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  • 1. A PROJECT REPORT ON “STUDY THE IMPACT OF CRM ON CUSTOMERS OF BANKS OF JAIPUR CITY” (Submitted in the partial fulfillment of course for the award of The degree of Master of Business Administration)Submitted to: Submitted By:Miss. Jaya Pareek Divya SharmaMrs. Nidhi Tak PSOM, DMS PART- II POORNIMA SCHOOL OF MANAGEMENT ISI-2, RIICO Institutional Area, Goner Road, Sitapura, Jaipur.
  • 2. CERTIFICATE Poornima School of ManagementThis is to certify that Miss Divya Sharma student of MBA 4th semester from Poornimaschool of management, Jaipur had completed its project report on the topic of ―STUDYTHE IMPACT OF CRM ON CUSTOMERS OF BANKS OF JAIPUR CITY‖ under thesupervision of miss Jaya pareek faculty member DMS PGC.To best of my knowledge report is original and has not been copied or submittedanywhere else. It is an independent work done by him. Dr. Vandana sharma Director, PSOM DMS, PGC
  • 3. DeclarationHereby I declare that the project report entitled ―STUDY THE IMPACT OF CRM ONCUSTOMERS OF BANKS OF JAIPUR CITY‖ submitted for the degree of MBA is myoriginal work and the project report has not formed the basis for the award of anydiploma, degree, associated ship, fellowship or similar other title. It has been notsubmitted to any other university or institution for the award of any degree or diploma. Name Divya Sharma MBA 2 year 4th sem nd
  • 4. PREFACEThe title of this study is ―STUDY THE IMPACT OF CRM ON CUSTOMERS OF BANKSOF JAIPUR CITY‖ This study shows that in current market why various banks are usingCRM activities, because overall goals of banks are to find, attract, and win new clients,nurture and retain those the company already has, entice former clients back into thefold, and reduce the costs of marketing and client service. This research is related tobasicly banks of Jaipur, specially HDFC and ICICI bank. The objective of this study is tobring insight and deeper understanding into the objectives, strategies and the expectedbenefits of CRM initiatives by organizations particularly service companies like banksand to understand consumer psyche about CRM in banking area.Method which used in this study is exploratory and source of data collection is bothsecondary and primery data collections which are collect by the questionnaire, internet,various types of newspapers, magazines and other books related to topic written byvarious author. This study will show impact on customers of various CRM activities.There are many limitation arise while study and prepare this research like The area ofstudy was Jaipur so it cannot be generalized to other cities and Time Period of theproject was not sufficient to study all the factors in deep. Key elements which considerin this study are satisfaction of customers, use of technology in banks, types of CRMactivities etc. There are not so much data available on this topic which is his limitation ofthis report. At last it is concluded that Technical solutions deployed by banks today areflexible, user-friendly and meant to facilitate specific workflow and requirements inimplementation processes. In order to simplify lives, banks have begun toimplement end-to-end technologies through all departments with the intention ofremoving human error from processes. Previously existing manual environments couldnot have been adequate for future visions, growth plans and strategies.
  • 5. ACKNOWLEDGEMENTI express my sincere thanks to the project guide Ms. Savita Panwar and Ms. JayaPareek ,and Mrs. Nidhi Tak faculty, Department of Management Studies, PoornimaGroup of Colleges, Jaipur, for guiding me right from the inception till the successfulcompletion of the project. I sincerely acknowledge both for extending the valuableguidance, support for literature, critical review of project and the report but above all,the moral support shehad provided to me during all stages of this project study.I would also like to thanks Mr. R. K. Agarwal and all the supporting staff of Departmentof Management Studies, Poornima Group of Colleges, Jaipur for their help andcooperation throughout the project. Divya Sharma
  • 6. EXECUTIVE SUMMARY“Customer relationship management (CRM) is a widely-implemented strategy formanaging a company‘s interactions with customers, clients and sales prospects. Itinvolves using technology to organize, automate, and synchronize business processesprincipally sales activities, but also those for marketing, customer service, andtechnical.‖Most CRM initiatives begin with a strategic need to manage the process of handlingcustomer related information more effectively. For beginners it could simply mean betterlead management capabilities or sales pipeline visibility. However, as organizationsmature in their CRM initiatives, they begin to look at CRM as tool to acquire strategicdifferentiators. The objective of this study to find out that how the expected benefits of CRM caninitiatives by organizations be described, to find out positive impact on the overallperformance of the organization in the long run, to get more knowledge about CRM inbanking sector, to understand consumer psyche about CRM in banking area, to analyzethat how CRM works as a link between banks and customers. The study might belimited by some factors like the primary data collected in form of questionnaires andinterview might have Inherent limitation of biasness and casual response, due tocompetitive advantage banks don‘t disclose their policies in public, banking sector isvery big and not full covered in limited time, many people were not serious while fillingthe Questionnaires, the sample size is very short.This research concluded that Technical solutions deployed by banks today are flexible,user-friendly and meant to facilitate specific workflow and requirements inimplementation processes. In order to simplify lives, banks have begun toimplement end-to-end technologies through all departments with the intention ofremoving human error from processes. Previously existing manual environments couldnot have been adequate for future visions, growth plans and strategies.
  • 7. INDEXS.NO CONTENT PAGE NO.1. Introduction to industry 1-602. Introduction to organization 61-1043. Research methodology 105-110 3.1. Title of study 3.2. Duration of the project 3.3. Objective of the project 3.4. Type of research 3.5. Sample size , method of selecting sample 3.6. Scope of study 3.7. Limitation of study4. Analysis and interpretation 111-1215. Facts and finding 122-1226. SWOT analysis 123-1267. Conclusion 127-1278. Recommendation/ suggestion 128-1299. Appendix 130-132 10. Bibliography 133-135
  • 8. INTRODUCTION OF INDUSTRYA bank is a financial intermediary that accepts deposits and channels those depositsinto lending activities, either directly or through capital markets. A bank connectscustomers with capital deficits to customers with capital surpluses.The banking section will navigate through all the aspects of the Banking System inIndia. It will discuss upon the matters with the birth of the banking concept in the countryto new players adding their names in the industry in coming few years.The banker of all banks, Reserve Bank of India (RBI), the Indian Banks Association(IBA) and top 20 banks like IDBI, HSBC, ICICI, ABN AMRO, etc. has been well definedunder three separate heads with one page dedicated to each bank. However, in theintroduction part of the entire banking cosmos, the past has been well explained underthree different heads namely: History of Banking in India Nationalization of Banks in India Scheduled Commercial Banks in IndiaThe first deals with the history part since the dawn of banking system in India.Government took major step in the 1969 to put the banking sector into systems and itnationalized 14 private banks in the mentioned year. This has been elaborated inNationalization of Banks in India. The last but not the least explains about the scheduledand unscheduled banks in India. Section 42(6)(a) of RBI Act 1934 lays down thecondition of scheduled commercial banks. The description along with a list of scheduledcommercial banks is given on this page.
  • 9. History of Banking in IndiaBanking in India originated in the last decades of the 18th century. The first bankswere The General Bank of India, which started in 1786, and Bank of Hindustan, whichstarted in 1790; both are now defunct. The oldest bank in existence in India is the StateBank of India, which originated in the Bank of Calcutta in June 1806, which almostimmediately became the Bank of Bengal. This was one of the three presidency banks,the other two being the Bank of Bombay and the Bank of Madras, all three of whichwere established under charters from the British East India Company. For many yearsthe Presidency banks acted as quasi-central banks, as did their successors. The threebanks merged in 1921 to form the Imperial Bank of India, which, upon Indiasindependence, became the State Bank of India.Indian merchants in Calcutta established the Union Bank in 1839, but it failed in 1848 asa consequence of the economic crisis of 1848-49. The Allahabad Bank, established in1865 and still functioning today, is the oldest Joint Stock bank in India.(Joint StockBank: A company that issues stock and requires shareholders to be held liable for thecompanys debt) It was not the first though. That honor belongs to the Bank of UpperIndia, which was established in 1863, and which survived until 1913, when it failed, withsome of its assets and liabilities being transferred to the Alliance Bank of Simla.When the American Civil War stopped the supply of cotton to Lancashire fromthe Confederate States, promoters opened banks to finance trading in Indian cotton.With large exposure to speculative ventures, most of the banks opened in India duringthat period failed. The depositors lost money and lost interest in keeping deposits withbanks. Subsequently, banking in India remained the exclusive domain of Europeans fornext several decades until the beginning of the 20th century.Foreign banks too started to arrive, particularly in Calcutta, in the 1860s. The ComptoiredEscompte de Paris opened a branch in Calcutta in 1860, and another in Bombay in1862; branches in Madrasand Puducherry, then a French colony,
  • 10. followed. HSBC established itself in Bengal in 1869. Calcutta was the most activetrading port in India, mainly due to the trade of the British Empire, and so became abanking center.The first entirely Indian joint stock bank was the Oudh Commercial Bank, established in1881 in Faizabad. It failed in 1958. The next was the Punjab National Bank, establishedin Lahore in 1895, which has survived to the present and is now one of the largestbanks in India.Around the turn of the 20th Century, the Indian economy was passing through a relativeperiod of stability. Around five decades had elapsed since the Indian Mutiny, and thesocial, industrial and other infrastructure had improved. Indians had established smallbanks, most of which served particular ethnic and religious communities.The presidency banks dominated banking in India but there were also some exchangebanks and a number of Indian joint stock banks. All these banks operated in differentsegments of the economy. The exchange banks, mostly owned by Europeans,concentrated on financing foreign trade. Indian joint stock banks were generally undercapitalized and lacked the experience and maturity to compete with the presidency andexchange banks. This segmentation let Lord Curzon to observe, "In respect of bankingit seems we are behind the times. We are like some old fashioned sailing ship, dividedby solid wooden bulkheads into separate and cumbersome compartments."The period between 1906 and 1911, saw the establishment of banks inspired bythe Swadeshi movement. The Swadeshi movement inspired local businessmen andpolitical figures to found banks of and for the Indian community. A number of banksestablished then have survived to the present such as Bank of India, CorporationBank, Indian Bank, Bank of Baroda, Canara Bank and Central Bank of India.The fervour of Swadeshi movement lead to establishing of many private banksin Dakshina Kannada and Udupi district which were unified earlier and known by thename South Canara ( South Kanara ) district. Four nationalised banks started in thisdistrict and also a leading private sector bank. Hence undivided Dakshina Kannadadistrict is known as "Cradle of Indian Banking".
  • 11. During the First World War (1914-1918) through the end of the Second WorldWar (1939-1945), and two years thereafter until the independence of India werechallenging for Indian banking. The years of the First World War were turbulent, and ittook its toll with banks simply collapsing despite the Indian economy gaining indirectboost due to war-related economic activities.At least 94 banks in India failed between 1913 and 1918 as indicated in the followingtable: Number of banks Authorized capital Paid-up CapitalYears that failed (Rs. Lakhs) (Rs. Lakhs)1913 12 274 351914 42 710 1091915 11 56 51916 13 231 41917 9 76 251918 7 209 1
  • 12. Post-IndependenceThe partition of India in 1947 adversely impacted the economies of Punjab and WestBengal, paralyzing banking activities for months. Indias independence marked the endof a regime of the Laissez-faire for the Indian banking. The Government of India initiatedmeasures to play an active role in the economic life of the nation, and the IndustrialPolicy Resolution adopted by the government in 1948 envisaged a mixed economy.This resulted into greater involvement of the state in different segments of the economyincluding banking and finance. The major steps to regulate banking included: The Reserve Bank of India, Indias central banking authority, was nationalized on January 1, 1949 under the terms of the Reserve Bank of India (Transfer to Public Ownership) Act, 1948 (RBI, 2005b).[Reference www.rbi.org.in] In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India." The Banking Regulation Act also provided that no new bank or branch of an existing bank could be opened without a license from the RBI, and no two banks could have common directors. NationalizationBanks Nationalization in India: Newspaper Clipping, Times of India, July, 20, 1969
  • 13. Despite the provisions, control and regulations of Reserve Bank of India, banks in Indiaexcept the State Bank of India or SBI, continued to be owned and operated by privatepersons. By the 1960s, the Indian banking industry had become an important tool tofacilitate the development of the Indian economy. At the same time, it had emerged as alarge employer, and a debate had ensued about the nationalization of the bankingindustry. Indira Gandhi, then Prime Minister of India, expressed the intention ofthe Government of India in the annual conference of the All India Congress Meeting in apaper entitled "Stray thoughts on Bank Nationalization." The meeting received the paperwith enthusiasm.Thereafter, her move was swift and sudden. The Government of India issued anordinance and nationalised the 14 largest commercial banks with effect from themidnight of July 19, 1969. Jayaprakash Narayan, a national leader of India, describedthe step as a "masterstroke of political sagacity." Within two weeks of the issue of theordinance, the Parliament passed the Banking Companies (Acquisition and Transfer ofUndertaking) Bill, and it received the presidential approval on 9 August 1969.A second dose of nationalization of 6 more commercial banks followed in 1980. Thestated reason for the nationalization was to give the government more control of creditdelivery. With the second dose of nationalization, the Government of India controlledaround 91% of the banking business of India. Later on, in the year 1993, thegovernment merged New Bank of India with Punjab National Bank. It was the onlymerger between nationalized banks and resulted in the reduction of the number ofnationalized banks from 20 to 19. After this, until the 1990s, the nationalized banks grewat a pace of around 4%, closer to the average growth rate of the Indian economy.LiberalizationIn the early 1990s, the then Narsimha Rao government embarked on a policyof liberalization, licensing a small number of private banks. These came to be knownas New Generation tech-savvy banks, and included Global Trust Bank (the first of such
  • 14. new generation banks to be set up), which later amalgamated with Oriental Bank ofCommerce, Axis Bank(earlier as UTI Bank), ICICI Bankand HDFC Bank. This move,along with the rapid growth in the economy of India, revitalized the banking sector inIndia, which has seen rapid growth with strong contribution from all the three sectors ofbanks, namely, government banks, private banks and foreign banks.The next stage for the Indian banking has been set up with the proposed relaxation inthe norms for Foreign Direct Investment, where all Foreign Investors in banks may begiven voting rights which could exceed the present cap of 10%,at present it has gone upto 74% with some restrictions.The new policy shook the Banking sector in India completely. Bankers, till this time,were used to the 4-6-4 method (Borrow at 4%;Lend at 6%;Go home at 4) of functioning.The new wave ushered in a modern outlook and tech-savvy methods of working fortraditional banks. All this led to the retail boom in India. People not just demanded morefrom their banks but also received more.Currently (2007), banking in India is generally fairly mature in terms of supply, productrange and reach-even though reach in rural India still remains a challenge for theprivate sector and foreign banks. In terms of quality of assets and capital adequacy,Indian banks are considered to have clean, strong and transparent balance sheetsrelative to other banks in comparable economies in its region. The Reserve Bank ofIndia is an autonomous body, with minimal pressure from the government. The statedpolicy of the Bank on the Indian Rupee is to manage volatility but without any fixedexchange rate-and this has mostly been true.With the growth in the Indian economy expected to be strong for quite some time-especially in its services sector-the demand for banking services, especially retailbanking, mortgages and investment services are expected to be strong. One may alsoexpect M&As, takeovers, and asset sales.In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stakein Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investorhas been allowed to hold more than 5% in a private sector bank since the RBI
  • 15. announced norms in 2005 that any stake exceeding 5% in the private sector bankswould need to be vetted by them.In recent years critics have charged that the non-government owned banks are tooaggressive in their loan recovery efforts in connection with housing, vehicle andpersonal loans. There are press reports that the banks loan recovery efforts havedriven defaulting borrowers to suicide.The Indian Banking industry, which is governed by the Banking Regulation Act of India,1949 can be broadly classified into two major categories, non-scheduled banks andscheduled banks. Scheduled banks comprise commercial banks and the co-operativebanks. In terms of ownership, commercial banks can be further grouped intonationalized banks, the State Bank of India and its group banks, regional rural banksand private sector banks (the old/ new domestic and foreign). These banks have over67,000 branches spread across the country.The first phase of financial reforms resulted in the nationalization of 14 major banks in1969 and resulted in a shift from Class banking to Mass banking. This in turn resulted ina significant growth in the geographical coverage of banks. Every bank had to earmarka minimum percentage of their loan portfolio to sectors identified as ―priority sectors‖.The manufacturing sector also grew during the 1970s in protected environs and thebanking sector was a critical source. The next wave of reforms saw the nationalizationof 6 more commercial banks in 1980. Since then the number of scheduled commercialbanks increased four-fold and the number of bank branches increased eight-fold.After the second phase of financial sector reforms and liberalization of the sector in theearly nineties, the Public Sector Banks (PSB) s found it extremely difficult to competewith the new private sector banks and the foreign banks. The new private sector banksfirst made their appearance after the guidelines permitting them were issued in January1993. Eight new private sector banks are presently in operation. These banks due totheir late start have access to state-of-the-art technology, which in turn helps them tosave on manpower costs and provide better services.
  • 16. During the year 2000, the State Bank Of India (SBI) and its 7 associates accounted fora 25 percent share in deposits and 28.1 percent share in credit. The 20 nationalizedbanks accounted for 53.2 percent of the deposits and 47.5 percent of credit during thesame period. The share of foreign banks (numbering 42), regional rural banks and otherscheduled commercial banks accounted for 5.7 percent, 3.9 percent and 12.2 percentrespectively in deposits and 8.41 percent, 3.14 percent and 12.85 percent respectivelyin credit during the year 2000.Current ScenarioThe industry is currently in a transition phase. On the one hand, the PSBs, which arethe mainstay of the Indian Banking system are in the process of shedding their flab interms of excessive manpower, excessive non Performing Assets (Npas) and excessivegovernmental equity, while on the other hand the private sector banks are consolidatingthemselves through mergers and acquisitions.PSBs, which currently account for more than 78 percent of total banking industry assetsare saddled with NPAs (a mind-boggling Rs 830 billion in 2000), falling revenues fromtraditional sources, lack of modern technology and a massive workforce while the newprivate sector banks are forging ahead and rewriting the traditional banking businessmodel by way of their sheer innovation and service. The PSBs are of course currentlyworking out challenging strategies even as 20 percent of their massive employeestrength has dwindled in the wake of the successful Voluntary Retirement Schemes(VRS) schemes.The private players however cannot match the PSB‘s great reach, great size andaccess to low cost deposits. Therefore one of the means for them to combat the PSBshas been through the merger and acquisition (M& A) route. Over the last two years, theindustry has witnessed several such instances. For instance, Hdfc Bank‘s merger withTimes Bank Icici Bank‘s acquisition of ITC Classic, Anagram Finance and Bank ofMadura. Centurion Bank, Indusind Bank, Bank of Punjab, Vysya Bank are said to be onthe lookout. The UTI bank- Global Trust Bank merger however opened a pandora‘s box
  • 17. and brought about the realization that all was not well in the functioning of many of theprivate sector banks.Private sector Banks have pioneered internet banking, phone banking, anywherebanking, mobile banking, debit cards, Automatic Teller Machines (ATMs) and combinedvarious other services and integrated them into the mainstream banking arena, whilethe PSBs are still grappling with disgruntled employees in the aftermath of successfulVRS schemes. Also, following India‘s commitment to the W To agreement in respect ofthe services sector, foreign banks, including both new and the existing ones, have beenpermitted to open up to 12 branches a year with effect from 1998-99 as against theearlier stipulation of 8 branches.Talks of government diluting their equity from 51 percent to 33 percent in November2000 has also opened up a new opportunity for the takeover of even the PSBs. The FDIrules being more rationalized in Q1FY02 may also pave the way for foreign bankstaking the M& A route to acquire willing Indian partners.Meanwhile the economic and corporate sector slowdown has led to an increasingnumber of banks focusing on the retail segment. Many of them are also entering thenew vistas of Insurance. Banks with their phenomenal reach and a regular interface withthe retail investor are the best placed to enter into the insurance sector. Banks in Indiahave been allowed to provide fee-based insurance services without risk participation,invest in an insurance company for providing infrastructure and services support and setup of a separate joint-venture insurance company with risk participation.Aggregate Performance of the Banking IndustryAggregate deposits of scheduled commercial banks increased at a compounded annualaverage growth rate (Cagr) of 17.8 percent during 1969-99, while bank credit expandedat a Cagr of 16.3 percent per annum. Banks‘ investments in government and otherapproved securities recorded a Cagr of 18.8 percent per annum during the same period.
  • 18. In FY01 the economic slowdown resulted in a Gross Domestic Product (GDP) growth ofonly 6.0 percent as against the previous year‘s 6.4 percent. The WPI Index (a measureof inflation) increased by 7.1 percent as against 3.3 percent in FY00. Similarly, moneysupply (M3) grew by around 16.2 percent as against 14.6 percent a year ago.The growth in aggregate deposits of the scheduled commercial banks at 15.4 percent inFY01 percent was lower than that of 19.3 percent in the previous year, while the growthin credit by SCBs slowed down to 15.6 percent in FY01 against 23 percent a year ago.The industrial slowdown also affected the earnings of listed banks. The net profits of 20listed banks dropped by 34.43 percent in the quarter ended March 2001. Net profitsgrew by 40.75 percent in the first quarter of 2000-2001, but dropped to 4.56 percent inthe fourth quarter of 2000-2001.On the Capital Adequacy Ratio (CAR) front while most banks managed to fulfill thenorms, it was a feat achieved with its own share of difficulties. The CAR, which atpresent is 9.0 percent, is likely to be hiked to 12.0 percent by the year 2004 based onthe Basle Committee recommendations. Any bank that wishes to grow its assets needsto also shore up its capital at the same time so that its capital as a percentage of therisk-weighted assets is maintained at the stipulated rate. While the IPO route was amuch-fancied one in the early ‗90s, the current scenario doesn‘t look too attractive forbank majors.Consequently, banks have been forced to explore other avenues to shore up theircapital base. While some are wooing foreign partners to add to the capital others areemploying the M& A route. Many are also going in for right issues at prices considerablylower than the market prices to woo the investors.Interest Rate SceneThe two years, post the East Asian crises in 1997-98 saw a climb in the global interestrates. It was only in the later half of FY01 that the US Fed cut interest rates. India hashowever remained more or less insulated. The past 2 years in our country wascharacterized by a mounting intention of the Reserve Bank Of India (RBI) to steadily
  • 19. reduce interest rates resulting in a narrowing differential between global and domesticrates.The RBI has been affecting bank rate and CRR cuts at regular intervals to improveliquidity and reduce rates. The only exception was in July 2000 when the RBI increasedthe Cash Reserve Ratio (CRR) to stem the fall in the rupee against the dollar. Thesteady fall in the interest rates resulted in squeezed margins for the banks in general.Governmental PolicyAfter the first phase and second phase of financial reforms, in the 1980s commercialbanks began to function in a highly regulated environment, with administered interestrate structure, quantitative restrictions on credit flows, high reserve requirements andreservation of a significant proportion of lendable resources for the priority and thegovernment sectors. The restrictive regulatory norms led to the credit rationing for theprivate sector and the interest rate controls led to the unproductive use of credit and lowlevels of investment and growth. The resultant ‗financial repression‘ led to decline inproductivity and efficiency and erosion of profitability of the banking sector in general.This was when the need to develop a sound commercial banking system was felt. Thiswas worked out mainly with the help of the recommendations of the Committee on theFinancial System (Chairman: Shri M. Narasimham), 1991. The resultant financial sectorreforms called for interest rate flexibility for banks, reduction in reserve requirements,and a number of structural measures. Interest rates have thus been steadilyderegulated in the past few years with banks being free to fix their Prime LendingRates(PLRs) and deposit rates for most banking products. Credit market reformsincluded introduction of new instruments of credit, changes in the credit delivery systemand integration of functional roles of diverse players, such as, banks, financialinstitutions and non-banking financial companies (Nbfcs). Domestic Private SectorBanks were allowed to be set up, PSBs were allowed to access the markets to shore uptheir Cars.
  • 20. Implications of Some Recent Policy MeasuresThe allowing of PSBs to shed manpower and dilution of equity are moves that will lendgreater autonomy to the industry. In order to lend more depth to the capital markets theRBI had in November 2000 also changed the capital market exposure norms from 5percent of bank‘s incremental deposits of the previous year to 5 percent of the bank‘stotal domestic credit in the previous year. But this move did not have the desired effect,as in, while most banks kept away almost completely from the capital markets, a fewprivate sector banks went overboard and exceeded limits and indulged in dubious stockmarket deals. The chances of seeing banks making a comeback to the stock marketsare therefore quite unlikely in the near future.The move to increase Foreign Direct Investment FDI limits to 49 percent from 20percent during the first quarter of this fiscal came as a welcome announcement toforeign players wanting to get a foot hold in the Indian Markets by investing in willingIndian partners who are starved of networth to meet CAR norms. Ceiling for FIIinvestment in companies was also increased from 24.0 percent to 49.0 percent andhave been included within the ambit of FDI investment.The abolishment of interest tax of 2.0 percent in budget 2001-02 will help banks pass onthe benefit to the borrowers on new loans leading to reduced costs and easier lendingrates. Banks will also benefit on the existing loans wherever the interest tax costelement has already been built into the terms of the loan. The reduction of interest rateson various small savings schemes from 11 percent to 9.5 percent in Budget 2001-02was a much awaited move for the banking industry and in keeping with the reducinginterest rate scenario, however the small investor is not very happy with the move.Some of the not so good measures however like reducing the limit for tax deducted atsource (TDS) on interest income from deposits to Rs 2,500 from the earlier level of Rs10,000, in Budget 2001-02, had met with disapproval from the banking fraternity whofeared that the move would prove counterproductive and lead to increasedfragmentation of deposits, increased volumes and transaction costs. The limit was
  • 21. thankfully partially restored to Rs 5000 at the time of passing the Finance Bill in theParliament.April 2001-Credit Policy ImplicationsThe rationalization of export credit norms in will bestow greater operational flexibility onbanks, and also reduce the borrowing costs for exporters. Thus this move could triggerexports growth in the future. Banks can also hope to earn increased revenue with theinterest paid by RBI on CRR balances being increased from 4.0 percent to 6.0 percent.The stock market scam brought out the unholy nexus between the Cooperative banksand stockbrokers. In order to usher in greater prudence in their operations, the RBI hasbarred Urban Cooperative Banks from financing the stock market operations and is alsoin the process of setting up of a new apex supervisory body for them. Meanwhile theforeign banks have a bone to pick with the RBI. The RBI had announced that forexloans are not to be calculated as a part of Tier-1 Capital for drawing up exposure limitsto companies effective 1 April 2002. This will force foreign banks either to infuse freshcapital to maintain the capital adequacy ratio (CAR) or pare their asset base. Further,the RBI has also sought to keep foreign competition away from the nascent net bankingsegment in India by allowing only Indian banks with a local physical presence, to offerInternet banking.Crystal GazingOn the macro economic front, GDP is expected to grow by 6.0 to 6.5 percent while theprojected expansion in broad money (M3) for 2001-02 is about 14.5 percent. Credit anddeposits are both expected to grow by 15-16 percent in FY02. Indias foreign exchangereserves should reach US$50.0 billion in FY02 and the Indian rupee should hold steady.The interest rates are likely to remain stable this fiscal based on an expected downwardtrend in inflation rate, sluggish pace of non-oil imports and likelihood of declining global
  • 22. interest rates. The domestic banking industry is forecasted to witness a higher degree ofmergers and acquisitions in the future. Banks are likely to opt for the universal bankingapproach with a stronger retail approach. Technology and superior customer service willcontinue to be the imperatives for success in this industry.Public Sector banks that imbibe new concepts in banking, turn tech savvy, leaner andmeaner post VRS and obtain more autonomy by keeping governmental stake to theminimum can succeed in effectively taking on the private sector banks by virtue of theirsheer size. Weaker PSU banks are unlikely to survive in the long run. Consequently,they are likely to be either acquired by stronger players or will be forced to look out forother strategies to infuse greater capital and optimize their operations.Foreign banks are likely to succeed in their niche markets and be the innovators interms of technology introduction in the domestic scenario. The outlook for the privatesector banks indeed looks to be more promising vis-à-vis other banks. While theirfocused operations, lower but more productive employee force etc will stand them good,possible acquisitions of PSU banks will definitely give them the much needed scale ofoperations and access to lower cost of funds. These banks will continue to be the earlytechnology adopters in the industry, thus increasing their efficiencies. Also, they havebeen amongst the first movers in the lucrative insurance segment. Already, banks suchas Icici Bank and Hdfc Bank have forged alliances with Prudential Life and StandardLife respectively. This is one segment that is likely to witness a greater deal of action inthe future. In the near term, the low interest rate scenario is likely to affect the spreadsof majors. This is likely to result in a greater focus on better asset-liability managementprocedures. Consequently, only banks that strive hard to increase their share of fee-based revenues are likely to do better in the future.Without a sound and effective banking system in India it cannot have a healthyeconomy. The banking system of India should not only be hassle free but it should beable to meet new challenges posed by the technology and any other external andinternal factors.
  • 23. For the past three decades Indias banking system has several outstandingachievements to its credit. The most striking is its extensive reach. It is no longerconfined to only metropolitans or cosmopolitans in India. In fact, Indian banking systemhas reached even to the remote corners of the country. This is one of the main reasonsof Indias growth process. The governments regular policy for Indian bank since 1969has paid rich dividends with the nationalization of 14 major private banks of India.Not long ago, an account holder had to wait for hours at the bank counters for getting adraft or for withdrawing his own money. Today, he has a choice. Gone are days whenthe most efficient bank transferred money from one branch to other in two days. Now itis simple as instant messaging or dials a pizza. Money has become the order of theday.The first bank in India, though conservative, was established in 1786. From 1786 tilltoday, the journey of Indian Banking System can be segregated into three distinctphases. They are as mentioned below: Early phase from 1786 to 1969 of Indian Banks Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms. New phase of Indian Banking System with the advent of Indian Financial & Banking Sector Reforms after 1991.To make this write-up more explanatory, I prefix the scenario as Phase I, Phase II andPhase III.Phase IThe General Bank of India was set up in the year 1786. Next came Bank of Hindustanand Bengal Bank. The East India Company established Bank of Bengal (1809), Bank ofBombay (1840) and Bank of Madras (1843) as independent units and called itPresidency Banks. These three banks were amalgamated in 1920 and Imperial Bank of
  • 24. India was established which started as private shareholders banks, mostly Europeansshareholders.In 1865 Allahabad Bank was established and first time exclusively by Indians, PunjabNational Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank,and Bank of Mysore were set up. Reserve Bank of India came in 1935.During the first phase the growth was very slow and banks also experienced periodicfailures between 1913 and 1948. There were approximately 1100 banks, mostly small.To streamline the functioning and activities of commercial banks, the Government ofIndia came up with The Banking Companies Act, 1949 which was later changed toBanking Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965).Reserve Bank of India was vested with extensive powers for the supervision of bankingin India as the Central Banking Authority.During those days public has lesser confidence in the banks. As an aftermath depositmobilization was slow. Abreast of it the savings bank facility provided by the Postaldepartment was comparatively safer. Moreover, funds were largely given to traders.Phase IIGovernment took major steps in this Indian Banking Sector Reform after independence.In 1955, it nationalized Imperial Bank of India with extensive banking facilities on a largescale especially in rural and semi-urban areas. It formed State Bank of India to act asthe principal agent of RBI and to handle banking transactions of the Union and StateGovernments all over the country.Seven banks forming subsidiary of State Bank of India was nationalized in 1960 on 19thJuly, 1969, major process of nationalization was carried out. It was the effort of the thenPrime Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the countrywere nationalized.
  • 25. Second phase of nationalization Indian Banking Sector Reform was carried out in 1980with seven more banks. This step brought 80% of the banking segment in India underGovernment ownership.The following are the steps taken by the Government of India to Regulate BankingInstitutions in the Country: 1949: Enactment of Banking Regulation Act. 1955: Nationalization of State Bank of India. 1959: Nationalization of SBI subsidiaries. 1961: Insurance cover extended to deposits. 1969: Nationalization of 14 major banks. 1971: Creation of credit guarantee corporation. 1975: Creation of regional rural banks. 1980: Nationalization of seven banks with deposits over 200 crore.After the nationalization of banks, the branches of the public sector bank India rose toapproximately 800% in deposits and advances took a huge jump by 11,000%. Bankingin the sunshine of Government ownership gave the public implicit faith and immenseconfidence about the sustainability of these institutions.Phase IIIThis phase has introduced many more products and facilities in the banking sector in itsreforms measure. In 1991, under the chairmanship of M Narasimham, a committee wasset up by his name which worked for the liberalization of banking practices.The country is flooded with foreign banks and their ATM stations. Efforts are being putto give a satisfactory service to customers. Phone banking and net banking isintroduced. The entire system became more convenient and swift. Time is given moreimportance than money.The financial system of India has shown a great deal of resilience. It is sheltered fromany crisis triggered by any external macroeconomics shock as other East Asian
  • 26. Countries suffered. This is all due to a flexible exchange rate regime, the foreignreserves are high, the capital account is not yet fully convertible, and banks and theircustomers have limited foreign exchange exposure.Nationalization of Banks in IndiaThe nationalization of banks in India took place in 1969 by Mrs. Indira Gandhi the thenprime minister. It nationalized 14 banks then. These banks were mostly owned bybusinessmen and even managed by them. Central Bank of India Bank of Maharashtra Dena Bank Punjab National Bank Syndicate Bank Canara Bank Indian Bank Indian Overseas Bank Bank of Baroda Union Bank Allahabad Bank United Bank of India UCO Bank Bank of IndiaBefore the steps of nationalization of Indian banks, only State Bank of India (SBI) wasnationalized. It took place in July 1955 under the SBI Act of 1955. Nationalization ofSeven State Banks of India (formed subsidiary) took place on 19th July, 1960.The State Bank of India is Indias largest commercial bank and is ranked one of the topfive banks worldwide. It serves 90 million customers through a network of 9,000
  • 27. branches and it offers -- either directly or through subsidiaries -- a wide range ofbanking services.The second phase of nationalization of Indian banks took place in the year 1980. Sevenmore banks were nationalized with deposits over 200 crores. Till this year,approximately 80% of the banking segment in India was under Government ownership.After the nationalization of banks in India, the branches of the public sector banks roseto approximately 800% in deposits and advances took a huge jump by 11,000%. 1955: Nationalization of State Bank of India. 1959: Nationalization of SBI subsidiaries. 1969: Nationalization of 14 major banks. 1980: Nationalization of seven banks with deposits over 200 crores. Banks in India
  • 28. In India the banks are being segregated in different groups. Each group has their ownbenefits and limitations in operating in India. Each has their own dedicated targetmarket. Few of them only work in rural sector while others in both rural as well as urban.Many even are only catering in cities. Some are of Indian origin and some are foreignplayers.All these details and many more is discussed over here. The banks and its relation withthe customers, their mode of operation, the names of banks under different groups andother such useful information are talked about.One more section has been taken note of is the upcoming foreign banks in India. TheRBI has shown certain interest to involve more of foreign banks than the existing onerecently. This step has paved a way for few more foreign banks to start business inIndia.
  • 29. ABN-AMRO Bank Indian Overseas Bank American Express Bank IndusInd Bank Andhra Bank ING Vysya Bank Allahabad Bank Jammu & Kashmir Bank Axis Bank (Earlier UTI Bank) JPMorgan Chase Bank Bank of Baroda Karnataka Bank Bank of India Karur Vysya Bank Bank of Maharastra Laxmi Vilas Bank Bank of Punjab Oriental Bank of Commerce Bank of Rajasthan Punjab National Bank Bank of Ceylon South Indian Bank BNP Paribas Bank Standard Chartered Bank Canara Bank State Bank of India (SBI) Catholic Syrian Bank State Bank of Bikaner & Jaipur Central Bank of India State Bank of Hyderabad Centurion Bank State Bank of Indore Citi Bank State Bank of Saurastra City Union Bank State Bank of Travancore Corporation Bank Syndicate Bank Dena Bank Taib Bank Deutsche Bank UCO Bank Development Credit Bank Union Bank of India Federal Bank United Bank of India HDFC Bank United Western Bank HSBC Vijaya Bank ICICI Bank Kotak Mahindra Bank IDBI Bank Yes Bank Indian BankScheduled Commercial Banks In India
  • 30. The commercial banking structure in India consists of: Scheduled Commercial Banks in India Unscheduled Banks in IndiaScheduled Banks in India constitute those banks which have been included in theSecond Schedule of Reserve Bank of India(RBI) Act, 1934. RBI in turn includes onlythose banks in this schedule which satisfy the criteria laid down vide section 42 (6) (a)of the Act.As on 30th June, 1999, there were 300 scheduled banks in India having a total networkof 64,918 branches. The scheduled commercial banks in India comprise of State bankof India and its associates (8), nationalized banks (19), foreign banks (45), privateSector banks (32), co-operative banks and regional rural banks."Scheduled banks in India" means the State Bank of India constituted under the StateBank of India Act, 1955 (23 of 1955), a subsidiary bank as defined in the State Bank ofIndia (Subsidiary Banks) Act, 1959 (38 of 1959), a corresponding new bank constitutedunder section 3 of the Banking Companies (Acquisition and Transfer of Undertakings)Act, 1970 (5 of 1970), or under section 3 of the Banking Companies (Acquisition andTransfer of Undertakings) Act, 1980 (40 of 1980), or any other bank being a bankincluded in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934),but does not include a co-operative bank"."Non-scheduled bank in India" means a banking company as defined in clause (c) ofsection 5 of the Banking Regulation Act, 1949 (10 of 1949), which is not a scheduledbank".The following are the Scheduled Banks in India (Public Sector): State Bank of India
  • 31. State Bank of Bikaner and Jaipur State Bank of Hyderabad State Bank of Indore State Bank of Mysore State Bank of Saurashtra State Bank of Travancore Andhra Bank Allahabad Bank Bank of Baroda Bank of India Bank of Maharashtra Canara Bank Central Bank of India Corporation Bank Dena Bank Indian Overseas Bank Indian Bank Oriental Bank of Commerce Punjab National Bank Punjab and Sind Bank Syndicate Bank Union Bank of India United Bank of India UCO Bank Vijaya BankThe following are the Scheduled Banks in India (Private Sector): ING Vysya Bank Ltd Axis Bank Ltd Indusind Bank Ltd
  • 32. ICICI Bank Ltd South Indian Bank HDFC Bank Ltd Centurion Bank Ltd Bank of Punjab Ltd IDBI Bank Ltd Jammu & Kashmir Bank Ltd.Banking services in IndiaWith years, banks are also adding services to their customers. The Indian bankingindustry is passing through a phase of customers market. The customers have morechoices in choosing their banks. A competition has been established within the banksoperating in India.With stiff competition and advancement of technology, the services provided by bankshave become more easy and convenient. The past days are witness to an hour waitbefore withdrawing cash from accounts or a cheque from north of the country beingcleared in one month in the south.This section of banking deals with the latest discovery in the banking instruments alongwith the polished version of their old systems.Financial and Banking Sector ReformsThe last decade witnessed the maturity of Indias financial markets. Since 1991, everygovernments of India took major steps in reforming the financial sector of the country.The important achievements in the following fields are discussed under separateheads:
  • 33. Financial markets Regulators The banking system Non-banking finance companies The capital market Mutual funds Overall approach to reforms Deregulation of banking system Capital market developments Consolidation imperativeNow let us discuss each segment separately.Financial MarketsIn the last decade, Private Sector Institutions played an important role. They grewrapidly in commercial banking and asset management business. With the openingsin the insurance sector for these institutions, they started making debt in the market.Competition among financial intermediaries gradually helped the interest rates todecline. Deregulation added to it. The real interest rate was maintained. Theborrowers did not pay high price while depositors had incentives to save. It wassomething between the nominal rate of interest and the expected rate of inflation.RegulatorsThe Finance Ministry continuously formulated major policies in the field of financialsector of the country. The Government accepted the important role of regulators.The Reserve Bank of India (RBI) has become more independant. Securities andExchange Board of India (SEBI) and the Insurance Regulatory and DevelopmentAuthority (IRDA) became important institutions. Opinions are also there that thereshould be a super-regulator for the financial services sector instead of multiplicity of
  • 34. regulators.The banking systemAlmost 80% of the business is still controlled by Public Sector Banks (PSBs). PSBsare still dominating the commercial banking system. Shares of the leading PSBs arealready listed on the stock exchanges.The RBI has given licences to new private sector banks as part of the liberalisationprocess. The RBI has also been granting licences to industrial houses. Many banksare successfully running in the retail and consumer segments but are yet to deliverservices to industrial finance, retail trade, small business and agricultural finance.The PSBs will play an important role in the industry due to its number of branchesand foreign banks facing the constrait of limited number of branches. Hence, in orderto achieve an efficient banking system, the onus is on the Government to encouragethe PSBs to be run on professional lines.Development finance institutionsFIss access to SLR funds reduced. Now they have to approach the capital marketfor debt and equity funds. Convertibility clause no longer obligatory for assistance tocorporate sanctioned by term-lending institutions. Capital adequacy norms extendedto financial institutions. DFIs such as IDBI and ICICI have entered other segments offinancial services such as commercial banking, asset management and insurancethrough separate ventures. The move to universal banking has started.Non-banking finance companiesIn the case of new NBFCs seeking registration with the RBI, the requirement ofminimum net owned funds, has been raised to Rs.2 crores Until recently, the money
  • 35. market in India was narrow and circumscribed by tight regulations over interest ratesand participants. The secondary market was underdeveloped and lacked liquidity.Several measures have been initiated and include new money market instruments,strengthening of existing instruments and setting up of the Discount and FinanceHouse of India (DFHI).The RBI conducts its sales of dated securities and treasury bills through its openmarket operations (OMO) window. Primary dealers bid for these securities and alsotrade in them. The DFHI is the principal agency for developing a secondary marketfor money market instruments and Government of India treasury bills. The RBI hasintroduced a liquidity adjustment facility (LAF) in which liquidity is injected throughreverse repo auctions and liquidity is sucked out through repo auctions.On account of the substantial issue of government debt, the gilt- edged marketoccupies an important position in the financial set- up. The Securities TradingCorporation of India (STCI), which started operations in June 1994 has a mandate todevelop the secondary market in government securities.Long-term debt market: The development of a long-term debt market is crucial to thefinancing of infrastructure. After bringing some order to the equity market, the SEBIhas now decided to concentrate on the development of the debt market. Stamp dutyis being withdrawn at the time of dematerialization of debt instruments in order toencourage paperless trading.The capital marketThe number of shareholders in India is estimated at 25 million. However, only anestimated two lakh persons actively trade in stocks. There has been a dramaticimprovement in the countrys stock market trading infrastructure during the last fewyears. Expectations are that India will be an attractive emerging market withtremendous potential. Unfortunately, during recent times the stock markets have
  • 36. been constrained by some unsavory developments, which has led to retail investorsdeserting the stock markets.Mutual fundsThe mutual funds industry is now regulated under the SEBI (Mutual Funds)Regulations, 1996 and amendments thereto. With the issuance of SEBI guidelines,the industry had a framework for the establishment of many more players, bothIndian and foreign players.The Unit Trust of India remains easily the biggest mutual fund controlling a corpus ofnearly Rs.70,000 crores, but its share is going down. The biggest shock to themutual fund industry during recent times was the insecurity generated in the mindsof investors regarding the US 64 scheme. With the growth in the securities marketsand tax advantages granted for investment in mutual fund units, mutual fundsstarted becoming popular. The foreign owned AMCs are the ones which are nowsetting the pace for the industry. They are introducing new products, setting newstandards of customer service, improving disclosure standards and experimentingwith new types of distribution.The insurance industry is the latest to be thrown open to competition from the privatesector including foreign players. Foreign companies can only enter joint ventureswith Indian companies, with participation restricted to 26 per cent of equity. It is tooearly to conclude whether the erstwhile public sector monopolies will successfully beable to face up to the competition posed by the new players, but it can be expectedthat the customer will gain from improved service.The new players will need to bring in innovative products as well as fresh ideas onmarketing and distribution, in order to improve the low per capita insurancecoverage. Good regulation will, of course, be essential.Overall approach to reforms
  • 37. The last ten years have seen major improvements in the working of various financialmarket participants. The government and the regulatory authorities have followed astep-by-step approach, not a big bang one. The entry of foreign players has assistedin the introduction of international practices and systems. Technology developmentshave improved customer service. Some gaps however remain (for example: lack ofan inter-bank interest rate benchmark, an active corporate debt market and adeveloped derivatives market). On the whole, the cumulative effect of thedevelopments since 1991 has been quite encouraging. An indication of the strengthof the reformed Indian financial system can be seen from the way India was notaffected by the Southeast Asian crisis.However, financial liberalization alone will not ensure stable economic growth. Sometough decisions still need to be taken. Without fiscal control, financial stability cannotbe ensured. The fate of the Fiscal Responsibility Bill remains unknown and highfiscal deficits continue. In the case of financial institutions, the political and legalstructures hve to ensure that borrowers repay on time the loans they have taken.The phenomenon of rich industrialists and bankrupt companies continues. Further,frauds cannot be totally prevented, even with the best of regulation. However,punishment has to follow crime, which is often not the case in India.Deregulation of banking systemPrudential norms were introduced for income recognition, asset classification,provisioning for delinquent loans and for capital adequacy. In order to reach thestipulated capital adequacy norms, substantial capital were provided by theGovernment to PSBs. Government pre-emption of banks resources throughstatutory liquidity ratio (SLR) and cash reserve ratio (CRR) brought down in steps.Interest rates on the deposits and lending sides almost entirely were deregulated.New private sector banks allowed to promote and encourage competition. PSBs
  • 38. were encouraged to approach the public for raising resources. Recovery of debtsdue to banks and the Financial Institutions Act, 1993 was passed, and specialrecovery tribunals set up to facilitate quicker recovery of loan arrears.Bank lending norms liberalized and a loan system to ensure better control overcredit introduced. Banks asked to set up asset liability management (ALM) systems.RBI guidelines issued for risk management systems in banks encompassing credit,market and operational risks. A credit information bureau being established toidentify bad risks. Derivative products such as forward rate agreements (FRAs) andinterest rate swaps (IRSs) introduced.Capital market developmentsThe Capital Issues (Control) Act, 1947, repealed, office of the Controller of CapitalIssues was abolished and the initial share pricing were decontrolled. SEBI, thecapital market regulator was established in 1992.Foreign institutional investors (FIIs) were allowed to invest in Indian capital marketsafter registration with the SEBI. Indian companies were permitted to accessinternational capital markets through euro issues.The National Stock Exchange (NSE), with nationwide stock trading and electronicdisplay, clearing and settlement facilities was established. Several local stockexchanges changed over from floor based trading to screen based trading.Private mutual funds permittedThe Depositories Act had given a legal framework for the establishment ofdepositories to record ownership deals in book entry form. Dematerialization ofstocks encouraged paperless trading. Companies were required to disclose allmaterial facts and specific risk factors associated with their projects while makingpublic issues.
  • 39. To reduce the cost of issue, underwriting by the issuer were made optional, subjectto conditions. The practice of making preferential allotment of shares at pricesunrelated to the prevailing market prices stopped and fresh guidelines were issuedby SEBI.SEBI reconstituted governing boards of the stock exchanges, introduced capitaladequacy norms for brokers, and made rules for making client or broker relationshipmore transparent which included separation of client and broker accounts.Buyback of shares allowedThe SEBI started insisting on greater corporate disclosures. Steps were taken toimprove corporate governance based on the report of a committee.SEBI issued detailed employee stock option scheme and employee stock purchasescheme for listed companies.Standard denomination for equity shares of Rs. 10 and Rs. 100 were abolished.Companies given the freedom to issue dematerialized shares in any denomination.Derivatives trading starts with index options and futures. A system of rollingsettlements introduced. SEBI empowered to register and regulate venture capitalfunds.The SEBI (Credit Rating Agencies) Regulations, 1999 issued for regulating newcredit rating agencies as well as introducing a code of conduct for all credit ratingagencies operating in India.Consolidation imperativeAnother aspect of the financial sector reforms in India is the consolidation of existinginstitutions which is especially applicable to the commercial banks. In India thebanks are in huge quantity. First, there is no need for 27 PSBs with branches allover India. A number of them can be merged. The merger of Punjab National Bank
  • 40. and New Bank of India was a difficult one, but the situation is different now. No oneexpected so many employees to take voluntary retirement from PSBs, which at onetime were much sought after jobs. Private sector banks will be self consolidatedwhile co-operative and rural banks will be encouraged for consolidation, and anywayplay only a niche role.In the case of insurance, the Life Insurance Corporation of India is a behemoth,while the four public sector general insurance companies will probably move towardsconsolidation with a bit of nudging. The UTI is yet again a big institution, eventhough facing difficult times, and most other public sector players are already exitingthe mutual fund business. There are a number of small mutual fund players in theprivate sector, but the business being comparatively new for the private players, itwill take some time.We finally come to convergence in the financial sector, the new buzzwordinternationally. Hi-tech and the need to meet increasing consumer needs isencouraging convergence, even though it has not always been a success till date. InIndia organizations such as IDBI, ICICI, HDFC and SBI are already trying to offervarious services to the customer under one umbrella. This phenomenon is expectedto grow rapidly in the coming years. Where mergers may not be possible, alliancesbetween organizations may be effective. Various forms of banc assurance are beingintroduced, with the RBI having already come out with detailed guidelines for entry ofbanks into insurance. The LIC has bought into Corporation Bank in order to spreadits insurance distribution network. Both banks and insurance companies havestarted entering the asset management business, as there is a great deal of synergyamong these businesses. The pensions market is expected to open up freshopportunities for insurance companies and mutual funds.It is not possible to play the role of the Oracle of Delphi when a vast nation like Indiais involved. However, a few trends are evident, and the coming decade should be asinteresting as the last one.
  • 41. Reserve Bank of India (RBI)Reserve Bank of India (RBI) is the central bank of the country and is different fromCentral Bank of India.The central bank of the country is the Reserve Bank of India (RBI). It was established inApril 1935 with a share capital of Rs. 5 crores on the basis of the recommendations ofthe Hilton Young Commission. The share capital was divided into shares of Rs. 100each fully paid which was entirely owned by private shareholders in the beginning. TheGovernment held shares of nominal value of Rs. 2, 20,000.Reserve Bank of India was nationalized in the year 1949. The general superintendenceand direction of the Bank is entrusted to Central Board of Directors of 20 members, theGovernor and four Deputy Governors, one Government official from the Ministry ofFinance, ten nominated Directors by the Government to give representation to importantelements in the economic life of the country, and four nominated Directors by theCentral Government to represent the four local Boards with the headquarters atMumbai, Kolkata, Chennai and New Delhi. Local Boards consist of five members eachCentral Government appointed for a term of four years to represent territorial andeconomic interests and the interests of co-operative and indigenous banks.The Reserve Bank of India Act, 1934 was commenced on April 1, 1935. The Act, 1934(II of 1934) provides the statutory basis of the functioning of the Bank.The Bank was constituted for the need of following: To regulate the issue of banknotes To maintain reserves with a view to securing monetary stability and To operate the credit and currency system of the country to its advantage.Functions of Reserve Bank of India
  • 42. The Reserve Bank of India Act of 1934 entrust all the important functions of a centralbank the Reserve Bank of India.Bank of IssueUnder Section 22 of the Reserve Bank of India Act, the Bank has the sole right to issuebank notes of all denominations. The distribution of one rupee notes and coins andsmall coins all over the country is undertaken by the Reserve Bank as agent of theGovernment. The Reserve Bank has a separate Issue Department which is entrustedwith the issue of currency notes. The assets and liabilities of the Issue Department arekept separate from those of the Banking Department. Originally, the assets of the IssueDepartment were to consist of not less than two-fifths of gold coin, gold bullion orsterling securities provided the amount of gold was not less than Rs. 40 crores in value.The remaining three-fifths of the assets might be held in rupee coins, Government ofIndia rupee securities, eligible bills of exchange and promissory notes payable in India.Due to the exigencies of the Second World War and the post-was period, theseprovisions were considerably modified. Since 1957, the Reserve Bank of India isrequired to maintain gold and foreign exchange reserves of Ra. 200 crores, of which atleast Rs. 115 crores should be in gold. The system as it exists today is known as theminimum reserve system.Banker to GovernmentThe second important function of the Reserve Bank of India is to act as Governmentbanker, agent and adviser. The Reserve Bank is agent of Central Government and of allState Governments in India excepting that of Jammu and Kashmir. The Reserve Bankhas the obligation to transact Government business, via. to keep the cash balances asdeposits free of interest, to receive and to make payments on behalf of the Governmentand to carry out their exchange remittances and other banking operations. The Reserve
  • 43. Bank of India helps the Government - both the Union and the States to float new loansand to manage public debt. The Bank makes ways and means advances to theGovernments for 90 days. It makes loans and advances to the States and localauthorities. It acts as adviser to the Government on all monetary and banking matters.Bankers Bank and Lender of the Last ResortThe Reserve Bank of India acts as the bankers bank. According to the provisions of theBanking Companies Act of 1949, every scheduled bank was required to maintain withthe Reserve Bank a cash balance equivalent to 5% of its demand liabilities and 2 percent of its time liabilities in India. By an amendment of 1962, the distinction betweendemand and time liabilities was abolished and banks have been asked to keep cashreserves equal to 3 per cent of their aggregate deposit liabilities. The minimum cashrequirements can be changed by the Reserve Bank of India.The scheduled banks can borrow from the Reserve Bank of India on the basis of eligiblesecurities or get financial accommodation in times of need or stringency byrediscounting bills of exchange. Since commercial banks can always expect theReserve Bank of India to come to their help in times of banking crisis the Reserve Bankbecomes not only the bankers bank but also the lender of the last resort.Controller of CreditThe Reserve Bank of India is the controller of credit i.e. it has the power to influence thevolume of credit created by banks in India. It can do so through changing the Bank rateor through open market operations. According to the Banking Regulation Act of 1949,the Reserve Bank of India can ask any particular bank or the whole banking system notto lend to particular groups or persons on the basis of certain types of securities. Since1956, selective controls of credit are increasingly being used by the Reserve Bank.The Reserve Bank of India is armed with many more powers to control the Indianmoney market. Every bank has to get a license from the Reserve Bank of India to do
  • 44. banking business within India, the license can be cancelled by the Reserve Bank ofcertain stipulated conditions are not fulfilled. Every bank will have to get the permissionof the Reserve Bank before it can open a new branch. Each scheduled bank must senda weekly return to the Reserve Bank showing, in detail, its assets and liabilities. Thispower of the Bank to call for information is also intended to give it effective control of thecredit system. The Reserve Bank has also the power to inspect the accounts of anycommercial bank.As supreme banking authority in the country, the Reserve Bank of India, therefore, hasthe following powers:(a) It holds the cash reserves of all the scheduled banks.(b) It controls the credit operations of banks through quantitative and qualitativecontrols.(c) It controls the banking system through the system of licensing, inspection and callingfor information.(d) It acts as the lender of the last resort by providing rediscount facilities to scheduledbanks.Custodian of Foreign ReservesThe Reserve Bank of India has the responsibility to maintain the official rate ofexchange. According to the Reserve Bank of India Act of 1934, the Bank was requiredto buy and sell at fixed rates any amount of sterling in lots of not less than Rs. 10,000.The rate of exchange fixed was Re. 1 = sh. 6d. Since 1935 the Bank was able tomaintain the exchange rate fixed at lsh.6d. though there were periods of extremepressure in favor of or against the rupee. After India became a member of theInternational Monetary Fund in 1946, the Reserve Bank has the responsibility ofmaintaining fixed exchange rates with all other member countries of the I.M.F.Besides maintaining the rate of exchange of the rupee, the Reserve Bank has to act asthe custodian of Indias reserve of international currencies. The vast sterling balances
  • 45. were acquired and managed by the Bank. Further, the RBI has the responsibility ofadministering the exchange controls of the country.Supervisory functionsIn addition to its traditional central banking functions, the Reserve bank has certain non-monetary functions of the nature of supervision of banks and promotion of soundbanking in India. The Reserve Bank Act, 1934, and the Banking Regulation Act, 1949have given the RBI wide powers of supervision and control over commercial and co-operative banks, relating to licensing and establishments, branch expansion, liquidity oftheir assets, management and methods of working, amalgamation, reconstruction, andliquidation. The RBI is authorized to carry out periodical inspections of the banks and tocall for returns and necessary information from them. The nationalization of 14 majorIndian scheduled banks in July 1969 has imposed new responsibilities on the RBI fordirecting the growth of banking and credit policies towards more rapid development ofthe economy and realization of certain desired social objectives. The supervisoryfunctions of the RBI have helped a great deal in improving the standard of banking inIndia to develop on sound lines and to improve the methods of their operation.Promotional functionsWith economic growth assuming a new urgency since Independence, the range of theReserve Banks functions has steadily widened. The Bank now performs a variety ofdevelopmental and promotional functions, which, at one time, were regarded as outsidethe normal scope of central banking. The Reserve Bank was asked to promote bankinghabit, extend banking facilities to rural and semi-urban areas, and establish andpromote new specialized financing agencies. Accordingly, the Reserve Bank has helpedin the setting up of the IFCI and the SFC; it set up the Deposit Insurance Corporation in1962, the Unit Trust of India in 1964, the Industrial Development Bank of India also in1964, the Agricultural Refinance Corporation of India in 1963 and the IndustrialReconstruction Corporation of India in 1972. These institutions were set up directly orindirectly by the Reserve Bank to promote saving habit and to mobilize savings, and to
  • 46. provide industrial finance as well as agricultural finance. As far back as 1935, theReserve Bank of India set up the Agricultural Credit Department to provide agriculturalcredit. But only since 1951 the Banks role in this field has become extremely important.The Bank has developed the co-operative credit movement to encourage saving, toeliminate moneylenders from the villages and to route its short term credit to agriculture.The RBI has set up the Agricultural Refinance and Development Corporation to providelong-term finance to farmers.Classification of RBIs functionsThe monetary functions also known as the central banking functions of the RBI arerelated to control and regulation of money and credit, i.e., issue of currency, control ofbank credit, control of foreign exchange operations, banker to the Government and tothe money market. Monetary functions of the RBI are significant as they control andregulate the volume of money and credit in the country.Equally important, however, are the non-monetary functions of the RBI in the context ofIndias economic backwardness. The supervisory function of the RBI may be regardedas a non-monetary function (though many consider this a monetary function). Thepromotion of sound banking in India is an important goal of the RBI, the RBI has beengiven wide and drastic powers, under the Banking Regulation Act of 1949 - thesepowers relate to licensing of banks, branch expansion, liquidity of their assets,management and methods of working, inspection, amalgamation, reconstruction andliquidation. Under the RBIs supervision and inspection, the working of banks hasgreatly improved. Commercial banks have developed into financially and operationallysound and viable units. The RBIs powers of supervision have now been extended tonon-banking financial intermediaries. Since independence, particularly after itsnationalisation 1949, the RBI has followed the promotional functions vigorously and hasbeen responsible for strong financial support to industrial and agricultural developmentin the country.
  • 47. RESERVE BANK OF INDIA ADDRESSReserve Bank of India,Central Office,Shaheed Bhagat Singh Road,Mumbai - 400 001. Website of Reserve Bank of India -www.rbi.org.inTop Banks in IndiaWith the advancement of technology and the birth of competition, banks are in the raceof becoming the best in the country. With an eye upon customer satisfaction policy theyare providing best of the best services with the minimum hazards.Banks like ABN AMRO introduced banking with a coffee. It made a tie-up with one ofthe best coffee bar in the country, Barista and remained open till late evening forcustomers with a setup of a coffee bar in the premises.Few banks have introduced world ATM card to make travelers across the globe moresafe and secure. What else. Internet and Phone Banking is the call of the day for banks.In this race towards the best, we have selected top 20 banks in the country from allsegment. It is not the ranking of banks but only for general information about the topbanks in India.Indian Banks Association (IBA)The Indian Banks Association (IBA) was formed on the 26th September, 1946 with 22members. Today IBA has more than 156 members comprising of Public Sector banks,Private Sector banks, Foreign banks having offices in India, Urban Co-operative banks,Developmental financial institutions, Federations, merchant banks, mutual funds,housing finance corporations, etc.
  • 48. The functioning of IBA To promote sound and progressive banking principles and practices. To render assistance and to provide common services to members. To organize co-ordination and co-operation on procedural, legal, technical, administrative and professional matters. To collect, classify and circulate statistical and other information. To pool together expertise towards common purposes such as reduction in costs, increase in efficiency, productivity and improve systems, procedures and banking practices. To project good public image of banking through publicity and public relations. To encourage sports and cultural activities among bank employees.The Organizational Structure of IBAThe Managing Committee manages the affairs, business and funds of IBA. Themanaging Committee is elected by the Ordinary members of the Association, and is thehighest management and policy making body of the Association.The Chairman of the Association heads upon the working of the Association. Heprovides guidelines to the Association. The administrative head of IBA is the ChiefExecutive of IBA. He is also the Secretary to the Managing Committee. He leads a teamof executives, officers and other staff members.
  • 49. ChannelsBanks offer many different channels to access their banking and other services: ATM is a machine that dispenses cash and sometimes takes deposits without the need for a human bank teller. Some ATMs provide additional services. A branch is a retail location Call center Mail: most banks accept check deposits via mail and use mail to communicate to their customers, e.g. by sending out statements Mobile banking is a method of using ones mobile phone to conduct banking transactions Online banking is a term used for performing transactions, payments etc. over the Internet Relationship Managers, mostly for private banking or business banking, often visiting customers at their homes or businesses Telephone banking is a service which allows its customers to perform transactions over the telephone without speaking to a human Video banking is a term used for performing banking transactions or professional banking consultations via a remote video and audio connection. Video banking can be performed via purpose built banking transaction machines (similar to an Automated teller machine), or via a videoconference enabled bank branch.Products and Services of bankRetail Business loan Cheque account Credit card Home loan Insurance advisor
  • 50.  Mutual fund Personal loan Savings accountWholesale Capital raising (Equity / Debt / Hybrids) Mezzanine finance Project finance Revolving credit Risk management (FX, interest rates, commodities, derivatives) Term loanTypes of banksBanks activities can be divided into retail banking, dealing directly with individuals andsmall businesses; business banking, providing services to mid-market business;corporate banking, directed at large business entities; private banking, providing wealthmanagement services to high net worth individuals and families; and investmentbanking, relating to activities on the financial markets. Most banks are profit-making,private enterprises. However, some are owned by government, or are non-profitorganizations.Types of retail banks Commercial bank: the term used for a normal bank to distinguish it from an investment bank. After the Great Depression, the U.S. Congress required that banks only engage in banking activities, whereas investment banks were limited to capital market activities. Since the two no longer have to be under separate ownership,
  • 51. some use the term "commercial bank" to refer to a bank or a division of a bank that mostly deals with deposits and loans from corporations or large businesses. Community banks: locally operated financial institutions that empower employees to make local decisions to serve their customers and the partners. Community development banks: regulated banks that provide financial services and credit to under-served markets or populations. Credit unions: not-for-profit cooperatives owned by the depositors and often offering rates more favorable than for-profit banks. Typically, membership is restricted to employees of a particular company, residents of a defined neighborhood, members of a certain labor union or religious organizations, and their immediate families. Postal savings banks: savings banks associated with national postal systems. Private banks: banks that manage the assets of high net worth individuals. Historically a minimum of USD 1 million was required to open an account, however, over the last years many private banks have lowered their entry hurdles to USD 250,000 for private investors.[citation needed] Offshore banks: banks located in jurisdictions with low taxation and regulation. Many offshore banks are essentially private banks. Savings bank: in Europe, savings banks took their roots in the 19th or sometimes even in the 18th century. Their original objective was to provide easily accessible savings products to all strata of the population. In some countries, savings banks were created on public initiative; in others, socially committed individuals created foundations to put in place the necessary infrastructure. Nowadays, European savings banks have kept their focus on retail banking: payments, savings products, credits and insurances for individuals or small and medium-sized enterprises. Apart from this retail focus, they also differ from commercial banks by their broadly decentralized distribution network, providing local and regional outreach—and by their socially responsible approach to business and society. Building societies and Landesbanks: institutions that conduct retail banking. Ethical banks: banks that prioritize the transparency of all operations and make only what they consider to be socially-responsible investments.
  • 52.  A Direct or Internet-Only bank is a banking operation without any physical bank branches, conceived and implemented wholly with networked computers.Types of investment banks Investment banks "underwrite" (guarantee the sale of) stock and bond issues, trade for their own accounts, make markets, and advise corporations on capital market activities such as mergers and acquisitions. Merchant banks were traditionally banks which engaged in trade finance. The modern definition, however, refers to banks which provide capital to firms in the form of shares rather than loans. Unlike venture capital firms, they tend not to invest in new companies.Both combined Universal banks, more commonly known as financial services companies, engage in several of these activities. These big banks are very diversified groups that, among other services, also distribute insurance— hence the term bancassurance, a portmanteau word combining "banque or bank" and "assurance", signifying that both banking and insurance are provided by the same corporate entity.Other types of banks Central banks are normally government-owned and charged with quasi- regulatory responsibilities, such as supervising commercial banks, or controlling the cash interest rate. They generally provide liquidity to the banking system and act as the lender of last resort in event of a crisis. Islamic banks adhere to the concepts of Islamic law. This form of banking revolves around several well-established principles based on Islamic canons. All banking activities must avoid interest, a concept that is forbidden in Islam. Instead,
  • 53. the bank earns profit (markup) and fees on the financing facilities that it extends to customers. INTRODUCTION OF CRM CRM, or Customer relationship management, is a number of strategies andtechnologies that are used to build stronger relationships between companies and theircustomers. A company will store information that is related to their customers, and theywill spend time analyzing it so that it can be used for this purpose. Some of the methodsconnected with CRM are automated, and the purpose of this is to create marketingstrategies which are targeted towards specific customers. The strategies used will bedependent on the information that is contained within the system. Customer relationshipmanagement is only used by corporations, and they will focus on maintaining a strongrelationship with their clients.There are a number of reasons why CRM has become so important in the last 10 years.The competition in the global market has become highly competitive, and it hasbecome easier for customers to switch companies if they are not happy with the servicethey receive. One of the primary goals of CRM is to maintain clients. When it is usedeffectively, a company will be able to build a relationship with their customers that canlast a lifetime. Customer relationship management tools will generally come in the for ofsoftware. Each software program may vary in the way it approaches CRM. It isimportant to realize that CRM is more than just a technology.Customer relationship management could be better defined as being amethodology, an approach that a company will use to achieve their goals. It should bedirectly connected to the philosophy of the company. It must guide all of its policies, andit must be an important part of customer service and marketing. If this is not done, theCRM system will become a failure. There are a number of things the ideal CRM systeshould have. It should allow the company to find the factors that interest their customers
  • 54. the most. A company must realize that it is impossible for them to succeed if they do notcater to the desires and needs of their customers. Customer relationship managementis a powerful system that will allow them to do this.It is also important for the CRM system to foster a philosophy that is oriented towardsthe customers. While this may sound like on sense, there are a sizeable number ofcompanies that have failed to do it, and their businesses suffered as a result. WithCRM, the customer is always right, and they are the most important factor in thesuccess of the company. It is also important for the company to use measures that aredependent on their customers. This will greatly tip the odds of success in their favor.While CRM should not be viewed as a technology, it is important to realize that thereare end to end processes that must be created so that customers can be properlyserved. In many cases, these processes will use computers and software.Customer support is directly connected to CRM. If a company fails to provide qualitycustomer support, they have also failed with their CRM system. When a customermakes complaints, they must be handled quickly and efficiently. The company shouldalso seek to make sure those mistakes are not repeated. When sales are made, theyshould be tracked so that the company can analyze the m fro m variousaspects. It is also important to understand the architecture of Customer relationshipmanagement.The architecture of CRM can be broken down into three categories, and these arecollaborative, operational, and analytical. The collaborative aspect of CRM deals withunication between companies and their clients. The operational aspect ofthe architecture deals with the concept of making certain processes automated. Theanalytical aspect of CRM architecture deals with analyzing customer information andusing if for business intelligence purposes. Each one of these elements are critical forthe success of a CRM system. A company must learn how to use all three properly,and when they do this proficiently, they will be able to build strong customerrelationships and ensure their profits for a long period of time. As more businessescontinue to compete on a global level, it will become more important for them to usesuccessful Customer relationship management techniques.
  • 55. MEANING OF CRM Customer Relationship Management is the establishment, development,maintenance and optimization of long-ter m mutually valuable relationshipsbetween consumers and the organizations. Successful customer relationshipmanagement focuses on understanding the needs and desires of the customers and isachieved by placing these needs at the heart of the business by integrating them withthe organizations strategy, people, technology and business processes.At the heart of a perfect CRM strategy is the creation of mutual value for all the partiesinvolved in the business process. It is about creating a sustainable competitiveadvantage by being the best at understanding, uncaring, and delivering, anddeveloping existing customer relationships in addition to creating andkeeping new customers.DEFINITION OF CRM―Customer Relationship Management (CRM) is a co-ordinate approach to the sellingprocess allowing the various operational, customer contact and salespromotional functions of an organization to function as a whole.‖ INTRODUCTION OF CRM IN BANKS Today, customers have more power in deciding their bank of choice.Consequently, keeping existing customers, as well as attracting new ones, is a criticalconcern for banks. Customer satisfaction is an important variable in evaluation andcontrol in a bank marketing management. Poor customer satisfaction will lead toa decline in customer loyalty, and given the extended offerings from the competitors,customers can easily switch banks. Banks need to leverage effectively on their
  • 56. customer relationships and make better use of customer information across theinstitution.Competition in the financial services industry has intensified in recent years, owing toevents such as technology changes and financial industry deregulation.Conventional banking distribution has been gradually supplemented by the emerginguse of electronic banking. Many bank customers prefer using ATMs or a website ratherthan visiting a branch, while technology has also reduced barriers to entry for newcustomers.CRM--A POWERFUL TOOL CRM is a powerful management tool that can be used to exploit sales potentialand maximize the value of the customer to the bank. Generally, CRM integrates variouscomponents of a business such as sales, marketing, IT and accounting. This strategymay not increase a businesss profit today or tomorrow, but it will add customer loyaltyto the business.In the long term, CRM produces continuous scrutiny of the banks business relationshipwith the customer, thereby increasing the value of the Customer‘s business. AlthoughCRM is known to be a relatively new method in managing customer loyalty, it has beenused previously by retail businesses for many years.The core objective of modern CRM methodology is to help businesses to usetechnology and human resources to gain a better view of customer behavior. With this,a business can hope to achieve better customer service, make call centres moreefficient, cross-sell products more effectively, simplify marketing and sales processes,identify new customers and increase customer revenues.As an example, banks may keep track of a customers life stages in order to marketappropriate banking products, such as mortgages or credit cards to their customers at
  • 57. the appropriate time. The next stage is to look into the different methods customersinformation are gathered, where and how this data is stored and how it is currentlybeing used. For instance, banksmay interact with customers in a countless ways via mails, emails, call centres,marketing and advertising. The collected data may flow between operational systems(such as sales and stock systems) and analytical systems that can help sort throughthese records to identify patterns. Business analysts can then browse through the datato obtain an in- depth view of each customer and identify areas where better servicesare required.CRM AND BANKS One of the banks greatest assets is their knowledge of their customers. Bankscan use this asset and turn it into key competitive advantage by retaining thosecustomers who represent the highest lifetime value and profitability. Banks can developcustomer relationships across a broad spectrum of touch points such as at bankbranches, kiosks, ATMs, internet, electronic banking and call centres. CRM is not a new phenomenon in the industry. Over the years, banks haveinvested heavily in CRM, especially in developing call centres, which, in the past, weredesigned to improve the process of inbound calls. In future, call centres will evolve toencompass more than just cost reduction and improved efficiency. According to GartnerGroup, more than 80 per cent of all US banks will develop their call centres asalternative delivery channels and revenue centres, to be used for the delivery ofexisting products and services.But to be successful, a bank needs more than the abilityto handle customer service calls. It needs a comprehensive CRM strategy in which alldepartments within the bank are integrated.
  • 58. OBJECTIVES OF CRM IN BANKS CRM, the technology, along with human resources of the banks, enables thebanks to analyze the behavior of customers and their value. The main areas offocus are as the name suggests: customer, relationship, and themanagement of relationship and the main objectives to implement CRM in thebusiness strategy are: • To simplify marketing and sales process • To make call centers more efficient • To provide better customer service • To discover new customers and increase customer Revenue • To cross sell products more effectivelyThe CRM processes should fully support the basic steps of customer life cycle. Thebasic steps are:• Attracting present and new customers• Acquiring new customers• Serving the customers• Finally, retaining the customers In todays increasingly competitive environment, maximizing organic growththrough sales momentum has become a priority for Banks and Financial institutions. Tobuild this momentu m banks are focusing on Customer relationshipmanagement initiatives to improve
  • 59. • Customer satisfaction and loyalty• Customer insight/ 360º view of customer • Speed to market for products and service • Increase products-to-customer ratio • Improve up sales and cross sales • Capitalizing on New market opportunities The idea of CRM is that it helps businesses use technology and humanresources gain insight into the behavior of customers and the value of those customers.If it works as hoped, a business can: provide better customer service, makecall centers more efficient , cross sell products more effectively, help sales staff closedeals faster, simplify marketing and sales processes, discover new customers,and increase customer revenues .It doesnt happen by simply buying software andinstalling it. For CRM to be truly effective, an organization must first decide what kind ofcustomer information it is looking for and it must decide what it intends to do with thatinformation. For example, many financial institutions keep track of customers life stages inorder to market appropriate banking products like mortgages or IRAs to them at theright time to fit their needs. Next, the organization must look into all of the differentways information about customers comes into a business, where and how this data isstored and how it is currently used. One company, for instance, may interact with customers in a myriad of differentways including mail campaigns, Web sites, brick-and-mortar stores, call centers, mobilesales force staff and marketing and advertising efforts. Solid CRM systems link up eachof these points. This collected data flows between operational systems (like sales andinventory systems) and analytical systems that can help sort through these records forpatterns. Company analysts can then comb through the data to obtain a holistic view ofeach customer and pinpoint areas where better services are needed.
  • 60. In CRM projects, following data should be collected to run process engine:1) Responses to campaigns,2) Shipping and fulfillment dates,3) Sales and purchase data,4) Account information,5) Web registration data,6) Service and support records,7) Demographic data,8) Web sales data
  • 61. INTRODUCTION TO ORGANIZATION WE UNDERSTAND YOUR WORLD HDFC Bank LimitedType PublicTraded as BSE: 500180,NYSE: HDBIndustry Banking Financial servicesFounded August 1994Headquarters Mumbai, IndiaArea served WorldwideKey people Aditya Puri (MD)Products Finance and insurance Investment Banking Commercial Banking Retail Banking Private Banking
  • 62. Asset Management Mortgages Credit CardsRevenue $4.476 billion (2010)Profit $545 million (2010)Total assets $53.670 billion (2010)Total equity $6.787 billion (2010)Employees 51,888 (2010)Website HDFCBank.comThe Housing Development Finance Corporation Limited (HDFC) was amongst thefirst to receive an in principle approval from the Reserve Bank of India (RBI) toset up a bank in the private sector, as part of the RBIs liberalization of the IndianBanking Industry in 1994.The bank was incorporated in August 1994 in the name ofHDFC Bank Limited, with its registered office in Mumbai, India. HDFC Bankcommenced operations as a Scheduled Commercial Bank in January 1995.HDFC Bank Limited (BSE: 500180, NYSE: HDB) is a major Indian financialservices company based in India, incorporated in August 1994, after theReserve allowed establishing private sector banks. The Bank was promoted bythe Housing Development Finance Corporation, a premier housing finance company(set up in 1977) of India. HDFC Bank has 1,725 branches and over 4,232 ATMs, in 779cities in India, and all branches of the bank are linked on an online real-time basis. As of
  • 63. 30 September 2008 the bank had total assets of Rs.1006.82 billion.For the fiscal year2008-09, the bank has reported net profit of 2,244.9 crore (US$498.37 million), up 41%from the previous fiscal. Total annual earnings of the bank increased by 58% reachingat 19,622.8 crore (US$4.36 billion) in 2008-09.It is one of the Big Four banks of India, along with State Bank of India, ICICIBank and Punjab National Bank—its main competitors.HDFC is Indias premier housing finance company and enjoys an impeccable trackrecord in India as well as in international markets. Since its inception in 1977, theCorporation has maintained a consistent and healthy growth in its operations toremain the market leader in mortgages. Its outstanding loan portfolio covers well over amillion dwelling units. HDFC has developed significant expertise in retail mortgageloans to different market segments and also has a large corporate client base for itshousing related credit facilities. With its experience in the financial markets, astrong market reputation, large shareholder base and unique consumer franchise,HDFC was ideally positioned to promote a bank in the Indian environment.HDFC Bank began operations in 1995 with a simple mission: to be a “World ClassIndian Bank.” We realized that only a single minded focus on product quality andservice excellence would help us get there. Today, we are proud to say that we are wellon our way towards that goal.HistoryHDFC Bank was incorporated in 1994 by Housing Development Finance CorporationLimited (HDFC), Indias largest housing finance company. It was among the firstcompanies to receive an in principle approval from the Reserve Bank of India (RBI) toset up a bank in the private sector. The Bank started operations as a scheduledcommercial bank in January 1995 under the RBIs liberalization policies.
  • 64. Times Bank Limited (owned by Bennett, Coleman & Co. / Times Group) was mergedwith HDFC Bank Ltd., in 2000. This was the first merger of two private banks in India.Shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 shares ofTimes Bank.In 2008 HDFC Bank acquired Centurion Bank of Punjab taking its total branches tomore than 1,000. The amalgamated bank emerged with a base of about Rs. 1,22,000crore and net advances of about Rs.89,000 crore. The balance sheet size of thecombined entity is more than Rs. 1,63,000 crore.Business focusHDFC Bank deals with three key business segments. - Wholesale Banking Services,Retail Banking Services, Treasury. It has entered the banking consortia of over 50corporates for providing working capital finance, trade services, corporate finance andmerchant banking. It is also providing sophisticated product structures in areas offoreign exchange and derivatives, money markets and debt trading and equity research.Wholesale banking servicesBlue-chip manufacturing companies in the Indian corp to small & mid-sized corporatesand agri-based businesses. For these customers, the Bank provides a wide range ofcommercial and transactional banking services, including working capital finance, tradeservices, transactional services, cash management, etc. The bank is also a leadingprovider of for its to corporate customers, mutual funds, stock exchange members andbanks.Retail banking servicesThe objective of the Retail Bank is to provide its target market customers a full range offinancial products and banking services, giving the customer a one-stop window for allhis/her banking requirements. The products are backed by world-class service and
  • 65. delivered to customers through the growing branch network, as well as throughalternative delivery channels like ATMs, Phone Banking, NetBanking and MobileBanking. HDFC Bank was the first bank in India to launch an International Debit Card inassociation with VISA (VISA Electron) and issues the Mastercard Maestro debit card aswell. The Bank launched its credit card business in late 2001. By March 2009, the bankhad a total card base (debit and credit cards) of over 13 million. The Bank is also one ofthe leading players in the ―merchant acquiring‖ business with over 70,000 Point-of-sale(POS) terminals for debit / credit cards acceptance at merchant establishments. TheBank is well positioned as a leader in various net based B2C opportunities including awide range of internet banking services for Fixed Deposits, Loans, Bill Payments, etc.TreasuryWithin this business, the bank has three main product areas - Foreign Exchange andDerivatives, Local Currency Money Market & Debt Securities, and Equities. Theseservices are provided through the banks Treasury team. To comply with statutoryreserve requirements, the bank is required to hold 25% of its deposits in governmentsecurities. The Treasury business is responsible for managing the returns and marketrisk on this investment portfolio. this is all about HDFC.Distribution network An HDFC Bank Branch
  • 66. HDFC Bank is headquartered in Mumbai. The Bank has an network of 1725 branchesspread in 780 cities across India. All branches are linked on an online real-time basis.Customers in over 500 locations are also serviced through Telephone Banking. TheBank has a presence in all major industrial and commercial centers across the country.Being a clearing/settlement bank to various leading stock exchanges, the Bank hasbranches in the centers where the NSE/BSE have a strong and active member base.The Bank also has 5,016 networked ATMs across these cities. Moreover, HDFC BanksATM network can be accessed by all domestic and international Visa/MasterCard, VisaElectron/Maestro, Plus/Cirrus and American Express Credit/Charge cardholders. March 2006 March 2007 March 2008 Citied 228 316 327 Branches 535 684 761 ATMs 1323 1605 1977As of March 31, 2008, the Bank‘s distribution network was at 761Branches and 1977ATMs in 327 cities as against 684 branches and 1,605 ATMs in 320 cities as ofMarch 31, 2007. Against the regulatory approvals for new branches in hand, theBank expects to further expand the branch network by around 150 branches by June30, 2008. During the year, the Bank stepped up retail customer acquisition withdeposit accounts increasing from 6.2 million to 8.7 million and total cards issued(debit and credit cards) increasing from 7 million to 9.2 million.Whilst credit growth in the banking system slowed down to about 22% for the yearended 2007-08, the Bank‘s net advances grew by 35.1% with retail advances growing
  • 67. by 38.6% and wholesale advances growing by 30%, implying a higher market share inboth segments.The transactional banking business also registered healthy growth With cashmanagement volumes increased by around 80% and trade services volumes by around40% over the previous year.Portfolio quality as of March 31, 2008 remained healthy with gross nonperformingassets at 1.3% and net non-performing assets at 0.4% of total customer assets. TheBank‘s provisioning policies for specific loan loss provisions remained higher thanregulatory requirements. TECHNOLOGY USED IN HDFC BANKIn the era of globalization each and every sector faced the stiff competition fromtheir rivals. And world also converted into the flat from the globe. After the policy ofliberalization and RBI initiatives to take the step for the private sector banks, more andmore changes are taking the part into it. And there are create competition between theprivate sector banks and public sector bank.Private sector banks are today used the latest technology for the different transactionof day to day banking life. As we know that Information Technology plays the vitalrole in the each and every industries and gives the optimum return from the limitedresources. Banks are service industries and today IT gives the innovativeTechnology application to Banking industries. HDFC BANK is the leader in theindustries and today IT and HDFC BANK together combined they reached the sky.New technology changed the mind of the customers and changed the queue concept
  • 68. from the history banking transaction. Today there are different channels are available for the banking transactions. We can see that the how technology gives the best results in the below diagram. There are drastically changes seen in the use of Internet banking, in a year 2001 (2%) and in the year 2008 ( 25%). These type of technology gives the freedom to retail customers.Centralized Processing Units Derived Economies of ScaleElectronic Straight Through Reduced Transaction CostProcessingData Warehousing , CRM Improve cost efficiency, Cross sellInnovative Technology Application Provide new or superior products HDFC BANK is the very consistent player in the New private sector banks. New private sector banks to withstand the competition from public sector banks came up with innovative products and superior service.
  • 69. ICICI BANKINTRODUCTION ICICI Bank (NSE: ICICIBANK, BSE: 532174, NYSE: IBN) (formerly Industrial Credit andInvestment Corporation of India, Hindi: आय आय आय ) is a major banking andfinancial services organization in India. It is the second largest bank in India and the largestprivate sector bank in India by market capitalization. The bank also has a network of 2,016branches (as on 31 March 2010) and about 5,219 ATMs in India and presence in 18 countries, aswell as some 24 million customers (at the end of July 2007). ICICI Bank offers a wide range ofbanking products and financial services to corporate and retail customers through a variety ofdelivery channels and specialization subsidiaries and affiliates in the areas of investmentbanking, life and non-life insurance, venture capital and asset management. (These data aredynamic.) ICICI Bank is also the largest issuer of credit cards in India. ICICI Banks shares arelisted on the stock exchanges at BSE, NSE,Kolkata and Vadodara (formerly Baroda) ;its ADRs trade on the New York Stock Exchange(NYSE). The Bank is expanding in overseas markets and has the largest international balancesheet among Indian banks. ICICI Bank now has wholly owned subsidiaries, branches andrepresentatives offices in 19 countries, including an offshore unit in Mumbai. This includeswholly owned subsidiaries in Canada, Russia and the UK (the subsidiary through which theHiSAVE savings brand is operated), offshore banking units in Bahrain and Singapore, an advisorybranch in Dubai, branches in Belgium, Hong Kong and Sri Lanka, and representative offices inBangladesh, China, Malaysia, Indonesia, South Africa, Thailand, the United Arab Emirates andUSA. Overseas, the Bank is targeting the NRI (Non-Resident Indian) population in particular.
  • 70. ICICI reported a 1.15% rise in net profit to 1,014.21 crore on a 1.29% increase in totalincome to 9,712.31 crore in Q2 September 2008 over Q2 September 2007. The banksCASAratio increased to 30% in 2008 from 25% in 2007. ICICI Bank is one of the Big Four Banks of India, along with State Bank of India, PunjabNational Bank Bank of India and Canara Bank — its main competitors.HISTORY ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financialinstitution, and was its wholly-owned subsidiary. ICICIs shareholding in ICICI Bank wasreduced to 46% through a public offering of shares in India in fiscal 1998, an equity offering inthe form of ADRs listed on the NYSE in fiscal 2000, ICICI Banks acquisition of Bank ofMadura Limited in an all-stock amalgamation in fiscal 2001, and secondary market sales byICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at theinitiative of the World Bank, the Government of India and representatives of Indian industry.The principal objective was to create a development financial institution for providing medium-term and long-term project financing to Indian businesses. In 1954, The Industrial Credit and Investment Corporation of India Limited (ICICI) wasincorporated at the initiative of World Bank, the Government of India and representatives ofIndian industry, with the objective of creating a development financial institution for providingmedium-term and long-term project financing to Indian businesses. In 1994, ICICI establishedBanking Corporation as a banking subsidiary. Formerly known as Industrial Credit andInvestment Corporation of India, ICICI Banking Corporation was later renamed as ICICI BankLimited. ICICI founded a separate legal entity, ICICI Bank, to undertake normal bankingoperations - taking deposits, credit cards, car loans etc. In 2001, ICICI acquired Bank ofMadura (est. 1943). Bank of Madura was a Chettiar bank, and had acquired ChettinadMercantile Bank (est. 1933) and Illanji Bank (established 1904) in the 1960s. In 2002, TheBoards of Directors of ICICI and ICICI Bank approved the reverse merger of ICICI, ICICI PersonalFinancial Services Limited and ICICI Capital Services Limited, into ICICI Bank. After receiving allnecessary regulatory approvals, ICICI integrated the groups financing and banking operations,both wholesale and retail, into a single entity. At the same time, ICICI started its international
  • 71. expansion by opening representative offices in New York and London. In India, ICICI Bankbought the Shimla andDarjeeling branches that Standard Chartered Bank had inherited when itacquired Grindlays Bank. In 2003, ICICI opened subsidiaries in Canada and the United Kingdom (UK), and in the UK itestablished an alliance with Lloyds TSB. It also opened an Offshore Banking Unit (OBU) inSingapore and representative offices in Dubai and Shanghai. In 2004, ICICI opened arepresentative office in Bangladesh to tap the extensive trade between that country, India andSouth Africa. In 2005, ICICI acquired Investitsionno-Kreditny Bank (IKB), a Russia bank withabout US$4mn in assets, head office in Balabanovo in the Kaluga region, and with a branchin Moscow. ICICI renamed the bank ICICI Bank Eurasia. Also, ICICI established a branchin Dubai International Financial Centre and in Hong Kong. In 2006, ICICI Bank UK opened abranch in Antwerp, in Belgium. ICICI opened representative offices in Bangkok, Jakarta,andKuala Lumpur. In 2007, ICICI amalgamated Sangli Bank, which was headquartered in Sangli,in Maharashtra State, and which had 158 branches in Maharashtra and another 31in Karnataka State. Sangli Bank had been founded in 1916 and was particularly strong in ruralareas. With respect to the international sphere, ICICI also received permission from thegovernment of Qatar to open a branch in Doha. Also, ICICI Bank Eurasia opened a secondbranch, this time in St. Petersburg. In 2008, The US Federal Reserve permitted ICICI to convertits representative office in New York into a branch. ICICI also established a branch in Frankfurt.In 2009, ICICI made huge changes in its organisation like elimination of loss making departmentand restreching outsourced staff or renegotiate their charges in consequent to the recession. Inaddition to this, ICICI adopted a massive approach aims for cost control and cost cutting. Inconsequent of it, compesation to staff was not increased and no bonus declared for 2008-09. On 23 May ICICI Bank announced that it would merge with Bank of Rajasthan through ashare-swap in a non-cash deal that values the Bank of Rajasthan at about 3,000 crore. ICICIannounced that the merger expand ICICI Banks branch network by 25%. On 18h October 2010, ICICI will inaugurate I-Express, an instant cross-border moneytransfer option for Non-Resident Indians (NRIs). This service will be available through the ICICIBanks select partners in the Gulf Cooperation Council.
  • 72. In the 1990s, ICICI transformed its business from a development financial institution offeringonly project finance to a diversified financial services group offering a wide variety of productsand services, both directly and through a number of subsidiaries and affiliates like ICICI Bank.In 1999, ICICI become the first Indian company and the first bank or financial institution fromnon-Japan Asia to be listed on the NYSE. After consideration of various corporate structuring alternatives in the context of theemerging competitive scenario in the Indian banking industry, and the move towards universalbanking, the managements of ICICI and ICICI Bank formed the view that the merger of ICICIwith ICICI Bank would be the optimal strategic alternative for both entities, and would create theoptimal legal structure for the ICICI groups universal banking strategy. The merger wouldenhance value for ICICI shareholders through the merged entitys access to low-cost deposits,greater opportunities for earning fee-based income and the ability to participate in the paymentssystem and provide transaction-banking services. The merger would enhance value for ICICIBank shareholders through a large capital base and scale of operations, seamless access toICICIs strong corporate relationships built up over five decades, entry into new businesssegments, higher market share in various business segments, particularly fee-based services, andaccess to the vast talent pool of ICICI and its subsidiaries. In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the mergerof ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal FinancialServices Limited and ICICI Capital Services Limited, with ICICI Bank. The merger wasapproved by shareholders of ICICI and ICICI Bank in January 2002, by the High Court ofGujarat at Ahmedabad in March 2002, and by the High Court of Judicature at Mumbai and theReserve Bank of India in April 2002. Consequent to the merger, the ICICI groups financing andbanking operations, both wholesale and retail, have been integrated in a single entity. ICICI Bank has formulated a Code of Business Conduct and Ethics for its directors andemployees. ICICI net banking / internet banking offers various facilities and has been registeringincreasing number of customers as well. The facility of net banking is immense and hence itoffers one of the largest customer bases. Some e-banking facilities provided by ICICI bank are asfollows-
  • 73. Transfer Funds Online. Account-2-Card Fund Transfer. Link your Bank/Card/Demat Accounts. Use your Debit Card Online. Pre-paid Mobile Recharge. Pay your Utility Bills. Send a Smart Money Order. Open Fixed Deposits and Recurring Deposits. Order a Demand Draft / Pay Order. Subscribe for Mobile Banking. Request a Cheque Book. Request a change of address. Stop Payment Request. Request a Debit Card. Monthly Bank Account Statement by E-mail. Re-issue/Upgrade of ATM/Debit Card. Link Bank Accounts to ATM/Debit Card. Renewal / Premature Closure of FD/RD. De-block/Activate ATM/Debit Card. Secure Mailbox. Request a Duplicate Physical Bank Statement ICICI Bank is Indias second-largest bank with total assets of Rs. 3,562.28 billion(US$ 77 billion) at December 31, 2009 and profit after tax Rs. 30.19 billion (US$648.8 million) for the nine months ended December 31, 2009. The Bank has anetwork of 1,723 branches and about 4,883 ATMs in India and presence in 18countries. ICICI Bank offers a wide range of banking products and financial servicesto corporate and retail customers through a variety of delivery channels and throughits specialized subsidiaries and affiliates in the areas of investment banking, life andnon-life insurance, venture capital and asset management. The Bank currently has
  • 74. subsidiaries in the United Kingdom, Russia and Canada, branches in United States,Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International FinanceCentre and representative offices in United Arab Emirates, China, South Africa,Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has establishedbranches in Belgium and Germany. ICICI Banks equity shares are listed in India onBombay Stock Exchange and the National Stock Exchange of India Limited and itsAmerican Depositary Receipts (ADRs) are listed on the New York Stock Exchange(NYSE).Subsidiaries I-Express, an instant cross-border money transfer option. ICICI Lombard ICICI PrudentialAcquisition 2005 - Investitsionno-Kreditny Bank (IKB), a Russian bank 2007 - Sangli Bank , Maharashtra State 23 May - Bank of RajasthanRecognitionThe Brand Trust Report, launched in 2011, has ranked ICICI in the 15th place as the mosttrusted brand of India.ControversyICICI Bank has been in focus in recent years because of alleged harassment of customers by itsrecovery agents. Listed below are some of the related news links: ICICI Bank was fined 55 lakh for hiring goons (known coloquially as "goondas") to recover a loan. Recovery agents had, allegedly, forcibly dragged out a youth (who was not
  • 75. even the borrower) from the car, beaten him up with iron rods and left him bleeding as they drove away with the vehicle. "We hold ICICI Bank guilty of the grossest kind of deficiency in service and unfair trade practice for breach of terms of contract of hire-purchase/loan agreement by seizing the vehicle illegally","No civilised society governed by the rule of law can brook such kind of conduct" said Justice Kaleem, who was born in Laddhawala, Muzaffarnagar is the president of the consumer commission. Four ICICI loan employees arrested on theft charges in Punjab ICICI Bank told to pay 1 lakh as compensation for using unlawful recovery methods. RBI warns ICICI Bank for coercive methods to recover loans ICICI Bank drives customer to suicide - Four men including an employee of ICICI Bank booked under sections 452, 306, 506 (II) and 34 of IPC for abetting suicide. According to the suicide note they advised him, "If you cannot repay the bank loan, sell off your wife, your kids, yourself, sell everything at your home. Even then if you cannot not pay back the due amount, then its better if you commit suicide." India biggest private bank has compensated the life by money. ICICI Bank on huge car recovery scam in Goa - ICICI Bank invest in car-jackers to recover loans in Goa. A half an hour investigative report on CNN-IBNs 30 Minutes. The under cover report was executed by CNN-IBNs Special Investigations Team from Mumbai, led by Ruksh Chatterji. Family of Y. Yadaiah alleged that he was beaten to death by ICICI Bank‟s recovery agents, for failing to pay the dues. Four persons were arrested in this case. A father while talking to Times of India, alleged that "ICICI Bank recovery agents visited his house and threatened his family. And his son Nikhil consumed poison because of the tension". Oppressed by ICICI Banks loan recovery agents, Shakuntala Joshi (38), committed suicide by hanging. The suicide note stated that she was upset with the ill-treatment meted out by ICICI Banks recovery agents and had thus decided to end her life. In another case of a suicide it is alleged that „goondas‟ sent by ICICI Bank abused Himanshu and his wife in front of the entire residential colony before taking away his vehicle. Feeling frustrated and insulted, he reportedly committed suicide.
  • 76.  C.L.N Murthy, a scientist with the Hyderabad-based Indian Institute of Chemical Technology, was allegedly tortured by recovery agents of ICICI Bank after he defaulted on his loan.“They humiliated me no end. They ripped my shirt, shaved my moustache, cut my hair and gave electric shocks on my chest and even spat on my face" adds Murthy. A dozen recovery agents of ICICI Bank, riding on bikes, allegedly forced a prominent lawyer, Someshwari Prasad, to stop his car. They held Prasad at gunpoint and also slapped him to force him. A manager of the ICICI Bank branch, Rakesh Mehta, along with four other employees were arrested. In a landmark case, Allahabad High Court had ordered registration of an FIR against ICICI Banks branch manager, President, Chairman and Managing Director on a complaint of 75-year-old widow Prakash Kaur. She had complained that “goondas” were sent by the bank to harass her and forcibly took away her truck. When the Supreme Court wanted to know about the procedure adopted by the Bank, ICICI Bank counsel said notice would be sent to a defaulter asking him either to pay the instalments or hand over the vehicle purchased on loan, failing which the agents would be asked to seize it. When the Bench pointed out that recovery or seizure could be done only legally, ICICI Bank counsel said, "If we have to go through the legal process it would be difficult to recover the instalments as there are millions of defaulters" Taking strong exception to ICICI Banks use of goondas against a defaulter, the president of Consumer Disputes Redressal Forum said, "The fact leaves us aghast at the manner of functioning and goondaism in which the bank is involved for a petty amount of 1,889... such attitude is deplorable and sends chills down the spine....The bank had the option to recover dues through legal means. They have no legal right to snatch the vehicle in such a manner which amounts to robbery,". In this case recovery agents pointed a pistol at a defaulter when he tried to resist. ICICI bank argued that they had taken peaceful possession of the vehicle "after due intimation to the complainant as he was irregular in remitting the monthly instalments". But the court found out that the records proved otherwise. Two senior ICICI Bank officials were booked for abducting one Vikas Porwal from his house and keeping him hostage in the Banks premises. The credit card division of the ICICI Bank allegedly threatened a senior citizen in Chandigarh with a fictitious arrest warrant on account of a default that never was.
  • 77.  A Consumer Commission has asked ICICI Bank MD K V Kamath to appear before it in respect a complaint. A borrower on protesting against the forceful dispossession of his car, as seen in the post-incident photographs, was roughed up and sustained injuries. An 18-year-old boy was allegedly kidnapped and detained at the Pune branch of ICICI Bank. There have been several other minor legal cases accusing harassment by ICICI Bank A consumer court imposed a joint penalty of 25 lakh on ICICI Bank and American Express Bank for making unsolicited calls.ICICI BANK SERVICESICICI net banking / internet bankingICICI net banking / internet banking offers various facilities and has been registering increasingnumber of customers as well.The facility of net banking is immense and hence it offers one ofthe largest customer bases.You can get the luxury of linking many accounts with the same customer id apart from that youcan view all the transactions online as well. You can transfer the funds to other accounts of thesame bank or to other banks as well. Official website for accessing icici net banking / internetbanking is www.icicibank.com.Apart from that, you can transfer funds from bank account to credit cards. If in case you havedone any transactions through your credit card, there will be auto debit. If you want to see theaccount statement, you don’t need to go to the bank, instead you can see through email aswell. One of the best things again relates with the fact that you can file online taxes.Now all your important transactions can be done online and are just a click away as well. Sincethe bank offers so many facilities as a result it has become one of the preferred choices of thepeople and it’s the love and affection of the people which has made the bank coming up with
  • 78. innovations to ease the lives of people so that you can have many reasons to opt for icici netbanking / internet bankingMOBILE BANKING: Conducting banking operations using the mobile phone has been fastcatching up around the world for its convenience. We have launched mobile services in India toconvenience our customers. You can do your banking operations sitting anywhere, anytime. It isdiscreet, personalized and on your phone. Use it when at a meeting, in a movie hall, while havingyour Sunday brunch or at any other place you cannot usually expect to get the information youwant from your bank. It is an empowering and user friendly mode of accessing your bankaccount. To get started, take a look at the menu on the left and go through our various services.You can now access the following ICICI Bank services via your mobile phone:
  • 79. INSTA BANKING Insta Banking makes your banking simpler, faster, and more convenient. Through these5 great channels - Internet Banking, Mobile Banking, ICICI Bank ATMs, Instant VoiceResponse (IVR) Banking and iMobile - you can do your day today banking anytime, anywhere.INTERNET BANKING ICICI Bank brings convenience and security to your desktop. Now you can checkyour account balance, transfer funds, download your account statement, and pay bills or even
  • 80. book tickets online, from the comfort of your home or in the middle of a busy day at the office.Explore the power of simpler and smarter Banking whether you are a Banking, Credit Card, Loanor Demat customer.ATM BANKING Bank 24/7 through a widespread network of ICICI Bank ATMs making life easy andconvenient for you. User-friendly graphic screens and easy to follow instructions availablein a choice of local languages, makes ATM Banking with ICICI Bank a smoother experience.ICICI Banks widespread network of ATMs makes it easy and convenient for you to bank 24/7.With over 4,883 + ATMs and 1,626 + branches set up within India, we ensure that you are nevertoo far from an ICICI Bank ATM. User-friendly graphic screens and easy to follow instructions ina choice of local languages, makes ATM Banking with ICICI Bank a smooth experience. ICICIBank.com also features the easy to access ATM Locator, making it easy for you tofind an ICICI Bank ATM in your neighborhood.The ICICI Bank edge Cash withdrawal up to Rs. 25,000/- per day from your account (50,000 for HNIs). Fast Cash option facilitates withdrawal of prefixed amounts; Ultra Fast Cash allows withdrawal of Rs. 3000/- in one shot. Check your ledger balance and available balance. Print out your Mini Statement which displays your last 8 transactions and the current balance. Deposit Cash / Cheques at all full function ATMs; cash deposited in ATMs will be credited to the account on the same day if deposited before the clearing and cheques are sent for clearing on the next working day. Transfer funds from one account to another linked account in the same branch. Change the Personal Identification Number (PIN) of your ATM or Debit card Pay bills, make donations to temples / trusts, buy internet packs, airtime recharges for prepaid
  • 81. mobile phones, etc. Request for a cheque book from our ATMs; concerned branch dispatches it to reach you within 10 working days. No charge is levied on ICICI Bank customers for transacting through ICICI Banks ATMs. But, if the minimum quarterly average balance is not maintained in your savings account, first 6 transactions in the quarter are free and thereafter, Rs. 25 per transaction is charged.I MOBILE ICICI Banks iMobile is a breakthrough innovation in banking that allows you to transferfunds, make your credit card payments, pay utility bills, check your balance and do lots more,for free. So why wait anymore. Just download the iMobile application on your phone bysending us an SMS and experience iMobile. . ICICI Bank brings to you the 2nd generationiMobile that has newer features, smarter interface, quicker navigation and enhancedfunctionality. ICICI Banks iMobile is your answer to banking on the move. The nextgeneration iMobile is your key to a faster, easier and simplified banking service. Using GPRSenabled on your mobile handset or through SMS, iMobile helps you to connect directly to yourbank account. This Rich Client Based Application needs to be installed on your mobilethereby enabling a single click access to your account.Services available with i Mobile: Payment of utility bills and credit card bills Transfer of funds to any bank account Payment of insurance premium Placement of service request such us ordering of cheque books, bank account statements, cheque status and balance enquiry.Access the following ICICI Bank services via iMobile:Bank Account
  • 82. Funds transfer Bill Payment Balance Enquiry Last 5 transactions Cheque Book Request Stop Cheque request Cheque status EnquiryCredit Card Balance Details Last Payment Details Payment Due Date Reward Point StatusDemat A/c Holding Enquiry Transaction Status Bill Enquiry ISIN EnquiryLoan A/c Provisional IT Certificate Final IT Certificate Reset Letter Rescheduled Letter Loan Agreement CopyM Shop Prepaid Mobile RechargeOther Services Status of Service Request Raised
  • 83. Locate USIVR BANKING Find answers to all your banking needs from your phone. ICICI Banks Instant VoiceResponse (IVR) Banking is free of charge, fully automated and at the same time user-friendly.Just having an ATM PIN for your account and credit card ensures that your transactions aresecure. Saving A/C Credit cards Demat Bonds OthersTV BANKING At ICICI Bank, weve introduced India to an all new way of banking. TV Banking.This pioneering initiative now enables you to get information regarding loans, accounts,deposits and a lot more while youre watching that exciting cricket match or your favorite sitcom.
  • 84. Review of Literature STUDY THE IMPACT OF CRM ON CUSTOMERS OF SELECTED BANKS OF JAIPUR CITYKrasnikov, AlexanderJayachandran, Satish KumarKrasnikov, Jayachandran and Kumar (2009) studied the impact of customerrelationship management (CRM) implementation on firm performance is an issue ofconsiderable debate. This study examines the impact of CRM implementation on twometrics of firm performance—operational (cost) efficiency and the ability of firms togenerate profits (profit efficiency)—using a large sample of U.S. commercial banks. Theauthors use stochastic frontier analysis to estimate cost and profit efficiencies andemploy hierarchical linear modeling to assess the effect of CRM implementation on costand profit efficiencies. They find that CRM implementation is associated with a declinein cost efficiency but an increase in profit efficiency. A firm-level factor, CRMcommitment, reduces the negative effect of CRM implementation on cost efficiency. Theauthors also find that two adoption-related factors, time of adoption and time sinceadoption, influence the relationship between CRM implementation and cost and profitefficiencies. Early adopters benefit less from CRM implementation than late adopters.However, time since adoption improves the performance of firms that implement CRM.By demonstrating the different ways CRM implementation influences cost and profitmeasures, the study provides valuable insights to CRM researchers and managers.Han-Yuh LiuHan-Yuh Liu(2007) tells that Although Customer Relationship Management (CRM) isarguable the most important area of concern to enterprises in an era of electroniccommerce (EC), few studies have explored it from an industry-specific perspective to
  • 85. develop usable action plans. The banking industry is one of the major beneficiaries ofthe ‗explosion‘ in CRM across all sectors of the economy, but there is an absence ofinformation and support for it in Taiwan. Embracing CRM requires changes in manyaspects of enterprises. This paper employs a four-strategic framework; of contactchannel management, enterprise-wide management, customer data management, andinformation technology management, in its review of what constitutes best practice inthe leading banks in Taiwan with respect to CRM. It is argued that if Taiwans bankingindustry adopts this framework it should be able to respond effectively to the variousinternal and external challenges identified in this study as well as to develop its ownCRM initiatives.WettemannWettemann(2007) discusses the advantages of implementing customer relationshipmanagement (CRM) solutions to improve healthcare provision. Several factors affectthe adoption of CRM solutions, such as customer data confidentiality concerns andinformation technology budget challenges. Many CRM vendors provide customizedsolutions for the healthcare vertical market and many implementation partners providevertical-specific expertise in making CRM applications work in healthcare. These thingsalso can relate in banking sector.Peelen, Edvan Montfort,Kee Beltman, Rob Klerkx, ArnoudPeelen, Edvan Montfort,Kee Beltman, Rob Klerkx, Arnoud(2009) studied thatCustomer Relationship Management (CRM) has attracted the attention of bothmarketing practitioners and researchers over the last decade. Significant progress has
  • 86. been made in identifying and researching the components of CRM individually and inthe design of a strategic framework. The role of CRM applications, customerinformation, customer interaction, customer loyalty and a customer-centric strategy hasbeen the subject of research lately. However no comprehensive research has beenconducted into the role of these CRM components in achieving CRM success acrossthe line. Also we have yet to find research that empirically shows evidence for therelationship between each CRM component. The goal of our research is to determinethe impact of CRM components on each other and on CRM success. We will strive todo so by using explorative qualitative research into CRM practitioners to formulatepropositions. These propositions will in turn be tested in a quantitative analysis of datacollected from 250 Dutch companies. Through building a Structural Equations Model(SEM), we determine the role and influence of the key components of CRM on eachother and on CRM success.Koh Hian ChyeChan Kin Leong GerryKoh Hian Chye, Chan Kin Leong Gerry(2002 ) studied that Advances in computerhardware and data mining software have made data mining accessible and affordableto many businesses. Hence, it is no surprise that data mining has gained widespreadattention and increasing popularity in the commercial world in recent years. Data miningprovides the technology to analyse mass volume of data and/or detect hidden patternsin data to convert raw data into valuable information. This paper discusses the potentialusefulness of data mining for customer relationship management (CRM) in the bankingindustry. First, the paper introduces the CRM concept and summarizes the data miningmethodology and tools. Second, it discusses the data mining literature, particularly itsapplications in banks. Third, it illustrates a possible CRM application of data mining in
  • 87. banking. Finally, it suggests other potential data mining banking applications andhighlights some of the limitations of data mining.Eid, RiyadEid, Riyad(2007) studied that In recent years, customer relationship management(CRM) has been the favored theme for numerous studies and reports. Yet, there is alack of systematic empirical evidence regarding the critical success factors (CSFs) forthe CRM implementation, the activities that are affected by the use of the CRMprogrammes, and their consequent performance outcomes. In this article, he documentthe role of the CRM programmes in the banking sector and identify marketing activitiesthat are affected by CRM usage. Taking a sample of 159 banks that utilize a CRMsystem, we found a substantial positive effect of the CRM usage on relationshipseffectiveness and marketing objectives. The results of this study have majorimplications for marketing people, as they suggest the notion that the CRM criticalsuccess factors should be implemented holistically rather than piecemeal to achieve thefull potential of the CRM. The findings also stress the central role of customer servicesin the successful implementation of CRM programmes within banks.Dibb, Sally Meadows, MaureenDibb, Sally Meadows, Maureen(2004) considers the shift towards relationshipmarketing principles and the implementation of CRM in the retail financial servicessector. Many players offering personal banking and related products have now boughtin to the concepts behind relationship marketing, and are investing heavily (particularlyin new information technology) to enhance customer relationships and improveretention rates. This trend is considered from the perspective of an organization that isone of those leading the change. An in-depth case study reveals the progress made inrecent years towards the companys goals, focusing especially on the introduction ofnew systems and moves to enhance customer data. However, the analysis alsosuggests that major challenges remain if the benefits of CRM are to be fully realized.
  • 88. Issues involving the structure of the organization and its approach to a range of staffissues such as recruitment and training are of particular concerns for the implementation ofCRM principles.Economist; 9/6/2003, conclude that Once the most aggressive users of informationtechnology (IT), financial institutions have learned to make do with less, as theirtechnological developments now focus on cost-cutting, improved system integration andthe revival of old-fashioned branch networks. For makers of computers, storage devicesand high-speed networks, that is grim news. The fact is that no other sector of theglobal economy drives capital spending on IT as much as the financial-servicesbusiness does, and until that recovers, the IT slump will continue. Mark Sievewright ofTowerGroup, a Reuter‘s subsidiary in Needham, Massachusetts, notes that financial-services firms continue to spend heavily on technology. He expects to see worldwidespending top $337 billion in 2003, a 2.3% increase over 2002. Wireless finance remainsa dream in America, though there are hints that things might change when (if) the latestgeneration of mobile phones takes off. But compared with the rest of the world, Americais still struggling in the dark ages of mobile telephony. Perhaps the most glaring lack ofinnovation in American financial services is in trading equities. While much of Europeand Asia eschews the use of cheques because they are slow and expensive, the UnitedStates Federal Reserve reckons that more than 60% of all financial transactions inAmerica were paid by cheque in 2001. While it leads the world in processingtransactions, Americas backwardness in other aspects of financial technology stemsfrom differences in national policy. one thing that unites financial-services firmseverywhere is the need to build a better relationship with their customers. Few things intechnology have promised so much and delivered so little as "customer (or client)relationship management" (CRM) software.
  • 89. Blery, Evangelia; Michalakopoulos, MichalisBlery, Evangelia; Michalakopoulos, Michalis(2006) studied that today, banks arefacing an aggressive competition and they have to make efforts to survive in acompetitive and uncertain market place. Banks have realized that managing customerrelationships is a very important factor for their success. Customer relationshipmanagement (CRM) is a strategy that can help them to build long-lasting relationshipswith their customers and increase their profits through the right management systemand the application of customer-focused strategies. CRM in the banking sector is ofstrategic importance. In this study, a single descriptive case study of one major Greekbank that has implemented CRM is presented. The aim of this study is to analyse thedesign and implementation of CRM in the bank, identify the benefits, the problems, aswell as the success and failure factors of the implementation and develop a betterunderstanding of CRM impact on banking competitiveness as well as provide a greaterunderstanding of what constitutes good CRM practices.E.W.T. Ngai,E.W.T. Ngai,told that The Purpose of this research to review the academic literature oncustomer relationship management (CRM), provide a comprehensive bibliography andpropose a method of classifying that literature.A range of online databases weresearched to provide a comprehensive listing of journal articles on CRM. Six hundredarticles were identified and reviewed for their direct relevance to CRM. Two hundredand five articles were subsequently selected. Each of these articles was furtherreviewed and classified. The review and classification process was independentlyverified. All papers were allocated to the main and sub-categories based on the majorfocus of each paper.Papers and research on CRM falls into five broad categories (CRM– General, Marketing, Sales, Service and Support, and IT and IS) and a further 34 sub-categories. The most popular areas covered by the papers lay in the sub-category ofCRM management, planning and strategy; and CRM general, concept, and study
  • 90. followed by papers in software, tools and systems; data mining, knowledgemanagement, and e-commerce.This is the first identifiable academic research. Thebibliography provides an academic database of the literature between 1992 and 2002covering 89 journals. The classification approach provides a means to conceptualise thecoverage of CRM and the relative popularity of CRM topic areas.Eleni K. Kevork and Adam P. VrechopoulosEleni K. Kevork and Adam P. Vrechopoulos(2008) studied that While electroniccustomer relationship management (e-CRM) has been thoroughly investigated viamultiple research perspectives and multidisciplinary approaches in the past, until today,there has been no available work providing an integrated framework of the relevant e-CRM literature and its corresponding classification schemes. To that end, this papermanipulates a database of approximately 400 references and classifies e-CRMresearch activity via classification variables, sector investigated, journal/year ofpublication, type of research employed (e.g., experiment vs. case study), discipline(s)involved, etc. This review paper serves as a useful point of reference for bothresearchers and practitioners, as it provides a broadened understanding of conceptualand functional e-CRM features, while clarifying the types of research conducted withinthe e-CRM spectrum as a whole. Further, this paper describes how e-CRM dimensionsare labeled and treated within the boundaries of the various disciplines/research areas.Andra BrigeAndra Brige says that This paper aims to give a short overview on bank/customerrelationship experience in the Latvian banking system and the impact of developingtechnology in banking. Without usage of technology commercial banks cannot providecustomers with effective services, but short banking history increases the danger ofsuch a reduced loyalty towards the services supplier.Satisfaction with services providedis not the only factor influencing customer loyalty level. Customers experiencing a short
  • 91. banking history can be loyal to the service provider due to the lack of financial literacy. Agreat impact on loyalty level is made by other factors, such as: image, prestige, word ofmouth, etc.The sample used for research did not include all 23 commercial banks of Latvia. Furtherresearch should be developed to compare customer loyalty levels in the moretechnologically developed and less technologically developed banks, and additionalloyalty-influencing determinants could be included.An analysis of ITC development inbanking side-effects provides useful information not only for transitional countries butalso for developing countries.Eleni K. Kevork, Adam P. VrechopoulosEleni K. Kevork, Adam P. Vrechopoulos says that The purpose of this paper is toreview the literature on customer relationship management (CRM) to obtain acomprehensive framework of mutually exclusive CRM research areas and sub-areasfree of all potentially disruptive factors (plethora of CRM definitions, personal judgments,etc.).The keywords reported in 396 CRM articles published during the period 2000-2006are used to uncover first a great number of detailed keyword sub-groups and, by subjectsummation, the CRM-related research areas. This classification scheme is consideredunbiased, in contrast with any direct classification of articles alone among CRMresearch areas fixed in advance. An up-to-date conceptual and functional CRMframework emerges, consisting of a total of nine distinct research areas having theirown weights, importance and popularity among the research community. Newlyemerging CRM research areas are self-identified as attracting the interest of theresearchers and managers. Keywords are activated, for a first time, as an added valuecharacteristic reflecting genuinely the authors beliefs about the subject content fields oftheir articles, important enough to reveal a self-supported and self-weighted unbiasedand exhaustive CRM framework, useful to researchers and marketing practitioners. Thepaper offers strong evidence that e-CRM is too complex to be comprehensivelyclassified by mere procedures and simple criteria alone.
  • 92. Jegham, Sahut,Jegham, Sahut, (2004)studied that the implementation of information andcommunication technology (ICT) project constitutes a major change for anyorganization, the actual implementation appear to be very heavily biased toward thetechnological aspects while paying little attention to managing the changes in process,structure and culture. Besides, we wonder what kind of measures should be taken alongwith the shifts induced by the ICT in order to make them accepted by the users. To givea concrete answer to this challenge, we made a qualitative and exploratory studyrelated to a CRM implementation project in a banking institution. To study the impact ofchange management measures of the ICT acceptation we propose for the futureresearch adopting an empirical approach based on the technology acceptance modelas stated in Davis (1989).Kalyani Menon and Aidan OConnorKalyani Menon and Aidan OConno argues that retail banks need to focus morestrongly on components of their Customer Relationship Management (CRM) strategythat will generate customer affective commitment and lead to an increase in customerretention, share of wallet, and advocacy. It is suggested that affective commitment isgenerated during moments of truth or episodes of interpersonal interaction betweencustomers and bankers. As shown in social psychology, effective interpersonalinteractions are a function of the assertiveness and affiliation demonstrated during theinteraction. Applying this to retail banking, bankers should mine their databases toidentify customers in terms of their levels of profitability and longevity, and shoulddeliver levels of assertiveness and affiliation appropriate to each customer. Testableresearch propositions are developed regarding how affective commitment might evolveduring a customers tenure with a retail bank, when bankers should deliverassertiveness and/or affiliation to customers of differing longevity and profitability, andhow these strategies to increase affective commitment will impact retention, share
  • 93. development, and advocacy. Overall, the call is to complement the emphasis on the useof high-tech CRM strategies that generate huge databases with a more high-touchstrategy that will indicate to bankers how to interact with each individual customer.S.S. Hugar and Nancy H. Vaz (DCosta)S.S. Hugar and Nancy H. Vaz (DCosta)(2007 studied that )India is on the threshold ofa stark global competition, especially so for the banking sector with the likelihood of theeconomy opened for global banks soon. The Indian public sector banks which havecome face-to-face with competition just since last decade are found wanting both withregard to performance as well as their customer orientation. This paper, first of all,evaluates the need for CRM implementation in the Indian public sector banks (PSBs)through the study of secondary as well as primary data. With the insight received fromthe exercise, and the review of other implementation models found in CRM and relatedIT literature, an optimum model for CRM implementation for Indian PSBs has beensuggested in the second part.Anumala, Srinivas; Kumar Reddy, Bollampally KishoreAnumala, Srinivas; Kumar Reddy, Bollampally Kishore(2007) said that Thecustomer relationship management (CRM) is essential and vital function of customeroriented marketing. Its functions include gathering and accumulating customer-relatedinformation in order to provide effective services. e-CRM is a combination of IT sectorbut also the key strategy to electronic commerce. e-CRM is a combination of software,hardware, application and management commitment. Aim of e-CRM system is toimprove customer service, develop a relationship and retain valuable customers. e-CRM is a concern for many organizations especially banking sector. The purpose of thisstudy is to gain a better understanding of the benefits e- CRM to customers andorganization in banking industry. To justify the purpose two research questions have
  • 94. been addressed and on the basis literature review, a frame of reference was developedwhich helped us to answer the research questions and collect data. A qualitativeresearch approach was used for this study. Empirical data was collected through in-depth interviews were conducted with two Swedish banks and a group of theircustomers. In the last chapter findings and conclusions were drawn on the basis onresearch questions. Our findings indicate that Swedish banks are well aware of thebenefits and applications of the e-CRM and use the system to maintain goodrelationships with their customers. Our findings also indicate that with theimplementation of e-CRM and the latest technologies. We have found that both thebanks seem to have same description about the benefits of e-CRM. We found that bothbanks have maintained good relationships with customers due to the usage of e-CRM.Our finding indicates that with the implementation of e-CRM and the latest technologiesbanks have ensured full security for the transactions of their customer‘s. E-CRMfacilitates the organizations to provide one to one services and also maintain thetransaction security of the customers.Sivaraks, P. Krairit, D. EsichaikulSivaraks, P. Krairit, D. Esichaikul(2010) attempts to examine and measure outcomesof e-CRM system implementation in the Thai Banking industry. The research is dividedinto two main sections. The first section is based on a qualitative approach to define e-CRM implementation in Thai banks. The second section uses a quantitative approach todetermine the relationships between e-CRM implementation and outcomes from thecustomers point of view. The contribution of this research lies in the fact that most e-CRM implementations are done in the back-office part, which cannot be directly seen orrecognized by the customers, so a new construct called ―e-CRM Service attribute‖ wasintroduced in this research in order to enable the measurement of e-CRM outcomesfrom the customers perspectives. From the 13 constructs that have been collected fromthe literature, the exploratory factor analysis was performed and the results showed thatthe outcomes of e-CRM implementation from the customers perspective can be
  • 95. grouped into three factors. The first one is the information factor, the second one isconvenience and the third one is communication channel factor. In addition, the T-testwas also employed to test the differences in e-CRM outcomes from the customersperspectives between the customers of the banks that implemented e-CRM and thosethat did not.Rajeev KumraRajeev Kumra told the potential impact of E-CRM on cost savings, revenue growth,and increased customer‘s convenience has generated considerable interest andspeculation across the industries. The immense growth of E-CRM market has openednew vistas of business for E-CRM vendors. However, with plethora of vendors andproducts available in the market it makes the choise of the companies difficult. Thepresent study after reviewing the literature of E-CRM attempts to do a comparativeanalysis of various E-CRM vendors.Tim ColtmanTim Coltmant said that the market enthusiasm generated around investment incustomer relationship management (CRM) technology is in stark contrast to the nay-saying by many academic and business commentators. This raises an importantresearch question concerning the extent to which banks should continue to invest inCRM technology. Drawing on field interviews and a survey of senior bank executivesthe results reveal that a superior CRM capability can deliver improved performance. Thepaper then demonstrates that in order to be most successful, CRM programs require acombination of technical, human and business capabilities.Abbas Keramati , M. Farshid , E. Salehi-Sangari , J. Toufighi ZavarehAbbas Keramati , M. Farshid , E. Salehi-Sangari , J. Toufighi Zavareh(2007) definethe aim of this research is to investigate customer relationship management (CRM)
  • 96. activities in e-banking among Iranian banks. These banks are already adopting CRMand approaching it differently, and achieving different rates of success in terms ofcustomer satisfaction and CRM. A comparative approach of their attitudes toward CRM,therefore, will reveal important insights. Following similar approaches researchers haveemployed in Europe, Pakistan, Malaysia, the UK and Ireland, we investigated the touchpoints and services that connect banks to their customers. According to theseresearches in other countries, we have developed a theoretical framework to investigateCRM activities in public and private Iranian banks by interviewing with qualitativeapproach case study. The main components of our research framework are:communicational/collaborative CRM, operational CRM and analytical CRM. We alsoconsider the relationship among the components. This research will reveal Iranianbanks positioning with regard to their view, concept and the benefits of CRM, with across-case comparison between Iranian banks CRM activities and also someconclusions for practitioners.Arpita KhareArpita Khare studied that Technology is fast altering the business services cape. Itsrole in improving customer service levels is being used strategically and increasingly byservice organizations. The service attributes and quality can be enhanced bydeployment of technology. The Internet has facilitated convenience in customerinteractions and transactions with the banks. Online banking is currently emerging as anew approach in India for providing improved accessibility and expediency tocustomers. Most banks have their own websites for improving the customer interfaceand offering online services. The article studies the applicability of online banking inIndia and its role in fostering relationships with customers and giving them more value.The research was conducted on customers familiar with online banking in India, andtheir perceptions about online banking were studied. The findings reveal that customersare using the services but are skeptical about the financial transactions and servicequality dimensions.
  • 97. K. Askool, S.S.Nakata,K. Askool, S.S.Nakata (2010) said that Web 2.0 at a high level is described as theconvergence of technologies that enable people to easily interact and collaborate. Theuse of these tools as a channel for communication and sharing information byindividuals has also an effect on customer relationship management (CRM). This paperreports on a scoping study that explored the current situation of CRM adoption inbanking industry in Saudi Arabia. It aims to identify the factors that influence the use ofsocial CRM (SCRM). Various models have been proposed to study technologiesacceptance and usage. This paper proposes an enhancement of the TechnologyAcceptance Model (TAM), by incorporating a range of factors identified in the businessrelationships literature believed to influence SCRM adoption.Manoj Patwardhan , Pankaj Srivastava , Kirti Kumar, Santosh Kumar ,Abhishek Garg , Devesh Arya 2009 told in this article that Customer RelationshipManagement (CRM) is no longer a new term but a reality for many organizations.Banking is a prime candidate for CRM transformation, as competition in this sectorincreases; an excellence in service becomes a critical success factor. The studydiscovers the factors that influence CRM in Indian Banking Sector and evaluates thecurrent CRM implementation process. Respondents are from both private and publicsector banks. Findings of this study have relevance for managers as these findingsprovide them with the current scenario of CRM. Further managers learn to identifyCRM-related factors that could contribute to CRM implementation.R.K. Mittal , Rajeev KumraR.K. Mittal , Rajeev Kumra(2001) studied that The advancement in information andcommunication technology has made the new millennium, e-millennium. The dividingline between banks and non-banking financial institutions, like insurance and mutual
  • 98. funds, is getting blurred. Competition from players in the market has resulted intoproducts and services traditionally offered by banks and financial institutions, are nowbeing offered by non-banking organizations more efficiently and effectively. In India themonopoly of banks over payment systems would be broken very soon after thelaunching of satellite based money order services by the P & T department. Nowbanking activities are not confined to borrowing (collection of savings) and lending(disbursement of loans), but provides a plethora of services keeping in mind therequirement and convenience of customers In the fast changing banking environmentworldwide, banks in India will not only have to learn the new rules but also upgrade theskills as well as the tools of banking. The challenge lies in addressing these issues andat the same time keeping the wheels of growth moving.Technology, people and customer are the three elements on which hinge the success ofbanking in the e-millennium. Technology will be an enabler in managing the pace andquantum of change. Success in technology can be brought about by skilled humanresources. In response to these technological challenges, organizations have to evolveinternal capabilities and skilled human resource management which is fundamental ingenerating these capabilities. However, ultimately the bank‘s performance dependsupon the satisfaction of its customers. In the emerging competitive and technologicaldriven banking era, banks have to strive hard for retaining and enlarging their customerbase.E-CRM, which is the latest buzzword in the corporate sector, is perceived as one of theeffective tool in this direction by the banks. The present paper attempts to analyze theconcept of e-CRM in Indian banks from its various dimensions covering specifically itsneed, process, present status and future prospects.Sami AlsmadiSami Alsmadi(2011) studied to develop a CRM model and empirically test itsunderlying constructs in the banking and financial sector in Jordan. Theempirical data was collected from a convenient sample of 141 banks and financialinstitutions, drawn from three major Jordanian cities (Amman, Irbid, and Al-Zarqa). A
  • 99. drop-off method of data collection was used (Aaker et al. 2004). The findings show thatJordanian banks and financial institutions were likely to have a clear CRM strategicvision with specific goals and programs, possess necessary resources to establishCRM, be able to manage CRM programs, and use two way communications tohandle CRM. Nevertheless, the analysis unveiled that these firms were not likely tohave a sufficient marketing database, nor customer intelligence, with little motivation toeither measure effectiveness of CRM programs or take actions to improve an unpopularCRM strategy. Further analysis of the findings indicated that the CRM concept did notseem to be well incorporated in the business strategy of most Jordanian banksand financial institutions. Several recommendations were made and certaindirections for future research were highlighted.Kallol Das, Jitesh Parmar, Vijay Kumar SadanandKallol Das, Jitesh Parmar, Vijay Kumar Sadanand (2009) explores the associationbetween deployment of customer relationship management (CRM) bestpractices and loyalty of profitable customers in Indian retail banking sector.The study comprises two parts. The first part called the CRM best practices surveyinvolves the use of descriptive research design. The second part viz. Casestudy research involves the use of embedded customer loyalty survey. Thehypothesis testing based on literal and theoretical replication is done using the conceptof pattern matching. The findings reveal that there is no perfect bank, as yet, across thethree bank types, which has deployed all the 29 CRM best practices to the fullestextent. The results of literal and theoretical replication done by using patternmatching technique indicates no strong association between deployment of CRMbest practices in scheduled commercial banks and loyalty levels of both high andmedium relationship value retail customers. The study develops a list of 29 CRMbest practices, which may be helpful to the organizations toward achievingcomprehensive CRM deployment. The results also imply that going for CRM
  • 100. deployment may not be a profitable strategy for retail banks, particularly in theIndian context.T. R. ColtmanT. R. Coltman(2007) studied that The market enthusiasm generated around investmentin customer relationship management (CRM) technology is in stark contrast to the nay-saying by many academic and business commentators. This raises an importantresearch question concerning the extent to which banks should continue to invest inCRM technology. Drawing on field interviews and a survey of senior bank executivesthe results reveal that a superior CRM capability can deliver improved performance. Thepaper then demonstrates that in order to be most successful, CRM programs require acombination of technical, human and business capabilities.Dr. R.K.UppalDr. R.K.Uppal present paper exhibits the growth of information technology in variousbank groups. In our country in 2009, 79 percent branches are under corebanking. The maximum technology is taking place in new generation private sectorbanks as well as foreign banks. 43.5 percent are off site ATMs in our country. Publicsectors banks have more on site ATMs where as new private sector banks and foreignbanks have more off site ATMs. The paper also suggests some strategies toenhance e delivery channels in banks particularly in public sector banks.Alexander Krasnikov, Satish Jayachandran, & V. KumarAlexander Krasnikov, Satish Jayachandran, & V. Kumar(2009) studied that theimpact of customer relationship management (CRM) implementation on firm
  • 101. performance is an issue of considerable debate. This study examinesthe impact of CRM implementation on two metrics of firm performance?Operational (cost) efficiency and the ability of firms to generate profits (profit efficiency)?Using a large sample of U.S. commercial banks. The authors use stochastic frontieranalysis to estimate cost and profit efficiencies and employ hierarchical linear modelingto assess the effect of CRM implementation on cost and profit efficiencies. They findthat CRM implementation is associated with a decline in cost efficiency but an increasein profit efficiency. A firm-level factor, CRM commitment, reduces the negative effect ofCRM implementation on cost efficiency. The authors also find that two adoption-related factors, time of adoption and time since adoption, influence therelationship between CRM implementation and cost and profit efficiencies. Earlyadopters benefit less from CRM implementation than late adopters. However, time sinceadoption improves the performance of firms that implement CRM. By demonstrating thedifferent ways CRM implementation influences cost and profit measures, the studyprovides valuable insights to CRM researchers and managers.Salma Rahman and Sarwar M. AzharSalma Rahman and Sarwar M. Azhar(2008) studied that CRM and service marketingare developing into competing paradigms in customer service marketing literature.Practicing managers are either ready to invest or already investing in CRMsystems without substantiated results in terms of improved performance andresultant returns on investments. Should companies in developing countries getonboard this bandwagon? The hypothesis of this paper is that both CRMand service marketing practices show considerable similarities, which make thesetwo paradigms close cousins rather than competitors. The paper therefore buildsan integrative model of commonalities of activities drawn from the two domains.Using academicians and practicing managers these groups of commonactivities are operational zed into current practices in the banking industry ofPakistan. A survey is conducted using these items to verify if the banks are practicing
  • 102. these activities and if so then it is premised that such banks may beready to fine tune their operations to become fully CRM systems oriented,which would mean incorporating further technology into the system OR elsethey should focus on continuing to improve their current service marketingoperations as defined by the activities that form part of the integrativemodel. The results support the later strategy for banks in Pakistan, at this point intime.Salim Hilal Al-Mamari, Miguel Baptista NunesSalim Hilal Al-Mamari, Miguel Baptista Nunes( 2008) studied that the paradigmshift from a product-focused view to a customer-focused view advocates thatorganizations need to consider first and foremost the needs of their customers. Inorder for organizations to achieve competitive advantage they need to adopt customer-centric solutions such as CRM. However, the adoption of such systems entailsbarriers and risk events that may hinder successful use of CRM. This paperdiscusses the barriers that may have impact on potential adoption of CRM inbanking sector in Oman. A range of previous studies have been criticallyexamined to provide a background for the study and have resulted in theidentification of different barrier categories, namely social, management and technicalbarriers. This initial categorization was used as a priori theory for an inductivestudy of the Banking sector in Oman. The study used in-depth interviewswith top management of 3 out of the 4 of the more representative banks in the country.The data collected was analyzed using a thematic analysis approach that enabled theidentification and classification of barriers into categories. These categories were thentranslated into a narrative that forms the theoretical proposition of this paper. Theawareness of the barriers presented and discussed here will help both practitioners andacademics to better understand and overcome the difficulties of CRM implementation.The paper also aims at contributing to the debate on the adoption, useand improvement of CRM.
  • 103. R.K. Mittal, Sanjay DhingraR.K. Mittal, Sanjay Dhingra(2007) studied that Indian banks are investing heavily inthe technologies such as telebanking, mobile banking, banking, and automated tellermachine (ATMs), credit cards, debit cards, smart cards, call centers, CRM, datawarehousing etc. To convince the management, investors and other stakeholders forthis heavy investment in technology, it is desirable to evaluate the impact ofcomputerization on the performance of Indian banks in terms of their profitability andproductivity. In this paper, after defining input and output parameters, DataEnvelopment Analysis (DEA) is used to study the impact of computerization on Indianbanks profitability and productivity. Private sector banks, which took more IT initiative,were found to be more efficient in productivity and profitability parameters than publicsector banks.Shwu-IngJr-Ming HungShwu-Ing ,Jr-Ming Hung(2008)studied that Recently, CRM (Cause-Related Marketing)has gradually been adopted by non-profit organizations. However, for the evaluation ofCRMs effect, a non-profit organization still refers to traditional financial data, whichcould not understand the influence and effect of CRM on a non-profit organizationcompletely. This research introduces the concept of the Balanced Scorecard as theframework for the evaluation of CRM, and utilizes the Balanced Scorecards fivedimensions in a non-profit organization to design a questionnaire. The questionnaire isused to collect the performance data of a non-profit organization after the execution ofCRM, and uses Structural Equation Modeling (SEM) to verify the relations andinteraction between each performance dimension. The primary purposes of thisresearch are (1) to analyze the influence and effect on a non-profit organization of itsparticipation of CRM; (2) to design a reliable measurement index to evaluate the effect
  • 104. of CRM; (3) to establish the relationship structure model of the influence factors of theCRMs effect. This research shows that the measurement index developed by thisresearch could measure the fact that the non-profit organization has effects in fivedimensions after the execution of CRM - namely, organizational mission, financial,customer, internal process, learning and growth - and these five dimensions influenceeach other.Grau, Stacy LandrethFolse, Judith Anne GarretsonGrau, Stacy Landreth, Folse, Judith Anne Garretson(2007)told that the majority ofcause-related marketing (CRM) campaigns implemented since their inception over 20years ago offer consumers who are highly involved with causes a strong reason toparticipate. Their involvement represents a significant motivating factor. However, amultitude of CRM campaigns competing for the limited number of socially consciousconsumers and the emergence of new generations that are reportedly less sociallyconscious suggests that firms and their nonprofit partners should consider additionaltarget-market opportunities. In two experiments, we assess the role of donationproximity and message framing on campaign attitudes and participation intentions ofless-involved consumers. Findings reveal that local donations and positive messageframing serve as effective message cues to produce favorable CRM outcomes amongthis market segment that strategists consider fertile ground. Additional findings andimplications for creating and communicating CRM campaigns are discussed.
  • 105. RESEARCH METHODOLOGYTITLE OF THE STUDY:“STUDY THE IMPACT OF CRM ON CUSTOMERS OF BANKS OF JAIPUR CITY”DURATION OF PROJECT:Duration of project study was semester long.
  • 106. OBJECTIVE OF STUDYThe primary objective of the study remains to identify the impact of CRM activities oncustomers in banking sector. The study will, in an overall perspective, aim to coverfollowing objectives.1. The objective of this study is to bring insight and deeper understanding into theobjectives, strategies and the expected benefits of CRM initiatives by organizationsparticularly service companies like banks.2. To find out that how the expected benefits of CRM can initiatives by organizations bedescribed?3. To find out positive impact on the overall performance of the organization in the longrun.4. To get more knowledge about CRM in banking sector5. To understand consumer psyche about CRM in banking area.6. To analyze that how CRM works as a link between banks and customers.
  • 107. TYPE OF RESEARCH: Research Design - It was an exploratory research. The data for study was collected by using both, primary as well as secondary sources. The data was collected by using various techniques and sources which are briefly described below. Data was collected from customer and marketer of banks. Like HDFC, ICICI bank etc. Apart from the data collected for aforesaid companies, data will be collected from regulatory sources, Journals, Books and Internet etc. Primary data collection: Primary data will be collected from following sources:1. Customer and marketer of banking service2. Bank officials Data will be collected through interviews and filling of questionnaire. Secondary data collection: Secondary data will constitute an integral part of the study and it will be assimilated in following areas:1. Published data regarding financial performance of banking companies by internet channels
  • 108. 2. Data regarding customer behavior towards new channels3. Data regarding opportunities for marketer in banking sector Secondary data will be collected through extensive literature survey and sources will include newspapers, internet, journals, magazines books reports and other publications SAMPLE SIZE & METHOD OF SELECTING SAMPLE:  Sample size: 50 respondents  Sampling method: Convenience Sampling
  • 109. Demographics Percentage Female 12 24Gender Male 38 76 Total 50 100 Under 25 yr 25 50Age 25 – 30 yr 17 34 30 – 35 yr 05 10 Above 35 yr 03 6 Total 50 100 Bachelor‘s Degree 12 24Education Master‘s Degree 29 58 Diploma/ Certificate Course 09 18 Total 50 100 Below 1.5 Lakhs 15 30Income 1.5 Lakhs – 2 Lakhs 18 36 2 Lakhs – 3 Lakhs 10 20 Above 3 Lakhs 07 14 Total 50 100 Table: Sample Profile
  • 110. SCOPE OF STUDY: 1. The objective of this study is to bring insight and deeper understanding into the objectives, strategies and the expected benefits of CRM initiatives by organizations particularly service companies like banks. 2. To find out that how the expected benefits of CRM can initiatives by organizations be described? 3. To find out positive impact on the overall performance of the organization in the long run. 4. To get more knowledge about CRM in banking sector 5. To understand consumer psyche about CRM in banking area. 6. To analyze that how CRM works as a link between banks and customers. LIMITATION OF THE STUDY: The study might be limited by following factors:1. CRM in banking is a very recent phenomenon.2. The primary data, collected in form of questionnaires and interviews, might have inherent limitations of biasness and casual response.3. Time Period of the project was not sufficient to study all the factors in deep.4. The area of study was Jaipur so it cannot be generalized to other cities.5. A different composition of sample skew the
  • 111. DATA ANALYSIS AND INTERPRETATION 1. What kind of bank is better in services? (A) Private = 37 (b) public = 13Respondents Private Public50 37 13INTERPRETATION:- In first question I found that most of the costumers are engaged with private banks. Inmy questionnaire I directly asked that what kind of banks are better of services and outof sample of fifty 74% customers went with private banks. Only 26% customers like theservices of public bank so out of 50 customers 37 likes private bank and rest 13 likepublic bank.
  • 112. 2. Does your bank use "CRM" activities? (a) Yes = 12 (b) no = 10 (c)No idea = 28Respondents Yes No No idea50 12 10 28INTERPRETATION:- In second question I found that most of the customers are not aware about the crmactivities in banks. Out of 50 customers 28 told that they have no idea about crmactivities or works in bank. Ten customers told that their bank does not use crmactivities but they were not confident about their saying, so somewhere I felt that theyhad not so much knowledge about crm activities. Only twelve customers spokepositively about crm.
  • 113. 3. If yes then, what kind of activities? (a) Wishing on festival = 15 (b) gifts = 12 (c) special schemes = 23Respondents Wishing on festival gifts special schemes50 15 12 23INTERPRETATION:-In this research I found that most of the customers don‘t know that which activities canbe added in crm through banks so I had gave some name of activities to find their view.23 customers told that band provides them special schemes as a crm activity. 15customers include wishing on festivals or special occasion by bank in crm and rest 12told that gifts given by bank can be one kind of crm activities.
  • 114. 4. What is the level of use of technology in services in your bank? (a) Low = 8 (b) average = 30 (c) High = 12Respondents Low Average High50 8 30 12INTERPRETATION:- In this research when I asked to customers about technology uses in banks then Ifound that most of the banks are using high level of technology in their operation.Private banks are using high and costly technology. 12 customers said that their bandare using high technology and all these customers engaged with private banks. 30customers said that their bank are using average technology and rest 8 customers thinkthat their bank are using low technology.
  • 115. 5. Which database your bank use to manage information about you? (a) Electronic = 32 (b) traditional paper database = 15 (c)Other =3Respondents Electronic traditional paper Other database50 32 15 3INTERPRETATION:- In research I found that customers are aware about database but not about theirtypes. 32 customers think that with the technology advancement banks are preferringelectronic database about their information. 15 customers told that banks are usingtraditional paper database for security purpose and rest 3 customers were not awareabout database.
  • 116. 6. When your bank arrange meeting with you? (a)Weekly = 16 (b) monthly = 24 (C) Yearly = 10Respondents Weekly monthly Yearly50 16 24 10INTERPRETATION:- In this research I found that most of the private banks conduct meetings with theircustomers regularly. Specially HDFC and ICICI are conducting monthly meetings withcustomers. 24 customers said that their banks monthly conduct the meeting. 16customers went with option weekly and rest 10 customers told that their bank conductyearly meeting. So I brought a conclusion that banks are conducting more and moremeetings to understand and retain the customers and to solve their problems.
  • 117. 7. Does your bank provide facility of "Any time banking"? (a) Yes = 46 (b) no = 4Respondents Yes No50 46 4INTERPRETATION:- Any time banking is a common function using by banks now a days. Out of 50customers 46 are agree that their bank is giving any time banking facility only 4customers told that night service of their banks are not good, so they do not count it inany time banking. As a conclusion I found that any time banking is a general function ofbanks.
  • 118. 8. When does your bank organize engagement activities? (a) On customer day, week = 21 (b) On Bank anniversary = 17 (c) On Festivals = 12Respondents On customer day, On Bank On Festivals week anniversary50 21 17 12INTERPRETATION:- In the answering of this question I got same weight age for all the options. Banksconduct engagement activities on various occasions like customer day, week , bankanniversary , on festivals etc. Respectively I got 21, 17 and 12 for above option out of50.
  • 119. 9. Does your bank solve your queries or problems within given time period? (a) Yes = 38 (b) no = 12Respondents Yes No50 38 12INTERPRETATION:- In this research I found that problem solving of a customer is the main aim in crmactivities. Banks takes immediate action about a query or a problem. In my survey 38customers said that their bank solve their problem within given time period. 12customers were not happy with the service of bank.
  • 120. 10. How does your bank provide solution for your problem? (A) Online = 7 (b) On phone = 15 (C) On place = 28Respondents Online On phone On place50 7 15 28INTERPRETATION:- In research I found that most of the private banks solve the problem at place and inthe case problem can‘t be solve on the place then they try to give solution on phone oronline. 7 customers marked option online, 15 marked on phone and 28 marked optionon place.
  • 121. 11. Are you satisfy with the services of your bank, or want to give some suggestion? (a) Satisfy = 33 (b) not satisfy = 17Respondents Satisfy not satisfy50 33 17INTERPRETATION:-As a conclusion of my questionnaire if I found that most of the customers of privatebanks are satisfy with the overall services of bank. The ratio of satisfaction anddissatisfaction is 33: 17.
  • 122. FACTS AND FINDINGS HDFC is the number 1 bank in using CRM activities and services. ICICI comes at second position in using CRM activities and services. CRM helps in understanding the customers, their needs, wants, motives, likes, dislikes, taste and performances. CRM facilitates identifying a bank‘s target customers satisfaction and focusing on the best one which helps the bank to optimize their sales and revenue. CRM maximizes customer satisfaction and boosts customer loyalty which builds long term relationship. CRM provides appropriate training and development to the employees who offer scope for growth and continuous improvement to the staff. CRM also helps the key functionalities of the bank which includes marketing, sales, research and development, services, lead, and opportunity management.
  • 123. SWOT ANALYSISSWOT of HDFC BankStrengths: -1. Right strategy for the right products.2. Superior customer service vs. competitors.3. Great Brand Image.4. Products have required accreditation.5. High degree of customer satisfaction.6. Good place to work7. Lower response time with efficient and effective service.8. Dedicated workforce aiming at making a long-term career in the field.Weakness: –1. Some gaps in range for certain sectors.2. Customer service staff need training.3. Processes and systems, etc4. Management cover insufficient.5. Sectoral growth is constrained by low unemployment levels and competition for staffOpportunities: –1. Profit margins will be good.2. Could extend to overseas broadly.3. New specialist applications.4. Could seek better customer deals.5. Fast-track career development opportunities on an industry-wide basis.6. An applied research center to create opportunities for developing techniques to provide added-value services.
  • 124. Threats: -1. Legislation could impact.2. Great risk involved3. Very high competition prevailing in the industry.4. Vulnerable to reactive attack by major competitors.5. Lack of infrastructure in rural areas could constrain investment.6. High volume/low cost market is intensely competitive.
  • 125. ICICI BankStrengths: Strong Balance Sheet Expanding international and rural business Well-established subsidiaries in life and non-life insurance and AMC business Strong Bench-strengthWeaknesses: Frequent capital dilution Lesser share in low-cost deposits, still to fix liability mix Large retail portfolio may breed NPAs going forward No promoters, shareholding quite scatteredOpportunities: – Bank –Insurance services: The bank should also provide insurance services. That means the bank can have a tie-up with a insurance company. The bank will advertise & promote the different policies introduced by the insurance company & convince their customers to buy insurance policies. Increase in percentage of Returns on increase: The bank should provide higher returns on deposits in comparison of the present situation. This will also upto large extent help the bank earn profits & popularity. Recruit professionally guided students: Bank & Insurance is a special non-aid course where the students specialize in the functioning & services of the bank & also are knowledge about various tax policies. The bank can recruit these
  • 126. students through tie-ups with colleges. Such students will surely prove as an asset to the bank. Associate with social cause: The bank can also associate itself with social causes like providing relief aid patients, funding towards natural calamities. But this falls in the 4th quadrant so the bank should neglect it.Threats: - Competition: ICICI Bank is facing tight competition locally as well as internationally. Bank like CITI Bank, HSBC, ABM, Standard Chartered, HDFC also provide equivalent facilities like ICICI do and also ICICI do not have consistency in its international operation. Net Services: ICICI Bank provides all kind of services on-line. There can be easy access to the e-mail ids of the customers through wrong people. The confidential information of the customers can be leaked easily through the e-mail ids. Decentralized Management: Each branch manager is given the authority of taking decisions in their respective branches. The decisions made by different managers are diverse and any one wrong decision can laid to heavy losses to the bank. No Proper Facilities To Uneducated customers: ICICI Bank provides all services through electronic computerized machines. This creates problems to the less educated people. But this threat falls in the 4th quadrant so its negligible. The company can avoid this threat.
  • 127. ConclusionBanking can be mysterious for consumers and how they interact with their finances canbe a complex matter. The challenges faced by banks and their customers are many butthe trick lies in de-mystifying complex financial relationships.Technical solutions deployed by banks today are flexible, user-friendly and meant tofacilitate specific workflow and requirements in implementation processes. In order tosimplify lives, banks have begun to implement end-to-end technologiesthrough all departments with the intention of removing human error from processes.Previously existing manual environments could not have been adequate for futurevisions, growth plans and strategies. In this day and age, customers enjoy complete luxury in terms of customizedtechnical solutions and banks use the same to cement long-term, mutually-beneficialrelationships. For a bank to succeed in adopting a CRM philosophy of doing business,bank management must first understand CRM as a holistic concept thatinvolves multiple, interlocking disciplines, including market knowledge, strategicplanning, business process improvement, product design and pricing analysis,technology implementation, human resources management, customer retention,and sales management and training.Turning the business strategy into actionable items is a difficultundertaking. For which Customer Relationship Management works a magic wand.
  • 128. RECOMMENDATIONS AND SUGGESTIONSCustomer Relationship Management (CRM), the most exciting strategies that emergedfrom networking technology revolution of the nineties, is today fast emerging one of themost important cooperates strategies. A well-executed Customer RelationshipStrategies can result in number of quantitative benefits, including greater ability to selland cross sell, improved retention besides cost of services. Customer Relationship Management is do-able. However the following musttake into consideration before embarking upon its implementation. All aspects ofcustomer relationship management, including technology solution, must befully explored effectively deliver the competencies required to realize the businessbenefits.1. Tackling any one competence alone will lead to a dysfunctionalbusiness. One competence does not customer relationship management make.2. Take pragmatic steps with a clear view on delivery of all the components in theMedium term, rather than piecemeal in the short term.3. Successful mass customization is crucial to reducing customer acquisition cost andImproving the cross selling capacity.4. Channels are a delivery mechanism. The effectiveness of the mechanism isachieved when it is faultless!5. 75% of all Customer Relationship Management projects have failed due to lapses inimplementation. Technology is not enough, implementation is the key and this is wherethe people aspect comes into the forefront.
  • 129. 6. Customer Relationship Management implementation is effective when companies areable to identify the internal and external customer and integrate them with its corebusiness process. ―No-one can guarantee success. You cannot foresee the future. However, youcan develop the possibilities and capabilities today, which will put you in a positiontomorrow to deal with future risks and opportunities to your advantage. And that is awhole lot better than waiting to see what "fate" has in store.‖
  • 130. QUESTIONNAIRE STUDY THE IMPACT OF CRM ON CUSTOMERS OF SELECTED BANKS OF JAIPUR CITY Name of customer : Name of bank : Occupation : Email address : Contact no. :Gender Male FemaleAge Under 25 yr 25 – 30 yr 30 – 35 yr Above 35 yrEducation Bachelor‘s Degree Master‘ Degree Diploma/ Certificate CoursesIncome Below 1.5 Lakhs 1.5 lakhs – 2 Lakhs 2 Lakhs – 3 Lakhs Above 3 Lakhs
  • 131. 1. What kind of bank is better in services?(A) Private (b) public2. Does your bank use "CRM" activities?(a) Yes (b) no(c)No idea3. If yes then, what kind of activities?----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------4. What is the level of use of technology in services in your bank?(a) Low (b) average(c) high5. Which database your bank use to manage information about you?(a) Electronic (b) traditional paper database(c)Other6. When your bank arrange meeting with you?(a)Weekly (b) monthly(C) Yearly7. Does your bank provide facility of "Any time banking"?(a) Yes (b) no
  • 132. 8. When does your bank organize engagement activities?(a) On customer day, week (b) On Bank anniversary(c) On Festivals9. Does your bank solve your queries or problems within given time period?(a) Yes (b) no10. How does your bank provide solution for your problem?(A) Online (b) On phone(C) On place11. Are you satisfy with the services of your bank, or want to give some suggestion?------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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