STRATEGY ANALYSIS OF RBL BANK LTD

1. STRATEGY
ANALYSISOF
RBL BANK LTD
GROUP MEMBERS
RAMAKRISHNA NAMBURI MP17033
ROHIT KUMAR MP 17038
BRAJESH KUMAR SINGH MP17011
PRASHANT DUNGDUNG MP17028

2. Source 1https://ir.rblbank.com/pdfs/financial-highlights/annual_report_fy_18.pdf

3. RBL Bank, formerly Ratnakar Bank, is one of India's fastest growing
private sector banks with an expanding presence across the country. It
currently services over 4.9 million customers through a network of 342
branches and 199 including banking outlets and 488ATMs spread
across 20 Indian states and UnionTerritories. Established in 1943, RBL
Bank started a transformational journey under a new management
team in 2010.
RBL Bank's Operating Verticals
Corporate and
Institutional
Banking (C&IB)
Commercial
Banking (CB)
Transaction
Banking
Branch and
Business
Banking (BBB)
Retail Assets
Treasury and
Financial
Markets
Operations
Company
profile

4. External
Analysis
– Porter’s 5
force
 Threat of New Entrants
 For deposit substitutes include investment in gold, real estate,
equity etc.
 For advances substitutes include, bonds, IPO etc.
 High Entry barrier – RBI, Banking License
 Emergence of Payments Bank
 High Cost of Product differentiation
 Difficult to build trust with customers
 Easy access toTechnology
MEDIUMThreat, Positive Impact on Industry profitability

5. External
Analysis
– Porter’s 5
force
 Bargaining Power of Customers
 Low SwitchingCost
 EasyAccess to information
 HIGH volume of customers
 LESS product differentiation
 LESS substitutes available
 Nascent debt market & volatile stock markets – Less opted by risk
averse Indian customers
 Banks are an indispensable source of funds in India
 HIGHThreat, Negative impact on Industry profitability

6. External
Analysis
– Porter’s 5
force
 Threat of Substitutes
 For deposits substitutes include
 Gold – volatile
 Equity – High Risk
 Real Estate –Volatile
 For advances substitutes include
 Bonds – Low Return
 IPO –Volatile, HIGH Risk
 Insurance – Low Liquidity
 LOWThreat, Positive Impact on Industry profitability

7. External
Analysis
– Porter’s 5
force
 Bargaining Power of Suppliers
 Largely customers prefer banks for its reliability
 Gradually, customers have hedged inflation by investing in other
riskier avenues.
 MEDIUMThreat, Parity on Industry profitability

8. External
Analysis
– Porter’s 5
force
 Competitive Rivalry
 Public sector banks, led by SBI & associates, control 77.3% of the
banking sector
 Aggressive rivalry in metropolitan areas
 Issuance of new licenses will increase competitive rivalry in rural
areas over medium to long term
 Emergence of PAYMENTS BANK has diluted the need of physical
presence.
 HIGHThreat, Negative Impact on Industry profitability

9. External
Analysis
– Porter’s 5
force
Sr.No
Porter’s 5 Forces
Level of
Threat
Impact on
Profitability
1 Threat of New Entrants Medium Positive
2
Bargaining Power of
Customers
High Negative
3 Threat of Substitutes Low Positive
4
Bargaining Power of
Suppliers
Medium Neutral
5 Competitive Rivalry High Negative
Overall Low to Medium Positive

10. External
Analysis
– PESTEL
 Political
 Govt. Budget affects Banking activities
 Restricted with Govt. Policies
 Government’s support to the PSU banks
 74% FDI allowed in Private Sector
 Loosening FDI policies for foreign players to invest.

 Economic
 PARA’ to handle complex debts under one umbrella
 Monetary policy affects the workings of the bank (Bank Rate, CRR,
SLR)
 Easing Restrictions on External Commercial Borrowings

11. External
Analysis
– PESTEL
 Social
 Social Media influencing buying behavior of customers and
awareness on Data Privacy
 Increase in working population of India and growing disposable
income
 Rapidly expanding rural market influenced by broadband and
mobile network penetration.
 Illiteracy still being an issue.
 MUDRA initiative – influence retail and corporate banking channels
by creating demand for customized product offerings with features
those of large corporates but with low volume transactions.
 Technology
 Internet Banking, Mobile Banking,Wallets
 Biometrics and identity management
 Tools like CRM, Big DataAnalytics becoming core of Business
 Blockchain – Distributed Ledger system, Chatbot

12. External
Analysis
– PESTEL
 Environment
 Green banks - A green bank is a financial institution, typically public or
quasi-public, that uses innovative financing techniques and market
development tools in partnership with the private sector to accelerate
deployment of clean energy technologies.
 Use of Green Credit Cards
 NABARD, SIDBI, NHB, EXIM
 Impact Investments
 Sustainable Livelihood development
 Legal -
 The Banking Regulation Act 1949
 Bankruptcy Code
 Basel III norms
 Financial Resolution and Deposit Insurance Bill, 2017 shifting power from
RBI to union government.
 SWIFT GPI system to track end-to-end transaction references of 11,000
customers involved in SWIFT transaction worldwide.

13. Internal
Analysis
–SWOT
STRENGTHS
1. Diverse Maketing Mix
2. Efficient and strong top
management
3. High Proportion of long term
liabilities
4. High profit & revenue growth
WEAKNESSES
1. Lacks aggressive marketing
2. Lacks international Presence
3. Extremely low number of
branches and ATM's
4. Lack of legacy strengths like of
bigger banks.
OPPORTUNITIES
1. Small enterprise banking
2. Affordable housing
3. Entry into rural market
THREATS
1. Modernization of public sector
banks
2. Increasing NPA
3. Payments Bank
4. Cyber Threats
SWOT

14. Internal
Analysis
–VRIO
Resources Valuable Rare Inimitable
Organizat
ion
Vision Yes Yes No Yes
Corporate
governance practices
Yes Yes Yes Yes
Sustained Competitive
Advantage
Corporate Customer
diversity
Yes Yes Yes No
Competitive Parity
Distribution Network Yes Yes Yes Yes
Sustained Competitive
Advantage
Geographic reach Yes No No No Competitive Parity
Capital Structure Yes Yes Yes Yes
Sustained Competitive
Advantage
Information System
and Communication
network
Yes Yes No Yes
Temporary Competitive
Advantage
Risk Appetite Yes Yes Yes Yes
Sustained Competitive
Advantage
Customer Service Yes Yes No Yes
Temporary Competitive
Advantage
Reputation Yes Yes Yes Yes
Sustained Competitive
Advantage
It can be concluded that RBL’s resources gives it a sustainable competitive advantage in the above mentioned resources.

15. Internal
Analysis
–Value
Chain

16. Business Level
Strategy
 RBL Bank is following the Differentiation business level strategy.
The below three statement given by CEO of the bank reflects
strategy of RBL Bank
 Statement: 1: “Our strategy was not to compete head-on with
the bigger banks”.
 Statement: 2: “We want to be a mass banking institution”.
 Statement:3: “Inclusion, technology to drive RBL Bank's growth
strategy”.

17. BANK IS
ACHIEVING
CRITICAL MASS
THROUGH:
1. Partnership
Mindset : RBL Bank
also refer to as a
‘Partners Ka Bank’
RBL continued to form strategic partnerships across multiple segments and product categories.
These collaborations speed up customer acquisition, lower expansion costs and enable to
generate higher value for our customers.
 RBL have formed the following new partnerships:
 ShriramTransport FinanceCompany (STFC): Partnered with ShriramTransport Finance to
create a digital payments ecosystem for their customers.
 ETMONEY: Partnered with ETMoney by providing creditline to further strengthen the
portfolio of digital solutions.
 Indian Oil: Collaborated with IndianOil (IOCL) to launch a unique co-branded Rupay-powered
prepaid card.
 Bajaj Finserv: In partnership with Bajaj Finance, the Bank launched a series of co-branded
credit cards, thereby strengthening scale of operations in the rapidly growing credit cards
business that taps into Bajaj Finance’s vast network.
 Moneytap: In partnership with Moneytap bank have co-created and enabled a unique line-of-
credit for individuals allowing them to get instant approval for a credit line online, it’s a card
plus loan rolled into one.
 Indifi: A tie-up with this digital lender allowed extending loans to small merchants based on
card receivables.
 Shubh Loans:The tie-up with Shubh Loans allowed extending personal lending to individuals
via an app, with proprietary credit engine and digital process.
 Zeta: RBL is transforming paper driven process to digital by partnering with Zeta, India’s
largest B2B salary benefit solution provider.

18. BANK IS
ACHIEVING
CRITICAL MASS
THROUGH:
2. Inclusive
Banking
India forms about a fifth of the global population that does not have
bank accounts. Most lower-income households still do not have
meaningful access to affordable credit.
This is reflective of the huge untapped potential of this segment and
the opportunities therein.
Lending at the bottom of the pyramid is crucial to achieving
inclusive and all-encompassing growth and RBL believe that a few
players who bring scale, agility and a mindset of partnership will
lead this space
RBL increased its stake in Swadhaar Finserv to 100%, making it a
wholly owned subsidiary of the Bank.As a captive banking
correspondent for RBL Bank, Swadhaar Finserve will act as a major
catalyst in enabling to grow further in the micro-banking segment.

19. BANK IS
ACHIEVING
CRITICAL MASS
THROUGH:
3. Nurturing
Talent
RBL Bank had created an employee-friendly organization and
embraced the philosophy of ‘One Bank’ throughout the
organization, through training, development, career progression
and empowerment.
67% of employees covered under the Employee Stock Ownership
Plan (ESOP).
These measures have brought in more ‘skin in the game’ and have
helped brew a ‘passion for growth’ culture within the organization.
907
1328
1859
2798
3465
3872
4902
5300
0
1000
2000
3000
4000
5000
6000
No. of Employees
No. of Employees
2010-11 2011-12 2012-13 2013-14
2014-15 2015-16 2016-17 2017-18
4.4
6.7
7.9 7.7
9.1
11.8
13.1
15.9
0
2
4
6
8
10
12
14
16
18
Business per Employee (in Crs)
Business per Employees
(in Crs)
2010-11 2011-12 2012-13 2013-14
2014-15 2015-16 2016-17 2017-18

20. BANK IS
ACHIEVING
CRITICAL MASS
THROUGH:
4. Strong Risk
Management
andGovernance
 RBL maintain strong asset quality through disciplined credit
risk management
Bank RBL Bank ICICI AXIS
Net NPA %
(2018)
0.78% 4.77% 3.09%

21. BANK IS
ACHIEVING
CRITICAL MASS
THROUGH:
5.Continuous
Investment in
Technology
 Technology has been and continues to be a major pillar in driving the Bank's
strategy and success.
 RBL Bank has stayed abreast with these technologies incorporating big data,
cloud computing, chat bots and APIs, among others to build customer-centric
solutions for delighting customers.
 RBL Bank had launched following products over the years:
Digital Product, Insta Redemption Solution, Exclusively For Lic Mutual
Fund
Unique Digital Savings Account
PartneredWith Creditvidya For Instant EmploymentVerification
Co-createdAnd Enabled A Unique Line-of-credit For Individuals In
PartnershipWith Moneytap.
1.4 8.14
31.09
52.39
127.02
0
50
100
150
No. of visitors (lakhs)
No of visitors on website
(in lakhs)
2013-14 2014-15 2015-16 2016-17 2017-18
8.3
15.3
22
28
48
0
10
20
30
40
50
60
No. of customers (lakhs)
No of customers
(in lakhs)
2013-14 2014-15 2015-16 2016-17 2017-18

22. RBL Bank has done
series of
acquisitions and
infusions to add
strength in the
desired product
and customer
segments and also
it helped in expand
its base.
 Graphs showing Steadily expanding geographical reach &
accessibility
365
375
388
350
355
360
365
370
375
380
385
390
No. of ATMs
No. of ATMs
2015-16 2016-17 2017-18
16
20 20
0
5
10
15
20
25
No. of States
No. of Cities
2015-16 2016-17 2017-18
173 183 197
239
265
0
50
100
150
200
250
300
No. of Branches
No. of Branches
2013-14 2014-15 2015-16
2016-17 2017-18
8.3
15.3
22
28
45
0
20
40
60
No. of Customers (lakhs)
No. of Customers
(lakhs)
2013-14 2014-15 2015-16
2016-17 2017-18

23. Financial and
Operational
Highlights
 Graphs showing Financial andOperational Highlights:
11599
17099
24349
34588
43902
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
Deposits (in Crs)
Deposits (Crs)
2013-14 2014-15 2015-16 2016-17 2017-18
92.67
207.17
292.48
446.05
635.09
0
100
200
300
400
500
600
700
Net Profits (in Crs)
Net Profits (Crs)
2013-14 2014-15 2015-16 2016-17 2017-18

24. BCG Matrix
Corporate and institutional banking
& Retail banking can be consider as
the cash cow of RBL Bank, as it is
successfully able to earn
Business banking can be
consider as the cash cow
of RBL Bank
Rural & Agriculture
Banking Sector can be
consider as the question
mark for RBL bank

25. Thankyou