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Net banking, phone banking, mobile banking, ATMs and bill payments are the
new buzz words that banks are using to lure customers.
With a view to provide an institutional mechanism for sharing of information on
borrowers / potential borrowers by banks and Financial Institutions, the Credit
Information Bureau (India) Ltd. (CIBIL) was set up in August 2000. The Bureau
provides a framework for collecting, processing and sharing credit information on
borrowers of credit institutions. SBI and AXIS are the promoters of the CIBIL.
The RBI is now planning to transfer of its stakes in the SBI, NHB and
National bank for Agricultural and Rural Development to the private players. Also,
the Government has sought to lower its holding in PSBs to a minimum of 33% of total
capital by allowing them to raise capital from the market.
Banks are free to acquire shares, convertible debentures of corporate and units
of equity-oriented mutual funds, subject to a ceiling of 5% of the total outstanding
advances (including commercial paper) as on March 31 of the previous year.
The finance ministry spelt out structure of the government-sponsored ARC
called the Asset Reconstruction Company (India) Limited (ARCIL), this pilot project
of the ministry would pave way for smoother functioning of the credit market in the
country. The government will hold 49% stake and private players will hold the rest
51%- the majority being held by ICICI Bank (24.5%).
REFORMS IN THE BANKING SECTOR:
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 has
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
scheduled commercial banks increased four-fold and the number of banks 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 complete 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% share in deposits and 28.1% share in credit. The 20 nationalized
banks accounted for 53.5% of the deposits and 47.5% of credit during the same
period. The share of foreign banks ( numbering 42 ), regional rural banks and other
scheduled commercial banks accounted for 5.7%, 3.9% and 12.2% respectively in
deposits and 8.41%, 3.14% and 12.85% respectively in credit during the year 2000.
CLASSIFICATION OF BANKS:
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 cooperative 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 Indian banking industry is a
mix of the public sector, private sector and foreign banks. The private sector banks are
again spilt into old banks and new banks.
NABARD NHB
Commercial
operative
Banks
Banks
Banks
IRBI
EXIM Bank
Regional Rural
Land Development
Banks
SBI Groups
Banks
ISIDBI
Nationalized Banks
CoBanks
Indian Banks
Foreign
The average growth in the first three quarters of the fiscal year was 6.9%. This
effectively means IMF expects the economy to grow only 4.4% in the last quarter.
As per the above estimates, the growth rate for Agriculture, Industry and
Services is estimated to be 2.6%, 4.8% and 9.6% respectively in 2008-09. In the quick
estimates for 2007-08, the corresponding growth rates for these three sectors were 4.9,
8.1 and 10.9% respectively.
After growing at 5.0% in 2006 and 4.9% in 2007, IMF estimates global GDP
growth to decelerate to 3.7% in 2008 in the wake of the current financial crisis. The
financial market turbulence in developed economies following the US sub-prime
mortgage crisis has reduced financial leverage, lowered credit availability and
negative wealth effects have emerged as risks to consumption and growth in advanced
economies, especially in the US. Continuing inflationary pressures from food and
commodity prices as well as high and volatile crude oil prices are other risks being
faced by the global economy.
India continued to be one of the fastest growing economies of the world.
During 2007-08, the Indian economy grew at a robust pace for the fifth consecutive
year. Real GDP growth, estimated at 8.7% in 2007-08, is in tune with the average
annual GDP growth of 8.7% in the five year period 2003-04 to 2007-08. Agriculture
and allied activities are estimated to grow by 2.6% in 2007-08, which is in line with
the average growth of 2.6% per annum during 2000- 01 to 2007-08. Food grains
production touched a record high in FY08, with total food grains production placed at
227.3 million tones, surpassing the target of 221.5 million tones and recording an
increase of 4.6% over the previous year. Industrial growth at 8.6% during 2007-08 has
moderated somewhat against 10.6% in the previous year.
The services sector maintained its double-digit growth at 10.6% during 200708, higher than the long term average of 8.9% (2000-01 to 2007-08). Within services,
transport and communications and financial services recorded double-digit growth for
the last two years and are expected to maintain the growth momentum. Trade and
hotels showed higher growth of 12.1% in 2007-08 against 11.8% growth in 2006-07.
Another positive feature underpinning growth is the sharp rise in the rate of savings
and investment in recent years, which rose to 34.8% and 35.9% respectively in 200607.
Towards the close of the fiscal year, higher inflation rate was noticed due to
rise in global prices of food, metals and crude oil. Inflation based on WPI declined
from 6.4% at the beginning of the fiscal year to a low of 3.1% by mid-October 2007,
partly reflecting moderation in the prices of some primary food articles and
manufactured products.
After hovering around 3% during November 2007, inflation began to edge up
from early December 2007 to touch 7.4% by 29 March 2008, mainly reflecting
hardening in prices of primary articles such as fruits and vegetables, oilseeds, raw
cotton and iron ore, as well as fuel and manufactured products such as edible oil/oil
cakes and basic metals, partly due to international commodity price pressures.
However, fiscal and monetary measures are being taken to contain inflation and
maintain high growth.
Need for a revolutionary approach towards privatization Nationalized banks
such as State Bank Of India (SBI), though pygmies in the international banking
market, are banking behemoths of India. They have branches spread over the entire
length and breadth of the country. SBI in particular is all-pervasive enjoying a
sprawling network of 9000 branches. Its blue and white shingle is visible to the
smallest hamlet. It has assets understood to be worth about Rs2,22,500 crore ($52
billion). SBI has a very conservative approach to accounting particularly when it
comes to declaration of its assets. Probably modesty does not permit the bank to
exhibit its strengths. In particular, it has real estate properties some of which are
heritage sites all over the country. These are estimated to collectively command a
value of Rs.30,000 crores. This, it is believed, does not get reflected in its book of
accounts.
SBI enjoys a monopoly of the government business. The Reserve Bank of
India owns about 60% of the banks equity. To its credit, SBI mobilized $4.2 billion
through the Resurgent India Bonds (RIB) issue in just 3 months down the postPokhran sanction period. This was the difficult time when the international credit
rating agencies had downgraded the country. SBI, time and again, does a rescue act
in the forex market to contain any volatility of the rupee.
SBI was formed under the SBI Act in 1955 with the takeover of Imperial
Bank and amalgamation of Bank of Bengal, Bank of Bombay, and Bank of Madras.
hastened so that investments thus released can migrate to more important areas like
development of new technologies and products in customer service and service
intensive areas. Privatization also helps to professionalize the banks day-to-day
operation, which will allow the management more freedom in decision making
during credit disbursement.
To aid privatization and effect a better price realization, the bank is
attempting to change over its accounting and reporting procedures to comply with
US GAAP norms. This is a prerequisite for trying out the ADR route, as it is
known that US market is by far the undisputed biggest market and can offer the best
price. At the moment, the SBI stock is undervalued at Rs.240 whereas experts expect
Rs.300 would be a more realistic value. Action on this front at blitzkrieg pace is the
need of the hour.
Manpower Retraining and not Retrenchment:
As a hangover of the past socialistic mindset, all the nationalized banks have
excess workforce. This is indeed a hot potato for the management of many
enterprises and is therefore being handled with kid gloves. In India, it is everyones
worry to look at business as a source of employment, while making money is
secondary. In this ocean of manpower, every institution does have its share of highly
skilled and talented manpower, which contribute to asset building. It is the semi
skilled manpower having outdated skills, which form the excess baggage. All banks
must invest in re-training the manpower so that they can migrate from the areas that
will be vacated by computerization. The level of Non-Performing-Assets (NPAs) is
still at very high levels and to start with, some of this excess manpower can cover
areas of debt recovery.
At the same time, one should also take note of the flight of talent from these
nationalized banks to newly set-up private and foreign banks. And, it is these new
banks top officials after migrating from the government banks are targeting at the
top corporate clients and thus poaching into the corporate business, which has been
the mainstay of the nationalized banks. This will soon become a problem of serious
proportion unless the banks initiate steps to stem the flow. It is difficult, to
exclusively address the problem of excess manpower by schemes such as voluntary
retrenchment scheme (VRS) because while attempting to remove dead wood, talent
also takes an exit. Many industries have faced this problem. Also it will be over
simplicity to state that the salaries should be raised because that will only start a
wage war. Instead, the banks should involve the services of international consultants
specialized in this field and take a holistic view of the problem. Retraining and
Rationalization of manpower commands higher priority over Retrenchment of
manpower.
New Products and New technologies:
Nationalized banks have generally been preoccupied with treasury business.
The new product areas that require greater penetration are personal banking, housing
finance, consumer durable finance, auto-finance, internet banking, insurance,
telephone banking et al. Development of these new areas call for heavy investments
and this cash - flow can only generated by privatization. In addition, surplus
manpower once retrained can be absorbed in the new ventures.
All nationalized banks and SBI in particular has the advantage of vast
network of branches and can therefore carry the new business to the remotest corner,
but to make this presence felt the banks have to move at blitzkrieg pace.
CAMEL: TOOL FOR MEASURING THE
PERFORMANCE OF BANKS
Bank of Baroda
Federal Bank
Indian Overseas Bank
Jammu & Kashmir Bank
State
Bank
of Dhanalakshmi Bank
Hyderabad
Punjab & Sind Bank
Karnataka Bank
Indian Bank
Foreign Banks
Shinhan bank
Abu Dhabi commercial bank
Mashreqbank P S C
Antwerp Diamond bank N V
Bank of Tokyo-Mitsubishi
UFJ
Calyon Bank
Krung Thai Bank Public Co.
State Bank of Mauritius
Bank of America National
Trust
Mizutto Corporate Bank
Banking Review-2009
NPAs rise for Private Banks, stable for PSBs
Gross NPAs of all Private Banks that we have covered have seen a sequential
rise. However, asset quality of most PSBs remained stable, with flat to lower Gross
NPAs
NIMs of most banks saw a sequential decline
Decline was largely due to PLR cuts by banks towards the end of Q4FY08
Most banks have, however, raised their PLRs and deposit rates by 100-150bps in
June08 and Q1FY09 NIMs should see a marginal improvement in Q2 on account of
PLR hikes However, as deposit re-pricing kicks in with a lag effect, NIMs may again
come under pressure.
Credit spreads saw a decline after a long time
After a long time, the sector saw a decline in credit spreads (Yield on advances
Cost of deposits). Decline in credit spreads was largely due to inability of most
banks to raise PLR in Q1 even as interest rates were rising BOB, IOB, Corpbank and
BOI saw substantial fall in yields on credit book, resulting in compression of credit
spreads Canbank, PNB, Union Bank saw sequential improvement in credit spreads in
Q1
CASA saw a mixed trend
Among Public Sector Banks (PSBs), SBI, Canara and Union saw marginal
improvement in CASA on YoY basis Others like BOB, BOI, OBC saw a decline on
YoY basis Among private banks, AXIS bank lost out due to CBOP merger, ICICI
Bank saw improvement both on YoY and sequential basis
Overall credit growth was robust
Among PSBs BOI, BOB, SBI and IOB saw above 30% growth. Canbank,
Union and PNB were more moderate at 16-20%. Among Private banks, except for
ICICI, most showed above 40+% growth. Even for ICICI, consolidated book
(including overseas book) grew 20% YoY.
Credit growth has been very robust at 26% in Q1 against 24.6% last year
Banks which witnessed high credit growth
Axis, AXIS Bank and Yes Bank among private
BOB, BOI and SBI among PSBs
SBI showed a robust growth across all segments, except for mortgages
International credit grew 46% YoY
SME credit grew 23% YoY
Mid Corporate credit grew 31% YoY
Home Loans grew 17% YoY
Axis among the private banks and BoI amongst
PSBs continues to deliver high NII growth
Credit growth of ICICI, Canara, Union, PNB, OBC was lower than the averag
Weakness
Technology
infrastructure.
Threats
Huge
investment
in
CHAPTER - 2
INTRODUCTION TO AXIS BANK AND
STATE BANK OF INDIA
The Bank was incorporated on 3rd December1993 and Certificate of business on 14th
December. The Bank transacts banking business of all description. UTI Bank Ltd. was
promoted by Unit Trust of India, Life Insurance Corporation of India, General
Insurance Corporation of India and its four subsidiaries.- The bank was the first
private sector bank to get a license under the new guidelines issued by the RBI.
1997. The Bank obtained license to act as Depository Participant with NSDL and
applied for registration with SEBI to act as `Trustee to Debenture Holders'.
Rupees 100 crores was contributed by UTI, the rest from LIC Rs 7.5 crores, GIC and
its four subsidiarie Rs1. croreseach. 1998. The Bank has 28 branches in urban and
semi urban areas as on 31st July. All the branches are fully computerised and
networked through VSAT. ATM services
The Bank came out with a public issue of 1,50,00,000 No. of equity shares of Rs 10
each at a premium of Rs 11 per share aggregating to Rs 31.50 crores and Offer for
sale of 2,00,00,000 No. of equity shares for cash at a price of Rs 21 per share. Out of
the public issue 2,20,000 shares were reserved for allotment on preferencial basis to
employees of UTI Bank. Balance of3,47,80,000shareswereofferedtothepublic.
The company offers ATM cards, using which account-holders can withdraw money
from any of the bank's ATMs across the country which are inter-connected by VSAT.
UTI Bank has launched a new retail product with operational flexibility for its
customers.
UTI Bank will sign a co-brand agreement with the market, leader, Citibank
NA
for
entering
into
the
highly
promising
credit
card
business.
UTI Bank promoted by India's pioneer mutual fund Unit Trust of India along with
LIC, GIC and its four subsidiaries. 1999 UTI Bank and Citibank have launched an
international co-branded credit card. UTI Bank and Citibank have come together to
launch an international co-branded credit card under the MasterCard umbrella.
UTI Bank Ltd has inaugurated an off site ATM at Ashok Nagar here, taking the total
number of its off site ATMs to 13.m 2000. The Bank has announced the launch of
Tele-Depository Services for its depository clients. UTI Bank has launch of
`iConnect', its Internet banking Product. UTI Bank has signed a memorandum of
bank's customers. AXIS Bank Ltd has informed that the Board of Directors of the
Bank at its meeting held on June 01, 2009, inducted Smt. Shikha Sharma as an
Additional Director of the Bank. Axis bank has received final clearance from the
Securities and Exchange Board of India (SEBI) to begin its mutual fund operations
and will launch debt and equity schemes soon whereas IDBI Bank is awaiting the
regulator's permit for an entry. Axis Bank opened the new branch at Irinjalakuda while
it has a network of 892 branches, 8 extension counters and 3,806 ATMs across the
country.
2010
Axis Bank Limited has informed that at the meeting of the Board of Directors
held on January 15, 2010, the following decisions were taken: (1) To appoint Dr.
Adarsh Kishore, former Finance Secretary, Government of India and former
Executive Director, International Monetary Fund representing Bangladesh, Bhutan,
India and Sri Lanka, as the Non-Executive Chairman of the Bank, subject to RBI
approval; (2) To appoint Shri S.B. Mathur, former Chairman, LIC and the National
Stock Exchange of India, as an Additional Independent Director, with immediate
effect. AXIS Bank Ltd has appointed Shri M. S. Sundara Rajan, former CMD, Indian
Bank as an Additional Independent Director with immediate effect. The Bank's
Registered Office is at Ahmedabad and its Central Office is located at Mumbai. The
Bank has a very wide network of more than 896 branches and Extension Counters (as
on 31st December 2009). The Bank has a network of over 4055 ATMs (as on 31st
December 2009) providing 24 hrs a day banking convenience to its customers. This is
one of the largest ATM networks in the country.The Bank has strengths in both retail
and corporate banking and is committed to adopting the best industry practices
internationally in order to achieve excellence.
REGISTERED OFFICE
rd 'Trishul', 3 Floor, Opp. Samartheshwar Temple, Law Garden, Ellisbridge,
Ahmedabad - 380 006.
Tel. No. : 079-2640 9322 Fax No : 079-2640 9321 Email : p.oza@axisbank.com,
rajendra.swaminarayan@axisbank.com
Web site : www.axisbank.com
Central Office
th Maker Towers 'F', 13 Floor, Cuffe Parade, Colaba, Mumbai - 400 005
HIGHLIGHTS
Profit after tax up 38.51% to Rs.2515.53 crores
Net Interest Income up 35.76% to Rs.5004.40 crores
Fee & Other Income up 23.80% to Rs.3123.40 crores
Deposits up 20.38% to Rs.141300.22 crores
Demand Deposits up 30.38% to Rs.66029.54 crores
Advances up 27.94% to Rs.104343.12 crores
Retail Assets up 29.72% to Rs.20822.90 crores
Network of branches and extension counters increased from 835 to1035
Total number of ATMs went up from 3,595 to4293
Net NPA ratio as a percentage of net customer assets up to0.36% from 0.35%
Earnings per share (Basic) increased from Rs. 50.61 to Rs.65.78
Proposed Dividend up from 100% to120%
Capital Adequacy Ratio stood at 15.80%as against the minimum regulatory
norm of 9%
Mission
Customer service and product innovation tuned to diverse needs of individual
and corporate clientele.
Continuous technology up gradation while maintaining human values.
Progressive globalization and achieving international standards
Core values
Customer satisfaction through
Providing quality service effectively and efficiently
smile, it enhances your face value a service quality stressed on
Periodic customers service audits
Maximization of stakeholder value
GOAL AND OBJECTIVES
AXISs main goals are as follows:
Develop close relationships with individual households,
Maintain its position as the premier housing finance institution in the
country,
BANKING PRIVILEGES
Investment Privileges
PERFORMANCE HIGHLIGHTS
PROFITABILITY
FEES
CAPITAL MARKETS
Ranked No. 1 in Bloomberg league for India Domestic Bonds for calendar
year 2008 and till quarter ended 30th June 09
Ranked No. 1 Debt Arranger by Prime Database for the quarter ended 30th Jun
09
Recent Awards:
-
SHAREHOLDING
resulted in making the State Bank of India more powerful, because as much as a
quarter of the resources of the Indian banking system were controlled directly by the
State. Later on, the State Bank of India (Subsidiary Banks) Act was passed in 1959.
The Act enabled the State Bank of India to make the eight former State-associated
banks as its subsidiaries.
The State Bank of India emerged as a pacesetter, with its operations carried
out by the 480 offices comprising branches, sub offices and three Local Head Offices,
inherited from the Imperial Bank. Instead of serving as mere repositories of the
community's savings and lending to creditworthy parties, the State Bank of India
catered to the needs of the customers, by banking purposefully. The bank served the
heterogeneous
financial
needs
of
the
planned
economic
development.
Branches
The corporate center of SBI is located in Mumbai. In order to cater to different
functions, there are several other establishments in and outside Mumbai, apart from
the corporate center. The bank boasts of having as many as 14 local head offices and
57 Zonal Offices, located at major cities throughout India. It is recorded that SBI has
about 10000 branches, well networked to cater to its customers throughout India.
ATM Services
SBI provides easy access to money to its customers through more than 8500
ATMs in India. The Bank also facilitates the free transaction of money at the ATMs of
State Bank Group, which includes the ATMs of State Bank of India as well as the
Associate Banks State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State
Bank of Indore, etc. You may also transact money through SBI Commercial and
International Bank Ltd by using the State Bank ATM-cum-Debit (Cash Plus) card.
Subsidiaries
The State Bank Group includes a network of eight banking subsidiaries and
several non-banking subsidiaries. Through the establishments, it offers various
services including merchant banking services, fund management, factoring services,
primary dealership in government securities, credit cards and insurance.
Contact
State Bank of India
CorporateCentre
MadamCamaRoad
Mumbai400021
India
Website: www.statebankofindia.com
KEY AREAS OF OPERATION
The business operations of SBI can be broadly classified into the key income
generating areas such as National Banking, International Banking, Corporate
Banking, & Treasury operations. The functioning of some of the key divisions is
enumerated below:
a)
CORPORATE BANKING
The corporate banking segment of the bank has total business of around
Rs1,193bn. SBI has created various Strategic Business Units (SBU) in order to
streamline its operations.
These SBUs are as follows:
Corporate Accounts
Leasing
Project Finance
b)
NATIONAL BANKING
The national banking group has 14 administrative circles encompassing a vast
c)
Agricultural Banking
Government Banking
INTERNATIONAL BANKING
SBI has a network of 73 overseas offices in 30 countries in all time zones and
correspondent relationship with 520 international banks in 123 countries. The bank is
keen to implement core banking solution to its international branches also. During
FY06, 25 foreign offices were successfully switched over to Finacle software. SBI has
installed ATMs at Male, Muscat and Colombo Offices. In recent years, SBI acquired
76% shareholding in Giro Commercial Bank Limited in Kenya and PT Indomonex
Bank Ltd. in Indonesia. The bank incorporated a company SBI Botswana Ltd. at
Gaborone.
d)
TREASURY
The bank manages an integrated treasury covering both domestic and foreign
exchange markets. In recent years, the treasury operation of the bank has become
more active amidst rising interest rate scenario, robust credit growth and liquidity
constraints. The bank diversified its operations more actively into alternative assets
classes with a view to diversify the portfolio and build alternative revenue streams in
order to offset the losses in fixed income portfolio. Reorganization of the treasury
processes at domestic and global levels is also being undertaken to leverage on the
operational synergy between business units and network. The reorganization seeks to
enhance the efficiencies in use of manpower resources and increase maneuverability
of banks operations in the markets both domestic as well as international.
e)
branches of its seven Associate Banks dominates the banking industry in India. In
addition to banking, the Group, through its various subsidiaries, provides a whole
range of financial services which includes Life Insurance, Merchant Banking, Mutual
Funds, Credit Card, Factoring, Security trading and primary dealership in the Money
Market.
1)
Associates Banks:
SBI has seven associate banks namely
window delivery system has been introduced in all associate banks. SBIs seven
associate banks are the first amongst the public sector banks in India to get fully
networked through CBS, providing anytime-anywhere banking to its customers to
facilitate a bouquet of innovative customer offerings.
2)
SBI Life:
ii)
iii)
iv)
v)
vi)
Human Resources
State Bank of Indias operating profit and net profit for Q209 surged 54.5%
and 40.2% yoy, respectively, exhibiting a strong performance.
Advances growth to slow down: SBI recorded a handsome 37% yoy growth
in advances, translating into an 18% sequential growth in the first half. However,
this momentum is likely to decelerate considerably in the second half of 2008-09.
Robust rise in deposits: State Bank of Indias deposit base surged 28% yoy
and its CASA ratio improved from 39.45% to 39.71% over the same period. On a
quarterly basis, the banks deposits grew by 10.3%.
Improvement in the credit-deposit ratio: The Banks credit-deposit ratio
increased from 68.9% in Q208 to 73.8% this quarter. This was following a
robust 37% yoy increase in advances, which exceeded the 28% growth in
deposits over the same period.
Increase in the NII and NIM: SBIs net interest income (NII) increased by 45%
yoy to reach Rs. 54.6 bn.
Profitability: The Banks ROE declined from 17.38% for H108 to 14.63%
for H109. The return on assets (annualized), however, increased from 0.99%
in Q208 to 1.13% in Q209.
CHAPTER - 3
SERVICE QUALITY
perceived service quality and suggest that these are not the same and that companies
need to take both into consideration. This because companies need to know whether
they should focus on having satisfied customers or to deliver the maximum service
quality. Perceived service quality is according to Parasuraman et al a global judgment
of, or, attitude relating to the superiority of the service and this definition can be found
in other service literature. The definition of the customer satisfaction has not the same
clear definition but Spreng et al use the definition an evaluative, affective or emotional
response.
Gap 5: Expected Service - Perceived Service Gap (or the Service Performance
Gap)
Leadership commitment
Standardise tasks
Communicate freely
Reliability
Responsiveness
Competence
Access
Courtesy
Communication
Credibility
Security
Tangibles
Meeting the commitments and standards for the products and services we
offer, and in the procedures and practices our staff follow;
Making sure our products and services meet relevant laws and regulations;
ensuring that our dealings with you will rest on principles of integrity and
transparency.
They will help you to understand how our financial products and services work
by:
General Information
Before you become a customer, we will:
Give you information explaining the key features of the services and products
you are interested in
Tell you what information they need from you to prove your identity and
address in order to comply with legal and regulatory requirements, and Once
you have chosen an account or service, they will tell you how it works. When
you open a single account or a joint account, they will give you information on
your rights and responsibilities
Interest Rates
You can find out about our interest rates by:
rates which apply to your accounts and the periodicity of payment of interest. In case
of loan accounts you will be given the relevant information relating to the interest
rates. We will explain how we apply interest to your account.
Charges
When you become a customer, we will give you details of any charges
applicable to the products chosen by you.
You can also find out about our charges by asking our staff at the branch or by
looking at our website.
If they increase any of these charges or introduce a new charge, you will be
notified before the revised charges are implemented.
They will tell you the charge for any other service or product before we provide that
service or product, and at any time you want such information
Statements
Cash Transactions
You should count notes and ensure correctness before leaving the cash
counter. The branch may have restrictions on certain cash transactions and you are
advised to check with the branch before contemplating any large cash transactions.
Fund Transfer
If you want to transfer money, they will give you:
A description of the services and how to use them time involved in the
remittance of funds and the reasons for possible delays
Confidentiality
They will treat all your personal information as private and confidential [even
when you are no longer a customer]. They will not reveal transaction details of your
accounts to a third party, including entities in our group, other than in the following
cases:
Axis Bank, Hong Kong Branch has outsourcing arrangements with Axis Bank,
India. The details are given below:
The Head Office of AXIS Bank Ltd. (AXIS Bank), having its place of
business in India and carrying on the business of banking in India as licensed
under the applicable laws and regulations of India, has decided to implement
the system to integrate and centrally manage and process the back office
operations of its overseas branches, including AXIS Bank Ltd., Hong Kong, at
the head office level in India.
In implementing the outsourcing system the Hong Kong Branch of the Bank
and AXIS Bank have entered into a Master Service Level Agreement (the
"Agreement" which includes such agreement as from time to time amended
and varied) which, provides that customers' data confidentiality under the
Personal Data (Privacy) Ordinance and Hong Kong's common law on
customer secrecy shall be recognized and protected.
If you ask them to reveal the information, or if they have your permission to
provide such information to their group/ associate /entities or companies when
they have tie-up arrangements for providing other financial service products.
Communication Link
Please make sure you let us know as soon as possible when you change your:
Name
Address
Phone number or
Taking care
Taking care of your cheques and other security information is essential to help
prevent fraud and protect your accounts. Please make sure that you follow the advice
given below:
Do not allow anyone else to use your password or other security information
Always learn your password and other security information and destroy the
notice as soon as you receive it
Always take reasonable steps to keep your cheque book in your personal
custody and your password and other security information secret at all times
name of the account holder [ABC Bank Account - XYZ]. You should draw a line
through unused space on the cheque so unauthorized person cannot add extra numbers
or names. Ignore any e-mail asking for your password or account number. What to do
if you lose your chequebook, or if someone else knows your password?
It is essential that you send a written communication to us immediately if you suspect
or discover that:
Cancelling Payments
To cancel a direct debit, you can inform the originator of the direct debit
In case the customer is not satisfied with the outcome of resolution, the
customer may consider escalating the complaint to the local, statutory
body/regulator
CHAPTER - 4
RESEARCH METHODOLOGY
RESEARCH METHODOLOGY
Type of Research
Research Problems
Source of Data
Sampling Design
Sample Size
Analysis of Data
Interpretation
Beneficiaries of project
Objective of Study
Limitations
TYPES OF RESEARCH
The basic types of research are as follows:
Analytical Research
In this the researcher has to use facts or information already available, and
analyze these to make a critical evaluation of material.
Quantitative Research
It is based on measurement of a quantity or an amount.
RESEARCH PROBLEM
The first step while conducting research is careful definition of Research
Problem. It refers to some difficulty, which a researcher experiences in the context of
either a theoretical or practical situation and wants to obtain a solution for the same.
My research is related to working capital problem.
RESEARCH DESIGN
A research design is a framework for the study and is used as a guide in
collection and analyzing the data. It is a strategy specifying which approach will be
used for gathering and analyzing the data. It also includes the time and cost budget
since most studies are done under these two constraints.
SOURCES OF DATA
The task of data collection begins after a research problems has been defined
and research design/plan chalked out. While deciding about the sources of data
collection to be used for the study, the researcher problem defines the nature of
sources of the sources of data.
Primary Data
Primary Data are those, which are collected afresh and for the first time. It
may be described as those data that have been observed and recorded by the
researchers for the first time to their knowledge.
Secondary Data
Secondary Data are those which have been collected by someone else and
which have already been through the statistical process. For example libraries,
literature, periodicals etc.
I have used secondary data in my study.
SAMPLING DESIGN
A Sample Design is a definite plan for obtaining s sample from a given
population. It refers to the technique or the procedure the researcher would adopt in
selecting items for the sample. Sample Design is determined before data are collected.
SAMPLE SIZE
A part of Population is known as sample. The process of drawing a sample
from a larger population is called Sampling. Following sampling is designed in order
to execute the survey.
Sample Area: : KURUKSHETRA
Sample size: 100 AXIS customers
ANALYSIS OF DATA
The collected data in the study has been presented and analyzed using the
various graphs for satisfaction level, score of various factors on the particular
dimensions, and overall dimension score and is compared with other service.
Also data is analyzed through performance matrix
INTERPRETATION
Interpretation is concerned with relationships within the collected data,
partially overlapping analysis. Interpretation also extends beyond the data of the study
of other research, theory and hypothesis..
BENEFICIARIES OF PROJECT:
Key findings and analysis will helpful to them for provide better services to
customers.
For researchers, to know the competitive advantage of both the banks and their
services.
The main objectives of this study were to examine the level of service
quality in Private banking industry from the perspective of bank customers
2.
3.
4.
5.
6.
7.
LIMITAIONS OF STUDY
The study was restricted to two banks, so the competitive scenario could not
be studied.
Inadequate time was the major constraint during the whole project.
All the answers given by the respondents have been assumed true.
It difficult to gather sufficient data relating to financial management.
Although, I tried my best to learn the possible during my stay, but still time
and resources constraints came in my way to learn more.
Data could not be available hence, it became difficult to analyze the
companys performance .
Although, all the employees of AXIS are highly co-operative and devoted their
valuable time on me, but still I was unable to use their knowledge due to their
busy schedule.
CHAPTER - 5
ANALYSIS AND INTERPRETATION
1.
From the graph it is clearly seen that for AXIS and SBI most of the
respondents are fall in satisfaction range.
For AXIS highest frequency is observed in satisfactory level, whereas
for SBI highest frequency is observed in neither satisfied nor
dissatisfied range.
So, for modern looking equipment AXIS bank has more number of
satisfied responses as compared to SBI.
2.
3.
From the graph, SBI respondents are showing more positive response then
that of AXIS respondents, and also respondents fall in satisfied range is
more in case of SBI then that of AXIS.
Also there are more numbers of respondents in moderate and strongly
agreed zone for SBI as compared to AXIS. And for AXIS most of the
respondents are present in 3,4 and 5 level of satisfaction, so respondents
are not satisfied for AXIS.
So for neat appearing employees SBI respondents has more satisfaction
level.
4.
Here, for AXIS bank there are slightly more numbers of respondents which are
fall in satisfied range then from SBI. Also most of the respondents fall in
neither dissatisfied nor satisfied and satisfied area for both the banks.
Here it is difficult to say that which bank is performing better in visually
appealing materials associated with the services.
5.
Here from the graph it is clearly seen that respondents of SBI are having more
satisfaction than that of AXIS, as more numbers of respondents are fall in
satisfaction level.
For both the banks most of the respondents are fall in neither satisfied nor
dissatisfied level and satisfied level. So for this factor both the banks are
relatively not performing well as per resondents.
Overall for this question SBI respondents are showing more satisfaction than
that of AXIS.
6.
Here from the graph, SBI and AXIS have nearly the same kind of responses,
but AXIS has slightly more numbers of satisfied repondents as compared to
SBI for showing sincere interest in solving a customers problem, so for this
factor AXIS is performing slightly well over SBI.
Here both the banks have more numbers of respondents who are fall in level 4
i.e. neither satisfied nor dissatisfied so both the banks can improve the level of
satisfaction by improving on this variable.
7.
Here for SBI highest frequency is observed in satisfied level, whereas for
AXIS it is in neither dissatisfied nor satisfied level.
Total number of respondents for SBI are more in satisfaction level, whereas
for AXIS most of the respondents are fall in dissatisfied and neither
dissatisfied nor satisfied level.
So for performing the service correctly the first time SBI respondents are
agreed compared to AXIS respondents.
Also for this factor AXIS is underperforming compared to SBI.
8.
From the graph, the responses are nearly similar for both AXIS as well as SBI.
So for providing the service at the time the service was performed both the
bank has similar kind of responses. Hence there is not so much difference in
providing the service at the time the service was performed.
Also there are very few respondents for both the banks which are highly or
moderatley satisfied, so both the banks need to improve satisfaction level on
this factor, so satisfaction level of their customers will improve.
9.
There is quite large difference among the respondents for insisting on error
free records, SBI respondents are showing
as
10.
Here from the graph it is clearly seen that almost all the respondents for both
the banks are falling in satisfied and neither dissatisfied nor satisfied level.
But number of respondents for SBI are more satisfied for employees telling
customers exactly what services will be performed.
Also there are very few respondents which are moderately and highly agreed
with the statements for both the banks.
So for both the banks there is a scope of improvement on this factor so
satisfaction level of customers can be improved.
11.
Here for SBI highest frequency is observed in satisfaction level, whereas for
AXIS it is in neither dissatisfied nor satisfied level.
So for employees giving prompt service to customers SBI respondents are
more agreed over AXIS respondents.
12.
So, for the statement employees always being willing to help customers AXIS
respondents are more agreed than of SBI respondents.
13.
From the graph, SBI respondents are more in number in satisfaction level as
compared to AXIS respondents.
Highest frequency of respondents for both AXIS and SBI is fall in neither
dissatisfied nor satisfied level.
Also there are quite more numbers of respondents for both the banks which
are dissatisfied.
So, for the statement that employees are never too busy to respond to
customers request SBI respondents are more agreed as compared to AXIS
respondents, the satisfaction level is slightly low for both the banks.
14.
From the graph it is seen that, there are more number of respondents for SBI
who are satisfied as compared to AXIS respondents.
Also most of the respondents for both the banks are falling in neither
dissatisfied nor satisfied and satisfied level.
So for the statement that the behavior of employees instilling confidence in
their customers, SBI respondents are more agreed as compared to AXIS
respondents.
15.
But for AXIS respondents they are nearly equally distributed in neither
dissatisfied nor satisfied to highly satisfied level, whereas for SBI in satisfied
level there is quite large peak of respondents.
So for the staement customer feeling safe in there transactions AXIS has more
number of respondents which are moderate to highly satisfied level and for
SBI respondents in satisfied zone are more.
Also here for AXIS numbers of respondents in moderate and highly satisfied
are more compared to SBI, but due to large number of respondents in satisfied
level for SBI lead them to more stronger position.
16.
Here from the graph, respondents of both the banks have nearly the same type
of responses, except in level 5 i.e. satisfied where more noumber of AXIS
respondents are fall.
For both the banks, there are more numbers of satisfied respondents so both
the banks are performing well on this criteria.
So here for the statement employees being consistently courteous with their
customers, AXIS has slightly more number of satisfied respondents.
17.
For this question the respondents are distributed all over the satisfaction scale
for both the banks.
So here there are more number of dissatisfied respondents as well as more
number of satisfied respondents for both the banks.
Highest frequency is observed in level 5 i.e. satisfied respondents.
But there are more number of respondents for SBI who are agreed with
statement hence for employees having the knowledge to answer customers
question SBI is ahead of AXIS.
18.
Here for AXIS there are more numbers of respondents who are agreed with the
question as compared to SBI respondents.
But here there is minor difference in the responses of respondents for both the
banks.
So level of satisfaction of respondents for both the banks is almost same for
this question.
Both the banks need to convert low satisfied customers to more satisfied
customers by improving the performance of this factor.
19.
20.
Here from the graph, we can say that SBI has more number of respondents
who are dissatisfied as compared to AXIS respondents.
Also highest frequency of respondents for AXIS is at level 4 i.e. neither
dissatisfied nor satisfied, whereas for SBI it is at level 3 i.e. dissatisfied.
So for employees giving customers personal attention AXIS has better
response as compared to SBI. Also for both the banks there are quite large
numbers of repondents who are not agreed with statement.
21.
Here most of the respondents for both the banks are fall in dissatisfaction
zone.
Also highest frequency is observed in level 3 i.e. dissatisfied for both the
banks.
So as far as for this question both the banks have negative response and they
need to improve it.
22.
From the graph, there are more numbers of respondents who are disagree with
this statement for both the banks.
But for SBI there are more numbers of repondents which are falling in level 4
and for AXIS more numbers of respondents are falling in level 5.
So for this question AXIS has comparatively good response. But both the
banks have below average response.
CHAPTER - 6
FINDINGS
AXIS has more satisfaction level of respondents for dimensions tangibility and
empathy; whereas SBI has more satisfaction level of respondents for
remaining three dimensions i.e. reliability, responsiveness, and assurance.
Most of the respondents for both the banks are less satisfied as far as visually
appealing physical facilities concerned and neat appearing employees are
concerned.
The difference in score was more for SBI, so AXIS was lagging more on
reliability dimension.
Insisting on error-free records the difference in score was huge for SBI in comparison
to AXIS. Also there is moderate difference in score for performing the service
correctly the first time for SBI over AXIS. Hence AXIS needs to improve on these
two factors as far as reliability dimension is concerned.
For these three factors keeping promise to do something by certain time,
providing the service at the time the service was promised and, performing the
service correctly the first time both the banks can improve the level of
satisfaction as there were less number of respondents who were satisfied.
For employees telling customers exactly what services will be performed
difference is so large for SBI over AXIS so AXIS has to focus on this factor to
improve score on responsiveness dimension.
Whereas for SBI they are almost performing well on responsiveness
dimension, but they need improvement on employees always being willing to
help customers.
Employees telling customers exactly what services will be performed and
employees are never to busy to respond to customers request for these two
questions both the banks had less satisfaction of customers so by focusing on
this to factors they can improve satisfaction level.
Both the banks are performing nearly same on dimension assurance, as there
was slight difference in the score.
Customers feeling safe in their transaction for this question, AXIS has more
number of respondents which were moderate to highly satisfied level and for
SBI respondents in satisfied zone were more but there were less number of
respondents in moderate to highly satisfied level so due to more numbers of
respondents in satisfied level, score of SBI is more.
Employees having enough knowledge to answer customers questions, here
both the banks need to improve on this factor as there were more numbers of
respondents in level 3 and level 4 for both the banks, so by focusing on this
they can improve satisfaction level of their customers.
SBI has to improve in all the aspects for the dimension empathy as AXIS is
performing well on this dimension. Mainly they have to focus on giving
customers individual attention and employees giving customers personal
attention as they were more lagging behind in these factors in comparison of
AXIS.
Both the banks need to improve its service for employees giving customers
personal attention, operating hours convenient to all their customers, having
the customers best interest at heart and the employees understanding the
specific needs of customers as there were more numbers of respondents who
were either not satisfied or less satisfied.
CHAPTER - 7
SUGGESTIONS
AXIS:
AXIS needs to improve on mainly these three factors i.e. Promise, Doing it
right and Competency as these factors are more important for banking industry
and they are lagging on these factors as compared to SBI.
AXIS should maintain these four factors i.e. Promptness, Willingness,
Competency and Understanding as in these factors either AXIS is performing
well or doing up to the mark and these four factors are important for banking
industry.
AXIS should deemphasize on factor Appearance and Approachable as in these
factors they are performing well, but these factors have less importance as
compared to other factors.
AXIS should concentrate on insisting on error free records, on performing the
service correctly the first time and employees telling customers exactly what
services will be performed.
SBI:
SBI should improve its performance on Understanding and Credibility as these
factors are important for banking industry and they are lagging in these two
factors.
SBI should concentrate on employees always being willing to help customers,
on giving customers individual attention, on employees giving customers
personal attention.
As SBI is performing poorly in all the aspect of empathy dimension, so SBI
should concentrate on this dimension more.
SBI should maintain these five factors i.e. Appearance, Promises, Doing it
right, Competency, and Approachable in these factors either SBI is performing
well or doing up to the mark and these four factors are important for banking
industry.
SBI should deemphasize on factor Promptness as in this factor they are
performing well, but these factors have less importance as compared to other
factors.
CONCLUSION
CONCLUSOIN
1.
2.
BIBLIOGRAPHY
REFERENCE BOOKS:
1) Zeithamal V. A., Gremler D.D., Bitner M.J., and Pandit A.: Service
Marketing Integrated Customer Focus Across The Firm, Fourth Edition, pp.
156-172.
2) Zillur Rahman, Service Quality: Gap in the Indian Bank Industry The ICFAI
Journal of Marketing Management, Feb. 2005, pp 37-50.
WEBSITES:
1) ideas.repec.org/a/ipf/finteo/v31y2007i2p185-201
2) marketing.byu.edu/download/measurementanalysis/servqual
3) http://areas.kenan-flagler.unc.edu/Marketing/FacultyStaff/zeithaml/Selected
%20Publications/SERVQUAL-%20A%20Multiple-Item%20Scale%20for
%20Measuring%20Consumer%20Perceptions%20of%20Service
4)
5)
6)
7)
%20Quality.pdf
business.mapsofindia.com/banks-in-india
rbidocs.rbi.org.in/rdocs/Speeches/PDFs/86160.pdf
www.researchandmarkets.com/reports/4020/indian_banking_industry
www.mckinsey.com/locations/india/mckinseyonindia/pdf/india_banking_
2010.pdf
8) media.wiley.com/product_data/excerpt/34/04713931/0471393134.pdf
9) www.marketresearch.com/product/display.asp?productid=2156584&g=1
10) www.sbi.co.in/
11) www.AXISbank.com/
12) www.experiencefestival.com/banking_in_india_-_current_scenario
13) http://pmindia.nic.in/eac_report_09.pdf
QUESTIONNAIRE
Sr. no.____
Questionnaire
The data/information gathered through this questionnaire would be strictly used for
academic purpose only. All the responses and data will be kept CONFIDENTIAL.
Dear Sir/Madam,
I am the student of GLS-MBA conducting a study on SERVQUAL analysis of
banking sector with emphasis on State Bank of India and AXIS Bank.
SERVQUAL for AXIS
Please rate the following 22 SERVQUAL instruments by circling the number from
strongly disagree=1 to strongly agree=7 accordingly to your perception.
1 Modern looking equipment
1 2 3 4 5 6 7
1 2 3 4 5 6 7
3 Neat-appearing employees
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
Personal Information
1. Gender
Male
Female
2. Age
25 years and below
36-45 years
26-35 years
Above 45 years
3. Education
Below H.Sc.
Graduate
4. Occupation
Own business
Professional
Housewife
Government employee
Student
Other
5. Income
Less than 1 lakh p.a.
3-5 lakh p.a.
Sr. no.____
Questionnaire
The data/information gathered through this questionnaire would be strictly used for
academic purpose only. All the responses and data will be kept CONFIDENTIAL.
Dear Sir/Madam,
I am the student of GLS-MBA conducting a study on SERVQUAL analysis of
banking sector with emphasis on State Bank of India and AXIS Bank.
SERVQUAL for SBI
Please rate the following 22 SERVQUAL instruments by circling the number from
strongly disagree=1 to strongly agree=7 accordingly to your perception.
1 Modern looking equipment
1 2 3 4 5 6 7
1 2 3 4 5 6 7
3 Neat-appearing employees
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
performed
11 Employees giving prompt service to customers
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
1 2 3 4 5 6 7
Personal Information
1. Gender
Male
Female
2. Age
25 years and below
36-45 years
26-35 years
Above 45 years
3. Education
Below H.Sc.
Graduate
4. Occupation
Own business
Professional
Housewife
Government employee
Student
Other
5. Income
Less than 1 lakh p.a.