy in which all

departments within the bank are integrated.

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OBJECTIVES OF CRM IN BANKS

CRM, the technology, along with human resources of the banks, enables the

banks to analyze the behavior of customers and their value. The main areas of

focus are as the name suggests: customer, relationship, and the

management of relationship and the main objectives to implement CRM in the

business strategy are:

• To simplify marketing and sales process

• To make call centers more efficient

• To provide better customer service

• To discover new customers and increase customer

Revenue

• To cross sell products more effectively

The CRM processes should fully support the basic steps of customer life cycle. The

basic steps are:

• Attracting present and new customers

• Acquiring new customers

• Serving the customers

• Finally, retaining the customers

In today's increasingly competitive environment, maximizing organic growth

through sales momentum has become a priority for Banks and Financial institutions. To

build this momentu m banks are focusing on Customer relationship

management initiatives to improve

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• Customer satisfaction and loyalty

• Customer insight/ 360º view of customer

• Speed to market for products and service

• Increase products-to-customer ratio

• Improve up sales and cross sales

• Capitalizing on New market opportunities

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.

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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

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Credit Cards

Revenue  $4.476 billion (2010)

Profit  $545 million (2010)

Total assets  $53.670 billion (2010)

Total equity  $6.787 billion (2010)

Employees 51,888 (2010)

Website HDFCBank.com

The Housing Development Finance Corporation Limited (HDFC) was amongst the

first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to

set up a bank in the private sector, as part of the RBI's liberalization of the Indian

Banking Industry in 1994.The bank was incorporated in August 1994 in the name of

'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank

commenced operations as a Scheduled Commercial Bank in January 1995.

HDFC Bank Limited (BSE: 500180, NYSE: HDB) is a major Indian financial

services company based in India, incorporated in August 1994, after the

Reserve allowed establishing private sector banks. The Bank was promoted by

the Housing Development Finance Corporation, a premier housing finance company

(set up in 1977) of India. HDFC Bank has 1,725 branches and over 4,232 ATMs, in 779

cities in India, and all branches of the bank are linked on an online real-time basis. As of

30 September 2008 the bank had total assets of Rs.1006.82 billion.For the fiscal year

2008-09, the bank has reported net profit of  2,244.9 crore (US$498.37 million), up 41%

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from the previous fiscal. Total annual earnings of the bank increased by 58% reaching

at  19,622.8 crore (US$4.36 billion) in 2008-09.

It is one of the Big Four banks of India, along with State Bank of India, ICICI

Bank and Punjab National Bank—its main competitors.

HDFC is India's premier housing finance company and enjoys an impeccable track

record in India as well as in international markets. Since its inception in 1977, the

Corporation has maintained a consistent and healthy growth in its operations to

remain the market leader in mortgages. Its outstanding loan portfolio covers well over a

million dwelling units. HDFC has developed significant expertise in retail mortgage

loans to different market segments and also has a large corporate client base for its

housing related credit facilities. With its experience in the financial markets, a

strong market reputation, large shareholder base and unique consumer franchise,

HDFC was ideally positioned to promote a bank in the Indian environment.

HDFC Bank began operations in 1995 with a simple mission: to be a “World Class

Indian Bank.” We realized that only a single minded focus on product quality and

service excellence would help us get there. Today, we are proud to say that we are well

on our way towards that goal.

History

HDFC Bank was incorporated in 1994 by Housing Development Finance Corporation

Limited (HDFC), India's largest housing finance company. It was among the first

companies to receive an 'in principle' approval from the Reserve Bank of India (RBI) to

set up a bank in the private sector. The Bank started operations as a scheduled

commercial bank in January 1995 under the RBI's liberalization policies.

Times Bank Limited (owned by Bennett, Coleman & Co. / Times Group) was merged

with HDFC Bank Ltd., in 2000. This was the first merger of two private banks in India.

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Shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 shares of

Times Bank.

In 2008 HDFC Bank acquired Centurion Bank of Punjab taking its total branches to

more than 1,000. The amalgamated bank emerged with a base of about Rs. 1,22,000

crore and net advances of about Rs.89,000 crore. The balance sheet size of the

combined entity is more than Rs. 1,63,000 crore.

Business focus

HDFC Bank deals with three key business segments. - Wholesale Banking Services,

Retail Banking Services, Treasury. It has entered the banking consortia of over 50

corporates for providing working capital finance, trade services, corporate finance and

merchant banking. It is also providing sophisticated product structures in areas of

foreign exchange and derivatives, money markets and debt trading and equity research.

Wholesale banking services

Blue-chip manufacturing companies in the Indian corp to small & mid-sized corporates

and agri-based businesses. For these customers, the Bank provides a wide range of

commercial and transactional banking services, including working capital finance, trade

services, transactional services, cash management, etc. The bank is also a leading

provider of for its to corporate customers, mutual funds, stock exchange members and

banks.

Retail banking services

The objective of the Retail Bank is to provide its target market customers a full range of

financial products and banking services, giving the customer a one-stop window for all

his/her banking requirements. The products are backed by world-class service and

delivered to customers through the growing branch network, as well as through

alternative delivery channels like ATMs, Phone Banking, NetBanking and Mobile

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Banking. HDFC Bank was the first bank in India to launch an International Debit Card in

association with VISA (VISA Electron) and issues the Mastercard Maestro debit card as

well. The Bank launched its credit card business in late 2001. By March 2009, the bank

had a total card base (debit and credit cards) of over 13 million. The Bank is also one of

the leading players in the “merchant acquiring” business with over 70,000 Point-of-sale

(POS) terminals for debit / credit cards acceptance at merchant establishments. The

Bank is well positioned as a leader in various net based B2C opportunities including a

wide range of internet banking services for Fixed Deposits, Loans, Bill Payments, etc.

Treasury

Within this business, the bank has three main product areas - Foreign Exchange and

Derivatives, Local Currency Money Market & Debt Securities, and Equities. These

services are provided through the bank's Treasury team. To comply with statutory

reserve requirements, the bank is required to hold 25% of its deposits in government

securities. The Treasury business is responsible for managing the returns and market

risk on this investment portfolio. this is all about HDFC.

Distribution network

An HDFC Bank Branch

HDFC Bank is headquartered in Mumbai. The Bank has an network of 1725 branches

spread in 780 cities across India. All branches are linked on an online real-time basis.

Customers in over 500 locations are also serviced through Telephone Banking. The

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Bank has a presence in all major industrial and commercial centers across the country.

Being a clearing/settlement bank to various leading stock exchanges, the Bank has

branches in the centers where the NSE/BSE have a strong and active member base.

The Bank also has 5,016 networked ATMs across these cities. Moreover, HDFC Bank's

ATM network can be accessed by all domestic and international Visa/MasterCard, Visa

Electron/Maestro, Plus/Cirrus and American Express Credit/Charge cardholders.

As of March 31, 2008, the Bank’s distribution network was at 761Branches and 1977

ATMs in 327 cities as against 684 branches and 1,605 ATMs in 320 cities as of

March 31, 2007. Against the regulatory approvals for new branches in hand, the

Bank expects to further expand the branch network by around 150 branches by June

30, 2008. During the year, the Bank stepped up retail customer acquisition with

deposit accounts increasing from 6.2 million to 8.7 million and total cards issued

(debit and credit cards) increasing from 7 million to 9.2 million.

Whilst credit growth in the banking system slowed down to about 22% for the year

ended 2007-08, the Bank’s net advances grew by 35.1% with retail advances growing

by 38.6% and wholesale advances growing by 30%, implying a higher market share in

both segments.

March 2006 March 2007 March 2008

Citied 228 316 327

Branches 535 684 761

ATMs 1323 1605 1977

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The transactional banking business also registered healthy growth With cash

management volumes increased by around 80% and trade services volumes by around

40% over the previous year.

Portfolio quality as of March 31, 2008 remained healthy with gross nonperforming

assets at 1.3% and net non-performing assets at 0.4% of total customer assets. The

Bank’s provisioning policies for specific loan loss provisions remained higher than

regulatory requirements.

TECHNOLOGY USED IN HDFC BANK

In the era of globalization each and every sector faced the stiff competition from

their rivals. And world also converted into the flat from the globe. After the policy of

liberalization and RBI initiatives to take the step for the private sector banks, more and

more changes are taking the part into it. And there are create competition between

the private sector banks and public sector bank.

Private sector banks are today used the latest technology for the different transaction

of day to day banking life. As we know that Information Technology plays the vital

role in the each and every industries and gives the optimum return from the limited

resources. Banks are service industries and today IT gives the innovative

Technology application to Banking industries. HDFC BANK is the leader in the

industries and today IT and HDFC BANK together combined they reached the sky.

New technology changed the mind of the customers and changed the queue concept

from the history banking transaction. Today there are different channels are available

for the banking transactions.

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We can see that the how technology gives the best results in the below diagram. There

are drastically changes seen in the use of Internet banking, in a year 2001 (2%) and in

the year 2008 ( 25%). These type of technology gives the freedom to retail customers.

Centralized Processing Units Derived Economies of Scale

Electronic Straight Through

Processing

Reduced Transaction Cost

Data Warehousing , CRM Improve cost efficiency, Cross

sell

Innovative Technology Application Provide new or superior

products

HDFC BANK is the very consistent player in the New private sector banks. New

private sector banks to withstand the competition from public sector banks came up

with innovative products and superior service.

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ICICI BANK

INTRODUCTION

ICICI Bank (NSE: ICICIBANK, BSE: 532174, NYSE: IBN)   (formerly Industrial Credit and

Investment Corporation of India, Hindi:  आय सी� आय सी� आय बैं�क )   is  a  major  banking  and 

financial  services organization in India.   It   is  the second largest bank  in  India and the  largest 

private sector bank in India by market capitalization. The bank also has a network of 2,016 

branches   (as   on   31  March   2010)   and   about   5,219   ATMs   in   India   and   presence   in   18 

countries, as well as some 24 million customers (at the end of July 2007). ICICI Bank offers a 

wide   range   of   banking   products   and   financial   services   to   corporate   and   retail   customers 

through a variety of delivery channels and specialization subsidiaries and affiliates in the areas 

of   investment  banking,   life  and non-life   insurance,  venture  capital  and  asset  management. 

(These data are dynamic.)   ICICI  Bank  is  also the  largest  issuer of credit  cards  in  India. ICICI 

Bank's   shares  are   listed  on   the   stock  exchanges  at BSE, NSE,Kolkata and Vadodara (formerly 

Baroda) ; its ADRs trade on the New York Stock Exchange(NYSE).

The Bank is expanding in overseas markets and has the largest international balance 

sheet   among   Indian   banks.   ICICI   Bank   now  has  wholly   owned   subsidiaries,   branches   and 

representatives  offices  in  19 countries,   including an offshore unit   in  Mumbai.  This   includes 

wholly  owned subsidiaries  in Canada, Russia and the UK (the subsidiary through which the 

HiSAVE savings brand is operated), offshore banking units in Bahrain and Singapore, an advisory 

branch in Dubai, branches in Belgium, Hong Kong and Sri Lanka, and representative offices in 

Bangladesh, China, Malaysia, Indonesia, South Africa, Thailand, the United Arab Emirates and 

USA. Overseas, the Bank is targeting the NRI (Non-Resident Indian) population in particular.

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ICICI reported a 1.15% rise in net profit to  1,014.21 crore on a 1.29% increase in total 

income to  9,712.31 crore in Q2 September 2008 over Q2 September 2007. The bank'sCASA 

ratio increased to 30% in 2008 from 25% in 2007. 

ICICI Bank is one of the Big Four Banks of India, along with State Bank of India, Punjab 

National Bank Bank of India and Canara Bank — its main competitors. 

HISTORY

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial

institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank was

reduced to 46% through a public offering of shares in India in fiscal 1998, an equity offering in

the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of

Madura Limited in an all-stock amalgamation in fiscal 2001, and secondary market sales by

ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at the

initiative of the World Bank, the Government of India and representatives of Indian industry.

The principal objective was to create a development financial institution for providing medium-

term and long-term project financing to Indian businesses. 

In  1954,   The   Industrial  Credit   and   Investment  Corporation  of   India   Limited   (ICICI)  was 

incorporated at the initiative of World Bank, the Government of India and representatives of 

Indian industry, with the objective of creating a development financial institution for providing 

medium-term and long-term project financing to Indian businesses. In 1994, ICICI established 

Banking   Corporation   as   a   banking   subsidiary.   Formerly   known   as   Industrial   Credit   and 

Investment Corporation of India, ICICI Banking Corporation was later renamed as 'ICICI Bank 

Limited'.   ICICI   founded   a   separate   legal   entity,   ICICI   Bank,   to   undertake   normal   banking 

operations   -   taking   deposits,   credit   cards,   car   loans   etc.   In   2001,   ICICI   acquired Bank   of 

Madura (est.   1943).   Bank   of   Madura   was   a Chettiar bank,   and   had   acquired Chettinad 

Mercantile   Bank (est.   1933)   and Illanji   Bank (established   1904)   in   the   1960s.   In   2002,   The 

Boards of Directors of ICICI and ICICI Bank approved the reverse merger of ICICI, ICICI Personal 

Financial Services Limited and ICICI Capital Services Limited, into ICICI Bank. After receiving all 

necessary regulatory approvals, ICICI integrated the group's financing and banking operations, 

both wholesale and retail, into a single entity. At the same time, ICICI started its international 

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expansion   by   opening   representative   offices   in New   York and London.   In   India,   ICICI   Bank 

bought the Shimla andDarjeeling branches that Standard Chartered Bank had inherited when it 

acquired Grindlays Bank.

In 2003, ICICI opened subsidiaries in Canada and the United Kingdom (UK), and in the UK it 

established an alliance  with  Lloyds  TSB.   It  also  opened an Offshore  Banking  Unit   (OBU)   in 

Singapore   and   representative   offices   in   Dubai   and   Shanghai.   In   2004,   ICICI   opened   a 

representative office in Bangladesh to tap the extensive trade between that country, India and 

South Africa.   In  2005,   ICICI  acquired  Investitsionno-Kreditny  Bank (IKB),  a  Russia  bank with 

about  US$4mn in  assets,  head office  in Balabanovo in   the Kaluga region,  and with a  branch 

in Moscow.   ICICI   renamed   the   bank   ICICI   Bank   Eurasia.   Also,   ICICI   established   a   branch 

in Dubai International  Financial  Centre  and  in Hong Kong.   In  2006,   ICICI  Bank UK opened a 

branch   in Antwerp,   in Belgium.   ICICI   opened   representative   offices   in Bangkok, Jakarta, 

andKuala Lumpur. In 2007, ICICI amalgamated Sangli Bank, which was headquartered in Sangli, 

in Maharashtra State,   and   which   had   158   branches   in   Maharashtra   and   another   31 

in Karnataka State. Sangli Bank had been founded in 1916 and was particularly strong in rural 

areas.  With   respect   to   the   international   sphere,   ICICI   also   received   permission   from   the 

government  of Qatar to  open  a  branch   in Doha.  Also,   ICICI  Bank  Eurasia  opened  a   second 

branch, this time in St. Petersburg. In 2008, The US Federal Reserve permitted ICICI to convert 

its representative office in New York into a branch. ICICI also established a branch in Frankfurt. 

In 2009, ICICI made huge changes in its organisation like elimination of loss making department 

and restreching outsourced staff or renegotiate their charges in consequent to the recession. In 

addition to this, ICICI adopted a massive approach aims for cost control and cost cutting. In 

consequent of it, compesation to staff was not increased and no bonus declared for 2008-09.

On 23 May ICICI Bank announced that it would merge with Bank of Rajasthan through a 

share-swap in a non-cash deal that values the Bank of Rajasthan at about  3,000 crore. ICICI 

announced that the merger expand ICICI Bank's branch network by 25%. 

On 18h October 2010, ICICI will inaugurate I-Express, an instant cross-border money

transfer option for Non-Resident Indians (NRIs). This service will be available through the ICICI

Bank's select partners in the Gulf Cooperation Council. 

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In the 1990s, ICICI transformed its business from a development financial institution offering

only project finance to a diversified financial services group offering a wide variety of products

and services, both directly and through a number of subsidiaries and affiliates like ICICI Bank.

In 1999, ICICI become the first Indian company and the first bank or financial institution from

non-Japan Asia to be listed on the NYSE. 

After consideration of various corporate structuring alternatives in the context of the

emerging competitive scenario in the Indian banking industry, and the move towards universal

banking, the managements of ICICI and ICICI Bank formed the view that the merger of ICICI

with ICICI Bank would be the optimal strategic alternative for both entities, and would create the

optimal legal structure for the ICICI group's universal banking strategy. The merger would

enhance value for ICICI shareholders through the merged entity's access to low-cost deposits,

greater opportunities for earning fee-based income and the ability to participate in the payments

system and provide transaction-banking services. The merger would enhance value for ICICI

Bank shareholders through a large capital base and scale of operations, seamless access to

ICICI's strong corporate relationships built up over five decades, entry into new business

segments, higher market share in various business segments, particularly fee-based services, and

access to the vast talent pool of ICICI and its subsidiaries. 

In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger

of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal Financial

Services Limited and ICICI Capital Services Limited, with ICICI Bank. The merger was

approved by shareholders of ICICI and ICICI Bank in January 2002, by the High Court of

Gujarat at Ahmedabad in March 2002, and by the High Court of Judicature at Mumbai and the

Reserve Bank of India in April 2002. Consequent to the merger, the ICICI group's financing and

banking operations, both wholesale and retail, have been integrated in a single entity. 

ICICI Bank has formulated a Code of Business Conduct and Ethics for its directors and

employees. 

ICICI   net   banking   /   internet   banking   offers   various   facilities   and   has   been   registering 

increasing number of customers as well.  The facility of net banking is immense and hence it 

offers one of the largest customer bases. Some e-banking facilities provided by ICICI bank are as 

follows-

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Transfer Funds Online.   

Account-2-Card Fund Transfer.

Link your Bank/Card/Demat Accounts.    

Use your Debit Card Online.

Pre-paid Mobile Recharge.

Pay your Utility Bills.    

Send a Smart Money Order.

Open Fixed Deposits and Recurring Deposits.

Order a Demand Draft / Pay Order.

Subscribe for Mobile Banking.   

Request a Cheque Book.

Request a change of address.    

Stop Payment Request.

Request a Debit Card.

Monthly Bank Account Statement by E-mail.

Re-issue/Upgrade of ATM/Debit Card.

Link Bank Accounts to ATM/Debit Card.

Renewal / Premature Closure of FD/RD.

De-block/Activate ATM/Debit Card.

Secure Mailbox.

Request a Duplicate Physical Bank Statement

ICICI Bank is India's second-largest bank with total assets of Rs. 3,562.28 billion

(US$ 77 billion) at December 31, 2009 and profit after tax Rs. 30.19 billion (US$

648.8 million) for the nine months ended December 31, 2009. The Bank has a

network of 1,723 branches and about 4,883 ATMs in India and presence in 18

countries. ICICI Bank offers a wide range of banking products and financial services

to corporate and retail customers through a variety of delivery channels and through

its specialized subsidiaries and affiliates in the areas of investment banking, life and

non-life insurance, venture capital and asset management. The Bank currently has

subsidiaries in the United Kingdom, Russia and Canada, branches in United States,

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Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance

Centre and representative offices in United Arab Emirates, China, South Africa,

Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has established

branches in Belgium and Germany. ICICI Bank's equity shares are listed in India on

Bombay Stock Exchange and the National Stock Exchange of India Limited and its

American Depositary Receipts (ADRs) are listed on the New York Stock Exchange

(NYSE).

Subsidiaries

I-Express, an instant cross-border money transfer option.

ICICI Lombard

ICICI Prudential

Acquisition

2005 - Investitsionno-Kreditny Bank (IKB), a Russian bank

2007 - Sangli Bank , Maharashtra State

23 May - Bank of Rajasthan

Recognition

The Brand Trust  Report,   launched  in 2011,  has ranked  ICICI   in  the 15th place as  the most 

trusted brand of India.

Controversy

ICICI Bank has been in focus in recent years because of alleged harassment of customers by its 

recovery agents. Listed below are some of the related news links:

ICICI Bank was fined  55 lakh for hiring goons (known coloquially as "goondas") to recover

a loan. Recovery agents had, allegedly, forcibly dragged out a youth (who was not even the

borrower) from the car, beaten him up with iron rods and left him bleeding as they drove

away with the vehicle. "We hold ICICI Bank guilty of the grossest kind of deficiency in

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service and unfair trade practice for breach of terms of contract of hire-purchase/loan

agreement by seizing the vehicle illegally","No civilised society governed by the rule of law

can brook such kind of conduct" said Justice Kaleem, who was born in Laddhawala,

Muzaffarnagar is the president of the consumer commission.

Four ICICI loan employees arrested on theft charges in Punjab 

ICICI Bank told to pay  1 lakh as compensation for using unlawful recovery methods.

RBI warns ICICI Bank for coercive methods to recover loans

ICICI Bank drives customer to suicide - Four men including an employee of ICICI Bank

booked under sections 452, 306, 506 (II) and 34 of IPC for abetting suicide.  According to the

suicide note they advised him, "If you cannot repay the bank loan, sell off your wife, your

kids, yourself, sell everything at your home. Even then if you cannot not pay back the due

amount, then it's better if you commit suicide." India biggest private bank has compensated

the life by money.

ICICI Bank on huge car recovery scam in Goa - ICICI Bank invest in car-jackers to recover

loans in Goa. A half an hour investigative report on CNN-IBN's 30 Minutes. The under cover

report was executed by CNN-IBN's Special Investigations Team from Mumbai, led by Ruksh

Chatterji.

Family of Y. Yadaiah alleged that he was beaten to death by ICICI Bank’s recovery agents,

for failing to pay the dues. Four persons were arrested in this case.

A father while talking to Times of India, alleged that "ICICI Bank recovery agents visited his

house and threatened his family. And his son Nikhil consumed poison because of the

tension".

Oppressed by ICICI Bank's loan recovery agents, Shakuntala Joshi (38), committed suicide

by hanging. The suicide note stated that she was upset with the ill-treatment meted out by

ICICI Bank's recovery agents and had thus decided to end her life.

In another case of a suicide it is alleged that ‘goondas’ sent by ICICI Bank abused Himanshu

and his wife in front of the entire residential colony before taking away his vehicle. Feeling

frustrated and insulted, he reportedly committed suicide.

C.L.N Murthy, a scientist with the Hyderabad-based Indian Institute of Chemical

Technology, was allegedly tortured by recovery agents of ICICI Bank after he defaulted on

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his loan.“They humiliated me no end. They ripped my shirt, shaved my moustache, cut my

hair and gave electric shocks on my chest and even spat on my face" adds Murthy.

A dozen recovery agents of ICICI Bank, riding on bikes, allegedly forced a prominent

lawyer, Someshwari Prasad, to stop his car. They held Prasad at gunpoint and also slapped

him to force him. A manager of the ICICI Bank branch, Rakesh Mehta, along with four other

employees were arrested.

In a landmark case, Allahabad High Court had ordered registration of an FIR against ICICI

Bank's branch manager, President, Chairman and Managing Director on a complaint of 75-

year-old widow Prakash Kaur. She had complained that “goondas” were sent by the bank to

harass her and forcibly took away her truck. When the Supreme Court wanted to know about

the procedure adopted by the Bank, ICICI Bank counsel said notice would be sent to a

defaulter asking him either to pay the instalments or hand over the vehicle purchased on loan,

failing which the agents would be asked to seize it. When the Bench pointed out that

recovery or seizure could be done only legally, ICICI Bank counsel said, "If we have to go

through the legal process it would be difficult to recover the instalments as there are millions

of defaulters"

Taking strong exception to ICICI Bank's use of 'goondas' against a defaulter, the president of

Consumer Disputes Redressal Forum said, "The fact leaves us aghast at the manner of

functioning and goondaism in which the bank is involved for a petty amount of  1,889...

such attitude is deplorable and sends chills down the spine....The bank had the option to

recover dues through legal means. They have no legal right to snatch the vehicle in such a

manner which amounts to robbery,". In this case recovery agents pointed a pistol at a

defaulter when he tried to resist. ICICI bank argued that they had taken peaceful possession

of the vehicle "after due intimation to the complainant as he was irregular in remitting the

monthly instalments". But the court found out that the records proved otherwise.

Two senior ICICI Bank officials were booked for abducting one Vikas Porwal from his

house and keeping him hostage in the Bank's premises.

The credit card division of the ICICI Bank allegedly threatened a senior citizen in

Chandigarh with a fictitious arrest warrant on account of a default that never was.

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A Consumer Commission has asked ICICI Bank MD K V Kamath to appear before it in

respect a complaint. A borrower on protesting against the forceful dispossession of his car, as

seen in the post-incident photographs, was roughed up and sustained injuries.

An 18-year-old boy was allegedly kidnapped and detained at the Pune branch of ICICI Bank.

There have been several other minor legal cases accusing harassment by ICICI Bank 

A consumer court imposed a joint penalty of  25 lakh on ICICI Bank and American Express

Bank for making unsolicited calls.

ICICI BANK SERVICES

ICICI net banking / internet banking

ICICI net banking / internet banking offers various facilities and has been registering increasing 

number of customers as well.The facility of net banking is immense and hence it offers one of 

the largest customer bases.

You can get the luxury of linking many accounts with the same customer id apart from that you 

can view all the transactions online as well.  You can transfer the funds to other accounts of the 

same bank or to other banks as well. Official website for accessing icici net banking / internet 

banking is www.icicibank.com.

Apart from that, you can transfer funds from bank account to credit cards.  If in case you have 

done any transactions through your credit card, there will be auto debit. If you want to see the 

account statement, you don’t need to go to the bank, instead you can see through email as 

well. One of the best things again relates with the fact that you can file online taxes.

Now all your important transactions can be done online and are just a click away as well. Since 

the bank offers so many facilities as a result it has become one of the preferred choices of the 

people and it’s the love and affection of the people which has made the bank coming up with 

innovations to ease the lives of people so that you can have many reasons to opt for icici net 

banking / internet banking

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MOBILE BANKING: Conducting banking operations using the mobile phone has been fast

catching up around the world for its convenience. We have launched mobile services in India to

convenience our customers. You can do your banking operations sitting anywhere, anytime. It is

discreet, personalized and on your phone. Use it when at a meeting, in a movie hall, while having

your Sunday brunch or at any other place you cannot usually expect to get the information you

want from your bank. It is an empowering and user friendly mode of accessing your bank

account. To get started, take a look at the menu on the left and go through our various services.

You can now access the following ICICI Bank services via your mobile phone:

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INSTA BANKING

Insta Banking makes your banking simpler, faster, and more convenient. Through these

5 great channels - Internet Banking, Mobile Banking, ICICI Bank ATMs, Instant Voice

Response (IVR) Banking and iMobile - you can do your day today banking anytime,

anywhere.

INTERNET BANKING

ICICI Bank brings convenience and security to your desktop. Now you can check

your account balance, transfer funds, download your account statement, and pay bills or even

book tickets online, from the comfort of your home or in the middle of a busy day at the office.

Explore the power of simpler and smarter Banking whether you are a Banking, Credit Card, Loan

or Demat customer.

ATM BANKING

Bank 24/7 through a widespread network of ICICI Bank ATMs making life easy and

convenient for you. User-friendly graphic screens and easy to follow instructions available

in a choice of local languages, makes ATM Banking with ICICI Bank a smoother experience.

ICICI Bank's widespread network of ATMs makes it easy and convenient for you to bank 24/7.

With over 4,883 + ATMs and 1,626 + branches set up within India, we ensure that you are never

too far from an ICICI Bank ATM. User-friendly graphic screens and easy to follow instructions in

a choice of local languages, makes ATM Banking with ICICI Bank a smooth experience.

ICICIBank.com also features the easy to access ATM Locator, making it easy for you to

find an ICICI Bank ATM in your neighborhood.

The ICICI Bank edge

Cash withdrawal up to Rs. 25,000/- per day from your account (50,000 for HNI's). Fast

Cash option facilitates withdrawal of prefixed amounts; Ultra Fast Cash allows withdrawal

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of Rs. 3000/- in one shot.

Check your ledger balance and available balance.

Print out your Mini Statement which displays your last 8 transactions and the current

balance.

Deposit Cash / Cheques at all full function ATMs; cash deposited in ATMs will be

credited to the account on the same day if deposited before the clearing and cheques are

sent for clearing on the next working day.

Transfer funds from one account to another linked account in the same branch.

Change the Personal Identification Number (PIN) of your ATM or Debit card Pay bills,

make donations to temples / trusts, buy internet packs, airtime recharges for prepaid

mobile phones, etc.

Request for a cheque book from our ATMs; concerned branch dispatches it to reach you

within 10 working days.

No charge is levied on ICICI Bank customers for transacting through ICICI Bank's

ATMs. But, if the minimum quarterly average balance is not maintained in your

savings account, first 6 transactions in the quarter are free and thereafter, Rs. 25 per

transaction is charged.

I MOBILE

ICICI Bank's iMobile is a breakthrough innovation in banking that allows you to transfer

funds, make your credit card payments, pay utility bills, check your balance and do lots more,

for free. So why wait anymore. Just download the iMobile application on your phone by

sending us an SMS and experience iMobile. . ICICI Bank brings to you the 2nd generation

iMobile that has newer features, smarter interface, quicker navigation and enhanced

functionality. ICICI Bank's iMobile is your answer to banking on the move. The next

generation iMobile is your key to a faster, easier and simplified banking service. Using GPRS

enabled on your mobile handset or through SMS, iMobile helps you to connect directly to your

bank account. This Rich Client Based Application needs to be installed on your mobile

thereby enabling a single click access to your account.

Page 81: Divya report

Services available with i Mobile:

Payment of utility bills and credit card bills

Transfer of funds to any bank account

Payment of insurance premium

Placement of service request such us ordering of cheque books, bank account statements,

cheque status and balance enquiry.

Access the following ICICI Bank services via iMobile:

Bank Account

Funds transfer

Bill Payment

Balance Enquiry

Last 5 transactions

Cheque Book Request

Stop Cheque request

Cheque status Enquiry

Credit Card

Balance Details

Last Payment Details

Payment Due Date

Reward Point Status

Demat A/c

Holding Enquiry

Transaction Status

Bill Enquiry

ISIN Enquiry

Loan A/c

Page 82: Divya report

Provisional IT Certificate

Final IT Certificate

Reset Letter

Rescheduled Letter

Loan Agreement Copy

M Shop

Prepaid Mobile Recharge

Other Services

Status of Service Request Raised

Locate US

IVR BANKING

Find answers to all your banking needs from your phone. ICICI Bank's Instant Voice

Response (IVR) Banking is free of charge, fully automated and at the same time user-friendly.

Just having an ATM PIN for your account and credit card ensures that your transactions are

secure.

Saving A/C

Credit cards

Demat

Bonds

Others

TV BANKING

At ICICI Bank, we've introduced India to an all new way of banking. TV Banking.

This pioneering initiative now enables you to get information regarding loans, accounts,

deposits and a lot more while you're watching that exciting cricket match or your favorite sitcom.

Page 83: Divya report

Review of Literature

STUDY THE IMPACT OF CRM ON CUSTOMERS OF

SELECTED BANKS OF JAIPUR CITY

Krasnikov, Alexander

Jayachandran, Satish Kumar

Krasnikov, Jayachandran and Kumar (2009) studied the impact of customer

relationship management (CRM) implementation on firm performance is an issue of

considerable debate. This study examines the impact of CRM implementation on two

metrics of firm performance—operational (cost) efficiency and the ability of firms to

generate profits (profit efficiency)—using a large sample of U.S. commercial banks. The

authors use stochastic frontier analysis to estimate cost and profit efficiencies and

employ hierarchical linear modeling to assess the effect of CRM implementation on cost

and profit efficiencies. They find that CRM implementation is associated with a decline

in cost efficiency but an increase in profit efficiency. A firm-level factor, CRM

commitment, reduces the negative effect of CRM implementation on cost efficiency.

The authors also find that two adoption-related factors, time of adoption and time since

adoption, influence the relationship between CRM implementation and cost and profit

efficiencies. Early adopters benefit less from CRM implementation than late adopters.

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However, time since adoption improves the performance of firms that implement CRM.

By demonstrating the different ways CRM implementation influences cost and profit

measures, the study provides valuable insights to CRM researchers and managers.

Han-Yuh Liu

Han-Yuh Liu(2007) tells that Although Customer Relationship Management (CRM) is

arguable the most important area of concern to enterprises in an era of electronic

commerce (EC), few studies have explored it from an industry-specific perspective to

develop usable action plans. The banking industry is one of the major beneficiaries of

the ‘explosion’ in CRM across all sectors of the economy, but there is an absence of

information and support for it in Taiwan. Embracing CRM requires changes in many

aspects of enterprises. This paper employs a four-strategic framework; of contact

channel management, enterprise-wide management, customer data management, and

information technology management, in its review of what constitutes best practice in

the leading banks in Taiwan with respect to CRM. It is argued that if Taiwan's banking

industry adopts this framework it should be able to respond effectively to the various

internal and external challenges identified in this study as well as to develop its own

CRM initiatives.

Wettemann

Wettemann(2007) discusses the advantages of implementing customer relationship

management (CRM) solutions to improve healthcare provision. Several factors affect

the adoption of CRM solutions, such as customer data confidentiality concerns and

information technology budget challenges. Many CRM vendors provide customized

solutions for the healthcare vertical market and many implementation partners provide

vertical-specific expertise in making CRM applications work in healthcare. These things

also can relate in banking sector.

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Peelen, Edvan Montfort,

Kee Beltman, Rob Klerkx, Arnoud

Peelen, Edvan Montfort,Kee Beltman, Rob Klerkx, Arnoud(2009) studied that

Customer Relationship Management (CRM) has attracted the attention of both

marketing practitioners and researchers over the last decade. Significant progress has

been made in identifying and researching the components of CRM individually and in

the design of a strategic framework. The role of CRM applications, customer

information, customer interaction, customer loyalty and a customer-centric strategy has

been the subject of research lately. However no comprehensive research has been

conducted into the role of these CRM components in achieving CRM success across

the line. Also we have yet to find research that empirically shows evidence for the

relationship between each CRM component. The goal of our research is to determine

the impact of CRM components on each other and on CRM success. We will strive to

do so by using explorative qualitative research into CRM practitioners to formulate

propositions. These propositions will in turn be tested in a quantitative analysis of data

collected from 250 Dutch companies. Through building a Structural Equations Model

(SEM), we determine the role and influence of the key components of CRM on each

other and on CRM success.

Koh Hian Chye

Chan Kin Leong Gerry

Koh Hian Chye, Chan Kin Leong Gerry(2002 ) studied that Advances in computer

hardware and data mining software have made data mining accessible and affordable

to many businesses. Hence, it is no surprise that data mining has gained widespread

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attention and increasing popularity in the commercial world in recent years. Data mining

provides the technology to analyse mass volume of data and/or detect hidden patterns

in data to convert raw data into valuable information. This paper discusses the potential

usefulness of data mining for customer relationship management (CRM) in the banking

industry. First, the paper introduces the CRM concept and summarizes the data mining

methodology and tools. Second, it discusses the data mining literature, particularly its

applications in banks. Third, it illustrates a possible CRM application of data mining in

banking. Finally, it suggests other potential data mining banking applications and

highlights some of the limitations of data mining.

Eid, Riyad

Eid, Riyad(2007) studied that In recent years, customer relationship management

(CRM) has been the favored theme for numerous studies and reports. Yet, there is a

lack of systematic empirical evidence regarding the critical success factors (CSFs) for

the CRM implementation, the activities that are affected by the use of the CRM

programmes, and their consequent performance outcomes. In this article, he document

the role of the CRM programmes in the banking sector and identify marketing activities

that are affected by CRM usage. Taking a sample of 159 banks that utilize a CRM

system, we found a substantial positive effect of the CRM usage on relationships

effectiveness and marketing objectives. The results of this study have major

implications for marketing people, as they suggest the notion that the CRM critical

success factors should be implemented holistically rather than piecemeal to achieve the

full potential of the CRM. The findings also stress the central role of customer services

in the successful implementation of CRM programmes within banks.

Dibb, Sally Meadows, Maureen

Dibb, Sally Meadows, Maureen(2004) considers the shift towards relationship

marketing principles and the implementation of CRM in the retail financial services

sector. Many players offering personal banking and related products have now 'bought

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in' to the concepts behind relationship marketing, and are investing heavily (particularly

in new information technology) to enhance customer relationships and improve

retention rates. This trend is considered from the perspective of an organization that is

one of those leading the change. An in-depth case study reveals the progress made in

recent years towards the company's goals, focusing especially on the introduction of

new systems and moves to enhance customer data. However, the analysis also

suggests that major challenges remain if the benefits of CRM are to be fully realized.

Issues involving the structure of the organization and its approach to a range of staff

issues such as recruitment and training are of particular concerns for the implementation of

CRM principles.

Economist; 9/6/2003, conclude that Once the most aggressive users of information

technology (IT), financial institutions have learned to make do with less, as their

technological developments now focus on cost-cutting, improved system integration and

the revival of old-fashioned branch networks. For makers of computers, storage devices

and high-speed networks, that is grim news. The fact is that no other sector of the

global economy drives capital spending on IT as much as the financial-services

business does, and until that recovers, the IT slump will continue. Mark Sievewright of

TowerGroup, a Reuter’s subsidiary in Needham, Massachusetts, notes that financial-

services firms continue to spend heavily on technology. He expects to see worldwide

spending top $337 billion in 2003, a 2.3% increase over 2002. Wireless finance remains

a dream in America, though there are hints that things might change when (if) the latest

generation of mobile phones takes off. But compared with the rest of the world, America

is still struggling in the dark ages of mobile telephony. Perhaps the most glaring lack of

innovation in American financial services is in trading equities. While much of Europe

and Asia eschews the use of cheques because they are slow and expensive, the United

States Federal Reserve reckons that more than 60% of all financial transactions in

America were paid by cheque in 2001. While it leads the world in processing

transactions, America's backwardness in other aspects of financial technology stems

from differences in national policy. one thing' that unites financial-services firms

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everywhere is the need to build a better relationship with their customers. Few things in

technology have promised so much and delivered so little as "customer (or client)

relationship management" (CRM) software.

Blery, Evangelia; Michalakopoulos, Michalis

Blery, Evangelia; Michalakopoulos, Michalis(2006) studied that today, banks are

facing an aggressive competition and they have to make efforts to survive in a

competitive and uncertain market place. Banks have realized that managing customer

relationships is a very important factor for their success. Customer relationship

management (CRM) is a strategy that can help them to build long-lasting relationships

with their customers and increase their profits through the right management system

and the application of customer-focused strategies. CRM in the banking sector is of

strategic importance. In this study, a single descriptive case study of one major Greek

bank that has implemented CRM is presented. The aim of this study is to analyse the

design and implementation of CRM in the bank, identify the benefits, the problems, as

well as the success and failure factors of the implementation and develop a better

understanding of CRM impact on banking competitiveness as well as provide a greater

understanding of what constitutes good CRM practices.

E.W.T. Ngai,

E.W.T. Ngai,told that The Purpose of this research to review the academic literature on

customer relationship management (CRM), provide a comprehensive bibliography and

propose a method of classifying that literature.A range of online databases were

searched to provide a comprehensive listing of journal articles on CRM. Six hundred

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articles were identified and reviewed for their direct relevance to CRM. Two hundred

and five articles were subsequently selected. Each of these articles was further

reviewed and classified. The review and classification process was independently

verified. All papers were allocated to the main and sub-categories based on the major

focus of each paper.Papers and research on CRM falls into five broad categories (CRM

– General, Marketing, Sales, Service and Support, and IT and IS) and a further 34 sub-

categories. The most popular areas covered by the papers lay in the sub-category of

CRM management, planning and strategy; and CRM general, concept, and study

followed by papers in software, tools and systems; data mining, knowledge

management, and e-commerce.This is the first identifiable academic research. The

bibliography provides an academic database of the literature between 1992 and 2002

covering 89 journals. The classification approach provides a means to conceptualise

the coverage of CRM and the relative popularity of CRM topic areas.

Eleni K. Kevork  and Adam P. Vrechopoulos

Eleni K. Kevork  and Adam P. Vrechopoulos(2008) studied that While electronic

customer relationship management (e-CRM) has been thoroughly investigated via

multiple research perspectives and multidisciplinary approaches in the past, until today,

there has been no available work providing an integrated framework of the relevant e-

CRM literature and its corresponding classification schemes. To that end, this paper

manipulates a database of approximately 400 references and classifies e-CRM

research activity via classification variables, sector investigated, journal/year of

publication, type of research employed (e.g., experiment vs. case study), discipline(s)

involved, etc. This review paper serves as a useful point of reference for both

researchers and practitioners, as it provides a broadened understanding of conceptual

and functional e-CRM features, while clarifying the types of research conducted within

the e-CRM spectrum as a whole. Further, this paper describes how e-CRM dimensions

are labeled and treated within the boundaries of the various disciplines/research areas.

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Andra Brige

Andra Brige says that This paper aims to give a short overview on bank/customer

relationship experience in the Latvian banking system and the impact of developing

technology in banking. Without usage of technology commercial banks cannot provide

customers with effective services, but short banking history increases the danger of

such a reduced loyalty towards the services supplier.Satisfaction with services provided

is not the only factor influencing customer loyalty level. Customers experiencing a short

banking history can be loyal to the service provider due to the lack of financial literacy.

A great impact on loyalty level is made by other factors, such as: image, prestige, word

of mouth, etc.

The sample used for research did not include all 23 commercial banks of Latvia. Further

research should be developed to compare customer loyalty levels in the more

technologically developed and less technologically developed banks, and additional

loyalty-influencing determinants could be included.An analysis of ITC development in

banking side-effects provides useful information not only for transitional countries but

also for developing countries.

Eleni K. Kevork, Adam P. Vrechopoulos

Eleni K. Kevork, Adam P. Vrechopoulos says that The purpose of this paper is to

review the literature on customer relationship management (CRM) to obtain a

comprehensive framework of mutually exclusive CRM research areas and sub-areas

free of all potentially disruptive factors (plethora of CRM definitions, personal

judgments, etc.).The keywords reported in 396 CRM articles published during the

period 2000-2006 are used to uncover first a great number of detailed keyword sub-

groups and, by subject summation, the CRM-related research areas. This classification

scheme is considered unbiased, in contrast with any direct classification of articles

alone among CRM research areas fixed in advance. An up-to-date conceptual and

functional CRM framework emerges, consisting of a total of nine distinct research areas

having their own weights, importance and popularity among the research community.

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Newly emerging CRM research areas are self-identified as attracting the interest of the

researchers and managers. Keywords are activated, for a first time, as an added value

characteristic reflecting genuinely the authors' beliefs about the subject content fields of

their articles, important enough to reveal a self-supported and self-weighted unbiased

and exhaustive CRM framework, useful to researchers and marketing practitioners. The

paper offers strong evidence that e-CRM is too complex to be comprehensively

classified by mere procedures and simple criteria alone.

Jegham, Sahut,

Jegham, Sahut, (2004)studied that the implementation of information and

communication technology (ICT) project constitutes a major change for any

organization, the actual implementation appear to be very heavily biased toward the

technological aspects while paying little attention to managing the changes in process,

structure and culture. Besides, we wonder what kind of measures should be taken

along with the shifts induced by the ICT in order to make them accepted by the users.

To give a concrete answer to this challenge, we made a qualitative and exploratory

study related to a CRM implementation project in a banking institution. To study the

impact of change management measures of the ICT acceptation we propose for the

future research adopting an empirical approach based on the technology acceptance

model as stated in Davis (1989).

Kalyani Menon and Aidan O'Connor

Kalyani Menon and Aidan O'Conno argues that retail banks need to focus more

strongly on components of their Customer Relationship Management (CRM) strategy

that will generate customer affective commitment and lead to an increase in customer

retention, share of wallet, and advocacy. It is suggested that affective commitment is

generated during 'moments of truth' or episodes of interpersonal interaction between

customers and bankers. As shown in social psychology, effective interpersonal

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interactions are a function of the assertiveness and affiliation demonstrated during the

interaction. Applying this to retail banking, bankers should mine their databases to

identify customers in terms of their levels of profitability and longevity, and should

deliver levels of assertiveness and affiliation appropriate to each customer. Testable

research propositions are developed regarding how affective commitment might evolve

during a customer's tenure with a retail bank, when bankers should deliver

assertiveness and/or affiliation to customers of differing longevity and profitability, and

how these strategies to increase affective commitment will impact retention, share

development, and advocacy. Overall, the call is to complement the emphasis on the use

of high-tech CRM strategies that generate huge databases with a more high-touch

strategy that will indicate to bankers how to interact with each individual customer.

S.S. Hugar  and Nancy H. Vaz (D'Costa)

S.S. Hugar  and Nancy H. Vaz (D'Costa)(2007 studied that )India is on the threshold

of a stark global competition, especially so for the banking sector with the likelihood of

the economy opened for global banks soon. The Indian public sector banks which have

come face-to-face with competition just since last decade are found wanting both with

regard to performance as well as their customer orientation. This paper, first of all,

evaluates the need for CRM implementation in the Indian public sector banks (PSBs)

through the study of secondary as well as primary data. With the insight received from

the exercise, and the review of other implementation models found in CRM and related

IT literature, an optimum model for CRM implementation for Indian PSBs has been

suggested in the second part.

Anumala, Srinivas; Kumar Reddy, Bollampally Kishore

Anumala, Srinivas; Kumar Reddy, Bollampally Kishore(2007) said that The

customer relationship management (CRM) is essential and vital function of customer

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oriented marketing. Its functions include gathering and accumulating customer-related

information in order to provide effective services. e-CRM is a combination of IT sector

but also the key strategy to electronic commerce. e-CRM is a combination of software,

hardware, application and management commitment. Aim of e-CRM system is to

improve customer service, develop a relationship and retain valuable customers. e-

CRM is a concern for many organizations especially banking sector. The purpose of this

study is to gain a better understanding of the benefits e- CRM to customers and

organization in banking industry. To justify the purpose two research questions have

been addressed and on the basis literature review, a frame of reference was developed

which helped us to answer the research questions and collect data. A qualitative

research approach was used for this study. Empirical data was collected through in-

depth interviews were conducted with two Swedish banks and a group of their

customers. In the last chapter findings and conclusions were drawn on the basis on

research questions. Our findings indicate that Swedish banks are well aware of the

benefits and applications of the e-CRM and use the system to maintain good

relationships with their customers. Our findings also indicate that with the

implementation of e-CRM and the latest technologies. We have found that both the

banks seem to have same description about the benefits of e-CRM. We found that both

banks have maintained good relationships with customers due to the usage of e-CRM.

Our finding indicates that with the implementation of e-CRM and the latest technologies

banks have ensured full security for the transactions of their customer’s. E-CRM

facilitates the organizations to provide one to one services and also maintain the

transaction security of the customers.

Sivaraks, P. Krairit, D. Esichaikul

Sivaraks, P. Krairit, D. Esichaikul(2010) attempts to examine and measure outcomes

of e-CRM system implementation in the Thai Banking industry. The research is divided

into two main sections. The first section is based on a qualitative approach to define e-

CRM implementation in Thai banks. The second section uses a quantitative approach

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to determine the relationships between e-CRM implementation and outcomes from the

customers' point of view. The contribution of this research lies in the fact that most e-

CRM implementations are done in the back-office part, which cannot be directly seen or

recognized by the customers, so a new construct called “e-CRM Service attribute” was

introduced in this research in order to enable the measurement of e-CRM outcomes

from the customers' perspectives. From the 13 constructs that have been collected from

the literature, the exploratory factor analysis was performed and the results showed that

the outcomes of e-CRM implementation from the customers' perspective can be

grouped into three factors. The first one is the information factor, the second one is

convenience and the third one is communication channel factor. In addition, the T-test

was also employed to test the differences in e-CRM outcomes from the customers'

perspectives between the customers of the banks that implemented e-CRM and those

that did not.

Rajeev Kumra

Rajeev Kumra told the potential impact of E-CRM on cost savings, revenue growth,

and increased customer’s convenience has generated considerable interest and

speculation across the industries. The immense growth of E-CRM market has opened

new vistas of business for E-CRM vendors. However, with plethora of vendors and

products available in the market it makes the choise of the companies difficult. The

present study after reviewing the literature of E-CRM attempts to do a comparative

analysis of various E-CRM vendors.

Tim Coltman

Tim Coltmant said that the market enthusiasm generated around investment in

customer relationship management (CRM) technology is in stark contrast to the nay-

saying by many academic and business commentators. This raises an important

research question concerning the extent to which banks should continue to invest in

CRM technology. Drawing on field interviews and a survey of senior bank executives

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the results reveal that a superior CRM capability can deliver improved performance.

The paper then demonstrates that in order to be most successful, CRM programs

require a combination of technical, human and business capabilities.

Abbas Keramati , M. Farshid , E. Salehi-Sangari , J. Toufighi Zavareh

Abbas Keramati , M. Farshid , E. Salehi-Sangari , J. Toufighi Zavareh(2007) define

the aim of this research is to investigate customer relationship management (CRM)

activities in e-banking among Iranian banks. These banks are already adopting CRM

and approaching it differently, and achieving different rates of success in terms of

customer satisfaction and CRM. A comparative approach of their attitudes toward CRM,

therefore, will reveal important insights. Following similar approaches researchers have

employed in Europe, Pakistan, Malaysia, the UK and Ireland, we investigated the touch

points and services that connect banks to their customers. According to these

researches in other countries, we have developed a theoretical framework to investigate

CRM activities in public and private Iranian banks by interviewing with qualitative

approach case study. The main components of our research framework are:

communicational/collaborative CRM, operational CRM and analytical CRM. We also

consider the relationship among the components. This research will reveal Iranian

banks' positioning with regard to their view, concept and the benefits of CRM, with a

cross-case comparison between Iranian banks' CRM activities and also some

conclusions for practitioners.

Arpita Khare

Arpita Khare studied that Technology is fast altering the business services cape. Its

role in improving customer service levels is being used strategically and increasingly by

service organizations. The service attributes and quality can be enhanced by

deployment of technology. The Internet has facilitated convenience in customer

interactions and transactions with the banks. Online banking is currently emerging as a

new approach in India for providing improved accessibility and expediency to

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customers. Most banks have their own websites for improving the customer interface

and offering online services. The article studies the applicability of online banking in

India and its role in fostering relationships with customers and giving them more value.

The research was conducted on customers familiar with online banking in India, and

their perceptions about online banking were studied. The findings reveal that customers

are using the services but are skeptical about the financial transactions and service

quality dimensions.

K. Askool, S.S.Nakata,

K. Askool, S.S.Nakata (2010) said that Web 2.0 at a high level is described as the

convergence of technologies that enable people to easily interact and collaborate. The

use of these tools as a channel for communication and sharing information by

individuals has also an effect on customer relationship management (CRM). This paper

reports on a scoping study that explored the current situation of CRM adoption in

banking industry in Saudi Arabia. It aims to identify the factors that influence the use of

social CRM (SCRM). Various models have been proposed to study technologies

acceptance and usage. This paper proposes an enhancement of the Technology

Acceptance Model (TAM), by incorporating a range of factors identified in the business

relationships literature believed to influence SCRM adoption.

Manoj Patwardhan , Pankaj Srivastava , Kirti Kumar, Santosh Kumar ,

Abhishek Garg , Devesh Arya 2009 told in this article that Customer Relationship

Management (CRM) is no longer a new term but a reality for many organizations.

Banking is a prime candidate for CRM transformation, as competition in this sector

increases; an excellence in service becomes a critical success factor. The study

discovers the factors that influence CRM in Indian Banking Sector and evaluates the

current CRM implementation process. Respondents are from both private and public

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sector banks. Findings of this study have relevance for managers as these findings

provide them with the current scenario of CRM. Further managers learn to identify

CRM-related factors that could contribute to CRM implementation.

R.K. Mittal , Rajeev Kumra

R.K. Mittal , Rajeev Kumra(2001) studied that The advancement in information and

communication technology has made the new millennium, e-millennium. The dividing

line between banks and non-banking financial institutions, like insurance and mutual

funds, is getting blurred. Competition from players in the market has resulted into

products and services traditionally offered by banks and financial institutions, are now

being offered by non-banking organizations more efficiently and effectively. In India the

monopoly of banks over payment systems would be broken very soon after the

launching of satellite based money order services by the P & T department. Now

banking activities are not confined to borrowing (collection of savings) and lending

(disbursement of loans), but provides a plethora of services keeping in mind the

requirement and convenience of customers In the fast changing banking environment

worldwide, banks in India will not only have to learn the new rules but also upgrade the

skills as well as the tools of banking. The challenge lies in addressing these issues and

at the same time keeping the wheels of growth moving.

Technology, people and customer are the three elements on which hinge the success

of banking in the e-millennium. Technology will be an enabler in managing the pace and

quantum of change. Success in technology can be brought about by skilled human

resources. In response to these technological challenges, organizations have to evolve

internal capabilities and skilled human resource management which is fundamental in

generating these capabilities. However, ultimately the bank’s performance depends

upon the satisfaction of its customers. In the emerging competitive and technological

driven banking era, banks have to strive hard for retaining and enlarging their customer

base.

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E-CRM, which is the latest buzzword in the corporate sector, is perceived as one of the

effective tool in this direction by the banks. The present paper attempts to analyze the

concept of e-CRM in Indian banks from its various dimensions covering specifically its

need, process, present status and future prospects.

Sami Alsmadi

Sami Alsmadi(2011) studied to develop a CRM model and empirically test its

underlying constructs in the banking and financial sector in Jordan. The

empirical data was collected from a convenient sample of 141 banks and financial

institutions, drawn from three major Jordanian cities (Amman, Irbid, and Al-Zarqa). A

drop-off method of data collection was used (Aaker et al. 2004). The findings show that

Jordanian banks and financial institutions were likely to have a clear CRM strategic

vision with specific goals and programs, possess necessary resources to establish

CRM, be able to manage CRM programs, and use two way communications to

handle CRM. Nevertheless, the analysis unveiled that these firms were not likely to

have a sufficient marketing database, nor customer intelligence, with little motivation to

either measure effectiveness of CRM programs or take actions to improve an unpopular

CRM strategy. Further analysis of the findings indicated that the CRM concept did not

seem to be well incorporated in the business strategy of most Jordanian banks

and financial institutions. Several recommendations were made and certain

directions for future research were highlighted.

Kallol Das, Jitesh Parmar, Vijay Kumar Sadanand

Kallol Das, Jitesh Parmar, Vijay Kumar Sadanand (2009) explores the association

between deployment of customer relationship management (CRM) best

practices and loyalty of profitable customers in Indian retail banking sector.

The study comprises two parts. The first part called the CRM best practices survey

involves the use of descriptive research design. The second part viz. Case

study research involves the use of embedded customer loyalty survey. The

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hypothesis testing based on literal and theoretical replication is done using the concept

of pattern matching. The findings reveal that there is no perfect bank, as yet, across the

three bank types, which has deployed all the 29 CRM best practices to the fullest

extent. The results of literal and theoretical replication done by using pattern

matching technique indicates no strong association between deployment of CRM

best practices in scheduled commercial banks and loyalty levels of both high and

medium relationship value retail customers. The study develops a list of 29 CRM

best practices, which may be helpful to the organizations toward achieving

comprehensive CRM deployment. The results also imply that going for CRM

deployment may not be a profitable strategy for retail banks, particularly in the

Indian context.

T. R. Coltman

T. R. Coltman(2007) studied that The market enthusiasm generated around investment

in customer relationship management (CRM) technology is in stark contrast to the nay-

saying by many academic and business commentators. This raises an important

research question concerning the extent to which banks should continue to invest in

CRM technology. Drawing on field interviews and a survey of senior bank executives

the results reveal that a superior CRM capability can deliver improved performance.

The paper then demonstrates that in order to be most successful, CRM programs

require a combination of technical, human and business capabilities.

Dr. R.K.Uppal

Dr. R.K.Uppal present paper exhibits the growth of information technology in various

bank groups. In our country in 2009, 79 percent branches are under core

banking. The maximum technology is taking place in new generation private sector

banks as well as foreign banks. 43.5 percent are off site ATMs in our country. Public

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sectors banks have more on site ATMs where as new private sector banks and foreign

banks have more off site ATMs. The paper also suggests some strategies to

enhance e delivery channels in banks particularly in public sector banks.

Alexander Krasnikov, Satish Jayachandran, & V. Kumar

Alexander Krasnikov, Satish Jayachandran, & V. Kumar(2009) studied that the

impact of customer relationship management (CRM) implementation on firm

performance is an issue of considerable debate. This study examines

the impact of CRM implementation on two metrics of firm performance?

Operational (cost) efficiency and the ability of firms to generate profits (profit efficiency)?

Using a large sample of U.S. commercial banks. The authors use stochastic frontier

analysis to estimate cost and profit efficiencies and employ hierarchical linear modeling

to assess the effect of CRM implementation on cost and profit efficiencies. They find

that CRM implementation is associated with a decline in cost efficiency but an increase

in profit efficiency. A firm-level factor, CRM commitment, reduces the negative effect of

CRM implementation on cost efficiency. The authors also find that two adoption-

related factors, time of adoption and time since adoption, influence the

relationship between CRM implementation and cost and profit efficiencies. Early

adopters benefit less from CRM implementation than late adopters. However, time

since adoption improves the performance of firms that implement CRM. By

demonstrating the different ways CRM implementation influences cost and profit

measures, the study provides valuable insights to CRM researchers and managers.

Salma Rahman and Sarwar M. Azhar

Salma Rahman and Sarwar M. Azhar(2008) studied that CRM and service marketing

are developing into competing paradigms in customer service marketing literature.

Practicing managers are either ready to invest or already investing in CRM

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systems without substantiated results in terms of improved performance and

resultant returns on investments. Should companies in developing countries get

onboard this bandwagon? The hypothesis of this paper is that both CRM

and service marketing practices show considerable similarities, which make these

two paradigms close cousins rather than competitors. The paper therefore

builds an integrative model of commonalities of activities drawn from the two

domains. Using academicians and practicing managers these groups of

common activities are operational zed into current practices in the banking

industry of Pakistan. A survey is conducted using these items to verify if the banks

are practicing these activities and if so then it is premised that such banks

may be ready to fine tune their operations to become fully CRM systems

oriented, which would mean incorporating further technology into the system

OR else they should focus on continuing to improve their current service

marketing operations as defined by the activities that form part of the

integrative model. The results support the later strategy for banks in Pakistan, at this

point in time.

Salim Hilal Al-Mamari, Miguel Baptista Nunes

Salim Hilal Al-Mamari, Miguel Baptista Nunes( 2008) studied that the paradigm

shift from a product-focused view to a customer-focused view advocates that

organizations need to consider first and foremost the needs of their customers. In

order for organizations to achieve competitive advantage they need to adopt customer-

centric solutions such as CRM. However, the adoption of such systems entails

barriers and risk events that may hinder successful use of CRM. This paper

discusses the barriers that may have impact on potential adoption of CRM in

banking sector in Oman. A range of previous studies have been critically

examined to provide a background for the study and have resulted in the

identification of different barrier categories, namely social, management and technical

barriers. This initial categorization was used as a priori theory for an inductive

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study of the Banking sector in Oman. The study used in-depth interviews

with top management of 3 out of the 4 of the more representative banks in the country.

The data collected was analyzed using a thematic analysis approach that enabled the

identification and classification of barriers into categories. These categories were then

translated into a narrative that forms the theoretical proposition of this paper. The

awareness of the barriers presented and discussed here will help both practitioners and

academics to better understand and overcome the difficulties of CRM implementation.

The paper also aims at contributing to the debate on the adoption, use

and improvement of CRM.

R.K. Mittal, Sanjay Dhingra

R.K. Mittal, Sanjay Dhingra(2007) studied that Indian banks are investing heavily in

the technologies such as telebanking, mobile banking, banking, and automated teller

machine (ATMs), credit cards, debit cards, smart cards, call centers, CRM, data

warehousing etc. To convince the management, investors and other stakeholders for

this heavy investment in technology, it is desirable to evaluate the impact of

computerization on the performance of Indian banks in terms of their profitability and

productivity. In this paper, after defining input and output parameters, Data

Envelopment Analysis (DEA) is used to study the impact of computerization on Indian

banks profitability and productivity. Private sector banks, which took more IT initiative,

were found to be more efficient in productivity and profitability parameters than public

sector banks.

Shwu-Ing

Jr-Ming Hung

Shwu-Ing ,Jr-Ming Hung(2008)studied that Recently, CRM (Cause-Related Marketing)

has gradually been adopted by non-profit organizations. However, for the evaluation of

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CRM's effect, a non-profit organization still refers to traditional financial data, which

could not understand the influence and effect of CRM on a non-profit organization

completely. This research introduces the concept of the Balanced Scorecard as the

framework for the evaluation of CRM, and utilizes the Balanced Scorecard's five

dimensions in a non-profit organization to design a questionnaire. The questionnaire is

used to collect the performance data of a non-profit organization after the execution of

CRM, and uses Structural Equation Modeling (SEM) to verify the relations and

interaction between each performance dimension. The primary purposes of this

research are (1) to analyze the influence and effect on a non-profit organization of its

participation of CRM; (2) to design a reliable measurement index to evaluate the effect

of CRM; (3) to establish the relationship structure model of the influence factors of the

CRM's effect. This research shows that the measurement index developed by this

research could measure the fact that the non-profit organization has effects in five

dimensions after the execution of CRM - namely, organizational mission, financial,

customer, internal process, learning and growth - and these five dimensions influence

each other.

Grau, Stacy Landreth

Folse, Judith Anne Garretson

Grau, Stacy Landreth, Folse, Judith Anne Garretson(2007)told that the majority of

cause-related marketing (CRM) campaigns implemented since their inception over 20

years ago offer consumers who are highly involved with causes a strong reason to

participate. Their involvement represents a significant motivating factor. However, a

multitude of CRM campaigns competing for the limited number of socially conscious

consumers and the emergence of new generations that are reportedly less socially

conscious suggests that firms and their nonprofit partners should consider additional

target-market opportunities. In two experiments, we assess the role of donation

proximity and message framing on campaign attitudes and participation intentions of

less-involved consumers. Findings reveal that local donations and positive message

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framing serve as effective message cues to produce favorable CRM outcomes among

this market segment that strategists consider fertile ground. Additional findings and

implications for creating and communicating CRM campaigns are discussed.

RESEARCH METHODOLOGY

TITLE OF THE STUDY:

“STUDY THE IMPACT OF CRM ON CUSTOMERS OF BANKS OF JAIPUR CITY”

DURATION OF PROJECT:

Duration of project study was semester long.

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OBJECTIVE OF STUDY

The primary objective of the study remains to identify the impact of CRM activities on customers in banking sector. The study will, in an overall perspective, aim to cover following objectives.

1. The objective of this study is to bring insight and deeper understanding into the

objectives, strategies and the expected benefits of CRM initiatives by organizations

particularly service companies like banks.

2. To find out that how the expected benefits of CRM can initiatives by organizations be

described?

3. To find out positive impact on the overall performance of the organization in the long

run.

4. To get more knowledge about CRM in banking sector

5. To understand consumer psyche about CRM in banking area.

6. To analyze that how CRM works as a link between banks and customers.

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TYPE OF RESEARCH:

Research Design - It was an exploratory research.

The data for study was collected by using both, primary as well as secondary sources. The data was collected by using various techniques and sources which are briefly described below. Data was collected from customer and marketer of banks. Like HDFC, ICICI bank etc.

Apart from the data collected for aforesaid companies, data will be collected from regulatory sources, Journals, Books and Internet etc.

Primary data collection:

Primary data will be collected from following sources:

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1. Customer and marketer of banking service

2. Bank officials

Data will be collected through interviews and filling of questionnaire.

Secondary data collection:

Secondary data will constitute an integral part of the study and it will be assimilated in following areas:

1. Published data regarding financial performance of banking companies by internet channels

2. Data regarding customer behavior towards new channels

3. Data regarding opportunities for marketer in banking sector

Secondary data will be collected through extensive literature survey and sources will include newspapers, internet, journals, magazines books reports and other publications

SAMPLE SIZE & METHOD OF SELECTING SAMPLE:

Sample size: 50 respondents

Sampling method: Convenience Sampling

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Demographics Percentage

Gender

Female

Male

12

38

24

76

Total 50 100

AgeUnder 25 yr

25 – 30 yr

30 – 35 yr

Above 35 yr

25

17

05

03

50

34

10

6

Total 50 100

EducationBachelor’s Degree

Master’s Degree

Diploma/ Certificate Course

12

29

09

24

58

18

Total 50 100

IncomeBelow 1.5 Lakhs

1.5 Lakhs – 2 Lakhs

2 Lakhs – 3 Lakhs

Above 3 Lakhs

15

18

10

07

30

36

20

14

Total 50 100

Table : Sample Profile

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SCOPE OF STUDY:

1. The objective of this study is to bring insight and deeper understanding into the

objectives, strategies and the expected benefits of CRM initiatives by organizations

particularly service companies like banks.

2. To find out that how the expected benefits of CRM can initiatives by organizations be

described?

3. To find out positive impact on the overall performance of the organization in the long

run.

4. To get more knowledge about CRM in banking sector

5. To understand consumer psyche about CRM in banking area.

6. To analyze that how CRM works as a link between banks and customers.

LIMITATION OF THE STUDY:

The study might be limited by following factors:

1. CRM in banking is a very recent phenomenon.

2. The primary data, collected in form of questionnaires and interviews, might have

inherent limitations of biasness and casual response.

3. Time Period of the project was not sufficient to study all the factors in deep.

4. The area of study was Jaipur so it cannot be generalized to other cities.

5. A different composition of sample skew the

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DATA ANALYSIS AND INTERPRETATION

1. What kind of bank is better in services?

(A) Private = 37 (b) public = 13

Respondents Private Public

50 37 13

INTERPRETATION:-

In first question I found that most of the costumers are engaged with private banks. In my questionnaire I directly asked that what kind of banks are better of services and out of sample of fifty 74% customers went with private banks. Only 26% customers like the services of public bank so out of 50 customers 37 likes private bank and rest 13 like public bank.

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2. Does your bank use "CRM" activities?

(a) Yes = 12 (b) no = 10

(c)No idea = 28

Respondents Yes No No idea

50 12 10 28

INTERPRETATION:-

In second question I found that most of the customers are not aware about the crm activities in banks. Out of 50 customers 28 told that they have no idea about crm activities or works in bank. Ten customers told that their bank does not use crm activities but they were not confident about their saying, so somewhere I felt that they had not so much knowledge about crm activities. Only twelve customers spoke positively about crm.

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3. If yes then, what kind of activities?

(a) Wishing on festival = 15 (b) gifts = 12 (c) special schemes = 23

Respondents Wishing on festival gifts special schemes

50 15 12 23

INTERPRETATION:-

In this research I found that most of the customers don’t know that which activities can be added in crm through banks so I had gave some name of activities to find their view. 23 customers told that band provides them special schemes as a crm activity. 15 customers include wishing on festivals or special occasion by bank in crm and rest 12 told that gifts given by bank can be one kind of crm activities.

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4. What is the level of use of technology in services in your bank?

(a) Low = 8 (b) average = 30

(c) High = 12

Respondents Low Average High

50 8 30 12

INTERPRETATION:-

In this research when I asked to customers about technology uses in banks then I

found that most of the banks are using high level of technology in their operation.

Private banks are using high and costly technology. 12 customers said that their band

are using high technology and all these customers engaged with private banks. 30

customers said that their bank are using average technology and rest 8 customers think

that their bank are using low technology.

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5. Which database your bank use to manage information about you?

(a) Electronic = 32 (b) traditional paper database = 15

(c)Other = 3

Respondents Electronic traditional paper database

Other

50 32 15 3

INTERPRETATION:-

In research I found that customers are aware about database but not about their

types. 32 customers think that with the technology advancement banks are preferring

electronic database about their information. 15 customers told that banks are using

traditional paper database for security purpose and rest 3 customers were not aware

about database.

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6. When your bank arrange meeting with you?

(a)Weekly = 16 (b) monthly = 24

(C) Yearly = 10

Respondents Weekly monthly Yearly

50 16 24 10

INTERPRETATION:-

In this research I found that most of the private banks conduct meetings with their

customers regularly. Specially HDFC and ICICI are conducting monthly meetings with

customers. 24 customers said that their banks monthly conduct the meeting. 16

customers went with option weekly and rest 10 customers told that their bank conduct

yearly meeting. So I brought a conclusion that banks are conducting more and more

meetings to understand and retain the customers and to solve their problems.

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7. Does your bank provide facility of "Any time banking"?

(a) Yes = 46 (b) no = 4

Respondents Yes No

50 46 4

INTERPRETATION:-

Any time banking is a common function using by banks now a days. Out of 50

customers 46 are agree that their bank is giving any time banking facility only 4

customers told that night service of their banks are not good, so they do not count it in

any time banking. As a conclusion I found that any time banking is a general function of

banks.

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8. When does your bank organize engagement activities?

(a) On customer day, week = 21 (b) On Bank anniversary = 17

(c) On Festivals = 12

Respondents On customer day, week

On Bank anniversary

On Festivals

50 21 17 12

INTERPRETATION:-

In the answering of this question I got same weight age for all the options. Banks

conduct engagement activities on various occasions like customer day, week , bank

anniversary , on festivals etc. Respectively I got 21, 17 and 12 for above option out of

50.

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9. Does your bank solve your queries or problems within given time period?

(a) Yes = 38 (b) no = 12

Respondents Yes No

50 38 12

INTERPRETATION:-

In this research I found that problem solving of a customer is the main aim in crm

activities. Banks takes immediate action about a query or a problem. In my survey 38

customers said that their bank solve their problem within given time period. 12

customers were not happy with the service of bank.

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10. How does your bank provide solution for your problem?

(A) Online = 7 (b) On phone = 15

(C) On place = 28

Respondents Online On phone On place

50 7 15 28

INTERPRETATION:-

In research I found that most of the private banks solve the problem at place and in

the case problem can’t be solve on the place then they try to give solution on phone or

online. 7 customers marked option online, 15 marked on phone and 28 marked option

on place.

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11. Are you satisfy with the services of your bank, or want to give some suggestion?

(a) Satisfy = 33 (b) not satisfy = 17

Respondents Satisfy not satisfy

50 33 17

INTERPRETATION:-

As a conclusion of my questionnaire if I found that most of the customers of private

banks are satisfy with the overall services of bank. The ratio of satisfaction and

dissatisfaction is 33: 17.

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FACTS AND FINDINGS

HDFC is the number 1 bank in using CRM activities and services.

ICICI comes at second position in using CRM activities and services.

CRM helps in understanding the customers, their needs, wants, motives, likes,

dislikes, taste and performances.

CRM facilitates identifying a bank’s target customers satisfaction and focusing on

the best one which helps the bank to optimize their sales and revenue.

CRM maximizes customer satisfaction and boosts customer loyalty which

builds long term relationship.

CRM provides appropriate training and development to the employees who offer

scope for growth and continuous improvement to the staff.

CRM also helps the key functionalities of the bank which includes

marketing, sales, research and development, services, lead, and opportunity

management.

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SWOT ANALYSIS

SWOT of HDFC Bank

Strengths: -

1. Right strategy for the right products.

2. Superior customer service vs. competitors.

3. Great Brand Image.

4. Products have required accreditation.

5. High degree of customer satisfaction.

6. Good place to work

7. Lower response time with efficient and effective service.

8. Dedicated workforce aiming at making a long-term career in the field.

Weakness: –

1. Some gaps in range for certain sectors.

2. Customer service staff need training.

3. Processes and systems, etc

4. Management cover insufficient.

5. Sectoral growth is constrained by low unemployment levels and competition for

staff

Opportunities: –

1. Profit margins will be good.

2. Could extend to overseas broadly.

3. New specialist applications.

4. Could seek better customer deals.

5. Fast-track career development opportunities on an industry-wide basis.

6. An applied research center to create opportunities for developing techniques to

provide added-value services.

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Threats: -

1. Legislation could impact.

2. Great risk involved

3. Very high competition prevailing in the industry.

4. Vulnerable to reactive attack by major competitors.

5. Lack of infrastructure in rural areas could constrain investment.

6. High volume/low cost market is intensely competitive.

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ICICI Bank

Strengths:

Strong Balance Sheet

Expanding international and rural business

Well-established subsidiaries in life and non-life insurance and AMC business

Strong Bench-strength

 

Weaknesses:

Frequent capital dilution

Lesser share in low-cost deposits, still to fix liability mix

Large retail portfolio may breed NPAs going forward

No promoters, shareholding quite scattered

 

Opportunities: –

Bank –Insurance services: The bank should also provide insurance services.

That means the bank can have a tie-up with a insurance company. The bank will

advertise & promote the different policies introduced by the insurance company

& convince their customers to buy insurance policies.

Increase in percentage of Returns on increase: The bank should provide higher

returns on deposits in comparison of the present situation. This will also upto

large extent help the bank earn profits & popularity.

Recruit professionally guided students: Bank & Insurance is a special non-aid

course where the students specialize in the functioning & services of the bank &

also are knowledge about various tax policies. The bank can recruit these

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students through tie-ups with colleges. Such students will surely prove as an

asset to the bank.

Associate with social cause: The bank can also associate itself with social

causes like providing relief aid patients, funding towards natural calamities. But

this falls in the 4th quadrant so the bank should neglect it.

Threats: -

Competition: ICICI Bank is facing tight competition locally as well as internationally.

Bank like CITI Bank, HSBC, ABM, Standard Chartered, HDFC also provide

equivalent facilities like ICICI do and also ICICI do not have consistency in its

international operation.

Net Services: ICICI Bank provides all kind of services on-line. There can be easy

access to the e-mail ids of the customers through wrong people. The confidential

information of the customers can be leaked easily through the e-mail ids.

Decentralized Management: Each branch manager is given the authority of taking

decisions in their respective branches. The decisions made by different managers

are diverse and any one wrong decision can laid to heavy losses to the bank.

No Proper Facilities To Uneducated customers: ICICI Bank provides all services

through electronic computerized machines. This creates problems to the less

educated people. But this threat falls in the 4th quadrant so its negligible. The

company can avoid this threat.

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Conclusion

Banking can be mysterious for consumers and how they interact with their finances can

be a complex matter. The challenges faced by banks and their customers are many but

the trick lies in de-mystifying complex financial relationships.

Technical solutions deployed by banks today are flexible, user-friendly and meant to

facilitate specific workflow and requirements in implementation processes. In order to

simplify lives, banks have begun to implement end-to-end technologies

through all departments with the intention of removing human error from processes.

Previously existing manual environments could not have been adequate for future

visions, growth plans and strategies.

In this day and age, customers enjoy complete luxury in terms of customized

technical solutions and banks use the same to cement long-term, mutually-beneficial

relationships. For a bank to succeed in adopting a CRM philosophy of doing business,

bank management must first understand CRM as a holistic concept that

involves multiple, interlocking disciplines, including market knowledge, strategic

planning, business process improvement, product design and pricing analysis,

technology implementation, human resources management, customer retention,

and sales management and training.

Turning the business strategy into actionable items is a difficult

undertaking. For which Customer Relationship Management works a magic wand.

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RECOMMENDATIONS AND SUGGESTIONS

Customer Relationship Management (CRM), the most exciting strategies that emerged

from networking technology revolution of the nineties, is today fast emerging one of the

most important cooperates strategies. A well-executed Customer Relationship

Strategies can result in number of quantitative benefits, including greater ability to sell

and cross sell, improved retention besides cost of services.

Customer Relationship Management is do-able. However the following must

take into consideration before embarking upon its implementation. All aspects of

customer relationship management, including technology solution, must be

fully explored effectively deliver the competencies required to realize the business

benefits.

1. Tackling any one competence alone will lead to a dysfunctional

business. One competence does not customer relationship management make.

2. Take pragmatic steps with a clear view on delivery of all the components in the

Medium term, rather than piecemeal in the short term.

3. Successful mass customization is crucial to reducing customer acquisition cost and

Improving the cross selling capacity.

4. Channels are a delivery mechanism. The effectiveness of the mechanism is

achieved when it is faultless!

5. 75% of all Customer Relationship Management projects have failed due to lapses in

implementation. Technology is not enough, implementation is the key and this is where

the people aspect comes into the forefront.

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6. Customer Relationship Management implementation is effective when companies are

able to identify the internal and external customer and integrate them with its core

business process.

“No-one can guarantee success. You cannot foresee the future. However, you

can develop the possibilities and capabilities today, which will put you in a position

tomorrow to deal with future risks and opportunities to your advantage. And that is a

whole lot better than waiting to see what "fate" has in store.”

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QUESTIONNAIRE

STUDY THE IMPACT OF CRM ON CUSTOMERS OF SELECTED BANKS OF JAIPUR CITY

Name of customer :

Name of bank :

Occupation :

Email address :

Contact no. :

Gender

Male

Female

Age

Under 25 yr

25 – 30 yr

30 – 35 yr

Above 35 yr

Education

Bachelor’s Degree

Master’ Degree

Diploma/ Certificate Courses

Income

Below 1.5 Lakhs

1.5 lakhs – 2 Lakhs

2 Lakhs – 3 Lakhs

Above 3 Lakhs

Page 130: Divya report

1. What kind of bank is better in services?

(A) Private (b) public

2. Does your bank use "CRM" activities?

(a) Yes (b) no

(c)No idea

3. If yes then, what kind of activities?

----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

4. What is the level of use of technology in services in your bank?

(a) Low (b) average

(c) high

5. Which database your bank use to manage information about you?

(a) Electronic (b) traditional paper database

(c)Other

6. When your bank arrange meeting with you?

(a)Weekly (b) monthly

(C) Yearly

7. Does your bank provide facility of "Any time banking"?

(a) Yes (b) no

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8. When does your bank organize engagement activities?

(a) On customer day, week (b) On Bank anniversary

(c) On Festivals

9. Does your bank solve your queries or problems within given time period?

(a) Yes (b) no

10. How does your bank provide solution for your problem?

(A) Online (b) On phone

(C) On place

11. Are you satisfy with the services of your bank, or want to give some suggestion?

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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Websites:

www.crm.co

www.businessline.co

www.customerrelation.co

www.marketing.co