Axis bank Reinventing banking Presented by : Nikunj Shah Reshma Sonawane Jayesh Surve Sanil Tharwal Ankita Trivedi
Indian Banking System
History of Banking in India
The first bank in India, though conservative, was established in 1786. the journey of Indian Banking System can be segregated into three distinct phases.
Phase 1 1786 to 1969
1786 : The General Bank of India
Next came Bank of Hindustan and Bengal Bank.
The East India Company established Bank of Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Banks.
These three banks were amalgamated in 1920 and Imperial Bank of India was established which started as private shareholders banks.
In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore.
Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up.
Reserve Bank of India came in 1935.
During the first phase the growth was very slow
Banks also experienced periodic failures between 1913 and 1948.
There were approximately 1100 banks, mostly small.
the Government of India came up with The Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965).
Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the Central Banking Authority.
In 1955, it nationalised Imperial Bank of India with extensive banking facilities on a large scale specially in rural and semi-urban areas.
It formed State Bank of India to act as the principal agent of RBI
7 Banks formed subsidiary of State Bank of India were nationalised.
It was the effort of the then Prime Minister of India, Mrs. Indira Gandhi.
14 major commercial banks in the country was nationalised.
The branches of the public sector bank India rose to approximately 800% in deposits and advances took a huge jump by 11,000%.
This phase has introduced many more products and facilities in the banking sector in its reforms measure.
In 1991, under the chairmanship of M Narasimha, a committee was set up by his name which worked for the liberalisation of banking practices.
The country is flooded with foreign banks and their ATM stations.
Efforts were being put to give a satisfactory service to customers.
Phone banking and net banking was introduced.
The entire system became more convenient and swift.
Time was given more importance than money.
Emergence of Private Banks
Private banking in India was practiced since the beginning of banking system in India.
The first Private Bank in India to receive an in principle approval from the Reserve Bank of India was Housing Development Finance Corporation Limited.
It was incorporated in August 1994 as HDFC Bank Limited with registered office in Mumbai and commenced operations as Scheduled Commercial Bank in January 1995.
List of Private Banks in India
Bank of Punjab
Bank of Rajasthan
Catholic Syrian Bank
City Union Bank
Development Credit Bank
ING Vysya Bank
Jammu & Kashmir Bank
Karur Vysya Bank
Laxmi Vilas Bank
South Indian Bank
United Western Bank
Axis Bank (Formerly known as UTI) was one of the few private banks to have began operations in 1994
The Bank was promoted jointly by the Administrator of the specified undertaking of the Unit Trust of India (UTI)
Life Insurance Corporation of India (LIC).
General Insurance Corporation Ltd (GIC).
National Insurance Company Ltd.
The New India Assurance Company.
The Oriental Insurance Corporation.
United Insurance Company Ltd.
Journey From UTI to AXIS
Incorporated as UTI Bank, headquartered in Mumbai
First Branch inaugurated at Ahmedabad
Completes first profitable year in operation in 1995
Deposit crosses Rs.10bn mark in 1996
Successfully completes its IPO in 1998 and gets itself listed on NSE and BSE
Cash management services as well as credit card launched
Profit crosses Rs.500m in 2000
Launches Internet banking module, iConnect retail loans introduced
Financial advisory services and e-commerce introduced
Second largest ATM network in the country with 200 ATMs
Private placement of 26% stake to CDC Capital Partners
Deposit crosses Rs.100bn mark in 2001, advances crosses Rs.50bn
First commercial bank to open an ATM at a post office
Crosses the 1,000 ATM mark in 2003
Gets listed on the London Stock Exchange, raises $239.3m
Opens its first international branch in Singapore
Opens Representative Office in Shanghai
Crosses the 2,000 ATM mark in 2006
Opens a Full Licence Bank Branch in Hong Kong
Re-brands itself as Axis Bank
Mumbai, Jul 30 2007 : UTI Bank on Monday rechristened itself as Axis Bank.
WHY THEY CHANGE THEIR NAME FROM UTI TO AXIS BANK
THERE ARE 3 MAIN REASONS
They had to give up the UTI name after using it for 13 years as we were not prepared to accept terms and conditions (including royalty) from UTI AMC
The decision to rebrand itself was taken by the bank as it was allowed to use the 'UTI' brand name for free till January 31, 2008, beyond which it had to pay royalty for using the name.
2. The recommendation for name change to Axis Bank has arisen from the existence of several shareholder-unrelated entities using the UTI brand, and the consequent brand confusion that this generates
3. The name UTI bank was changed to AXIS bank as UTI gave a look of government sector bank. They had to change our name to have our own brand and identity.
"The name was taken into effect consequent to the approval of shareholders, Reserve Bank of India and the central government (Registrar of Companies).
The UTI brand is owned by UTI Asset Management Company
The bank would change logo and colour of logo the bank is likely to spend around Rs 50 crore in the re-branding exercise.
The bank acquired the services of Ogilvy & Mather (O&M) to design and implement the rebranding campaign
The new name AXIS
The new name was chosen considering the bank’s pan-Indian as well as international presence.
The first time that a bank has dropped an established brand for an unknown name.
The name Axis is chosen as it is simple and it conveys a sense of solidity and a sense of maturity. It also has a universal appeal.
The New Logo The logo depicts a strong growth path for the bank supported by a strong base, indicating that the bank is moving on from a position of strength.
Customer Service and Product Innovation tuned to diverse needs of individual and corporate clientele.
Continuous technology up gradation while maintaining human values.
Progressive globalization and achieving international standards.
Efficiency and effectiveness built on ethical practices.
Core Values of Axis
Customer Satisfaction through
Providing quality service effectively and efficiently
"Smile, it enhances your face value" is a service quality stressed on
Periodic Customer Service Audits
Maximizations of Stakeholder value
Success through Teamwork, Integrity and People
The banks business is divided into four segments:
Retail, corporate, treasury and merchant banking.
Apart from this the bank is also into insurance, investment banking, mortgage financing, credit cards, and depository services amongst others.
it is also registered on the following exchanges:
London stock exchange
Loans and advances
Different variant like: Gold plus card, Gold card, Silver & silver plus cards.
Normal Current Account
Trust/NGO Savings Account
Private Equity, Mergers & Acquisitions
Capital Market Funding
Shikha Sharma was named as the bank's managing director and CEO on 20 April 2009.
As on the year ended March 31, 2009 the Bank had a net profit of Rs 1,815.36crores
The bank now has 835 branches including extension networks across 30 States and 4 Union Territories.
The bank also has overseas offices in Singapore, China, Hong Kong and Dubai.
Crosses the 3,723 ATM mark in 2009
Launches Platinum Credit Card, India's first EMV chip based card
Axis Bank is now trading at Rs 911.85 (17 th sep).
Axis Financial Position Rs in crs. Particulars Mar 07 Mar 08 Mar 09 Deposits 58,785.60 87,626.22 117,374.11 Advances 36,876.48 59,661.14 81,556.77 Share Capital 281.63 357.71 359.01 Net worth 3,402.21 8,770.69 10,214.80 Book Value 120.80 245.19 284.53 Interest earned 4,560.40 7,005.32 10,835.49 Interest expenditure 2,993.32 4,419.96 7,149.27 Net profit 659.03 1,071.03 1,815.36 Net NPAs 0.61% 0.36% 0.35% Total Assets 73,257.21 109,577.84 147,722.06 Return on Assets 1.10% 1.24% 1.44%
Axis Bank Ratio Analysis Particulars Mar 07 Mar 08 Mar 09 Capital Adequacy Ratio 11.57 13.73 13.69 Net profit margin 12.01 12.22 13.31 Operating Expense / Total Inc 23.26 26.20 24.95 Return on Net worth (%) 19.37 12.21 17.77 Net Interest Income/total funds 4.01 4.74 4.98 Non Interest Income/total funds 0.03 0.02 0.06 Net Profit / Total Funds 1.07 1.17 1.41 Earning per share 23.40 29.94 50.57 Equity Dividend (%) 45.00 60.00 100.00
Revenue Break – up of Axis Rs in crs Segment Revenue Mar 09 Treasury 20,290.71 Corporate /wholesale banking 7280.14 Retail banking 6675.51 Other banking business (5.40)
Comparative Analysis As on Mar 09. Rs in crs Particulars Axis HDFC PNB HSBC Deposits 117,374.11 142,811.58 209,760.50 49,970.27 Advances 81,556.77 98,883.05 154,702.99 27,588.68 Share Capital 359.01 425.38 315.30 4,499.16 Net worth 10,214.80 15,052.73 14,653.63 11,214.3 Book Value 284.53 344.44 416.74 - Interest earned 10,835.49 16,332.26 19,326.16 6,326.9 Interest expenditure 7,149.27 8,911.10 12,295.30 2,661 Net profit 1,815.36 2,244.94 3,090.8 12,91.2 Net NPAs 0.35% 1.49% 0.17% 1.42% Total Assets 147,722.06 183,270.78 246,918.62 94,620.3 Return on Assets 1.44% 1.10% 1.15% 1.51%
Comparative Ratio Analysis Particulars Axis HDFC PNB HSBC Capital Adequacy Ratio 13.69 13.60% 12.96% 15.31% Net profit margin 13.31 11.35 13.76 Operating Expense / Total Inc 24.95 35.06 21.53 Return on Net worth (%) 17.77 15.32 23.52 Net Interest Income/total funds 4.98 6.86 4.34 6.66% Non Interest Inc/total funds 0.06 - 0.25 2.84% Net Profit / Total Funds 1.41 1.42 1.40 4.39% Earning per share 50.57 52.77 98.03 - Equity Dividend (%) 100.00 100.00 200 - Net Interest margin (%) 3.33 4.40 3.58
Axis Bank want to achieve following marketing objectives by the end of the year 2011.
To get the market capitalization 500 Crore
To get the 200 Crore retail investment.
To get 125 Crore Corporate investments.
To get the 175 Crore Capital investments.
Has retained the burgundy color, but has changed the logo.
Spend around Rs50 Crore in the re-branding exercise.
Had hired advertising firm O&M.
Bankers Identify Near-Team and Long Term Concerns 1991 2015 Maintaining profitability Credit Portfolio Management Service Quality Regional Economy Cost Management / Expense reduction Declining Earnings/ more failures Market / customer focus Capital adequacy Stock market value Industry Overcapacity Service quality Maintaining profitability Market / customer focus Operations/systems/technology Credit portfolio management Productivity improvement Investment to stay competitive Stock market value Asset/liability management Electronic Banking
SWOT ANALYSIS OF AXIS BANK
PESTLE ANALYSIS OF AXIS BANK
For the private sector banks:
Differentiation on the basis of area coverage.
Level of service is the same.
Axis got advantage because of Product Innovation.
For the government sector banks
High level of service quality and through product innovation.
AXIS not any where near, but has created a different set of segment.
People who believe in the higher set of services
For the International Banks :
Differentiated itself on the base of the reach and coverage to the people.
Service level is somewhat same.
In the future these banks may create a problem.
Features Of Axis Bank
Instant Fund Transfer
At-Par (Multicity) Chequebook
ATM cum Debit Card
Marketing Mix in Banking Industries
Other than these :
7 P’s OF MARKETING OF AXIS BANK
Product Mix :
Value for money.
Lower fee charged.
Making available the promised services to the ultimate users.
Selecting a suitable place for bank branches.
Plans to set up 210 more branches across the country in this fiscal.
Flow of activities
Number of steps
Employee’s dress code
Metros & divisional cities
Salaried class (both Govt. and private)
The people who believes in modern banking with higher set of services i.e. Internet banking (icontact, mobile refill, travel currency card etc.).
Corporate banking market : This market target the industries and fulfil their financial needs.
Capital market : This segment is targeted on the long term needs of the individual as well as of industries
Retail banking market : This segment is for the retail investor and provide them short term financial credit for their personal, household needs.
Selective specialization strategy
Here the bank selected a number of segments, each objectively attractive & appropriate. There may be little or low synergy among the segment but each segment proves to be worth full for it.
If we take the example of cards then Axis bank have separate set of credit cards, each targeted at different set of people i.e. segment and each one has its own importance for the bank.
Axis bank has positioned itself as a bank which gives higher standard of services through product innovation for the diverse need of individual & corporate clients. So they want to highlight following points in their positioning statement:
The Key Target Audience Worksheet
Where does sales and usage come from?
From urban and sub-urban areas.
Does marketing objective require trial or continued usage?
What do we know about our target segment?
People bothered more about the services more in the STP analysis.
Who are the decision makers?
User of the services.
The Communication Strategy Worksheet
What are the Communication Objectives ?
Bring the bank into the top 3 banks in India. (At present it is on 6th position).
Generate Brand awareness.
Develop positive attitude about the brand.
Give product information.
Communicate Bank’s emphasis on high standard of services.
Result of the communication exercise:
Image change about the bank.
Purchase our services.
The fact that the top 9 banks account for barely 57.8% of the market share suggests that several smaller players occupy the remaining 42.2%
AXIS Eligibility Criteria
(AQB) of Rs. 1 Lakh in your savings account (75,000 if in case you have a salary account with Axis Bank)
Rs. 5 lacs in combination of your savings and term deposits (Minimum AQB of Rs. 50,000 in the savings account)
Minimum Average quarterly relationship of Rs. 10 lacs across members of the same family - subject to a minimum (AQB) of Rs. 80,000 being maintained in the savings account of each member and the remaining amount in Term Deposits
Put in place relevant HRD strategies and use modern methodologies.
Create a performance-driven culture and an exciting workplace.
Create a pool of entrepreneurial managers and business leaders.
Create a learning organization for employees .
FUNCTIONS OF HRD
Ultimate aim of the human resources function is to build and manage a motivated pool of professionals delivering optimum value to customers.
Major platforms on which the success of the bank's corporate strategy rests is bringing on board the requisite skills.
Young bank with an average age of 29 years and a talent pool comprising a mix of new recruits and experienced officers.
HR BUSINESS MODEL
HR BLUEPRINT FOR BUSINESS DRIVEN HR REFORMS
HR Steering Committee
Axis Financial Rewards For Business Leaders
Hr Policy For Overseas Selection & Deployment
Hr Resourcing Policy
Performance Appraisal System For Clerical And Sub-staff
Axis LEADERSHIP DEVELOPMENT CENTRE
RECRUITMENT PROCESS IN AXIS BANK
Axis Bank Information System Overview
Implemented a new derivatives system-- Summit FT with the help of global financial applications provider – Misys.
Provides ability to structure derivative products in real time and give a single view of the entire transaction to the customer
The bank hopes to leverage the ability to rationalize its currently dispersed functions to provide a single view of every transaction to customers.
Apart from creating a new derivatives product, it also helps from a regulatory compliance standpoint.
RBI favors transparent online systems that can track every transaction and report it exactly as it is.
An automated system removes this anomaly and improve compliance to a great extent.
SUNTEC’S TOOL FOR AXIS BANK
AXIS Bank Chose SunTec Business Solutions software to centralize and streamline the bank’s pricing and billing processes.
Implemented a solution that helps Axis Bank create personalized product packages and manage fee billing for payment and cash management, while having a unified view of its customers.
Axis Bank is SunTec’s second banking services client in India, after ICICI Bank.
Pyxis systems has provided AXIS bank its RisKompass as the software solution for financial derivatives risk management.
It enables clients to manage derivative trades in a further controlled way from the front to back office.
Automated system that can be accessed by anyone on the different locations of the bank.
Smoother deal processing, with verifying and online risk monitoring mechanism.
The system is user friendly, and the software offers good portfolio management features.
Atom Technologies, A Subsidiary Of The Bse-listed Financial Technologies (India) Ltd (FTIL), Which Runs The Multi Commodity Exchange Of India Has Innovated A Technology, Which Enables Mobile Payments.
Electronic Clearing Service (ECS Credit) .
Real Time Gross Settlement (RTGS).
ORGANISATION TRANSACTION PROCESSING SYSTEM:
EBS ( E-Billing Solutions):
It is the Merchant Account providing company partnered with Axis Bank.
Visualizes you how to become more competitive and help you to make the changes to your online payment processing for risk free business.
EBS "Payment Gateway" is specifically designed to accommodate the increasing demand by e-commerce companies for sophisticated payment solutions to tap the enormous opportunities for global Internet transactions.
HOW IT WORKS?
Extensive Network .
Centralized Service Desk.
Comprehensive MIS .
Mobile Alert Service.
UTI Bank has changed its name to Axis Bank Ltd
Immediately, the bank replaced signages
Informed customers about the brand change through various channels
Restructured its operations after rebranding
How their strategy changed after rebranding:
Earlier they were only customer centric
NOW they have added Service centric and product innovation into their strategy.
Played a vital role in growth of organization
To retain a competitive edge, the Bank's technology infrastructure is continuously upgraded
Use of technology-
first among Indian banks in submitting centralised Return for foreign exchange transactions
first bank in the India to market EMV chip embedded Debit Platinum, Travel Currency and Credit Platinum cards
A unique product that has changed the way money is sent across borders.
Available as a delivery mode for remittances made through the Web Portal www.Remit2India.com .
Based on the remitter’s request, a personalised Remittance Card is prepared for the beneficiary, which is preloaded with the funds remitted to him in INR.
VISA Money Transfer Service:
To send money from an AXIS Bank account to any of the VISA Cards issued in India
To pay VISA credit card bills by giving the card number and making a direct payment
The sender’s account would be debited instantaneously with the transferred amount, but the funds will reach the beneficiary’s VISA Card within one or two days.
The service has been enabled through all Axis bank’s ATMs and i-Connect (Internet Banking)
EMV standard based Platinum Credit Card:
Card has an embedded chip, which stores cardholder’s information in an encrypted format, thereby providing the highest level of security to the cardholder against possible misuse.
Offers clear authentication of debit and credit payments combined with easy fraud detection.
The chip cannot be duplicated, ruling out counterfeiting and skimming. This makes your card safer and secure than any other card in India.
How does it work:-
The merchant inserts the chip card into his EDC terminal in the chip reader slot. The card need not be swiped.
The card remains inserted in the terminal throughout the transaction .
The purchase amount is entered in the terminal.
Once the purchase is approved a receipt will be printed.
The Cardholder signs the receipt and removes his/her card from the terminal.
Tie- up with Banque Privee Edmond de Rothschild Europe:
Axis Bank and Banque Privee Edmond de Rothschild Europe have signed an agreement on September 19, 2007 in Luxembourg.
Agreement enabled both organisations to work together and provide Wealth Management solutions to overseas Indians.
The tie-up will also enable Axis Bank to offer investment opportunities in global financial products for overseas Indians and will offer the joint products through its branches in Hong Kong, Singapore and Dubai.
Tie-ups with various Govt. Departments:
MCD - Municipal Tax or Fees ePayments
MCD - eTendering Project
Sampark - Utility Bill ePayments
Bangalore One Project - Utility Bill ePayments
Internet Banking Channel
Mobile Banking Channel
All its ATMs are connected to Base24 ATM switch
The Bank through its ATMs offers the following services :
Mobile Airtime Refill
Bill Payment e.g.: BSNL, MTNL
Life Insurance Corporation Premium Payment
Purchase and redemption of UTI Mutual Fund Schemes through the ATM.
Bilateral ATM sharing arrangement:
State Bank of India
ABN Amro Bank
Bank of Rajasthan
Karur Vysya Bank
Multilateral ATM sharing arrangement:
Cashnet (A shared network run by Euronet India Pvt. Ltd.)
BANCS (Formerly known as Swadhan. Now run by E Funds Ltd.)
Internet Banking Channel:
Axis bank provides a number of value-added services on the Internet banking platform
a) Funds Transfers
To the customers own Axis Bank account
To any Axis bank account
To any account in any other bank in India (Power Transfer)
b) Bill Payment
Presentment or EBPP (Electronic Bill Presentment & Payment):
Bill presentment happens
The biller will send an electronic version of the bill for acceptance and payment
No bill presentment happens
The customer is free to select the biller and pay accordingly to his convenience.
c) Shopping etc.
Mobile Banking Channel:
Debit or credit in your account: Receive alerts on your mobile phone every time there is a debit or credit in your Axis Bank account for more than
You can also request for the following information:
- Last three Transactions
- Know the status of your cheque
- Request security balance in demat account
Growth Prospects of Axis
Over the last five years, the CAGR for loan growth for the banking industry has been 25-26 per cent; for Axis Bank it has been above 40 per cent.
Nonetheless, the bank is still expected to grow its loan portfolio at 1.5-1.7x the industry average.
In FY09 its advances grew at the rate of 37.5 per cent.
In FY10 they are expected to grow at the rate of 27-28 per cent and in FY11 at 25 per cent.
For the banking industry as a whole, the loan book is expected to grow at 18 per cent in FY10 and 16 per cent in FY11.
Thus, Axis Bank’s fast pace of growth is expected to sustain over the next couple of years.
AXIS bank has differentiated itself very well on the basis of high level service and product quality.
They have successfully implemented the change and due to this their market share has increased only despite of tough competition prevails.