Final 100mks Project - Doc Final - Doc 21.09 Repaired)

Strategies adopted by banks to improve their overerall
pereformance
EXECUTIVE SUMMARY
In today’s competitive market, it has become vital for bank to improve their overall
performance. Performance in the banking sector means process for establishing an
understanding about what is to be achieved, how it is to be achieved and the
probability of achieving success. It is about every actions and behavior which
individuals take to manage planned processes, which pervade the organization
where individuals function.
This report includes:

Need for performance:
• To earn profit.
• To attract more customer, shareholders etc.
• To gain a key position in the market.
• To manage risk.(credit, market, operations risk)
• To improve branch operations.
• Design and execute more effective marketing campaigns etc.
There are various factor on which the performance can be measured. This report
describe in brief the financial and non financial indicators of performance,balance
scorecard followed by banks, and performance guideliness.
Banks have been forced to the volatile changes in the business environment through
various defensive strategies. Banks operate in a complex, competitive and highly
regulated environment, with low margins and high customer expectations. To
manage this rapidly changing economic and regulatory landscape, banks need a
reliable way to quickly translate strategic business decisions into concrete actions
that lead to measurable results. Much of the banks need to make strategic decisions
that can improve their performance and increase their profitability. To improve
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performance it is very important that banks adopt certain strategies. This report
recommends both:
• Qualitative strategies.
• Quantitative strategies and
• Other strategies.
These strategies help banks to survive and grow profitably with the changing needs
of consumers and market. Banks recently have been swept by numerous trends,
causing remarkable changes in their position and operations. These changes have
caused banks to become larger, better, faster and more reliable and resistant. Even if
banks have become larger, the effect of technological changes, volatility and global
trends, weakened them. Banks rely on strategies to take certain crucial decisions.
The report addresses the various risk associated with banking activities and give
appropriate strategies to manage these risk efficiently.
While implementing the strategies a lot of hurdles are faced by bank like:
• Penetration of banking services.

• Competition.
• Economic recession.
• Basel II norms.
• Geographical expansion and consolidation.
• Borrowings from capital market.
• Deregulation
• Technological revolution.
Hence banks have to prudently manage all the risk and hurdles that comes in the
way of implementing the strategies. Banking industry has travelled long way post
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independence and has undergone enormous changes in its operation, efficiency and
product design and delivery with the changing external and internal factors.
Strategic management has therefore become an important part of its planning to
survive in the ever changing economy to improve their performance.
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1. INTRODUCTION TO INDIAN BANKING SECTOR
Just imagine, for a moment, a world without banking institutions, and then to ask
yourself a few questions.
If there were no banks…..
Where would you go to borrow money?
What would you do with your savings?
Would you be able to borrow (save) as much as you need it, in form of that would
be convenient for you?
What risks might you face as a saver (borrower)?
The banking industry in India is governed by Banking Regulation Act of India,

1949. A healthy banking system is essential for any economy striving to achieve
good growth and yet remain stable in an increasingly global business environment.
The Indian banking system, with one of the largest banking networks in the world,
has witnessed a series of reforms over the past few years like the deregulation of
interest rates, dilution of the government stake in public sector banks (PSBs), and
the increased participation of private sector banks. The growth of the retail financial
services sector has been a key development on the market front. Indian banks (both
public and private) have not only been keen to tap the domestic market but also to
compete in the global market place. New foreign banks have been equally keen to
gain a foothold in the Indian market. The growth in the Indian Banking Industry has
been more qualitative than quantitative and it is expected to remain the same in the
coming years. Based on the projections made in the "India Vision 2020" prepared
by the Planning Commission and the Draft 10th Plan, the report forecasts that the
pace of expansion in the balance-sheets of banks is likely to decelerate. The Indian
Banking Industry can be categorized into non-scheduled banks and scheduled
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banks. Scheduled banks constitute of commercial banks and co-operative banks.

There are about 67,000 branches of Scheduled banks spread across India. As far as
the present scenario is concerned the Banking Industry in India is going through a
transitional phase
The Public Sector Banks (PSBs), which are the base of the Banking sector in India
account for more than 78 per cent of the total banking industry assets.
Unfortunately they are burdened with excessive Non Performing assets (NPAs),
massive manpower and lack of modern technology. On the other hand the Private
Sector Banks are making tremendous progress. They are leaders in Internet
banking, mobile banking, phone banking, ATMs. As far as foreign banks are
concerned they are likely to succeed in the Indian Banking Industry.
Since 1949, this sector has undergone phenomenal reforms due to the efforts and
the vision of the policymakers. The first phase of reform began with nationalization
of the 14 banks in 1969. At this stage, priority sectors were identified and banking
support was given to them. The second phase was the nationalization of 6 more
banks in 1980. However, what can be considered as a breakthrough in banking
services was the entry to private sector banks which was initiated in 1993. Eight
new banks entered the market at this stage with state of art technology and a
brought with them a new wave of professionalism. It was at this time that India was
introduced to the concept of Debit and Credit cards, e-transfer of funds, ATM and
mobile banking. It was at this time that competition was truly introduced in this
sector.
At present, the industry is in the makeover mode. The Public Sector Banks (PSBs)
are in the midst of rejuvenation process with exercises like downsizing the units,
reducing the volume of Non Performing Assets (NPAs). They are gearing
themselves for the fierce competition that is posed by the private banks.
Private Banks, on the other hand, are in the consolidation mode. Big banks are
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getting bigger. Small banks are being taken over by the bigger ones. Mid sized
banks are expanding.
The sector is in the growth stage with many new products and services offered and
a wide market base tapped. Quality of assets has improved and the confidence in
the system is building up due to the increased transparency norms. Government
interference is also gradually reducing.
Indian banking industry faced many uncertainities during 2008-09 in the face of
tight market liquidity in the global financial markets. The RBI’s prompt and
relevant measures ensured adequate domestic and foreignliqidity to indian banking
so that the flow of credit to productive sector would not suffer much. Yet, on
account of the severe global economic slowdown and its spillover effects on india,
growth of bank credit to commercial sector decelerated in 2008-09.
The Indian banks, in general, posted healthy financial results during 2008-09
compared to their global peer despite challenging economic conditons.The outlook
for Indian banking industry remains positive in 2009-10 on the backdrop of its
stricter prudential regulation by the RBI, sound financial indicators and stable
political regime.
2.BANKING SECTOR—PERFORMANCE
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 MEANING:
The traditional thinkers conceive Performance as the final outcome of activities.

Their concept is solely based on the result of actions undertaken. They equate
performance with actions and end results. This understanding has severe limitations
about the concept of performance. There are many situations where there could be
no measurable output despite sincere and competent effort. Again there may be
occasions where high performance can result without putting required type and
quality of effort. The context (situational and exceptional advantage or
disadvantage) where performance takes place has to be appropriately dealt with and
proper weightage is to be put to understand the concept of core performance.
 DEFINITION OF PERFORMANCE:
Performance as such can be defined as “being concerned with means as well as

ends, inputs (competence) as well as output (results.” Performance is based on
objectives, knowledge, and skill and competence requirement with respect to plans.
Simply put, performance includes activities where goals are consistently being met
in an effective and efficient manner. Performance is a process foe establishing an
understanding about what is to be achieved, and how it is to be achieved, and an
approach which increase, the probability of achieving success. Performance is about
the everyday actions and behavior which individuals take to manage planned
processes, which pervade the organization where individuals function.
NEED FOR PERFORMANCE:
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Performance is needed in each every sector. Every organization tries its best to
improve their performance. Performance is needed because of following reasons:
The prime objective of an individual or of organization is to perform according to

preplanned standard of quantity and quality to actualize short term goal and realize
long-term mission and vision.
• To earn profit.
• To attract more customer, shareholders etc.
• To gain a key position in the market.
• To manage risk.(credit, market, operations risk)
• To improve branch operations.
• Design and execute more effective marketing campaigns etc.
 PERFORMANCE STANDARD
While the list of Major Job Duties tells the employee what is to be done,
performance standards provide the employee with specific performance
expectations for each major duty. They are the observable behaviors and actions
which explain how the job is to be done, plus the results that are expected for
satisfactory job performance. They tell the employee what a good job looks like.
The purpose of performance standards is to communicate expectations. Some
supervisors prefer to make them as specific as possible, and some prefer to use
them as talking points with the specificity defined in the discussion. Keep in mind
that good performance typically involves more than technical expertise. You also
expect certain behaviors (e.g. friendliness, helpfulness, courteousness, punctuality,
etc.) It is often these behaviors that determine whether performance is acceptable.
Performance standards are:
• Based on the position, not the individual

• Observable, specific indicators of success
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• Meaningful, reasonable and attainable

• Describe "fully satisfactory" performance once trained
• Expressed in terms of Quantity, Quality, Timeliness, Cost, Safety, or Outcomes
In determining performance standards, consider the following:
• What does a good job look like?
• How many or how much is needed?
• How long should it take?
• When are the results needed?
• How accurate or how good is acceptable?
• Are there budget considerations?
• Are there legislative or regulatory requirements that require strict adherence?
• Are there behaviors that are expected in your department to promote teamwork,
leadership, creativity, customer service?
• What results would be considered satisfactory?
 The Need for a Range of Performance Measures
Organizational control is the process whereby an organization ensures that it is

pursuing strategies and actions which will enable it to achieve its goals. The
measurement and evaluation of performance are central to control and mean posing
4 basic questions:-
• What has happened?

• Why has it happened?
• Is it going to continue?
• What are we going to do about it?
The first question can be answered by performance measurement. Management will

then have to hand far more useful information than it would otherwise have in order
to answer the other three questions. By finding out what has actually been
happening, senior management can determine with considerable certainty which
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direction the company/bank is going in and, if all is going well, continue with the
good work. Or, if the performance measurements indicate that there are difficulties
on the horizon, management can then lightly effect a touch on the tiller or even alter
course altogether with plenty of time to spare.
As to the selection of a range of performance measures which are appropriate to a

particular company/bank, this selection ought to be made in the light of the
company's/bank’s strategic intentions which will have been formed to suit the
competitive environment in which it operates and the kind of business that it is.
For example, if technical leadership and product innovation are to be the key source
of a manufacturing company's competitive advantage, then it should be measuring
its performance in this area relative to its competitors. But if a service company
decides to differentiate itself in the marketplace on the basis of quality of service,
then, amongst other things, it should be monitoring and controlling the desired level
of quality.
Authors from differing management disciplines tend to categories the various

performance indicators that are available as follows:
• Competitive advantage.
• Financial performance.
• Quality of services.
• Flexibility.
• Resources utilizationand innovation.
These 6 generic performance dimensions fall into two conceptually different

categories. Measures of the first two reflect the success of the chosen strategy, i.e.
ends or results. The other four are factors that determine competitive success, i.e.
Means or determinants.
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Another way of categorizing these sets of indicators is to refer to them either as

upstream or as downstream indicators, where, for example, improved quality of
service upstream leads to better financial performance downstream.
Table 1. Upstream Determinants and Downstream Results
Performance Dimensions Types of Measures

Relative market share and position
Competitiveness
Sales growth, Measures re customer base
Financial Performance Profitability, Liquidity, Capital Structure,market Rations, etc.
Reliability, Responsiveness, Appearance, Cleanliness,
Quality of Service Comfort,Friendliness, Communication, Courtesy, Competence Access,
Availability, Security etc.
Flexibility Volume Flexibility, Specification and Speed of Delivery Flexibility
Resource Utilization Productivity, Efficiency, etc.
 Performance indicators:
There are two types of performance indicators for any bank or any company
namely,
• Financial Indicators.
• Non-financial Indicators.
Financial Indicators: Financial indicators remain the fundamental management

tool and could be said to reflect the capital market's obsession with profitability as
almost the sole indicator of corporate performance. Opponents of this approach
suggest that it encourages management to take a number of actions which focus on
the short term at the expense of investing for the long term. It results in such action
as cutting back on R & D revenue expenditure in an effort to minimize the impact
on the costs side of the current year's P & L, or calling for information on profits at
too frequent intervals so as to be sure that targets are being met, both of which
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actions might actually jeopardize the company's overall performance rather than
improve it.
Non financial Indicators: Increasingly, over the past decade, there has been
emphasizing that executives should come to realize the importance of the non-
financial type of performance measurement. Research in support of this approach
has come up with new dictums for the workplace: "the less you understand the
business, the more you rely on accounting numbers" and "the nearer you get to
operations, the more non-financial performance indicators you realize could be
valuable aids to better management"; or "graphs and bars carry much more punch
than numbers for the non-financial manager".
So what do non-financial indicators relate to? They relate to the following

functions:-
• manufacturing and production

• sales and marketing
• people
• research and development
• the environment
BALANCE SCORE CARD METHOD--------A TOOL TO MEASURE

PERFORMANCE
One of the recent dramatic shifts in strategic thinking by management has recently
produced a new approach to performance measurement at many firms, both
financial and nonfinancial. The primary catalyst is an appreciation that financial
measures alone do not provide sufficient information regarding a firms overall
performance. In addition to profit and risk measures, managers need benchmarks
and targets for efforts and activities related to customer satisfaction, employee
satisfaction, organizational innovation, and development of business processes.
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This is particularly true if a bank is customer-focused. Doesn’t it seems appropriate

that management should target and measure performance along the lines of market
share, service quality, customer profitability, sales performance, and customer
satisfaction? Kaplan and Norton have led the thinking in this context with a series
of articles and their book, the balance scorecard, which describes the framework for
integrating financial and no financial performance measures and targets.
A firm’s balance scorecard represents a set of measures that gives managers an

immediate, comprehensive picture of the firm’s business strategy. There are at least
four dimensions: financial, customer satisfaction, internal processes, and
organization innovation. One objective is to help managers focus on a firm’s
competitive agenda. A scorecard approach should help a firm be more customer-
oriented, build teamwork among employees, and improve the quality of product and
services delivery framework if someone can examine 15 to 20 of a firm’s scorecard
measures and be able to understand the firm’s competitive strategy.
A sample balanced scorecard framework with four blocks appears in above table.
Each addresses a different general issue for management that can be described as:
• Financial Performance: How Do Stockholders View Our Risk and Returns

Profile?
• Customer Performance: How do customers see us?
• Internal Process Management: At What Must We Excel?
• Innovation and Learning: How Can We Continue To Improve and Create Value?
Completing a scorecard for a bank involves identifying and implementing firm’s

objectives, performance measures and targets, along with initiatives or action steps
to achieve the objective. Together, this scorecard represents the bank’s vision for
the future and management’s strategy to achieve the vision.
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According to Kaplan and Norton, customers are typically most concerned about
time, or how long it takes to meet their needs: products/service quality represented
by the level of defects: service related to whether products or services are
perceived to create value: and cost. The critical issue in internal process
management is to identify the firm’s core competencies and structure processes to
best satisfy customer needs. Today, this requires a reasonably sophisticated
information system to analyze performance measures to assess the source of
problems and track improvement. For innovation and learning, management
should emphasize continued education and a quality work environment for
employees and research and development of new products, markets, and delivery
systems. Finally, each of these three blocks should directly influence the financial
performance of the firm, which is reflected in profits ratios such as return on
equity, return on assets, efficiency ratios, earning per share and economic value
added, among others as well as market share figures and risk measures. [Year]
SCORE CARD MEASURES
FINANCIAL CUSTOMER
MEASURES MEASURES INTERNAL MEASURES LEARNING MEASURES
Customer Life cycle
profitability. segment Channel usage Skill competency
market share.
Lifestyle Customer
segment satisfaction. Product usage. Sales productivity.
profitability.
Product Customer
profitability. retention. Percentage of Employer satisfaction.
revenue from new
products.
Delivery channel
cost. Market share. Percentage of Employee retention.
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revenue from
product promotions.
Return on Customer Product development Employee
investment. acquisition. cycle satisfaction.
Customer Employee
Revenue growth. profitability. Hours with productivity.
customers.
Deposit service Share of Strategic job
cost segment. New product coverage
change. revenue. ratio.
Depth of
Revenue mix. relationship. Cross-sale ration. Strategic information
availability ratio.
Sales growth Brand name
and rating. Channel mix change. Personal goals
target markets. alignment.
Number of Revenue per
Dollars past due customer Service error rate. employees.
divided by total
dollar complaints. `
loans.
Fee revenue Closed accounts
divided by Request fulfillment Sales force average.
by total revenue Reason time length of service.
Net income Share of wallet Loss ratio Turnover.
Return on risk Percent of target Underwriting quality Training hours
adjusted equity Accounts audit divided by FTE.
Net income after Overhead ratio number of training
capital charge . programs offered
Ratio of branch to on-

Cost of capital call Turnover ratio.
transactions-ATM
transactions
Efficiency Sales per sales call
Economic value
added Sales per referral Turbulence.
Assets per
employee New sales divided by
banker productivity
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Efficiency ratio
New sales divided by
as percent of total
Given table lists the performance measures commonly cited by banks in their
scorecards. Note the comprehensive nature of the financial measures and the
emphasis on customer satisfaction, market share, cross-sell ratios, customer profit
ratios, product development and promotion, cost/loss ratios, and quality of service
measures. It is argued that the scorecard framework shares three themes with
traditional investor analysis of banking. First, stock analyst’ focus on earning
quality is analogous to the scorecard emphasis o service quality, customer
satisfaction, and market share, which represent competitive factors. Second,
earnings quality is also evidenced by scorecard concerns about cost and risk
control. Finally, the use of targets and projections for all performance measures is
comparable to what stock analysts do when they attempt to forecast firm earnings
and establish a target stock price. The implication is that banks, which choose to
manage across both financial and non-financial perspective, will better meet
competitive needs. The BSC can be viewed as a two-way street. Since it is designed
to help implement strategy (strategy → BSC), it also should reflect strategy (BSC
→ strategy). One should be able to infer a firm’s strategy by a careful study of the
firm’s.
 PERFORMANCE MEASUREMENT GUIDELINES
• PROCESS IMPROVEMENT :
Throughout the implementation of a Performance Management system, which may

span from months to years, there is a need to constantly focus on the critical goals
that can bring visible progress and enhancement. Otherwise, there is a tendency for
busy employees to lose sight of the ultimate objective of performance measurement,
and treat its implementation as a mere data collection exercise for management.
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• EMPLOYEE INVOLVEMENT
A truly empowered team must play the lead role in designing its own measurement
system as it will know best what sort of measurement it needs to align with the
organization’s strategy.
• REPORTABLE
There is no value for measurements that cannot be put into a simple and clear
report. Measurements must focus on most the critical items and not sacrifice quality
for quantity. Too much measurement may mean that teams end up spending too
much time collecting data, monitoring their activities, and not enough time
managing the project outcome.
• FORWARD LOOKING
Unlike financial measurements that often record past accounting numbers, a good
Performance Measurement system should also capture its relevance to the
organization vision, validate its strategies and chart new directions. It should not
dwell in the past but focus on measurements that impact future deliverables.
• OPTIMIZATION
Will improvement in one area of the organization be achieved at the expense of

another? If it does, how much sacrifice or risk should the organization take? The
Performance Measurement system should cover a comprehensive range of measures
and offer perspectives that provide an understanding of cause-effect relationship to
rearrange resources or priorities effectively. This usually requires a balance of
financial and non-financial measures. For example, should a manufacturer delay
production dateline because a new supplier is coming with cheaper alternatives to
save cost? Or should an estate investor forgo the stringent, time consuming
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regulatory and compliance checks before making the hot, time-sensitive deal that
has the potential to bring in millions in profit?
• REALISTIC
The measures agreed by the employer and employee have to be ambitious and
challenging, and at the same time, be realistic and attainable. Too little means
employees fall into complacency; too much and they start to rebel or leave. This
requires a careful balance and is the manager’s call and responsibility if there are
disagreements.
• MANAGEMENT COMMITMENT
Before anything can be done, senior managers need to buy-in to the change
management philosophy and adopt the performance-based management principles.
The focus should be on strategy and vision, and not day-to-day operational controls.
Managers should dictate strategic goals, ensure that each team understands how its
job fits into the strategy, and provide training so that the team can devise its own
measures.
3. INTRODUCTION TO STRATEGY
WHAT IS STRATEGY?
Strategy is a term that comes from the Greek strategia, meaning "generalship."
Strategy refers to a course of action. In other words, it refers to the selection of a
course of action out of the available course in order to achieve the long term goals
through continuous and active interaction with the environment. There are various
definitions given by a great person and from that it is concluded that
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• Strategy is that which top management does that is of great importance to the
organization.
• Strategy refers to basic directional decisions, that is, to purposes and missions.
• Strategy consists of the important actions necessary to realize these directions.
• Strategy answers the question: What are the ends we seek and how should we
achieve them?
Strategy —it is perspective, position, plan, and pattern. Strategy is the bridge
between policy or high-order goals on the one hand and tactics or concrete actions
on the other. Strategy and tactics together straddle the gap between ends and means.
In short, strategy is a term that refers to a complex web of thoughts, ideas, insights,
experiences, goals, expertise, memories, perceptions, and expectations that provides
general guidance for specific actions in pursuit of particular ends.
Strategy, then, has no existence apart from the ends sought. It is a general
framework that provides guidance for actions to be taken and, at the same time, is
shaped by the actions taken. This means that the necessary precondition for
formulating strategy is a clear and widespread understanding of the ends to be
obtained. Without these ends in view, action is purely tactical and can quickly
degenerate into nothing more than a flailing about.
Some Fundamental Questions
Regardless of the definition of strategy, or the many factors affecting the choice of
corporate or competitive strategy, there are some fundamental questions to be asked
and answered. These include the following:
Related to Mission & Vision:
 Who are we?

 What do we do?
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 Why are we here?

 What kind of company are we?
 What kind of company do we want to become?
 What kind of company must we become?
 Related to Corporate Strategy:
 What is the current strategy, implicit or explicit?
 What assumptions have to hold for the current strategy to be viable?
 What is happening in the larger, social and educational environments?
 What are our growth, size, and profitability goals?
 In which markets, business, geographic areas will we compete?
Related to Competitive Strategy:
 What is the current strategy, implicit or explicit?

 What assumptions have to hold for the current strategy to be viable?
 What is happening in the industry, with our competitors, and in general?
 What are our growth, size, and profitability goals?
 What products and services will we offer and to what customers or users?
 How will the selling/buying decisions be made?
 How will we distribute our products and services?
 What technologies will we employ?
 What capabilities and capacities will we require and which ones are core?
 What will we make, what will we buy, and what will we acquire through
alliance?
 On what basis will we compete?
Some Concluding Remarks
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 Strategy has been borrowed from the military and adapted for business use. In
truth, very little adaptation is required.
 Strategy is about means. It is about the attainment of ends, not their
specification. The specification of ends is a matter of stating those future conditions
and circumstances toward which effort is to be devoted until such time as those
ends are obtained.
 Strategy is concerned with how you will achieve your aims, not with what
those aims are or ought to be, or how they are established. If strategy has any
meaning at all, it is only in relation to some aim or end in view.
 Strategy is one element in a four-part structure. First are the ends to be obtained.
Second are the strategies for obtaining them, the ways in which resources will be
deployed. Third are tactics, the ways in which resources that have been deployed
are actually used or employed. Fourth and last are the resources themselves, the
means at our disposal. Thus it is that strategy and tactics bridge the gap between
ends and means.
Over time, the employment of resources yields actual results and these, in light of
intended results, shape the future deployment of resources. Thus it is that "realized"
strategy emerges from the pattern of actions and decisions. And thus it is that
strategy is an adaptive, evolving view of what is required to obtain the ends in view.
The driving forces on the basis of which banks formulate strategy are:
1.Operational Strategy is predicated on the production and delivery of products and

excellence: services. The objective is to lead the industry in terms of price and
convenience
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2.Customer Strategy is predicated on tailoring and shaping products and services

Intimacy: to fit an increasingly fine definition of the customer. The objective is
long-term customer loyalty and long-term customer profitability.
3.Product Strategy is predicated on producing a continuous stream of state-of-

Leadership: the-art products and services. The objective is the quick
commercialization of new ideas.
Each of the three value disciplines suggests different requirements. Operational

Excellence implies world-class marketing, manufacturing, and distribution
processes. Customer Intimacy suggests staying close to the customer and entails
long-term relationships. Product Leadership clearly hinges on market-focused R&D
as well as organizational nimbleness and agility.
There are just some of question to be concerned about when managing strategy in
banks. Strategic management in banks is a huge challenge.
 How will we attract and retain new customer?

 How can we manage our strategy effectively in such a turbulent domestic and
global environment?
 What are the strategic competencies that are critical for implementing our
strategic and how can we have sufficient capability in this area?
 What is the software and IT infrastructure that will enable us to monitor our
strategic performance and execute more effectively?
The most important aspects of a strategic management process are analysis, actions
and the decisions. These could also be termed as being central to the entire process.
These three processes are also known as
 Strategy analysis.
 Strategy implementation and
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 Strategy formulation.
However, as far as application is concerned these three concepts can be said to be
dependent on each other. In the context of the business world it has been observed
that these concepts are not always exercised in a serial manner.
4.STRATEGIES ADOPTED BY BANK TO IMPROVE

THEIR OVERALL PERFORMANCE.
The changing economic environment has a significant impact on banks and thrifts as
they struggle to effectively manage their interest rate spread in the face of low rates
on loans, rate competition for deposits and the general market changes, industry
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trends and economic fluctuations. It has been a challenge for banks to effectively set
their growth strategies with recent economic market.
Banks rely on strategies to take certain crucial decisions and actions to accomplish
objectives efficiently. Strategic management principally involves long term
planning on the basis of the study of opportunities and threats in the external
environment with view to face competition. It encompasses all the key result areas
of performance. At times, strategies are crucial even for mere survival let alone
prosperity.
Globally, the banking sector has its own opportunities and threats and individual
banks have followed different strategies in different situations with varying degrees
of success. There are various strategies that bank adopt, it can be quantitative,
qualitative and other.
STRATEGIES THAT
BANKS ADOPT
QUANTITATIVE QUALITATIVE OTHER
STRATEGIES STRATEGIES STRATEGIES
 QUANTITATIVE STRATEGIES:
Quantity addresses how much work the employee or organizations have produced.
Quantity measures are expressed as a number of products produced or services
provided.
A. PRICING OF PRODUCT:
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In banks, pricing relates to interest paid by the bankers on deposits, interest charged
on loans, overdraft, cash credit, charges for various types of services rendered on
standing instructions given to the bank and commission charged.
Pricing policy of a bank is considered important for raising the number of actual
customers.
The potential customer or investors generally frame their investment decisions on

the basis of interest to be received on the investments. While framing a pricing
policy different pricing methods are used by banks namely,
Cost plus pricing: In this a detailed analysis is done.
Competition related approach: In this, the price is decided on the competitor’s

price.
Banks are required to frame two fold strategies. Strategies concerned with interest
and commission to be paid to the customers and interest or commission to be paid
by the customers for different types of services.
The banks also take the value satisfaction variable into consideration while
formulating pricing strategies. RBI has to be more liberal so that the commercial
banks make decisions in tune with the changing savings and investment behavior.
B.COST BENEFITS ANALYSIS:
It is more important for every bank to know about from where the money is
received and where it is spent i.e., they should be aware about their cost and
benefits. They should maintain balance between these two things. Rupee earned and
rupee spend are required for smooth running of business and financial soundness.
This type of watch can control and eliminate the unnecessary spending of banks.
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Cost-benefit analysis suggests that a monetary value can be placed on all the costs
and benefits of a strategy, including tangible and intangible returns to other people
and organizations in addition to those immediately impacted.
Decisions are made by comparing the present value of the costs with the present
value of the benefits of the strategy. Decisions are based on whether there is a net
benefit or cost to the strategy, i.e. total benefits less total costs.Costs and benefits
that occur in the future have less weight attached to them in a cost-benefit analysis.
To account for this, it is necessary to discount, or reduce, the value of future costs
or benefits to place them on a par with costs and benefits incurred today.
Although in practice monetary valuation is often difficult, it can be done and,

despite difficulties, cost-benefit analysis is an approach which is valuable if its
limitations are understood. Its major benefit is in forcing people to be explicit about
the various factors which should influence strategic choice.
Hence the balancing is must between these two factors for every organization
especially in the era of globalization where there are stiff competition among the
various market playerrs
C. SHIFTING TO FEE BASED SERVICES AND RESTRAIN ON FUND

BASED SERVICES:
Banks have been rapidly expanding the menu of financial services they offer to
their customers. This proliferation of services has accelerated over the years under
the pressure of increasing competition from other financial firms. It has also
increased bank costs and posed a great risk to bank failure. The new services have
has a positive effect in the industry through a new source of bank revenue called as
non-fund based income, which are likely to grow relative to the more traditional
source of bank revenue(interest income)
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With the interest income coming under pressure, banks are urgently looking for
expanding fee-based income activities. Banks are increasingly getting attracted
towards activities such as marketing mutual funds and insurance policies, offering
credit cards to suit different categories of customers and services such as wealth
management, equity trading, advisory services regarding underwriting, guarantees,
letter of credit and electronic bill presentation and payment (EBPP) services. These
are indeed proving to be more profitable to banks than a plain vanilla lending and
borrowing i.e. fund based services.
D.) REDUCTION IN NPA:
The major concern of the Indian banking industry currently is that it has a high
level of non-performing assets. Banks have realized that high level of NPAs in their
credit portfolio is a drag on their profitability which is already under strain. They
have initiated various strategies and action points to bring down their level of NPAs
and have achieved some degree of success in terms of recovery and upgradation of
their existing NPAs. The main reasons responsible for such situation include slow
economic and industrial growth, slump in capital market, financial indiscipline,
willful defaults by the borrowers, overburdened and slow judiciary, competition
faced by local industries from the multi-nationals, lack of support to the borrowers
from the banks in time of need etc.
The following strategies have successfully been tried by some major bank in
bringing down their NPAs.
1. Accounts Creation of proper data base:

2. Creating awareness among bank staff:
3. Strengthening pre-sanction appraisal:
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4. Post sanctioning monitoring and follow up system of loan

5. Rehabilitation of potentially viable sick units.
6. Review and renewal of loan accounts.
7. Meeting with the borrowers
8. Checking slippage of standard accounts to NPA category.
9. Recovery/legal department.
10.Recovery of dues through compromise settlements.
11.Bringing attitudinal changes.
12.Writing off bad debts
13.Involvement of the staff in recovery process.
14.Filling claim cases with DICGC (Deposit Insurance and Credit Guarantee
Corporation) and ECGC (Export Credit Guarantee Corporation)
E.) ASSET LIABILITY MISMATCH:
Asset liability management, i.e. profit and risk control which is unique to the
banking industry. Asset-liability mismatches exposes banks to various types of risks
i.e. risks of illiquidity and insolvency; risks arising from globalization and
deregulation. Risk management is a continuous process of controlling assets and
liabilities in terms of size, maturities and yields. As operations in the financial
market become varied and complex, banks have to equip themselves with a variety
of skills and appropriate technology. The RBI has issued guidelines to banks in
April 1999, for asset liability management which would help the bank management
to meet the challenges. Banks are required to prescribe risk parameters and
establish effective control systems.
F.) MARKET SEGMENTATION:
In banking services, the banks are expected to satisfy rural customers, urban
customers, high earning and low earning customers, small-scale and large scale
entrepreneur and so on.
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Hence segmentation of market is considered to be important.
According to Philip kotler, “market segmentation is the sub-division of a market

into homogenous sub-sets of customer were any sub-set may conceivably be
selected on a market target to be reached with a distinct marketing mix.”
Since the bank have to deal with different types of customers from different fields
and localities, banking service need segmentation.
The purchasing power of potential customers is different. In respect of term deposit

of different maturities or deposit schemes the potential customers are required to be
influenced. These potential customers may be located in some pockets of the urban
areas.
In the Indian setting we find the emergence of rural market which is wider. Here it
is necessary that the segmentation should in tune with the changing socio-economic
condition of the rural users.
Therefore market segmentation not only from the view point of expanding market
but also with the motto of satisfying the user. If the marketing decisions of the bank
are on the basis of micro-level market segment, then only a fine blending of service
and profit elements are possible.
G.) DOMESTIC MERGERS, ACQUISITIONS AND ALLIANCES
Banks can also grow in their domestic markets via mergers and acquisitions
(M&A’s). The attractiveness and feasibility of this option depends on the
circumstances in the country. These circumstances include elements such as
concentration, diversification possibilities, synergetic opportunities and the attitude
of the supervisory authorities.
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Domestic M&A’s can deliver both cost and income synergies. Cost synergies are
reached mostly when two banks merge, since they both have the same type of
support departments, ICT systems and distribution channels. Intersectoral mergers
(for instance banks with insurance companies) show less promising cost synergies,
because of the complexity of the integration process and cultural differences. These
intersectoral mergers do show the potential for revenue synergies because the
different products of the merged companies can be sold through the distribution
channels of both institutions. However, in practice, these synergies are hard to
achieve and the costs of the merger often exceed the revenue synergies. Forming an
alliance can be an attractive alternative. The alliance offers the possibility to
achieve income synergies without the expensive integration process. Alliances are
often complemented with cross-shareholding to underline the dedication to the
cooperation. Alliances that work out well may eventually lead to full
mergers.HDFC merged with centurion bank and it lead to success.
QUALITATIVE STRATEGIES
Quality addresses how well the employee or groups performed the work/or the
accuracy or effectiveness of the final product. Quality refers to accuracy,
appearance, usefulness or effectiveness.
Today’s pacesetter companies do not view their strength in enabling growth in

terms of the quantity of management of the hierarchical leadership of an earlier day,
instead, they emphasize the quality of management, which recognizes and is
measured in terms of leadership and networking capability foe focusing a
company’s total resources on sustaining business growth.
They implement this result through effectiveness in developing and deploying

management capital’s intellectual, technical, human information, and other
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resources in integrating the banks: hard” and “soft” assets. This takes place through
the processes, tools, and strategies that help each man person in the bank think,
learn, act, and make decisions about how he or she both or individually and as part
of team can help provide the superior value for customers and, consequently, for
investors that meet today’s accelerating business demands. Following are the
measures that are following and they need to follow:
A. SERVICE DESIGN AND DELIVERY STRATEGIES IN BANKS:
New distribution channels have transformed the world of banking. ICICI bank was
the first private sector bank to launch its net banking services called infinity. It
allows user to access account information securely, request cheque books and stop
payment, and even transfer funds between ICICI accounts. The services of a bank
are only a part of service spectrum. In India even the NBFC’s are offering
commercial banking services and commercial banks are offering merchant banking
services.`
B.CUSTOMER RELATIONSHIP MANAGEMENT:
Customer relationship is the base on which the entire structure of banking reset.
When we look at the cost and returns factor in building up customer -relationship
management, we find that the initial cost to develop customer relationship is always
higher than revenue. However, as the relationship grows new demands will appear
and then the incremental revenue would be higher than the incremental cost.
Indian banks have now started to recognize superior customer care and maintenance
of well-greased relationship with customers as important tools to profitability. With
the growth of awareness and rapid imbibing of the internet culture. Common man is
not ready to accept anything less than the best. It incorporates such seminal
concepts such as the sales culture, one to one marketing, data warehousing, data
mining, customer segmentation, loyalty programs and cross-selling.
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There was survey conducted which reveals information on the CRM software used
by various banks for managing customer records and customer interaction
information. Only three foreign banks have installed CRM packages for
maintaining customer details and the packages used are: Citibank: Seibel; American
express: Seibel; ABN amro: PeopleSoft. The Citibank system has been equipped
with the “sales” module for providing customers readily available information
about their assets and liabilities with the bank. It also enables the Citibank
relationship managers in maintaining a history of contacts with their customers thus
assisting them in serving better. Though the other banks surveyed have started
implementing CRM they have not implemented any technology or CRM software
for managing customer details and services. The remaining banks surveyed have
also initiated CRM in various forms, i.e., providing efficient services to customers
through mobile telephony or the internet but still have to adopt a technology or
software for the same.
Among public sector banks, bank of India is already in the process of adopting a
software package; either Seibel or SAP. SBI uses software developed by B K
Systems of Hyderabad but those services cover only it’s corporate and NRI clients.
The central bank uses a software SWIFT but it is used in managing its foreign
accounts and transactions.
Business strategies developed to increase customer acquisition and retention is

shown in the graph below (on a scale of 1 to 8 with 8 being the most important
marketing strategy).
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Technological up gradation is identified as one of the most successful strategy in

customer acquisition and retention followed by expansion of ATM networATM
network, advertisements and additional sales force.
Strategies adopted by bank are:
To raise the level of customer satisfaction, banks will have to set up CRM groups or
CRM departments.
Banks have started selling their customer online banking and consultation services
to add value to their services and satisfy their customers. But once a customer is
online, it is harsh to keep them loyal to the banks.
Most banks are focused upon re-engineering the existing and introducing newer
technologies like Internet Banking, ATM, Phone Banking and VRU (Voice
Response Unit).
With the advent of newer technologies there is lack of personal touch and a
customer can be lured by big financial institutions somewhere at the other end of
the world providing services better than almost any local bank. But of late, banks
have realized that successful migration of customer’s the internet lies in transferring
the offline relationship to online environment
C. STAFF RETENTION/ HUMAN RESOURCE DEVELOPMENT

RIGIDITIES
HRD is the most important need for a service industry like banking. The banking
industry being largely in the public sector, certain rigidities developed in the HRD
within banking sector. Apart from being the preferred employer for the educated
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manpower, public sector banks followed a hierarchical structure, which gives

preference to seniority over performance.
The approach to human resources management in banks will have to change in tune
with the fast changing banking environment at home and abroad. Banks can
improve their existing practices of recruitment, training and redeployment.
For customer retention it is equally important that first staffs are retained. The
theme of the service-profit chain, a model depicted below, conceived by Leonard
Schlesinger and James Keskett of Harvard Business School-“Employee satisfaction
drives customer satisfaction and thereof profits” very clearly states how STAFF
SATISFACTION leads to customer satisfaction and customer retention.
STAFF
SERVICE PROFIT CHAIN

RETENTION
External
Internal Staff
support Satisfaction
Service quality
satisfactio
nn
Customer Customer
PROFIT
retention satisfaction
Thus the fact that customer satisfaction is derived by staff retention is recognized
by banks today. But now banks are giving a renewed look to their HR policy by
giving emphasis to:
• Good, timely and appropriate training.

• Performance based compensation.
• Reorienting the attitude and latititude of the staff to solve customers’ problems.
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Service companies have found that if the frontline people mainly sales people,
technical staff and managers have authority to response customer’s problems, two
things occur. First, staff feel empowered, more satisfied, they stay with the business
which keeps staff turnover cost down. Secondly, the span of control (the ratio of
staff to managers) also increases.
So importance of ‘Staff Retention’ for service profit chain cannot be ignored at all.
Further, the customer facing team should be sensitive to customer expectations at

multiple touch points of the bank. This will help deliver a unified and consistent
experience across all these touch points.
D.) TRAINING:
Training is essential for improvement in the banking sector. Information technology

and internet revolution have made available avenues of training and education that
combine economy, flexibility and convenience. To sustain performance and
increases market share, new and old players alike need to have a long term strategy,
in which training would be crucial factor. Old players in the market especially need
to invest a huge amount of money not only foe putting in place an information
technology infrastructure but also for training its ageing manpower.
Today’s trend is towards affordable, continuous training in proven business skills

and knowledge duly supplemented by in house, on-demand, self-directed and
video-based mini seminars. Globally, top companies in very field invest a minimum
of 3 percent of their revenues on training and in return they get US$3 to 300 for
every dollar invested. Viewed in this light, valuable business skills and knowledge
come absolutely free. This clearly indicates that training holds the key to success.
A leading international consultant has developed a web-based training curriculum

for its client to train the latter’s employees across the globe. Offering training over
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internet also help employees to have access to training facilities at their work place
itself.
There are techniques through which training can be provided namely;
Information technology based training: taking a cue from the aforesaid trends,
HR professionals and training managers of domestics banks in India need to invest
in modern techniques of training like Computer based training (CBT), Web based
training, self- development to enable employees learn the skills without being away
from the customers.
Self-training techniques: There is a strong case for domestic banks to seriously

consider self-training techniques by encouraging their employees to upgrade their
skills because the requirement of multi-skilled employees, especially in the
financial sector, is increasing as players in the financial sector are looking for
diversification of their activities to enhance their profit margins and overall growth.
Some banks have initiated innovative measures like encouraging their employees to
broad base their knowledge and upgrade their skills by granting them financial aid
to purchase books, newspapers, magazines and CD-ROMs on banking related
subjects.
Retraining: retraining focuses on the basic competencies needed in a new or

redesigned job and addresses advanced-level technical skills. It helps banks in
redirecting their human resources to address skill imbalances or projected skill
shortages resulting from internal and external factors. It helps banks to expand
knowledge and skills of employees through multi-skilling and cross training and
helps stabilize the work environment. It can also build employee morale which was
adversely affected by the exodus of several skilled personnel from the scene in the
wake of VRS.
E.) ORGANIZATIONAL STRUCTURE:

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An enterprise-wide technology initiative is not about technology alone. Banks have

to consider organizational redesign, change management and above all else, a
business plan to back it up. A simple rule of organizational redesign is ‘structure
follows strategy’. This means that the structure of the organization supplements the
strategy. Organizational redesign is not at one time activity at the start of the
project, it is ongoing process.
The transformation of an organization has many elements to it; technology is only

one of these. Often, organization focuses on technology alone. For instance, it is
very important to have effective teamwork at the senior management level. In the
face of rapid business changes, this is a big challenge. Further, there is a compelling
need to sustain innovation without losing performance discipline. At the same time,
it is critical to ensure minimal impact on customer service. There is also need for
open communication within the bank.
F.) CORPORATE GOVERNANCE:
Corporate governance has its backbone a set of transparent relationships between an

institutions management, its board, shareholders and other stakeholders. It, is
therefore needs to take into account a number of aspects such as, enhancement of
shareholder value, protection of shareholder’s rights, composition and role of the
board of directors, integrity of accounting practices and disclosure norms and
internal control system. In a service industry like banking, corporate governance
relates to the manner in which the business and affairs of individual banks are
directed and managed by their board of directors and senior management. It also
provides the structure through which the objectives of the institution are set, the
strategy for attaining them is determined and the performance of the Banks is
monitored.
G.) ORGANIZATIONAL PERFORMANCE TARGETS:
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For performance measurement system banks need set their organizations

performance targets. If an organization were to decide to measure its performance
against (let's say) the number of clients served in a year, then it would not be
surprising if the organization were to establish a target related to that measure. The
organization might set a target of, say, "service provided to 50,000 clients in 2008".
This target (together with, presumably, a number of others) would become a basis
for assessing the quality of the performance of the organization as a whole, or of a
unit within the organization, or even of particular employees. The implication of
setting a performance target is that failure to meet the target implies substandard
performance unless a satisfactory explanation can be provided as to why the target
was not met.
Performance targeting has an important place in the organizational manager's

toolkit. There is no reason to doubt that, when used properly, targeting can make a
positive contribution to organizational performance. However, the assumption that
organizations will indeed make proper use of performance targets is not always well
founded. Designers of performance targeting schemes -- if they wish to add value to
their organization’s performance -- must bear in mind the limitations of
performance targeting, and the potential of targeting schemes to cause significant
and unintended perverse outcomes. Experience has shown that when targeting
schemes are not carefully designed and implemented, they risk causing more harm
than good.
OTHER STRATEGIES
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Apart from quantitative and qualitative strategies there are other strategies that bank
follows and should follow in case if they are not following. The various other
strategies are as follows:
 Recovery strategy.
 Turnaround strategy.
 Promotional strategy.
 Funding strategy.
I. RECOVERY STRATEGY:
The gross non performing assets of commercial banks and development financial
institutions have reportedly crossed the rupees one lakh twenty thousand crore
mark. Commercial banks have made various efforts for recovery, like out of court
settlements, one time settlements etc., with a view to keep gross NPA figure low.
Present NPA is around 2 to 3%
Some analysts and rating agencies however maintain that these figures have been
significantly underestimated through evergreening; rescheduling, restructuring etc.
the least effective of all recovery measures is obviously the judicial route, thanks to
a tardy and outdated legal system.
The recent ordinance (securitization) and reconstruction of financial asset and

enforcement of security interest ordinance 2002) has paved the way for the creation
of securitization and asset reconstruction companies, besides empowering banks to
take over the management of a defaulting borrower company besides its secured
assets for realization of loan amounts, without court intervention. This ordinance
will have a great ‘deterrence value’ as willful defaulters lose the protection of legal
delays besides the privilege of asset stripping. Quite a few FIs and banks have
already initiated measures to recover measures to recover their dues from chronic
defaulters. ICICI bank, and IDBI and IFCI, for instance, have sent notices to 22
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companies which collectively owe them Rs. 1200 crore. In addition, IDBI has
issued notices to 17 borrowers for an amount aggregating Rs. 1640 crore. The State
Bank of India has issued notices to about 70 defaulters while others are also in the
process of doing so.
Hence bank has to properly adopt recovery strategy so that at the recovery stage
performance is maintained.
II. TURNAROUND STRATEGY
The overall goal of turnaround strategy is to return an underperforming or

distressed bank to normal in terms of acceptable levels of profitability, solvency,
liquidity and cash flow.
Turnaround strategy is described in terms of how the turnaround strategy

components of managing, stabilizing, funding and fixing an underperforming or
distressed company are applied over the natural stages of a turnaround.
When bank fails or is at the verge of failue bank adopt the turnaround strategy.the
followinf figure shows the recovery of bank while applying turnaround startegy.
Crisis management regrowth
stabilisation
III .PROMOTIONAL STRATEGY
Promotion has different aspects for different industries, products and services. Its
final goal is to communicate positive word of mouth among existing and potential
customers about the corporate, product and service. In banking the customers must
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be ensured that services provided by a particular bank have been designed to give
them maximum value of their money. In brief, it can be said that in India wherever
the dilemma of private and public sector comes always two things are considered.
Public sector is more reliable but not so good in the quality and innovativeness.
Private sector is not considered so reliable, there may be hidden charges in the
services and false and misleading information in the advertising but they are better
in the service quality. Private sector banks must be more true and reliable first.
They have to win the hearts of the customers, after that they will be able to win
minds as well. In traditional tools of promotion both sectors' banks are almost same.
Private Sector banks are adopting more push strategies to attract and catch the
customers. This creates the difference between promotional strategies adopted by
Public and Private Sector Banks
Promotional Strategies by Public and

Private Sector Banks
Public Sector Private Sector

Promotional Tool Bank Bank
Advertising on telivision Yes Yes

Newspapers
Personal Selling/ No Yes

Personal Contact.
In Journals and magazines. Yes Yes
Tele Calling by Sales persons. No Yes
Outdoor Advertising, hoardings. Yes Yes
Schemes/Gifts/Prizes No Yes
for Customers.
Public Relations/ Yes Yes
events/Programmes.
Online Marketing/e-mail. Yes But Few Yes
Pamphlets/Propaganda. No Yes
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Letter/Mail/ with No Yes

Relevant Material.
Publishing News in newspapers. Yes But Few Yes
Banks use different promotional strategies like personal selling, advertising,

discounts, melas etc. For example, banks like HDFC and ICICI have acustomer care
executives who contact the customers either personally or on the phone and
recommend their new services/products. The SBI held home losn melas and property
fairs across the country as the lending rates plummeted and the market became very
competitive.
IV.FUNDING STRATEGY
The recent financial crisis has important implications for the feasibility of different
banking models. On the funding side, the crisis has clearly exposed the dangers of a
bank's excessive reliance on wholesale funding
Generally speaking, banks source their funds from deposits (50%) and through
wholesale funding, comprising, short-term wholesale funding (25%) and long-term
wholesale funding (25%), in both the domestic and global markets (these
proportions will vary from bank to bank). Short-term funding relates to borrowings
for up to 12 months while long-term funding includes borrowings of greater than 12
months.
The price that banks pay for funds depends on many factors. These include changes
in the official cash rate, competition, international events, the credit rating of the
bank and the supply of wholesale funds. When the term of any funding arrangement
expires, either in domestic and global markets, banks have to re-finance. Since the
onset of the global financial crisis, wholesale funding costs have increased
significantly. Furthermore, interest rate volatility has increased in these markets
and it is widely reported that considerable uncertainty will remain over the next
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year. Due to the protracted nature of the sub-prime crisis, pressures on financing
costs from the wholesale market continue
In the current environment, many banks have come to the realization that they have
little control over the yields on their assets as they are very much a function of the
competing market place (i.e. commodity like). In addition, they are better
understanding that the most expensive funding source can often be local, rate
sensitive, depositors who want the best rates but, at the same time, want to keep
their funding flexible and in short term investments. Is this type of customer a
profitable relationship for the bank, or would the bank be better served to
selectively reduce rates and allow rate shoppers to shop somewhere else?
This raises the question as to what the right mix of funding should be for any
particular bank. What should the mix be between retail deposits and wholesale
funding that provides the overall lowest cost of total funds; but provides the
flexibility to manage the liquidity and interest rate position of the balance sheet?
Most banks that have traditionally relied on customer-only deposits to fund their
balance sheets are at a tactical disadvantage. With the preponderance of new loan
assets being fixed rate for at least three to five years and depositors wanting to keep
maturities short, there is little ability for a bank to effectively manage their interest
rate risk position and net interest margins.
What most banks need is the ability to acquire funding that is not only cost effective
at the margin, but, also has the maturity characteristics that best meet the interest
rate characteristics of the balance sheet. Wholesale funding in the current
flat/inverted yield curve environment can meet these requirements.
While a bank’s core customer base continues to be the “franchise,” wholesale

funding strategies, when combined with selectively reducing rates on higher cost
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local deposits, could very well result in lower overall funding costs and reduced
balance sheet risk.
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5.SURVEY WITH QUESTIONNAIRE
STRATEGY ADOPTED BY BANK OF BARODA TO IMPROVE THEIR

OVERALL PERFORMANCE
BANK OF BARODA–THRUST ON GROWTH WITH QUALITY.
Bank of Baroda Started in 1908 from a small building in Baroda to its new hi-rise
and hi-tech Baroda Corporate Centre in Mumbai, is a saga of vision, enterprise,
financial prudence and corporate governance.
Mission statement
To be a top ranking National Bank of International Standards committed to
augmenting stake holders' value through concern, care and competence.
Bank’s corporate goals and strategy
“To maximize quality growth and profit through enhanced customer orientation
with prudent risk and liquidity management policies and practices in our endeavor
to consolidate Bank’s financial strength”
During the year 2008-09, the Bank’s focus was mainly on implementing effective
strategies to optimize human resource management in a highly motivating work
environment, drawing maximum mileage out of the available Information
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Technology infrastructure and imbibing a full-fledged marketing culture to promote

a sense of professionalism in approach and attitude.
During the year 2009-10, the Bank would continue to perform with a
thrust on “Growth with Quality” by focusing on low-deposits by further reducing

the dependence on bulk Business and by protecting the asset quality with a firm
control on the process of credit origination.
The Bank’s business plan and broad strategy in the year 2009-10 to achieve its
corporate goals, objectives and to explore newer business opportunities in the
domestic as well as overseas market would be as under:
• Reorienting its systems and procedures towards customer convenience and

enhanced customer satisfaction.
• Formulating and adhering to the best corporate governance practices with an aim
to set high standard of ethical values, transparency and disciplined approach to
achieve excellence.
• Focusing on a consistent and broad-based resource mobilization plan.
• Enlarging the base of retail customers by leveraging technology and taking newer
technology based initiatives.
• Diversifying the loan book and managing the credit risk effectively.
• Penetrating deeper into hitherto unbanked centres/customer segments.
• Aggressively canvassing non-fund based business so as to improve the share of
fee-based income
• Maintaining a fine balance between the size and the strength of the Balance Sheet
by managing Net Interest Margin (NIM), Risk Profile of the Bank and improving
the Cost-Income Ratio.
• Enhancing the image of the Bank as a Customer Centric Organization.
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During the year 2008-09, Bank of Baroda enhanced the strength of its balance
sheet and proved its ability to deliver strong results even during turbulent times.
With a sustained thrust on risk management, technology, marketing and customer
centricity, it is well positioned to take advantage of the future opportunities
I had visited Bank of Baroda (Altamount road branch, Grant road.) on 19/09/09 and
had a conversation with bank’s branch manager S.P Dhingra which is as follows:
Q.) According to you what is overall performance for your bank?
 Basically there are 5 parameters i.e.
• Increase in deposit.
• Increase in advances.
• Decrease in NPAs.
• Profitability.
• Increasing non-fund based services.
We give more importance to quality as quality is important for long term growth.
Q.)What are the various strategies adopted by bank for better customer satisfaction?
 Actually there is no one specific strategy. For us ‘Customer is Boss’ and you
know that we have to listen to our boss. We don’t have separate CRM department,
it is partially there for wholesale banking and large corporate accounts.
The bank has taken a series of customer centric technology initiatives in the past
few years. The transaction processing system has stabilized under CBS (Core
Banking Solution) environment. The alternate e-delivery channels are made
available to the customers. The banks ATM network expanded to 1,179. The bank
launched several new IT products and services such as phone banking service,
corporate cash management system, payment messaging solution and global
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treasury etc to increase customer convenience and also to reduce the transaction
cost. Thus, many steps have been taken by the bank to serve the customer with
speed and efficiency.
Q.) How does your bank evaluate the performance of the employees?
 We follow Balance Scorecard method to measure the performance of officers.

The superior authority also keeps track of the performance periodically and uses his
experience and expectation to coach and motivate his subordinate for further
improving upon the performance levels. Managing the performance of employees
and manager is most important. Performance management is not a one time activity
it is a composite system composed of goal setting, tracking changes, coaching,
appraisal, feedback and employee development. The figure below shows these
activities which must happen on acyclic and ongoing basis.
Tracking progress together
Mutual goal setting motivate

(begninng of year) Review
(mid year)
employee
research and coach

development
Appraisal
year end tracking progress together
Q.)Does your bank have separate HRM department?
 Yes, we have separate HRM department called HRnes (Human Resource

Network for employee services). It is a web enabled enterprise wide HR solution
launched on 26.11.2007. Further, additional employee- friendly functionalities were
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added to enable the employees to submit online applications for request transfer,
promotion etc.
Q.)How do you manage the various inherent risks?
 Bank of Baroda has a robust risk management system to ensure that the risks
assumed by it are within the defined risk appetites and are adequately compensated.
Liquidity Risk: The bank’s ALCO (asset liability committee) has the overall
responsibility to monitor the liquidity risk.
Credit Risk: Bank has adopted various credit rating models to measure the level of
credit risk in a specific loan transaction.
Market Risk: The bank has an asset liability policy to address the market risk.
These policies comprise management practices, procedures, prudential risk limit,
review mechanism and reporting system. These policies are revised periodically in
line with changes in financial and market conditions.
Operational risk: the bank has ORMC (operational risk management committee)
who has the authority and responsibility of monitoring the operational risk of the
bank.
Q.) What is your bank’s future planning?
 We plan to increase the following profitability ratios:
• Net interest margin (at present 2.91%)

• Interest spread (at present 2.64%)
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• Gross (operating) profit (at present 2.22%)

• Return on average assets (at present 1.09%)
• Credit deposit ratio (at present 82.36%)
• Capital adequacy ratio (at present 12.88%)
• Yield on advances (at present 9.50%)
To decrease following ratios
• Operating expenses (at present 1.84%)

• Cost income ratio (at present 45.38%)
• Cost of deposit (at present 5.71%)
The recent strategy of our bank is to promote or recruit the young talents.
In its relentless striving for quality perfection, the Bank secured the ISO 9001:2000
certifications for 15 branches. By end of the current financial, the Bank is targeting
54 more branches for this quality certification.
At Bank of Baroda, change is a journey. It has a beginning. There will be no end. It

will be a long and difficult march. And the Bank will emerge stronger, more
resilient and positioned to become India's first bank of truly global standards.
6.BARRIERS FACED BY BANKS WHILE

IMPLEMENTING STRATEGIES
The road ahead will be tough and rough but when the roads get tough, only the
tough get going. In fact, internal risk management, financial inclusion, managing
human capital, high intermediation costs, low productivity, better corporate
governance and improving customer service, believe industry analysts, remain
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major hurdles for the Indian banks to overcome or become global comp[editors.
Besides, they feel, the banking community needs to learn a lesson from the recent
US subprime crisis and bank going bankrupt due to operational inefficiency.
The road to perfection by banks wasn’t free from hurdles. Since the initiation of
financial sector reforms in the early ‘90s, the Indian banking sector has undergone
several changes. Private sector banks, led by ICICI bank, HDFC bank and axis bank
had to face many stumbling blocks which led to the introduction of various
innovations and technology changes such as migration from legacy systems- to
attract and reach customers. But even as some key obstacles were overcome, there
are many issues as follows which the banks need to look into to get on to a high
growth competitions.
1. COMPETITION
The level and intensity of competition has increased in the financial services
industry as banks and their competitors have expanded their service offerings. The
local bank offering business and customer credit, savings and retirement plans and
financial institutions, credit unions, securities firms, financial markets, insurance
companies, etc. for the bank’s core deposit base. Commercial paper, medium term
notes and other financial market innovations challenge the banks traditional lending
products. There has been a spectacular proliferation of new financial instruments
like zero coupon bands, collateralized mortgage obligations, Eurobonds and all
kinds of derivatives. The competitive pressures have acted as a spur to develop
more services for the future. With competition hotting up, understanding the needs,
spending and consumption patterns of customers will be critical for a bank to
remain competitive in the market.
2. FINANCIAL INSTABILITY
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The instability of the financial system in the case of some countries highlights the
needs for further strengthening of international financial system particularly cross
border capital flows.
3. LARGE NUMBER OF PLAYER IN RETAIL FIELD
While there is a room for large number of player in retail field, banks are better
placed due to risk dispersion and better quality of assts. Consequently constant
refinements in the nature and pricing of retail products, delegation of powers,
simplified sanction and disbursement procedures, and removal of bottlenecks have
been effected to achieve a healthy growth. There is no doubt that retail banking has
to be central to the development strategy of banks. But the challenge now is to
acquire a more flexible, customer centric business model while simultaneously
achieving economies of scale.
4. PENETRATION OF BANKING SERVICES
The penetration of banking services to Indian households stand at a mere 35.5%.

According to the data released by the Census office, even relatively prosperous
states like Maharashtra,Gujarat and Karnataka have less than half of their total
households operating a bank account. Delhi was ranked 8th with only 51% of the
population having access to banking facilities.
Some of the efforts highlighted to increase this penetration level were:
Tapping the rural market
It is time that Indian banks capitalize upon the untapped potential of the rural
markets. Rural India is now being viewed more as an opportunity than as a
challenge. Rural markets are difficult but profitable market improving macro
indicators like better education, higher income levels and comfort with technology
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clearly indicates the rural India’s potential of massive economic upsurge. NBFCs
can actually help banks achieve financial inclusion and increase credit growth.
Opening more branches in Tier II and Tier III towns
Fierce competition in the business of banks in metro cities has brought into sharp
focus the untapped potential in the emerging markets of the Tier II and Tier III
cities across the country. In fact, analysts have forecasted that the next retail boom
is waiting to happen in these smaller towns and cities, as urban markets have now
saturated. Many public sector banks are now enhancing their focus towards the Tier
II cities, as most of them have lost their considerable market share in the metros to
their private sector and foreign counterparts.
5. GEOGRAPHICAL EXPANSION AND CONSOLIDATION
The geographical expansion and consolidation of the banking units have expanded
beyond the boundaries of a single nation to encompass the entire globe. Today, the
largest banks in the world compete with each other for business on every continent.
Size does matter. Especially if banks have to make their presence felt in the
overseas market and consolidation will help in achieving size. Because, the bigger
the bank, the easier it is raise cheaper resources. Also, only if a bank has a huge
balance sheet will it be able to fund big ticket loans.
India may not be all that bad in terms of the size of the banks when compared to
many other emerging market counterparts. It is imperative for the banks to grow
their business in India first, before they look at competing with foreign banks. Once
Indian banks have achieved size and strength in the domestic market, they would be
better placed to compete with foreign banks.
For example:
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Chinese banks, even as they are three times the size of big banks in India, they do
not have significant overseas presence. Thus, in the current scenario Indian banks
can only look at competing with banks in the under-developed and developing
economies.
6. BASEL II NORMS
For the uninitiated, Basel II uses a ‘three pillars’ concept-minimum capital

requirements (addressing risk) (supervisory review and market discipline (to
promote greater stability in the financial system). It is part of the original Basel
Capital Accord that was released in 1988, under which regulatory authorities within
the G-10 countries made a commitment to specify a minimum capital requirement
for banks, and later implemented by countries outside the G-10 as well.
Basel norms are vicious circle. It will only widen the gap between the risky banks.
There will be a lot more transparency, but banks will need to keep modifying their
strategy to make sure that they meet capital requirements. Banks will become more
quality conscious and the onus will be to tap enough creditworthy customers.
For example:To be able to maintain a capital adequacy of 12%, advocated by

advanced Basel II norms. Indian banks are required to generate Rs 5, 68,744 crore
over the next five years. While public sector banks will have a capital requirement
of Rs 369115 crore 64.9%), the private sector and foreign banks will have to infuse
around Rs 199629 crore (35.1%). This is likely to result in bank merger and
acquisition opportunities, Basel II guidelines will force banks to become more
efficient from improved operational and credit risk management practices.
7. ECONOMIC RECESSION
Economic recession coupled with increased competition have forced banks to

reduce their charges in the form of appraisal fee, commitment charges,
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documentation charges, up front charges and remittance charges etc. to attract new
customers and have an edge over other banks. All these factors are putting the
‘other income’ of banks also under pressure.
8. FINANCIAL INCLUSION:
In the history of human civilization it has always been the technology which has led
to mass availability of products and services. Same is the case for banking services.
We are in the midst of the most exciting period of human civilization when two
billion of population is expected to move ‘up’ from below poverty line to above
poverty line (BPL). Majority of these will be in this sub-continent and banks will
have an opportunity to participate in this process, which will bring sustainable
peace and prosperity to the mankind.
For achieving the goal of Financial Inclusion, experts have recommended the
Business Correspondent / Facilitator (BC/BF) model. However, some recent studies
have pointed out that the BC model at the initial stage may not be commercially
viable due to a high transaction cost for the banks and customers. Here, the
appropriate use of technology can help in reducing the transaction cost. The need of
the hour is to develop and implement scalable platform independent technology
solutions which, if implemented on a larger scale, will bring down the high cost of
operation. Technology, thus, really holds the key for financial inclusion to take
place on an accelerated scale.
The need of the hour is leveraging technology in Indian banking for providing
affordable and cost-effective banking services to the masses through multi-delivery
channels.
9. RISK :
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While implementing strategies, banks have to face various kinds of risk. It is the
inherent part of every bank. While performing banks mainly face three kinds of
risks namely,
• Credit risks
• Market risks
• Operational risks.
CREDIT RISK: the risk arises due to default of borrower is called credit risk. The
recent US example of sub prime was due to the default of borrower in repaying the
principal amount. Because of this the performance of many banks in US was
hampered and many banks had filed bankruptcy.
How to minimize credit risk
Pre sanction ongoing post review mechanism

appraisal technique sanction monitoring
• . Internal audit
• External audit
ON –SITE OFF-SITE
[Personal visit, stock audit [stock statement, conduct
Factory audit] of account]
MARKET RISK: It is the risk caused due to market fluctuating. Basically, bank face
interest rate risk, liquidity risk due to market fluctuation. Because of this reason,
65
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bank always have to design their strategy accordingly. Market fluctuation lead to
inconsistency in performance
How to minimize market risk?
cash flow analysis forecasting gap anlaysis
OPERATIONAL RISK: Failure in this risk arises due to people, process, and
system in bank. Operational risk has more affect on bank performance.
How operational risk can be minimized
• Motivating employee
• Training
• Proper internal control system.
• Technological upgradation.etc.
10.FINANCIAL BARRIERS
These include budget restrictions limiting the overall expenditure on the strategy,
financial restrictions on specific instruments, and limitations on the flexibility
with which revenues can be used to finance the full range of instruments
11.POLITICAL AND CULTURAL BARRIERS
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These involve lack of political or public acceptance of an instrument, restrictions

imposed by pressure groups, and cultural attributes, such as attitudes to
enforcement, which influence the effectiveness of instruments.
7.FINDINGS
This project gives detailed report on:
 Concepts, measures, indicators of performance.

 Strategies adopted by banks to perform in a consistent manner.
 Issues/challenges faced by bank in implementing strategies.
 Banks adopt separate strategies to improve its both qualitative and quantitative
performance. But nowadays banks are giving importance to quality.
 Today Pacesetter Company do not view their strength and performance in
enhancing growth in terms of quantity of management of hierarchical leadership of
an earlier day, instead the emphasis on quality of management.
The channel through which banks improve their performance product
development, supply management, operation effectiveness and quality as well as
others.
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Banks are now devising various non quantitative determinants to help it improve
the service quality a well as their performance. Some of the areas on which banks
focuses include branch premises and customer lounges, ATM, technology, publicity
and banks staff members.
Financial; performance of banks is determined using various ratios like debt-
equity ratio, profitability ratio, return on asset, return on investment etc.
 The most commonaly cited ratio today is the efficiency retio, which is equal to
noninterest expense divided by the sum of net interest income and noninterest
income. The lower the ratio, the better a bank’s performance—ceteris paribus—
because it indicates how much a bank must pay in noninterest expense to generate
one dollar revenu of operating revenue. Many banks cite this ratio along with return
on equity, return on assets and net interest margin when describing performance for
the whole bank.
The crucial facet of managing non interest income and expense is knowledge
about the profitability of different customer relationships.this information allows
management to target product and services and alter pricing strategies to ensure that
customers get what they want and that the packages of services or porducts are
prifitable.
 Nowadays, public sector banks are using CRM. They have separate CRM
department and also banks have various CRM software like Seibel ,finacle and
variou others.
The various strategies adopted by banks have resulted in customer satisfaction,
effective and faster delivery channel, innovative products, and better penetration pf
banking services, proper pricing of product etc.
Three patterns have emerged of strategy implementation:
 Some initiatives fail

 Some get off to a promising start and then lose momentum.
65
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 A small number launch a process of self sustaining improvement.
Therefore it is not only important to plan strategy but also to ensure its wise
implementation. Strategic management has become vital part of planning to survive
in the ever changing economy to improve performance.
8.LIMITATIONS OF PROJECT
 TIME CONSTRAINT: The project report is prepared within a limited period

which is not sufficient to carry out a detailed research on the topic.
 PAGE CONSTRAINT: The page constraint in preparing the report makes it

difficult to compile all the information which is important. Thus it is not possible to
explain the concepts more deeply and make the report more interesting, detailed
and practical.
 SPACE CONSTRAINT: The report is prepared only with reference to the
Indian scenario and some of the strategies mentioned do not apply for the banks in
other countries.
 LACK OF EXPERIENCE: As a student, having limited experience,
knowledge and exposure to practical world, it is difficult to view and analyze the
practical application of the strategies in the banking industry. Thus making the
project more of theoretical and less practical.
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 Partial disclosure regarding the various aspect of strategy by the manager of

Bank of Baroda has leads to no in-depth study regarding the strategy adopted by
bank of Baroda.
 The banking industry is often exposed to changing reforms and technology
revolution which necessitates providing strategies relating to present scenario only.
CONCLUSION
In the present environment, a paradigm change in the Indian banking industry is

inevitable. As said by Charles Darwin: it is not the strongest of the species that
survive, not the most intelligent, but the one most responsive to change.
It is important for the banks to adapt to the changing environment. Banks are
increasingly operating in a world where their products have been commoditized;
where pricing wars have resulted in zero sum game; and where physical location
has become irrelevant. Consequently, the customer experience of a banks service
becomes its brand. However customer orientation cannot be mandated. Banks have
to build a management system and a corporate culture that enthuses each person to
provide world class service to there customers. This is how banks build global
brands that are respected anywhere in the world. It is also important to remember
that technology is an enabler and not a panacea.
The marketing of banking and insurance services in India has a still a long way to
go especially since there is a huge untapped market. Due to the competition
introduced by the liberalization process, the existing and the new entrants will have
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to be conscious of the changing market requirements. The recent years have seen a
drastic change in the banking services as banks are noe becoming more customer
friendly. Technology has introduced revolutionary products like Home Banking,
Internet banking. Most of the banks are now becoming one-stop shop for the
various financial services. Further, the quality of service has also risen sharply even
in the public sector banks due to the competitive forces.
Indian banks have to adopt the best practises of successful financial institutions in
India and elsewhere. Otherwise Indian banks will no be competitive in global
financial markets. Further deregulation and proper monitoring of their
implementation are other ways of bringing about positive outcomes in the right
direction. As India is looking forward to implement Basel II supervisory
requirements in the near future, areas such as enhanced internal risk management
activities, increased flexibility, efficient operations, and higher revenues could be
expected for the banking sector.
Obviously, different banks follow different strategies to improve performance. This

follows from differences in individual bank operating environments as determined
by business mix, overall corporate strategic objectives, the geographic markets, and
history of cost management behavior. Each strategy can be suuceefully
implemented if pursued with long-term objectives.
To conclude, improved accounting gains are just camouflaging the banks’

performance. There are several systemic challenges. They should be reconized.
There are also opportunities for growth and value creation. India has the fastest
growing market for most products and the segments acrros asia. Ultimately,
corporate leadership and the will to manage with charasmatic leadership and strong
teams will eventually separate the hunters from prey.
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BIBLIOGRAPHY
BOOKS:
 Performance of public sector banks after reforms---G. Rama Krishna.

 Sevice design and delivery strategies in banks(banking service operation)
 Banking strategy vol-1(ICFAI)
 Banking strategy vol-2(ICFAI)
 Indian banking : managing transformation---Dr.N. Nagarajan
 Indian banking: Emerging issues----------Katuri Nageswara Rao
and Yash Pal Pahuja.
 Bank management---Timothy W.Koch and S.Scott Mac Donald
 5 kick Ass Strategies---Robert Grede.
 The Concept of Corporate Strategy, 2nd Edition (1980). Kenneth Andrews. Dow-
Jones Irwin.
 "What is Strategy?" Michael Porter. Harvard Business Review (Nov-Dec 1996).
 Competitive Strategy (1986). Michael Porter. Harvard Business School Press.
MAGZINES
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 Bank quest vol 73 (jan-march 2002)

 Journal of Indian institute of banking and finance (april-june 2008)
 Bank Quest –emerging areas I banking (april-june 2008)
 Bobmaitri (april-may 2009)
 Annual report of Bank of Baroda-Baroda next (2009-2009)
WEBSITE
 http://books.google.co.in/books?
q=what+comes+in+banks+overall+performance&lr=&sa=N&start=260
 http://www.agr.hr/cro/istrazivanja/projekti/ahead/doc/strategic_mgmt_3.pdf
 http://www.mgutheses.org/page/?q=T%201071&search=&page=&rad=#
 http://www.emeraldinsight.com/Insight/searchQuickOptions.do?
hdAction=button_search&ExSearchTerm=overall%20performance%20by
%20banks%20in%20india----JOURNAL
 http://www.business-standard.com/india/storypage.php?autono=369333
 www.turnaroundhelp.co.uk
 http://interactive .cabinetoffice.gov./startegy/survivalguide/skills/index.htm/
 http//en.wikipedia.org/wiki/performance_measurement
 www.fpm.com/index.html
 www.indiana_edu/uhrs/training/performance_management/define_common_exp.ht
m
 www.bankablestrtaegies.com
 www.baroda.com
 www.baroda.co.in
 www.icici.com
 www.sbi.co.in
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SEARCH ENGINE
 www.google.com
 www.yahoo.com
 www.rediff.com
 www.blackle.com
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Strategies adopted by banks to improve their overerall

This report includes:

• Penetration of banking services.

1. INTRODUCTION TO INDIAN BANKING SECTOR

If there were no banks…..

Where would you go to borrow money?

What would you do with your savings?

What risks might you face as a saver (borrower)?

The banking industry in India is governed by Banking Regulation Act of India,

banks. Scheduled banks constitute of commercial banks and co-operative banks.

The traditional thinkers conceive Performance as the final outcome of activities.

Performance as such can be defined as “being concerned with means as well as

NEED FOR PERFORMANCE:

The prime objective of an individual or of organization is to perform according to

• Based on the position, not the individual

• Meaningful, reasonable and attainable

 The Need for a Range of Performance Measures

Organizational control is the process whereby an organization ensures that it is

• What has happened?

The first question can be answered by performance measurement. Management will

As to the selection of a range of performance measures which are appropriate to a

Authors from differing management disciplines tend to categories the various

These 6 generic performance dimensions fall into two conceptually different

Another way of categorizing these sets of indicators is to refer to them either as

Table 1. Upstream Determinants and Downstream Results

Performance Dimensions Types of Measures

Financial Indicators: Financial indicators remain the fundamental management

So what do non-financial indicators relate to? They relate to the following

• manufacturing and production

BALANCE SCORE CARD METHOD--------A TOOL TO MEASURE

This is particularly true if a bank is customer-focused. Doesn’t it seems appropriate

A firm’s balance scorecard represents a set of measures that gives managers an

• Financial Performance: How Do Stockholders View Our Risk and Returns

Completing a scorecard for a bank involves identifying and implementing firm’s

SCORE CARD MEASURES

Ratio of branch to on-

 PERFORMANCE MEASUREMENT GUIDELINES

Throughout the implementation of a Performance Management system, which may

Will improvement in one area of the organization be achieved at the expense of

Some Fundamental Questions

Related to Mission & Vision:

 Who are we?

 Why are we here?

Related to Competitive Strategy:

 What is the current strategy, implicit or explicit?

Some Concluding Remarks

1.Operational Strategy is predicated on the production and delivery of products and

2.Customer Strategy is predicated on tailoring and shaping products and services

3.Product Strategy is predicated on producing a continuous stream of state-of-

Each of the three value disciplines suggests different requirements. Operational

 How will we attract and retain new customer?

4.STRATEGIES ADOPTED BY BANK TO IMPROVE

QUANTITATIVE QUALITATIVE OTHER

STRATEGIES STRATEGIES STRATEGIES

The potential customer or investors generally frame their investment decisions on

Cost plus pricing: In this a detailed analysis is done.

Competition related approach: In this, the price is decided on the competitor’s

B.COST BENEFITS ANALYSIS:

Although in practice monetary valuation is often difficult, it can be done and,

C. SHIFTING TO FEE BASED SERVICES AND RESTRAIN ON FUND

D.) REDUCTION IN NPA:

1. Accounts Creation of proper data base: