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Note: This Case Study has been authored by Prof NM Bhatta, purely for the

purpose of teaching of Business Excellence concepts. Any resemblance to any

real life names or incidents could only be a coincidence. This case study is
copyrighted and is not to be used by any one for any purpose without the
written permission of the author.

Maha Bank
The atmosphere in the boardroom of Maha Bank was very tense on on 24 July
2010. For the first time Maha Bank, or for that matter any PSB (Public Sector
Bank),was going to the market with its own Wealth Management offering. The
entire senior leadership team was anxiously waiting for the arrival of the
Chairman. The MD operations, Rupesh Bajaj was referring to his notes nervously
and frequently.
Maha Bank was founded as The Maharashtra Sugar growers cooperative bank
in Satara in 1906 by sugar growers of Maharashtra for taking care of the offseasonal needs of small farmers in the region. Gradually, the bank expanded its
operations to other parts of the country and by 1942, it had become the most
liked bank of

the farmers across the country. Post-independence, it

rechristened itself as Maha Bank to shake off the image of a regional bank and
its deposits and advances rose to Rs 4,200 Crores. It also shifted its corporate
office to Bombay and adopted a tag line Banker for the farmer. The growth of
the bank continued leaps and bounds owing to transparent, ethical and pro poor
orientation with a market share more than 80% touching every village of the
country. Government of India nationalised the Bank on 19 July 1969 and the
tagline was changed to The banker to every household. It boasted of a
footprint across the length and breadth of the country. By 2008, Maha Bank had

a total business of Rs 42,000 Crores and a net profit of Rs 964 Crores. It became
a favourite Bank with Industries because of its liberal and considerate policies.
Banking Scenario in India in the 1st decade of the 21st century changed
dramatically, with several private and foreign Banks expanding their operations
in the country. However, most of these banks focused on High Networth
Individuals in segments like IT , Telecom, independent professionals (Doctors,
Management consultants, etc.) and the like. The business of Maha Bank
remained unaffected as its loyal customers were from the middle class whose
needs were well met by Maha Bank.
As the countrys growth story unfolded significantly increasing the number of
High Networth Individual, income generated by the Foreign Private Banks on
wealth management increased phenomenally. Maha Bank started feeling the
heat when for the first time, one of private bank declared more profits than
Maha Bank.

During the annual strategy meet held in Khandala the top

leadership unanimously agreed that it is high time Maha Bank entered wealth
management segment and established itself if it wanted to maintain leadership
position among banks.
The Board Meeting in 2010
Exactly at 2 pm, the chairman arrived as per schedule & the meeting
commenced. In his opening address he gave an emotional speech Friends, this
country has always seen Wealth Management portfolio run by either Foreign
Banks or by Private Banks and the common belief in the country is that a PSBis
incapable of designing and offering wealth management services without
partnership. We are going to change this by giving our people an affordable and
user friendly wealth Management service, which is designed indigenously. I

want every one of you to take this up as a challenge and make it a reality. Now
I want to hear the views from the team
Deputy Managing Director of Product Marketing Group, Homi Buhariwalla, said
Mr. Chairman and Gentlemen, I have carried out an extensive market research
for this project. The study reveals that people of India are very excited about the
prospect of Wealth Management application being rolled out by our bank. The
team feels that in the first year, we will be able to get at least 5,000 HNI
Customers per month and in subsequent years it will go up to 150,000 per year
@20% growth rate Year on Year. It all depends on my friends from Operations
and Capital Markets, whether they will be able to meet this magnitude of
MD Capital Markets Ramaswamy Venkatnarayan, Ramu to his colleagues.
Ramu got up and gave a smile to Mr. Buhariwalla and told Homi - you just look
after the market, the operations will back you up completely. We are fully
prepared, all partners and front line research teams have been identified and
evaluated and everybody is geared for the final go ahead of the board.
The Chairman looked at Satpathy Biswal, the Chief Information Officer and head
of IT. And asked Sat, are you ready with your IT systems. Satpathy explained
how the IT systems have been updated to integrate capital markets and savings
and current account and how the capital market research application has been
developed and explained that Gentlemen, as of now, our wealth Management
application is the best in the world. It has been built on Service Oriented
Architecture (SOA) and is scalable as the business grows. We are fully ready.
Thereafter the CFO, Head of Corporate Credit and other seniors spoke one after
another. All voices echoed the sentiment that they are fully prepared for the

most memorable event in the history of the bank, viz. Bank will have its own
wealth Management portfolio . The board meeting ended after approving the
project and everyone was hopeful of a very bright year ahead for bank.
Next 6 months, went off like 6 minutes and the first Wealth Management Branch
was scheduled to be opened in Mumbai on a pilot operations basis. True to its
spirit, this program was named Maha Sampatti to represent wealth in Indias
national Language. Some of the best performing staff were identified to man
this branch. A week after the commencement of operations, the complete
leadership team was waiting to know business figures from the branch. The ED
Capital Markets Mr. Niranjan Sahu entered the room with a sullen face and
announced, Gentlemen I am extremely sorry that I am not able to give the news
that you are looking for. We have captured only 10 customers in last 7 days with
a business of Rs 11 Lakhs.
Everybody was shocked to listen to this. All eyes turned towards Homi. To avoid
embarrassment to Homi, Rupesh announced, Gentlemen lets not expect
miracles in the first week. Any new offering takes time to reach clients and once
this happens business will pick up.
Over the next 10 weeks, business showed no sign of getting better. Only 50 more
customers were added by the new branch and business figures at the end of the
quarter was limited to Rs 46 Lakhs. Further information from the field revealed
that hundreds of people were pouring into branch to know about the new
portfolio but very few of these actually wanted to do business.
An emergency board meeting was convened the following week. Much before
the board meeting, Homi submitted his resignation taking moral responsibility
for the failure of his department. During the board meeting the Chairman

cheered up all and introduced a new marketing head Hariprasad (Hari) who had
25 years of experience in the field of Wealth Management. The first task given
to Hari by the board was to carry out detailed research and come back and
report to Board within 60 days on what went wrong and how it can be corrected.
Hari knew that the marketing team was de-motivated due to the debacle. He
addressed the team and told them Forget what happened. Let us start on a
clean slate; Let us hire a few marketing interns from B-schools and push them
to interact with common people to carry out a fresh research on what people
thought about Maha Sampatti. Lets meet after 2 months, when we have some
inputs to discuss. He personally addressed a team of 50 specially recruited
marketing interns on what is expected out of them.
Two months passed quite fast and the young interns returned with some
John Abraham from XLRI, Leader of the research team for East parts of the city
was the first to report. He was very nervous and worried and said: Sir I am sorry,
if I had gone wrong in my approach as this is my first market research
assignment. What my colleagues and I hear from the people is diametrically
opposite to earlier inputs.
Hari reassured and asked him to share the findings without a worry. John
continued: The general perception of people of India is that Maha Bank is a
damned good savings and credit bank for common and low income group
people. Association of Maha Bank name with common peoples general banking
and credit is so strong that people find it difficult to

perceive wealth

management portfolio coming out of the brand. Excellence of Maha Bank in

small savings and credit is creating a weakness for its wealth management for
HNIs. So HNIs are hesitant to risk their Lifes earnings with the bank.
Sanjay Chourasia from IIM Lucknow heading the North and Central City team
gave the next report. Sir my teams findings are also by and large similar. The
people in the North and Central parts of the city who interacted with the new
branch felt that the mind-set of Maha Sampatti team is no different from that
of a a normal banker. They do not believe in reaching out to customers. They do
not know how to handle the idiosyncrasies, apprehensions and egoistic nature
of the wealthy and more importantly expected that the client will come to the
bank seeking information. Also, when the clients were not available at their
offices, the bank representatives left their business card with a message asking
potential clients to come and meet them at bank.. Mind-set and behaviours of
the staff in the new branch staff was exactly similar to those in their normal
branches. HNI customers did not show interest to approach them.
Several other interns submitted their reports. Other than the above points, the
main issues reported were non-availability of attractive schemes, failure in
branding to bring confidence in target group, complacency in the branch staff
minds, doubts on servicing capabilities, etc.
Hari realised that perception of people is vital and can influence decisions more
than actual performance. The most important task at hand was to change the
perception of the people.
In the next board meeting, Hari presented an all new marketing strategy for the
Maha Sampatti product. The TV and radio commercials were to be used for
changing the perception of the people - Maha Bank is as good at wealth
management as it handled the savings and credit. The promotion activities must

reflect how Maha Bank has grown peoples money several fold by wisely
investing in capital markets and other instruments. Hari insisted that the staff
manning wealth management operations from corporate to branch level who
were earlier brought in from regular banking operations should be reverted back
as they were not the right cut for the wealth management type of operations.
He recommended employing hard-core wealth management experts with a
view to study competitors moves and create better strategies. He expanded the
Wealth Management branches to 50 covering all major cities of the Country to
create a Big Bang impact.
A few steps like gifts, servicing customers at the door step, greater visibility on
returns and risks, 24 X 7 collection services etc. were also approved by the board.
All these steps started yielding results slowly and customer numbers picked up
in 4 months time. To further enhance customer reach Hari introduced a new
policy of customer engagement. Special events were organised across the
country with the participation of existing customers to spread the message of
the true value they got from the initiative, viz. returns, liquidity and above all
safety of their capital. He also set up a team of 500 tele service operators to
continuously call all the customers and ask about their experience with the
program. The programs ran successfully and people were excited to give their
But as days went by, the enthusiasm died down and customers started shouting
at tele services operators for frequently disturbing them. When such incidents
increased in number, the matter reached Hari who called for a discussion on the
subject with the team. Everyone was feeling that customers outburst of this
nature are only an exception and need not be taken seriously. However, a
youngster Anil Paranjape from Poona University holding MBA degree and a

recent joinee got up and said Sir in my view, no customer would tolerate
frequent violation of privacy. Further by frequently asking questions on how our
scheme is performing, we might be sending wrong signals about the anticipated
performance of the scheme and this might be construed as our lack of
confidence in the product. Instead, we should contact the customer and enquire
not about our scheme, but to wish them for their birthdays, anniversaries etc.,
which will, not only serve as an excellent tool for customer engagement, but also
leave behind a pleasant feeling in the minds of customer that we remember
them on important days.
The idea appealed to Hari and was implemented immediately. The results were
almost instantaneous. Customer numbers touched 100,000 in the next year.
Customer Satisfaction survey by an independent agency showed satisfaction
scores greater than 70% across most dimensions and a favourable
loyalty/advocacy score. The footfalls to sales conversion ratio became healthy
and kept growing indicating favourable perception.
Questions Points to Ponder
1. What did the Bank want to do?
2. What is the Key issue?
3. Where did the Bank fail?
4. What is the key learning?
5. What brought the turn-around?