MBA PROJECT
SWOT analysis of HDFC Bank And Comparison with ICICI Bank By:- VARUN BAWA
Acknowledgements If words are considered to be signs of gratitude then let these words Convey the very same My sincere gratitude to HDFC BANK for providing me with an opportunity to work with BANK and giving necessary directions directions on doing this project to the best of my abilities. I am highly indebted to Mr.Tejvir singh., Branch Manager and company project guide, who has provided me with the necessary information informatio n and also for f or the support sup port extended ext ended out ou t to me in the completion of this report and his valuable suggestion and comments on bringing out this report in the best way possible. I also thank Prof. ______________ ,
who has
sincerely supported me with the valuable insights into the completion of this project.
2
CONTENTS
Sr. No.
Subject Covered
Page No.
1
Banking Structure in India
6-7
2
Indian Banking Industries
8-9
3
Upcoming Foreign Bank in India
10
4
HDFC BANK
11-12
5
Company Profile
13-15
6
Technology used
16-19
7
Product and Customer segments
20-23
8
Business Strategy
24-25
9
Inside Hdfc Bank
26-31
10
Rupee Earned – Rupee Spent
32-33
11
Recent Development
34-41
12
SWOT Analysis
42-48
3
BANKING STRUCTURE IN INDIA
Scheduled Banks in India (A) Scheduled Commercial Banks
Public sector Banks
•
•
•
(28) Nationalized Bank Other Public Sector Banks (IDBI) SBI and its Associates
Private sector Banks
Foreign Banks in India
Regional Rural Bank
(27) Old Private Banks
(29)
(102)
•
•
New Private Banks
(B) Scheduled Cooperative Banks
Scheduled Urban Cooperative Banks (55)
Scheduled State Cooperative Banks (31)
4
Here we more concerned about private sector banks and competition among them. Today, there are 27 private sector banks in the banking sector: 19 old private sector banks and 8 new private sector banks. These new banks have brought in state-of-the-art technology and Aggressively Aggressivel y marketed their products. The Public sector banks are Facing a stiff competition from the new private sector banks. The banks which have been setup in the 1990s under the guidelines of the Narasimham Committee are referred to as NEW PRIVATE SECTOR BANKS.
New Private Sector Banks •
Superior Financial Services
•
Designed Innovative Products
•
Tapped new markets
• •
Accessed Low cost NRI funds Greater efficiency
5
INDIAN BANKING INDUSTRIES
The Indian banking market is growing at an astonishing rate, with Assets expected to reach US$1 trillion by 2010. An expanding economy, middle class, and technological innovations are all contributing to this growth.
The country’s middle class accounts for over 320 million people. In correlation with the growth of the economy, rising income levels, increased standard of living, and affordability affordabili ty of banking products are promising factors for continued expansion.
6
The Indian banking Industry is in the middle of an IT revolution, Focusing on the expansion of retail and rural banking. Players are becoming becoming increasingly increasingly customer - centric in
their
approach, which has resulted in innovative methods of offering new banking products and services.
Banks are now realizing
the
importance of being a big player and are beginning to focus their attention on mergers
and acquisitions acquisition s to take advantage of
economies of scale and/or comply with Basel II
regulation.
“Indian banking industry assets are expected to reach US$1 trillion by 2010 and are poised to receive a greater infusion of foreign capital,” says Prathima Rajan, Rajan , analyst in Celent's banking group and author of the report.
“The banking industry should focus on having a small
number of large players that can compete globally rather than having a large number of fragmented players."
UPCOMING FOREIGN BANKS IN INDIA
By 2009 few more names is going to be added in the list of foreign banks in India. This is as an aftermath of the sudden interest shown
7
by
Reserve Bank of India paving roadmap for foreign banks in India
greater freedom in India. Among them is the world's best private bank by EuroMoney magazine, Switzerland's UBS.
The following are the list of foreign banks going to set up business in India :-
•
Royal Bank of Scotland
•
•
Switzerland's UBS
•
•
US-based GE Capital
•
•
Credit Suisse Group
•
•
Industrial and Commercial Bank of China
WE UNDERSTAND YOUR WORLD The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval from the
8
Reserve Bank of India (RBI) to set up a bank in the private sector, as part of the RBI's liberalization liberalization of the Indian Banking Banking Industry in 1994. 1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995.
HDFC is India's premier housing finance company and enjoys an impeccable track record in India as well as in international internation al markets. Since its inception in 1977, the Corporation has maintained a consistent and healthy growth in its operations to remain the market leader in mortgages. Its outstanding loan portfolio covers well over a million dwelling units.
HDFC has developed significant expertise in
retail mortgage loans to different market segments and also has a large corporate client base for its housing related credit facilities. With its experience experience in the financial markets, markets,
a strong market market
reputation, large shareholder base and unique consumer franchise, HDFC was ideally positioned to promote a bank in the Indian environment.
9
HDFC Bank began operations in 1995 with a simple mission : to be a “ World Class Indian Bank.” We realized that only a single minded
focus on product quality and service excellence would help us get there. Today, we are proud to say that we are well on our way towards that goal.
COMPANY PROFILE
10
STRONG NATIONAL NETWORK
HDFC BANK
HDFC bank ltd provides various financial products and services. It operates In three segments: Retail Banking, Wholesale Banking, and Treasury. The Retail banking segment provides various deposit products, including savings Accounts, current accounts, fixed deposits, and demat accounts. It also offers
11
Auto, personal, commercial vehicle, home, gold, and educational loans; loans Against securities, property, and rental receivables; and health care finance Working capital finance, construction equipment finance, and warehouse Receipt loans, as well as credit cr edit cards, debit cards, depository, investment Advisory, bill payments, and transactional services. In addition, this segment Sells third party financial products, such as mutual funds and insurance, as Well as distributes life and general insurance products through its tie-ups With insurance companies and mutual fund houses. The wholesale banking Segment provides loans, non-fund facilities, and transaction services to large Corporate, emerging corporate, small and medium enterprise, supply chain, Public sector undertaking, central and state government departments, and Institutional customers. It offers deposit and transaction banking products, Supply chain financing, working capital and term finance, agricultural loans, And funded non-funded treasury, and foreign exchange products. This segment’s services include trade services, ser vices, cash management, and money Market, custodial, tax collection, and electronic banking. In addition, it Provides correspondent bank services to co-operative banks, private banks, Foreign banks, and regional rural banks; and wealth management m anagement products For non-resident Indians. The Treasury Services segment operates primarily 12
In areas, such as foreign exchange, money market, interest rate trading, and Equities. As of March 31, 2009 HDFC bank had a network of 1,142 branches And 3,295 automated teller machines in 528 cities in India . The company was founded in 1994 and is based in Mumbai , India . KEY
EXECUTIVES
Mr. Aditya Puri , 59
Managing Director, Director, Member of Investors Grievance (Share) Committee, Member of Fraud Monitoring Committee, Member of Premises Committee, Member of Credit Approval Committee and Member of Risk Monitoring Committee Mr. Harish Engineer, 60 Head of Wholesale Banking, Exec. Director and Member of Customer Service Committee Mr. Paresh Sukthankar, 46 Head of Credit, Market Risk & Investor Relations, Exec. Director and Member of Risk Monitoring Committee Mr. Deepak S. Parikh, 64 Exec. Chairman Mr. Debajeet Das , VP, Treasury
13
March 2006
March 2007
March 2008
Citied
228
316
327
Branches
535
684
761
ATMs
1323
1605
1977
As of of March 31, 2008, the Bank’s distribution network was at 761 Branches and 1977 ATMs in 327 cities as against 684 branches and 1,605 ATMs in 320 cities as of March 31, 2007. Against the regulatory approvals for new branches in hand, the Bank expects to further expand the branch network by around 150 branches by June 30, 2008. During the year, the Bank stepped up retail customer acquisition with deposit 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 year ended 2007-08, the Bank’s net advances grew by 35.1% with retail advances growing by 38.6% and wholesale advances growing by 30%, implying a higher market share in both segments.
14
The transactional banking business also registered healthy growth With cash management volumes increased by around 80% and trade services volumes by around 40% over the previous year.
Portfolio quality as of March 31, 2008 remained healthy with gross nonperforming assets at 1.3% and net non-performing assets at 0.4% of total customer assets. The Bank’s provisioning policies for specific loan loss provisions remained higher than regulatory requirements.
15
TECHNOLOGY USED IN HDFC BANK
In the era of globalization each and every sector faced the stiff competition competitio n from their rivals. And world also converted into the flat from the globe. After the policy of liberalization liberalization and RBI initiatives initiatives to take the the step for the private sector banks, more and more changes are taking taking the part into it. And there there are create competition competition between the private sector banks and public sector bank. Private sector banks are today used the latest technology for the different transaction of day to day banking life. As we know that Information Technology plays the vital role in the each and every industries and gives the optimum return from the limited resources. Banks are service industries and today IT gives the innovative Technology application to Banking industries. HDFC BANK is the leader in the industries and today IT and HDFC BANK together combined they reached the sky. New technology changed the mind of the customers and changed ch anged the queue concept from the history hi story
16
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 drasticall y 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 Elec Electr tron onic ic Stra Straig ight ht Processing
Thro Throug ugh h
Data Warehousing , CRM Innovative Application
Technology
Derived Economies of Scale Reduced Transaction Cost Improve cost efficiency, Cross sell Provi rovid de new or supe superi rio or products
HDFC BANK is the very consistent consistent player player in the New private private sector banks. New private sector banks to withstand the competition from public sector banks came up with innovative products and superior service.
17
2001 Branches 43 ATM 40% Phone Bankin 14% Internet 2% Mobile 1%
2005 Branches 17 ATM 45% Phone Bankin 12% Internet 25% Mobile 1%
( % customer initiated Transaction by Channel )
18
HDFC BANK PRODUCT AND CUSTOMER SEGMENTS
PERSONAL BANKING
Loan Product
• •
•
• • • •
• •
• •
•
•
•
Auto Loan Loan Against Security Loan Against Property Personal loan Credit card 2-wheeler loan Commercial vehicles finance Home loans Retail business banking Tractor loan Work Workiing Capi apital tal Finance Construction Equipment Finance Health Care Finance Education Loan
Deposit Product
• • • • •
Saving a/c Current a/c Fixed deposit Demat a/c Safe Deposit Lockers
Investment & Insurance
• • • • •
•
•
Mutual Fund Bonds Knowledge Centre Insurance General and Health Insurance Equity and Derivatives Mudra Gold Bar
19
•
Gold Loan Cards
• • •
Payment Services
Credit Card Debit Card Prepaid Card
• • • • • •
-------------------------------Forex Services -------------------------------Product & Services • Trade Services • Forex service • Branch Locater RBI Guidelines •
• •
•
•
NetSafe Merchant Prepaid Refill Billpay Visa Billpay InstaPay DirectPay VisaMoney Transfer e–Monies Electronic Funds Transfer Online Payment of Direct Tax
Access To Bank
NetBanking OneView • InstaAlert • MobileBanking ATM • Phone Banking • Email Statements • Branch Network • •
WHOLESALE BANKING
20
Corporate
•
•
•
•
Funded Services Non Non Funded Funded Services Value Added Services Internet Banking
Small and Medium Enterprises • •
•
•
•
Funded Services Non Funded Services Specialized Services Value added services Internet Banking
Financial Institutions and Trusts BANKS •
•
• • • •
Clearing SubMembership RTGS – submembership Fund Transfer ATM Tie-ups Corporate Salary a/c Tax Collection
Financial Institutions Mutual Funds Stock Brokers Insurance Companies Commodities Business Trusts
BUSINESS MIX
21
Total Deposits
Retail
•
Gross Advances
Net Revenue
Wholesale
HDFC Bank is a consistent player in the private sector bank and have a well balanced product and business mix in the Indian as well as overseas markets.
•
Customer segments (retail & wholesale) account for 84% of Net revenues ( FY 2008)
•
Higher retail revenues partly offset by higher operating and credit costs.
•
Equally well positioned to grow both segments.
.
NRI SERVICES
22
Accounts & Deposits • • • • •
Rupee Saving a/c Rupee Current a/c Rupee Fixed Deposits Foreign Currency Deposits Accounts for Returning Indians
Remittances • • • • • • •
North America UK Europe South East Asia Middle East Africa Others Quick remit IndiaLink Cheque LockBox Telegraphic/ Wire Transfer Funds Transfer Cheques/DDs/TCs
Investment & Insurances • • • •
Mutual Funds Insurance Private Banking Portfolio Investment Scheme
Loans • • • •
Home Loans Loans Against Securities Loans Against Deposits Gold Credit Card
Payment Services • • • • • •
NetSafe BillPay InstaPay DirectPay Visa Money Online Donation
Access To Bank • • • • • • •
NetBanking OneView InstaAlert ATM PhoneBanking Email Statements Branch Network
23
BUSINESS STRETEGY
HDFC BANK mission is to be
" a World Class Indian Bank ",
benchmarking themselves against international internatio nal standards and best practices in terms of product offerings, technology, service levels, risk management management and audit & compliance. compliance. The objective objective is to build build sound customer customer franchises across distinct businesses so as to be a preferred provider of banking services for target retail and wholesale customer segments, and to achieve a healthy growth in profitability, profitabil ity, consistent with the Bank's risk risk appetite. appetite. Bank is committed to do this while ensuring the highest levels of ethical standards, professional integrity, integrity , corporate governance and regulatory compliance. Continue to develop new product and technology is the main business strategy of the bank. Maintain good relation with the customers is the main and prime objective of the bank.
HDFC BANK business strategy emphasizes the following :
24
•
Increase market share in India’s India’s expanding banking
and
financial services industry by following a disciplined growth strategy focusing on quality and not on quantity and delivering high quality customer service. •
Leverage our technology platform and open scaleable systems to deliver more mor e products to more customers and an d to control contr ol operating costs.
•
Maintain current high standards for asset quality through disciplined credit risk management.
•
Develop innovative products and services that attract the targeted customers and address inefficiencies inefficien cies in the Indian financial sector.
•
Continue to develop products and services that reduce bank’s cost of funds.
•
Focus on high earnings growth with low volatility.
INSIDE HDFC BANK 25
FIVE “S” , PART OF KAIZEN WORK PLACE TRANSFORMATION Focus on effective work place organization organization Believe in “ Small changes lead to large improvement ”
Every successful organization have their own strategy to win the race in the competitive market. They use some technique and methodology for smooth running of business. HDFC BANK also aquired the Japanese technique for smooth running of work and effective work place organization. organization.
Five ‘S’ Part of Kaizen is the technique which is used in the bank For easy and systematic work place and eliminating unnecessary things from the work place. BENEFIT OF FIVE “S”
26
• • • • •
It can be started immediately. Every one has to participate. Five “ S” is an entirely people driven initiatives. Brings in concept of ownership. All wastage are made visible.
FIVE ‘S’ Means :S-1 S-2 S-3 S-4 S-5
SORT SYSTEMATIZE SPIC-N-SPAN STANDARDIZE SUSTAIN
SEIRI SEITON SEIRO SEIKETSU SHITSUKE
(1) SORT :It focus on eliminating unnecessary items from the work place. It is excellent way to free up valuable floor space. It segregate items as per “require and wanted”.
Frequently Required Remove everything from workplace
Wanted but not Required
(2) SYSTEMATIZE :-
Less Frequently Required
Junk
Junk
Systematize is is focus on efficient efficient and effective effective Storage method. method.
27
That means it identify, organize and arrange retrieval. It largely focus on good labeling and identification practices. Objective :- “A place for everything and everything in its place”. (3) SPIC- n - SPAN :Spic-n-Span focuses on regular clearing and self inspection. It brings in the sense of ownership. (4) STANDERDIZE :It focus on simplification and standardization. standardization. It involve standard rules and policies. It establish checklist to facilitates autonomous maintenance maintenance of workplace. It assign responsibility for doing various jobs and decide on Five S frequency. (5) SUSTAIN:It focuses on defining a new status and standard of organized work place. Sustain means regular training to maintain standards developed developed under S-4. It brings in self- discipline and commitment towards workplace organization.
28
LABELLING ON FILE
FILE NUMBER SUBJECT FROM DATE TO DATE OWNER
BOX LABEL
For Example
1/3/A/6 1 – Work Station (1) 3 – Drawer (3) A - Shelf (A) 6 – File Number ( 6)
29
COLOUR CODING OF FILES
DEPARTMENT
Welcome Desk
Personal Banker Teller Relationship Manager Branch Manager Demat Others
In the HDFC BANK each department department has their their different different color color coding apply on the different file. Due to this everyone aware about their particular color file which is coding on it and they save their valuable time. It is a part of Kaizen and also included included in the system of of the Five ‘S’. Logic behind it that , the color coding are always differentiate the things from the similar one.
30
HUMAN RESOURCES
The Bank’s staffing needs continued to increase during the year particularly in the retail banking businesses in line with the business growth. Total number of employees employ ees increased from 14878 as of March31,2006 to 21477 as of March 31, 2007. The Bank continues to focus on training its employees on a continuing basis, both on the job and through training programs conducted by internal and external faculty. The Bank has consistently believed that broader employee ownership of its shares has a positive impact on its performance and employee motivation. The Bank’s employee stock option scheme so far covers around 9000 employees.
31
RUPEE EARNED - RUPEE SPENT
It is more important for every organization to know about from where and where to spent money. And balanced between these two things rupee earned and rupee spent are required for smooth running of business and financial soundness. soundness. This type of watch watch can control control and eliminate the unnecessary spending of business. In this diagram it include both things from where Bank earned Rupee and where to spent.
32
HDFC BANK earned from the ‘Interest from Advances’ 51.14 % , ‘Interest from Investment’ Investment’ 27.12 %, bank bank earned commission exchange and brokerage of 15.25 %. These are the major earning sources of the bank. Bank also earned from the Forex and Derivatives Derivativ es and some other Interest Income. Bank spent 39.75 % on Interest Expense, 30.27 % on Operating Expense and 14.58 % on Provision. Provision. Bank also spent spent Dividend and Tax on dividend, Loss on Investment , Tax. As we discuss above that balancing is must between these two for every organization especially in the era of globalization where there are stiff competition among various market players.
RECENT DEVELOPMENT
33
The Reserve Bank of India has approved the scheme of amalgamation of Centurion Bank of Punjab Ltd. with HDFC Bank Ltd. with effect from May 23, 2008.
All the branches of Centurion Bank of Punjab will function as branches of HDFC HDFC Bank with effect from May 23, 2008. 2008. With RBI’s approval, all requisite statutory and regulatory approvals for the merger have been obtained.
34
The combined entity would have a nationwide network of 1167 branches; a strong deposit base of around Rs.1,22,000 crores and net advances of around Rs.89,000 crores. The balance sheet size of the combined entity would be over Rs.1,63,000 crores.
Merger with Centurion Bank of Punjab Limited On March 27, 2008, the shareholders shareholders of the Bank accorded their consent to a scheme of amalgamation of Centurion Bank of Punjab Limited with HDFC Bank Limited. The shareholders shareholders of the Bank approved the issuance of one equity share of Rs.10/- each of HDFC Bank Limited for every 29 equity shares of Re. 1/- each held in Centurion Bank of Punjab Limited. This is subject to receipt of Approvals from the Reserve Reserv e Bank of India, stock stoc k exchanges and Other requisite statutory and regulatory authorities. The shareholders Also accorded their consent to issue equity shares and/or warrants convertible into equity shares at the rate of Rs.1,530.13 each to HDFC Limited and/or other promoter group companies on preferential basis, subject to final regulatory approvals in this regard.
The
Shareholders Shareholder s of the Bank have also al so approved app roved an a n increase incre ase in the authorized capital from Rs.450 crores to Rs.550 crores.
35
Promoted in i n 1995 by Housing Development De velopment Finance Corporation (HDFC), India's leading housing finance company, HDFC Bank is one of India's premier banks providing a wide range of financial products and services to its over 11 million customers across hundreds of Indian cities using multiple distribution channels including a pan-India network of branches, ATMs, phone banking, net banking and mobile banking. Within a relatively short span of time, the bank has emerged as a leading player in retail banking, wholesale banking, and treasury operations, its three principal business segments.
The bank's competitive strength clearly lies in the use of technology and the ability to deliver world-class service with rapid response time. Over the last 13 years, the bank has successfully successfull y gained market share in its target customer franchises while maintaining healthy profitability and asset quality.
36
As on March 31, 2008, the Bank had a network of 761 branches and 1,977 ATMs in 327 cities. For the year ended March 31, 2008, the Bank reported report ed a net profit prof it of INR 15.90 billion billi on (Rs.1590.2crore), (Rs.1590.2crore ), up 39.3%, over the corresponding year ended As of
March 31, 2007.
March 31, 2008 total deposits deposits were INR 1007.69 billion, billion,
(Rs.100,769 crore) up 47.5% over the corresponding year ended March 31, 2007. Total balance sheet size too grew by 46.0% to INR 1,331.77 billion bi llion
(133177 crore). Leading Leadin g Indian and international internat ional
Publications have recognized the bank for its performance and quality.
Centurion Bank of Punjab is one of the leading new generation private sector banks in India. The bank serves individual consumers, small and medium med ium businesses and large l arge corporations with a full range of financial products and services for investing, lending and
37
advice on financial planning. The bank offers its customers an array of wealth management products such as mutual funds, life and general insurance and has established a leadership 'position'. The bank is i s also a strong player in foreign exchange services, personal loans, mortgages and agricultural loans.
Additionally the bank offers a full suite of NRI banking products to Overseas Indians. On 29th August 2007, Centurion Bank of Punjab merged with Lord Krishna Bank (LKB), post obtaining all requisite statutory
and regulatory approvals.
This merger has further
strengthened the geographical reach of the Bank in major towns and cities across the country, especially in the State of Kerala, in addition to its existing dominance in the northern part of the country.
Centurion Bank of Punjab now operates on a strong nationwide franchise of 404 branches and 452 ATMs in 190 locations across the country, supported by employee base of over 7,500 employees. In addition to being listed on the major Indian stock exchanges, the Bank’s shares are also listed on the
Luxembourg
Stock
38
Exchange.
ACHIEVEMENT IN 2007
Business Monitor survey
TodayGroup
Financ Financial ial Expres ExpresssErnst & Young Award
One of India's " Most Innovative Companies"
Best Bank Award in the Private Sector category
39
Global HR 'Emp 'Emplo loye yerr Br Bran and d of th thee Year Year 2007 2007 -200 -2008' 8' Excellenc Excellencee Awards Awards Award - First Runner up, & many more - Asia Pacific HRM Congress: Business Today
'Best Bank' Award
Dun & Bradstreet – Amer Americ ican an Expr Expres esss Corporate Best 'Corporate Best Bank' Award Bank Award 2007 The Bombay Stock Exchange and Nasscom 'Best Corporate Foundation's Practice' Award Business for Social Responsibility Awards 2007
Social
Responsibility ity
Outl Outloo ook k Mone Money y & Best Bank Award in the Private Pr ivate sector category. NDTV Profit The The Asia Asian n Bank Banker er Best Retail Bank in India Excellence in Retail Fina Financ ncia iall Serv Servic ices es Awards Asian Banker
HDFC BANK Managing Director Aditya Puri wins the
Leadership Achievement Achievement Award for India
40
SWOT ANALYSIS
WEAKNESSES
STRENGTH •
Righ ight str strate ategy for for the
•
right products. •
Superior
Some gaps in range for certain sectors.
customer
service vs. competitors.
•
Customer service staff need training. 41
•
Great Brand Image
•
•
Produc Products ts have have requi required red
•
Management
cover
insufficient.
accreditations. •
Processes and systems, etc
High degree of customer satisfaction.
•
Good place to work
•
Lower
response
time
with
efficient
and
•
Sectoral growth is constrained by low unemployment levels and competition for staff
effective service. •
Dedicated workforce aiming at making a long-term career in the field.
42
Opportunities •
•
Threats
Profit margins will be good. Could Could extend extend to overse overseas as broadly.
•
•
•
•
•
New specialist applications. applications. Could seek better customer
Legislation could impact. Great risk involved Very
high
competition
prevailing in the industry. •
deals
Vulnerable to reactive
.
•
•
Fast-track
attack by major competitors career
•
Lack of inf infras rastru tructu cture in
developm development ent opportu opportunitie nities s
rural areas could constrain
on an industry-wide basis.
investment.
An applied research centre to create opportunities for developing techniques to provide added-value services.
•
High volume/low cost market is intensely competitive.
43
COMPETITIVE SWOT ANALYSIS WITH ICICI BANK STRENGTHS O P S – O Strategies P O Strength: Large Capital base. R T Opportunity: Market Expansion. U N I Strategy: Deep Penetration into T I Rural Market. E S S – T Strategies T H Strength: Low operating costs R E A Threat: Increased Competition T from others Pvt. Banks. S Strategy: Steps to Ensure Loyalty by old Customers.
WEAKNESSES W – O Strategies Weakness: Workforce Responsiveness. Opportunity: Outsourcing of Non – Core Business. Strategy: Outsource Customer Care & other E-Helps. W – T Strategies Weakness: Not Equal to International Standards. Threat: Entry of many Foreign F oreign Banks. Strategy: Consider additional benefits
44
Detailed Analysis: i.
Strength - Opportunity Analysis.
Strength:
It is well know that that ICICI Bank Bank has the largest largest Authorised Authorised Capital Base in the Banking System in India i.e. having a total capacity to raise Rs. 19,000,000,000 (Non – Premium Value). Opportunity:
Seeing the present financial & economic development of Indian Economy and also the
tremendous growth of the
Indian
Companies including the acquisition spree followed by them, it clearly states the expanding market for finance requirements and also also the growth in surplus surplus disposal disposal income of Indian Indian citizens has given a huge rise in savings deposits – from the above point it is clear that there is a huge market expansion possible in banking sector in India. Strategy:
From the analysis of Strength & Opportunity the simple and
45
straight possible strategy for ICICI Bank could be - to penetrate into the rural sector of India for expanding its market share as well as leading all other Pvt. Banks from a great gap.
ii.
Strength - Threat An Analysis.
Strength:
ICICI Bank is not only known for large capital but also for having a low operations cost though having huge number of branches and services provided. Threat:
After showing a significant growth overall, India is able to attract many international international financial & banking banking institutes, which are known for their state of art working workin g and keeping low operation operatio n costs. Strategy:
To ensure that that ICICI Bank keeps keeps going on on with low operation cost & have continuous business it should simply promote itself well & provide quality service so as to ensure customer loyalty, therefore guaranteeing continuous business.
46
iii iii.
Weak Weakne ness ss - Opp Oppor ortu tuni nity ty Analy nalysi sis. s.
Weakness:
It is well known that workforce responsiveness responsiveness in banking sector is Very low in Indian banking sector, though ICICI Bank has better responsible staff but it still lacks behind its counterparts like HSBC, HDFC BANK, CITI BANK, YES BANK etc. Opportunity:
In the present world, India is preferred one of the best places for out – sourcing of business process works and many
more.
Strategy:
As international companies are reaping huge benefits after outsourcing there customer care & BPO’s, this same strategy should be implemented by ICICI Bank so as to have proper customer service without hindering customer expectations.
47
iv.
Weak Weakne ness ss - Th Threat eat An Analysi ysis.
Weakness:
Though having a international presence, ICICI Bank has not been able to keep up the international international standards in providing providing customer customer service as well as banking works. Threat:
In recent times, India has witnessed entry of many international banks like CITI Bank, YES Bank etc which posses an external entrant threat to ICICI Bank – as this Banks are known for their art of working and maintain high standards of customer
service.
Strategy:
After having new entrants threat, ICICI Bank should come up with More additional benefits to its customer or may be even reduce some fees for any additional works of customers.
48
QUESTIONNARIE BASED ANALYSIS:
1. Are you aware of all products or schemes offered by the banks? a) YES b) NO
40% 60%
yes no
2. How do you find the service of the bank? a) Good b) Ok c) No comments
49
50%
good ok
45%
no comments 5%
3) What are reason that attract you to be a customer of the bank ? a) Its image b) Its service c) Products d) all of the above
50
5% 25% its image its ser vice vice 45%
its products all the above 25%
4. Are you satisfied with the dealing of the bank officials? a) Yes b) No c) To some extent
51
25%
30%
yes no to some extent
45%
5. Do you know about these products of the banking industry? a) Savings a/c b) fixed deposits c)current a/c d) de-mat a/c
yes/no yes/no yes/no yes/no
52
e) credit cards
yes/no
f) insurances
yes/no
g) mutual funds
yes/no
h) loans
yes/no
saving a/c 5%
15%
fixed deposit current a/c 15%
40%
demat a/c credit cards
5% 10%
5% 5%
insurances mutual funds loans
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6. Which of these products are you interested in? a) Savings a/c b) Fixed deposits
yes/no yes/no
c) Current a/c
yes/no
d) De-mat a/c
yes/no
e) credit card
yes/no
f) Insurances
yes/no
g) mutual funds
yes/no
h) Loans
yes/no
saving a/c 5%
19%
23%
fixed deposit current a/c demat a/c
24% 14% 3%
10%
credit cards insurances mutual funds loans
2%
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7. Which of the following banks are you interested in ? a) Private sector banks b) Public sector banks
30%
70%
private sector banks public sector banks
8. Do you know about the innovative service being provided by the banks ? 55
a) Yes yes
45% 55%
no
b) No
56
9. which of the following innovative services of of the bank would you like to go in for ? 57
a) phone banking b) A T M c)Net banking d) Mobile banking e)Bill payment f) None of these g) All of these
phone banking
5% 5%
10%
ATM
10% net banking 10% mobilebankin g 60%
none of these all of these
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10. How do you want to contacted? a) By personal banker b) By sales person c) By references d) Can’t say e) Any other (please mention)
9%
personal banker
5%
sales person 36% references
27% can't say 23%
any other
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11.Are you aware of the schemes offered for different age groups? a) yes b) no
60
40%
yes no
60%
If yes, what are those among the following? c) Senior citizen privileges d) Kid’s advantages privileges e) Preferred customer privileges f) All the above
senior citizen previliges 5% 30%
45% 20%
kid's advantages previliges preferredcust omer previliges all the above
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12. Which products of the bank would you rate the best? A) Savings a/c b) Fixed deposits c) Current a/c d) De-mat a/c e) Credit cards f) Insurances g) Mutual funds h) Loans
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saving a/c
0% 10%
fixed deposit
30%
demat a/c 30%
current a/c insurance
20%
5% 5%
mutual funds loan
13. How do you get to know about the various products of the banks? a) Through adds b) Through relations of friends c) Personal banker d) Sales
63
18%
adds
9% 18%
relatives or friends personal banker
55%
sales person
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FINDINGS:
•
•
•
•
•
•
•
•
•
•
•
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It has been find that the person in invest in the various products pr oducts and scheme of the banks only when he is having discriminatory income/surplus money. Businessman rarely invests invests in the deposit deposit schemes because he would would like to invest in his business to purchase more stock or to expand his business if he has surplus surplus money. I have also find that most m ost of the people like to go for fixed deposit schemes , mutual funds investments schemes . Persons having fixed monthly salary such as service class employee, Govt. employee professionals like doctors, teachers quite invest their savings in the deposit schemes so as to multiple their savings. Indian banking industry is no longer an assonated entity .it is increasingly beings effected by dynamic and highly competed global banking environment . Banks not only have to reduce cost but also have to design innovative strategy. Asset products like loans are getting least preference prefer ence by the customer due to the higher interest rate and cumbersome procedure. A visit was made to some branches; it was found that these schemes could not get due publicity or promotion at branches. Only a pamphlet is available which is given only to those who visit the bank to know about various schemes. It has been observed that people are unaware of new schemes and they keep on investing in the old scheme only. Went ask the people about the reason behind unawareness 80% of the the peopl peoplee say say that that unaw unawaren areness ess is is due due to lack lack of prop proper er advertisement.
65
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10% say that that unaw unawaren areness ess is due to the indiff indifferen erence ce of the bank bank officials. The bank officials attend their friends and relatives better than to the ordinary persons. - 10% say say unawa unawaren reness ess is is due to to diffic difficult ult acce access ss to bank bank offici officials als as as most of the time the bank officials remain busy. They don’t have time for ordinary persons, so a person is unable to know about the latest products or schemes offered by the bank.
LIMITATION:
Selling a product is not that much easy as we thick .there are certain hurdles that come in our way while selling a product. These are as follows: 1. customer customer are very very busy and and have have no time time to attend attend the the clll. 2. limite limited d access access to phone phone lines lines.. 3. lack of comprehe comprehensive nsive information information of the the bank’s products products for for the trainees. 4. change change of of contac contactt no. of of custome customers. rs. 5. interest interest rate on saving saving a/c’s, a/c’s, F’s is very very low as compared compared to other other banks. 6. preferred preferred customer customer know know much much about the the products products and and it is very very difficult to cross sell. 7. strict strict docume documenta ntatio tion. n. 8. complexity complexity of banki banking ng procedures procedures like: a) In case case of mutual mutual funds funds invest investment ment scheme scheme PAN PAN card is mandatory and some customer are not having PAN card. b) Icase of of credit credit carss carss there is a central centralized ized eligib eligibility ility criterion criterion for all the customers. Also in case of credit card , the customer have been segmented on the based of their profession.e.g: pr ofession.e.g: transporters, lawyers,
66
defence personnel and person in legal and political am bit are not eligible for credit cards. 9. mardet is at risk risk now a days days ,so not not everyone everyone is is willing willing to invest invest money in mutual funds investment scheme. scheme. 10.It is very difficult to open saving MAX MAX a/c becoz in saving MAX a/c customer is required to maintain a balance of rupees 25000 and that’s not possible for the middle class people which comprises maximum percentage of our population and who saves just 10 and 20 % of their income ……
SUGGESTIONS
• • • • • •
•
Documentation and formalites should should be less. Processing time and charged should be less Easy and quick accessibility of information should be there. More branches should be open . Reduction in interest rates for loan loan and over charges. At the time of providing loan loan bank should have have less terms and conditios Banks should try to aim at providing better service to the customers
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• •
Bank should also adopt latest trends for advertising of their products Banks officials should inprovedtheir work behavior and they should maintain sound relation with their customers.
•
DECLARATION
I, pardeep sharma, do hereby declare that the work presented by me In this project is original & bears no
68
resemblance with any of the studies/ works undertaken by anyone.
QUESTIONARRIE:
Name:Age:Designation;Annual income:Gender: - male/female Contact no.:-……………………(mob) …………………….(resi) ……………………..(off) 1. Are you you aware of of all the product productss or scheme scheme offered offered of the bank? a) Yes b) No 2. How do you you find find the service service of the bank? a) Good b) Ok c) no comm commen ents ts 3. What are are reasons reasons that attrac attractt you to be a customer customer of the the bank? bank? a) its im image 69
b) b) its its ser servi vice ce c) products d) all all of of the the abov abovee 4. Are you you satisfied satisfied with with the dealin dealing g of the bank bank official officials? s? a) Yes b) No
c) To some some exte extend nd 5. How do you you get to know know about about the various various product productss of the banks? banks? a) Adve Advert rtis isem emen entt b) b) sale saless agen agents ts c) perso persona nall bank banker er d) all all the the abov abovee 6. Do you know about about these these product productss of the banki banking ng industry? industry? a) Savings a/c
Yes/no
b) Fixed deposits
yes/no
c) Current a/c’s
yes/no
d) Demat a/c’s
yes/no
e) Credit card
yes/no
f) Insurances
yes/no
70
g) Mutual funds
yes/no
h) Loans
yes/no
7. Which of these products are you using? a) Savings a/c
b) Fixed deposits
yes/no yes/no
c) Current a/c
yes/no
d) De-mat a/c
yes/no
e) Credit card a/c
yes/no
f) Insurance
yes/no
g) Mutual finds
yes/no
h) Loans
yes/no
8. Which of these products are you interested in?
a) Savings a/c
yes/no
B) Fixed deposits
yes/no
c) Current a/c
yes/no
d) De-mat a/c
yes/no 71
e) Credit card a/c
yes/no
f) Insurance
yes/no
g) Mutual finds
yes/no
h) Loans yes/no 9. Which of the following banks are you interested in? a) priv privat atee secto sectorr banks banks b) b) public public sector sector banks banks c) 10. Do you you know about about the innovat innovative ive services services being being provided provided by the banks? a) Yes b) No 11.Which of the following f ollowing innovative service of the banks would you Like to go in for? a) Phone banking b) ATM c) Net banking d) Mobile banking e) Bill payment f) None of these 72
g) All of these 12. How do you want to contacted? a) By personal banker b) By sales person c) By references d) Can’t say e) Any other (please mention)
13. Are you aware of the schemes offered age groups? a) Yes b) No
If yes, what are those among the following? A) Senior citizen privileges b) Kid’s advantage privileges c) Preferred customer privileges d) All the above 14. Which product of the banks would you rate the best?
a) Saving a/c b) Fixed deposits
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c) Current a/c d) De-mat a/c e) Credit card a/c f) Insurance g) Mutual finds h) Loans
15. How do you get get to know about the various products of the banks? a) Though add b) Through relation of friends c) Personal banker D) Sales
16. Any suggestion:……………………………………………………………………………… ……………………………………………………………………………… ……………………………………………………………………………… ……………………………………………………………………………… ……………………………………………………………………………….. ………………………………………………………………………………. ……………………………………………………………………………… ……………………………………………………………………………… ……………………………………………………………………………… ……………………………………………………………………………… ……………………………………………………………………………… …………………………
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BIBLIOGRAPHY •
www.bnknetindia/com/banking/finance
•
http://en.wikipedia.org/wiki/bankingfinancialcompany
•
www.hdfcbank.com
•
www.hdfcbank/products/finance
•
www.google.com
•
Bank brochures and products folders.
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