MINOR PROJECT REPORT

COMPARATIVE ANALYSIS OF AXIS BANK LIMITED

WITH OTHER BANKS

SUBMITTED BY:
LAIRENLAKPAM MANGAL SINGH
02814901810
BBA (B&I) (M) 3rd SEMESTER
UNDER THE GUIDENCE OF:
Dr. MONIKA BOHRA
ASSISTANT PROFESSOR
DEPT. OF BUSINESS ADMINISTRATION

MAHARAJA SURAJMAL INSTITUTE

(Affiliated to Guru Gobind Singh Indraprastha University)
1

(Recognized by UGC U/S2 (F))

C-4 JANAK PURI, NEW DELHI-58

CERTIFICATE

This is to certify that LAIRENLAKPAM MANGAL SINGH of BBA (B&I) (M) 3rd
SEMESTER has accomplished the project report title AXIS BANK under my
guidance and provision.
He has submitted this project in the partial fulfillment of requirement as per the GURU
GOBIND SINGH INDTRAPRASTHA UNIVERSITY.
I further certify that this is an original work. All sources of information and help have
been duly mentioned and acknowledged.

Dr. MONIKA BOHRA

ASSISTANT PROFESSOR
DEPT. OF BUSINESS ADMINISTRATION
MAHARAJA SURAJMAL INSTITUTE

ACKNOWLEDGEMENT

This project has been possible through the direct and indirect cooperation of various
people who bear the imprints of their efforts for my work. I take this opportunity to
acknowledge the invaluable assistance of the people who helped me in the completion of
this project report.
I humbly convey my sincerest gratitude to my internal guide Dr. Monika Bohra for her
guidance, suggestions and unintended support, without which the project would not have
been possible. I would also like to thank the faculty members who provided me all the
necessary information in the completion of the project report.
Last but not the least; I would like to place a word of thanks for all those who directly or
indirectly helped me in the successful completion of the project.

LAIRENLAKPAM MANGAL SINGH

02814901810
BBA (B&I) (M) 3rd Semester

TABLE OF CONTENTS
3

Chapter 1:

Introduction

Chapter 2:

Objectives of the study

Research methodology
Limitations of the study

Profile of the organization

12
16
24
35

Evolution
Mission and Values
7 Ps of the Bank

Achievements

Chapter 3:

6
7
8

Analysis and Interpretation

Financial Performance
S.W.O.T Analysis

50
57

Chapter4:

Conclusion

59

Annexure:

Bibliography

62

CHAPTER I

INTRODUCTION

BANKING IN INDIA

HISTORY
The fi rst bank in India, though conservative, was established in 1786. From
1786 till today, the j o u r n e y o f I n d i a n B a n k i n g S y s t e m c a n b e s e g r e g a t e d
i n t o t h r e e d i s t i n c t p h a s e s . T h e y a r e a s mentioned below:

PHASE I - Early phase from 1786 to 1969 of Indian Banks

PHASE II - Nationalization of Indian Banks and up to 1991
PHASE III - Indian Financial & Banking Sector Reforms after 1991.

PHASE I
The General Bank of India was set up in the year 1786. Next came
B a n k o f H i n d u s t a n a n d 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, mostly Europeans shareholders. During the first phase the growth
was very slow and banks also experienced periodic failures between 1913 and 1948.
There were a p p r o x i m a t e l y

1100

banks, mostly

t h e f u n c t i o n i n g a n d a c t i v i t i e s o f commercial

small.

banks,

the

To

streamline

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 b a n k i n g i n I n d i a a s t h e C e n t r a l B a n k i n g A u t h o r i t y. D u r i n g t h o s e d a y
s p u b l i c h a s l e s s e r confidence in the banks. As an aftermath deposit mobilization
was slow. Abreast of it the savings bank facility provided by the Postal department was
comparatively safer. Moreover, funds were largely given to the traders.

PHASE II
Government 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 large
scale especially in rural and semi-urban areas. Second phase of nationalization Indian
Banking Sector Reform was carried out in 1980 with seven more banks. This step brought
80% of the banking segment in India under Government ownership. The following are the
steps taken by the Government of India to Regulate Banking Institutions 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 to

approximately 800% in deposits and advances took a huge jump by 11,000%. Banking in
the sunshine of Government ownership gave the public implicit faith and immense
confidence about the sustainability of these institutions.

PHASE III

This phase has introduced many more products and facilities in the banking sector in its
reforms measure. In 1991, under the chairmanship of M Narasimham, a committee was
set 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 put to give a
satisfactory service to customers. Phone banking and net banking is introduced. The
entire system became more convenient and swift. The financial system of India has
shown a great deal of resilience. It is sheltered from any crisis triggered by any external
macroeconomics shock as other East Asian Countries suffered. This is all due to a flexible
exchange rate regime, the foreign reserves are high, the capital account is not yet fully
convertible, and banks and their customers have limited foreign exchange exposure.

BANKING STRUCTURE IN INDIA

Reserve bank of
India (central bank
& supreme
monetary authority
of the country)

Scheduled
banks

Co-operatives
bank

Commercial
Banks

Public
sector (27)

Private
sector (25)

Foreign
banks in
India (39)

Regional Rural
Banks (357)

Urban
Cooperative
Banks (53)

State Cooperative
Banks (31)
Old Private Banks
(17)

State Bank of India

& its Associates
(8)

Nationalized
banks (19)
New Private
Banks (8)

OBJECTIVE OF THE PROJECT

To gain the knowledge of products and services of Axis Bank Ltd. and to compare
it vis-vis other banks.
To identify the perception of consumer about their banks with comparison to other
banks.
Recommendations to increase customer satisfaction level.

Because of the following reasons, I prefer this project

work to get the knowledge of the banking system.
Banking is an essential industry.
It is where we often wind up when we are seeking a problem in financial crisis
and money related query.
Banking is one of the most regulated businesses in the world.
Banks remain important source for career opportunities for people.
It is vital system for developing economy for the nation.
Banks can play a dynamic role in delivery and purchase of consumer durables
10

RESEARCH METHODOLOGY

1. Descriptive Research
2. Follow Questionnaire method
3. Primary Data: In some cases the researchers may realize the need for collecting
the first hand information. As in the case of everyday life, if we want to have first
hand information on any happening or event, we either ask someone who knows
about it or we observe it ourselves, we do the both. Thus, the two methods by
which primary data can be collected is observation and communication. Those
data collected first hand, either by the researcher or by someone else, especially
for the purpose of the study is known as primary data.
4. Secondary Data: Any data, which have been gathered earlier for some other
purpose, are secondary data in the hands of researcher.
5. Information was collected through both primary and secondary sources.

The data collected for this project has been taken

mostly from the secondary source.

11

LIMITATIONS

Some of the limitations of the project are listed as below:

1. Due to the financial and time constraints a cluster analysis of the

population so as to get better results was not feasible.
2. It was difficult to break the ice with the common people initially. It
was a daunting task to convince them to fill in the personal
details of the questionnaire where they have to mention the
monthly income, occupation etc.
3. To convince the people for a proper interviewing process is also
difficult.
4. Figures keep on changing from time to time.
5. Data may be outdated.
6. Compilation of data on competitor analysis was difficult due to
non-availability of correct information.
7. The figures have been taken as approximations.

12

CHAPTER II

PROFILE OF THE BANK

13

Type

Public

Traded as

BSE: 532215
LSE: AXBC
NSE: AXISBANK

Industry

Banking, Financial services

Founded

1994

Headquart Mumbai, India

ers
Key people Adarsh Kishore, Chairman
Shikha Sharma MD & CEO
Products

Credit cards, consumer banking, corporate banking, finance and

insurance, investment banking, mortgage loans, private banking,
private equity, wealth management
[1]

Revenue

198.26 billion (US$4.02 billion)(2011)

Net

33.88 billion (US$687.09 million)(2011)

income
AUM

US$ 40.121 billion (2010)

Employees 21,640 (2010)[2]

Website

www.axisbank.com

14

[1]

COMPANY PROFILE: AXIS

BANK
Axis Bank India, the first bank to begin operations as new private banks in 1994 after the
Government of India allowed new private banks to be established. Axis Bank was jointly
promoted by the Administrator of the specified undertaking of the

Unit Trust of India (UTI-I)

Life Insurance Corporation of India (LIC)
General Insurance Corporation Ltd.
Also with associates viz. National Insurance Company Ltd., The New India Assurance
Company, The Oriental Insurance Corporation and United Insurance Company Ltd. Axis
Bank in India today is capitalized with Rs. 43,283.77 Crores. It has more than
1281 branch offices and Extension Counters in the country with over 6270 Axis Bank
ATM proving to be one of the largest ATM networks in the country. This is the first bank
in India to offer the AT-PAR Cheque facility, without any charges, to all its Savings Bank
customers in all the places across the country where it has presence. With the AT PAR
cheque facility, customers can make cheque payments to any beneficiary at any of its
existence place. The ceiling per instrument is Rs. 50,000/-.The latest offerings of the bank
along with Dollar variant is the Euro and Pound Sterling variants of the International
Travel Currency Card. The Travel Currency Card is a signature based pre-paid travel card
which enables travelers global access to their money in local currency of the visiting
country in a safe and convenient way. The Bank has strengths in both retail and corporate
banking and is committed to adopting the best industry practices internationally in order
to achieve excellence.
It is has a diversified presence across business and product lines with corporateAdvances
constituting ~57% of its total loan book, retail ~20%, SME ~14% and agriculture ~9%, as
on December 31, 2010.
The bank was formerly known as UTI Bank; it changed its name to Axis Bank in July 2007.
The bank has overseas offices at Singapore, Dubai and Hong Kong and a representative o
ffice in
Shanghai.

15

EVOLUTION

UTI was established in 1964 by an Act of Parliament; neither did the Government of India
own it nor contributes any capital. The RBI was asked to contribute one-half of its initial
capital of Rs 5 crore, and given the mandate of running the UTI in the interest of the unitholders. The State Bank of India and the Life Insurance Corporation contributed 15 per
cent of the capital each, and the rest was contributed by scheduled commercial banks
which were not nationalized then. This kind of structure for a unit trust is not found
anywhere else in the world. Again, unlike other unit trusts and mutual funds, the UTI was
not created to earn profits. In the course of nearly four decades of its existence, it (the
UTI) has succeeded phenomenally in achieving its objective and has the largest share
anywhere in the world of the domestic mutual fund industry.'' The emergence of
a "foreign expert" during the setting up of the UTI makes an interesting story. The
announcement by the then Finance Minister that the Government of India was
contemplating the establishment of a unit trust caught the eye of Mr. George Woods,
the then President of the World Bank. Mr. Woods took a great deal of interest in the Indian
financial system, as he was one of the principal architects of the ICICI, in which his
bank, First Boston Corporation Bank, had a sizeable shareholding. Mr. Woods offered,
through Mr. B.K. Nehru, who was India's Executive Director on the World Bank, the
services of an expert. The Centre jumped at the offer, and asked the RBI to hold up the
finalization of the unit trust proposals till the expert visited India. The only point Mr.
Sullivan made was that the provision to limit the ownership of units to individuals might
result in unnecessarily restricting the market for units. While making this point, he had in
mind the practice in the US, where small pension funds are an important class of
customers for the unit trusts. The Centre accepted the foreign expert's suggestion, and
the necessary amendments were made in the draft Bill. Thus, began corporate
investment in the UTI, which received a boost from the tax concession given by the
government in the 1990-91 Budget. According to this concession, the dividends received
by a company from investments in other companies, including the UTI, were completely
exempt from corporate income tax, and provided the dividends declared by the investing
company were higher than the dividends received. The result was a phenomenal increase
in corporate investment which accounted for 57 per cent of the total capital under US-64

16

scheme. Because of high liquidity the corporate sector used the UTI to park its liquid
funds. This added to the volatility of the UTI funds.

The corporate lobby which perhaps subtly opposed the establishment of the UTI in the
public sector made use of it for its own benefits later. The Government-RBI power
game started with the finalization of the UTI charter itself. The RBI draft of the UTI charter
stipulated that the Chairman will be nominated by it, and one more nominee would be on
the Board of Trustees. While finalizing the draft Bill, the Centre changed this stipulation.
The Chairman was to be nominated by the Government, albeit in consultation with RBI.
Although the appointment was to be made in consultation with the Reserve Bank, the
Government could appoint a person of its choice as Chairman even if the Bank did not
approve of him.

Board of Directors
The members of the Board are
Dr. Adarsh Kishore

Chairman

Smt. Shikha Sharma

Managing Director & CEO

Shri S. K. Chakrabarti

Deputy Managing Director

Dr. R.H. Patil

Director

Smt. Rama Bijapurkar

Director

Shri R.B.L. Vaish

Director

Shri M.V. Subbiah

Director

Shri K. N. Prithviraj

Director

Shri V. R. Kaundinya

Director

Shri S. B. Mathur

Director

Shri Prasad R. Menon

Director

Shri R. N. Bhattacharyya

Director

Shri Samir K Barua

Director

17

SHAREHOLDING (as on March31,2011)

Shareholding pattern (Per cent)

2010

Promoters
Fll
Dll
Others

June 2010

September

December

March 2011

37.7
36.3
6.5
19.5

2010
37.5
37.2
5.5
19.7

2010
37.4
36.6
5.3
20.8

37.2
37.7
5.1
20.0

18

Above charts show, Axis Banks net advances are skewed towards the corporate segment,
of which the financial industry, infra, power, and metal together make up around 42%.
Only 20% of the net advances are in retail banking, with a major exposure to the housing
segment followed auto loans. Each of them (corporate and retail banking) contributes
23% to the net revenue of the Bank.

19

MISSION AND VALUES

OUR VALUES
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
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
Maximization of Stakeholder value
Success through Teamwork, Integrity and People

MARKETING OBJECTIVES
Axis Bank wants 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

MAJOR PLAYER IN THE BANKING INDUSTRY

HDFC
20

HISTORY
The Housing Development Finance Corporation Limited (HDFC) was amongst the first to
receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank
in the private sector, as part of the RBI's liberalization of the Indian Banking Industry in
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.

BUSINESS SUMMARY
HDFC Bank Limited offers a range of commercial and transactional banking services, and
treasury products to wholesale and retail customers. It operates in three segments:

Retail Banking,
Wholesale Banking,
Treasury Services.

WHOLE SALE BANKING SERVICES

The Bank's target market ranges from large, blue-chip manufacturing companies in the
Indian corporate to small & mid-sized corporate and agri-based businesses. For these
customers, the Bank provides a wide range of commercial and transactional banking
services, including

Working capital finance,

Trade services,
Transactional services,
Cash management,

RETAIL BANKING SERVICES

The objective of the Retail Bank is to provide its target market customers a full range of
financial products and banking services, giving the customer a one-stop window for all
his/her banking requirements. The products are backed by world-class service and

21

delivered to the customers through the growing branch network, as well as through
alternative delivery channels like

ATMs,
Phone Banking,
Net Banking,
Mobile Banking.

TREASURY
Within this business, the bank has three main product areas

Foreign Exchange and Derivatives,

Local Currency Money Market & Debt Securities,
Equities.

ICICI
HISTORY

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution,
and was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank was reduced
to 46%through a public offering of shares in India in fiscal 1998, an equity offering in
the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of
Madura Limited in an all-stock amalgamation in fiscal 2001, and secondary market sales
by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955
at the initiative 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 the
1990s, ICICI transformed its business from a development financial institution offering
only project finance to a diversified financial services group offering a wide variety of

22

products and 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 from non-Japan Asia to be listed on the NYSE. After consideration of
various corporate structuring alternatives in the context of the emerging competitive
scenario in the Indian banking industry, and the move towards universal banking, the
managements of ICICI and ICICI Bank formed the view that the merger of ICICI with ICICI
Bank would be the optimal strategic alternative for both entities, and would create
the optimal legal structure for the ICICI group's universal banking strategy. The merger
would enhance value for ICICI shareholders through the merged entity's access to lowcost deposits, greater opportunities for earning fee-based income and the ability to
participate in the payments system and provide transaction-banking services. The merger
would enhance value for ICICI Bank shareholders through a large capital base and scale of
operations, seamless access to ICICI's strong corporate relationships built up over five
decades, entry into new business segments, higher market share in various business
segments, particularly fee-based services, and access to the vast talent pool of ICICI
and its subsidiaries. In October 2001, the Boards of Directors of ICICI and ICICI Bank
approved the merger of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI
Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank.
The merger was approved by shareholders of ICICI and ICICI Bank in January2002, by the
High Court of Gujarat at Ahmedabad in March 2002, and by the High Court of Judicature
at Mumbai and the Reserve Bank of India in April 2002. Consequent to the merger, the
ICICI group's financing and banking operations, both wholesale and retail, have been
integrated in a single entity.
Performance Review Quarter and year ended March 31, 2010

35% year-on-year increase in standalone profit after tax to Rs. 1,006

crore for the quarter ended March 31, 2010 from

Rs. 744 crore for the quarter ended March 31, 2009
Highest ever consolidated profit after tax of Rs. 4,670 crore for the year
ended March 31, 2010; 31% increase from Rs.

3,577 crore for the year ended March 31, 2009

Current and savings account (CASA) ratio increased to 41.7% at March 31,
2010 from 28.7% at March 31, 2009

Net non-performing asset ratio decreased to 1.87% at March 31, 2010

from 1.96% at March 31, 2009 and 2.19% at December 31, 2009
Strong capital adequacy ratio of 19.4% and Tier-1 capital adequacy of

23

14.0%
Dividend of Rs. 12 per share proposed

Balance sheet

During

the

year

ended

March

31,

2010,

the

Bank

has

significantly

strengthened its deposit franchise. This is reflected in the strong growth

in savings and current account deposits and increase in the CASA ratio.
The Bank continues to invest in expansion of its branch network to
enhance its deposit franchise and create an integrated distribution
network for both asset and liability products.
CASA deposits increased 34% to Rs. 84,216 crore (US$ 18.8 billion) at March
31, 2010 from Rs. 62,668 crore (US$ 14.0 billion) at March 31, 2009 and
the CASA ratio increased from 28.7% at March 31, 2009 to 41.7% at March
31, 2010. Total deposits of the Bank were Rs. 202,017 crore (US$ 45.0
billion) at March 31, 2010, compared to Rs. 218,348 crore (US$ 48.6
billion) at March 31, 2009.
The branch network of the Bank has increased to 1,741 branches at April 24,
2010 giving the Bank a wide distribution reach in the country.
The loan book of the Bank decreased to Rs. 181,206 crore (US$ 40.4 billion)
at March 31, 2010 from Rs. 218,311 crore (US$ 48.6 billion) at March 31,
2009 mainly due to the repayments from the retail loan portfolio and the
loan portfolio of overseas branches.

24

SBI
HISTORY

The origin of the State Bank of India goes back to the first decade of the nineteenth
century with the establishment of the Bank of Calcutta in Calcutta on 2 June 1806.Three
years later the bank received its charter and was re-designed as the Bank of Bengal (2
January 1809). A unique institution, it was the first joint-stock bank of British India
sponsored by the Government of Bengal. The Bank of Bombay (15 April 1840) and the
Bank of Madras (1 July 1843) followed the Bank of Bengal. These three banks remained at
the apex of modern banking in India till their amalgamation as the Imperial Bank of India
on 27 January 1921.Primarily Anglo-Indian creations, the three presidency banks came
into existence either as a result of the compulsions of imperial finance or by the felt
needs of local European commerce and were not imposed from outside in an arbitrary
manner to modernize India's economy. Their evolution was, however, shaped by ideas
culled from similar developments in Europe and England, and was influenced by changes
occurring in the structure of both the local trading environment and those in the relations
of the Indian economy to the economy of Europe and the global economic framework.

BUSINESS SUMMARY
The business of the banks was initially confined to discounting of bills of exchange or
other negotiable private securities, keeping cash accounts and receiving deposits and
issuing and circulating cash notes. Loans were restricted to Rs. one lakh and the period
of accommodation confined to three months only. The security for such loans was public
securities, commonly called Company's Paper, bullion, treasure, plate, jewels, or goods
'not of a perishable nature' and no interest could be charged beyond a rate of twelve per
cent. Loans against goods like opium, indigo, salt woolens, cotton, cotton piece goods,
mule twist and silk goods were also granted but such finance by way of cash credits
gained momentum only from the third decade of the nineteenth century.

25

All commodities, including tea, sugar and jute, which began to be financed later, were
either pledged or hypothecated to the bank. Demand promissory notes were signed by
the borrower in favor of the guarantor, which was in turn endorsed to the bank. Lending
against shares of the banks or on the mortgage of houses, land or other real property
was, however, forbidden. Indians were the principal borrowers against deposit of
Company's paper, while the business of discounts on private as well as salary bills was
almost the exclusive monopoly of individuals Europeans and their partnership firms. But
the main function of the three banks, as far as the government was concerned, was
to help the latter raise loans from time to time and also provide a degree of stability to
the prices of government securities.

SERVICES PROVIDED

PERSONAL BANKING:
AGRICULTURAL BANKING
CORPORATE BANKING
NRI BANKING

26

INDIAN OVERSEAS BANK

HISTORY
Indian Overseas Bank (IOB) was founded on February 10, 1937 by Shri.M.Ct.M.
Chidambaram Chettyar. IOB had the unique distinction of commencing business on the
inaugural day itself in t h r e e b r a n c h e s s i m u l t a n e o u s l y - a t K a r a i k u d i a n d
C h e n n a i i n I n d i a a n d R a n g o o n i n B u r m a (presently Myanmar) followed by a
branch in Penang.
Indian Overseas Bank was the first Bank to venture into consumer credit. It introduced
the popular Personal Loan scheme. In 1964, the Bank made a beginning in
computerization in the areas of inter-branch reconciliation and provident fund accounts.
IOB was one of the 14 major banks that were nationalized in 1969. On the eve of
Nationalization in 1969, IOB had 195branches in India with aggregate deposits of Rs
67.70 crores and Advances of Rs 44.90 crores. In1977, IOB opened its branch in Seoul and
the Bank opened a Foreign Currency Banking Unit in the free trade zone in Colombo in
1979.As of March 2003, IOB had 1427 branches in India and 6 branches overseas. Besides
the Bank has a network of over 240 ATMs and 243 Extension Counters. IOB has
specialized branches to cater to the exclusive needs of Commercial & Industrial credit,
Industrial finance, Small Scale industries, hi-tech agriculture and foreign exchange.

SERVICES PROVIDED

Saving Bank Deposits

No Frills SB Accounts
Current Account
Fixed Deposit
Reinvestment Deposit
Recurring Deposit Account
Annuity Deposit Plan
Multiple Investment Scheme
Cumulative Benefit Deposit
Multiple Deposit Account
27

7P FRAME WORK IN AXIS BANK

Once the marketing strategy is developed, there is a "Seven P Formula" that should be
used to continually evaluate and reevaluate your business activities. These seven are:

Product,
Price
Promotion
Place
Process
Positioning

People, as products, markets, customers and needs change rapidly, company must
continually revisit these seven Ps to make sure you're on track and achieving the
maximum results possible for you in today's marketplace.

PRODUCT
To begin with, develop the habit of looking at your product as though you were an outside
marketing consultant brought in to help your company decide whether or not it's in the
right business at this time. Ask critical questions such as, "Is the current product or
service, or mix of products and services, appropriate and suitable for the market and the
customers of today?"
Develop a habit of assessing your business honestly and asking,

Are these the right products or services for our customers today?
Compared to your competitors, is your product or service superior in some significant
way to anything else available? If so, what is it? If not, could you develop an area
of superiority? Should you be offering this product or service at all in the current market

place?
Product variety, quality and its features.
Is there a market for the service on offer?
Is the market growing or shrinking?
Is the service new or established?
The competition prevailing in the market for the service on offer?
The USP of the product.

Products and Services on offered by AXIS Bank

28

 Accounts:

Easy Access Accounts

Prime Savings Account
Salary Account
Womens Saving Account
Senior Privilege Account
Defense Salary Account
Trust & NGO Savings Account
Azzadi No frills
RFC (D) Account
Pension savings Account.

Investments:

Insurance:

Deposits:

Fixed Deposits
Recurring deposits
Encash 24
Tax Saver Fixed Deposits

Loans:

Online Trading
Mutual Funds
Fixed Income
Depository Services
E Depository Services

Consumer Loan

Home loan
Personal loan
Loan Against Property
Loan Against Security
Car Loans
Study Loans
Two Wheeler Loan

29

Health Insurance
Family Health
Health Guard
Hospital Cash

 PRICES

The second P in the formula is price. Develop the habit of continually

examining and reexamining the prices of the products and services you
sell to make sure they're still appropriate to the realities of the current
market. Sometimes you need to lower your prices. At other times, it
may be appropriate to raise your prices. Many companies have found
that the profitability of certain products or services doesn't justify the
amount of effort and resources that go into producing them. By raising
their prices, they may lose a percentage of their customers, but the
remaining percentage generates a profit on every sale. Could this be
appropriate for you? Sometimes you need to change your terms and
conditions of sale. Sometimes, by spreading your price over a series of
months or years, you can sell far more than you are today, and the
interest you can charge will more than make up for the delay in cash
receipts. Sometimes you can combine products and services together
with special offers and special promotions. Sometimes you can include
free additional items that cost you very little to produce but make your
prices appear far more attractive to your customers. In business, as in
nature, whenever you experience resistance or frustration in any part
of your sales or marketing activities, be open to revisiting that area. Be
open to the possibility that your current pricing structure is not ideal
for the current market. Be open to the need to revise your prices, if
necessary, to remain competitive, to survive and thrive in a fastchanging market place.

AXIS bank has developed innovative strategies against its competitors

with respect to pricing by use of technology. The use of technology is
the strategic differentiator for AXIS bank that helps in cost
minimization and creating efficiency for the customer. The creation of
centralized processing system linking all its branches has been a major
strategic move in this regard.

The pricing mechanism and features of various HDFC products are as

follows: Home Loans:

Floating rates:

For loan of up to five years for amounts between Rs one lakh and Rs 50 lakh is at9.25 per
cent (9 per cent).
The rate for loans of 5 years and above up to 10 years is now at 9.75 per cent (9.50 per cent).
The interest rate for above ten years now stands at 10.25 per cent (10 per cent)

Description of Charges
Minimum Average Quarterly

Regular Savings Account

Rs 5000 (urban),

Balance

Rs 2500(Semi Urban),

Rs 1000 (Rural branch),

Rs 500 (student account)

Rs750 per quarter(urban &

Charges on non
maintenance thereof

semi urban)

Rs 500 (Rural branch),

Cheque Book, Pass Book

Rs 250 (student account)

Free

Issuance

Account Statements
Phone banking and Net banking

Free
Free

PROMOTION

The third habit in marketing and sales is to think in terms of promotion

all the time. Promotion includes all the ways you tell your customers
about your products or services and how you then market and sell to

them. Small changes in the way you promote and sell your products
can lead to dramatic changes in your results. Even small changes in
your advertising can lead immediately to higher sales.

AXIS bank has devised an aggressive promotional strategy through its

diversified distribution mix which includes tied agencies and alternate
channels like banks, brokers, telemarketing, direct sales force, internet
advertizing .

Some of the promotional activities undertaken are:

Cross Selling exercises

Organizing school level painting competitions in order to create awareness about the
environmental concerns and the wild life to promote kids advantage account.
Wheels of fortune - This promo are targeted at all those customers who avail a personal
loan, car or a two wheeler loan. There will be lucky draw at the end of the promo and the
winners would get exotic prizes.
Personalized promos by sending mailers about various products on offer to all those who
come in contact during the mass promotion strategies.

The promotional strategies are carried out with an objective of

positioning AXIS bank as a one stop financial super market. The focus
of the promotions are not just confined to acquisition of new products
but also extends to creating product awareness, enhancing usage, and
also provide value add to the customers for their faith and loyalty.
These promotions are scientifically designed based on data analysis
and data mining in order to have maximum impact on the target
audience.

PLACE

The fourth P in the marketing mix is the place where your product or
service is actually sold. You can sell your product in many different
places. Some companies use direct selling, sending their salespeople

out to personally meet and talk with the prospect. Some sell by
telemarketing. Some sell through catalogs or mail order. Many
companies use a combination of one or more of these methods. It
refers to those activities of the company that makes the product
available

to

distribution

target

consumers.

channels,

dealer

It

includes

ships

that

geographic

spread,

facilitate

network

establishment. Axis bank is widely spread in India and its core banking
operations has huge network

1281 branches and extension counters foreign offices in Singapore, Hong Kong,
Shanghai and Dubai
6270 ATMs reaches out to 34 states and union territories across the country

AXIS bank owns a wholly owned distribution channel with dedicated

workforce, thereby lowering the operating costs. It uses its network base to good
effect to sell customized products.

PROCESS

The fifth element in the marketing mix is the process. Develop the
habit of standing back and looking at every visual element in the
process or service through the eyes of a critical prospect. Remember,
people from their first impression about you within the first 30 seconds
of seeing you or some element of your company. Small improvements
in the process or external appearance of your product or service can
often lead to completely different reactions from your customers. With
regard to the process of your company, your product or service, you
should think in terms of everything that the customer sees from the

first moment of contact with your company all the way through the
purchasing process.

Process refers to the way your product or service appears from the
outside. Packaging refers to your people and how they dress and
groom. It refers to your offices, your waiting rooms, your brochures,
your correspondence and every single visual element about your
company. Everything counts. Everything helps or hurts. Everything
affects your customer's confidence about dealing with you.

POSITIONING

The next P is positioning, the habit of thinking continually about how

you are positioned in the hearts and minds of your customers.

How do people think and talk about you when you're not present?
How do people think and talk about your company?
What positioning do you have in your market, in terms of the specific words people use
when they describe you and your offerings to others?

AXIS Bank has positioned its branches in all the strategic position so
that it is easily accessible to maximum customer. It has also come
up with some phone banking centre and centralized collection and
payment hub.

CENTRALISED PHONE BANKING CENTRE

The Banks Centralized Phone Banking Centre provides customers

across the country Access to the Bank over the phone, handling
multiple queries in about 7000 calls per day.

CENTRALISED COLLECTION AND PAYMENT HUB

The Banks Centralized Collection and Payment Hub (CCPH) manages

the entire collection and payment activity under the Banks Cash
Management Services (CMS) across the country, handling on an
average about Rs.5000 crores per month on the collection front and
aboutRs.1500 crores per month on the payment front.

PEOPLE

The final P of the marketing mix is people. Develop the habit of

thinking in terms of the people inside and outside of your business who
are responsible for every element of your sales and marketing strategy
and

activities.

It's

amazing

how

many

entrepreneurs

and

businesspeople will work extremely hard to think through every

element of the marketing strategy and the marketing mix, and
then pay little attention to the fact that every single decision and
policy has to be carried out by a specific person, in a specific way. Your
ability to select, recruit, hire and retain the proper people, with the
skills and abilities to do the job you need to have done, is
more important than everything else put together. An essential
ingredient to any service provision is the use of appropriate staff and
people. Recruiting the right staff and training them appropriately in the
delivery of service is essential if the organization has to obtain
competitive advantage. AXIS bank values its human resources very
highly and is on a constant endeavor to continuously develop its
human resources by laying strong emphasis on training development.
It possesses a highly motivated team of professionals and has the
lowest employee turnover rate in the industry.

PROMOTIONAL STRATERGIES

In early 1950's most of the markets were choking with surplus products
on offer, defying the theory "the best quality will always sell". The

emergence of Branding as a value in offering has kept many

organizations leaders, and in survival. Branding is termed as a part of
offering, created in the mind of customer and consumer of superior
values that he or she perceives and ready to pay for. The brand can be
associated with superior product, superior services, and superior sales
after services,

or

easy

access.

In

today's

era

with

increasing

competition, is that not important enough to revisit Brand as a

marketing offering (Product or Service).

BRAND NAME

UTI has officially announced the change of its name to Axis Bank. The
awareness campaign titled UTI Bank is now Axis Bank; everything is
the same except the name, has been created by O&M and is the
brainchild of Sumanto Chattopadhyay.

The decision to re-brand the bank emanated from the need to move
out of a scenario of brand confusion that is created by several
shareholder-unrelated entities using the UTI brand. On the creative
point of view, the change of name from UTI Bank to Axis Bank is
precisely just a name change. Everything else about the brand remains
the same. Axis is a strong name with an international aura to it. It is
very much in keeping with UTIs success story in the private banking
arena.

LOGO DESIGN

The logo design of Axis Bank is based on the letter A. It is a

contemporary, universal and solid design that retains the burgundy
color of the original UTI logo as a link to its heritage

MARKETING INITIATIVES

On the marketing initiatives, a multimedia campaign was unfolded on

August 1 that will go on for the next few weeks. It seeks to reassure
customers that the change of name will in no way affect the services
offered by the bank. On the thought process the creative platform
adopted for the name change is based primarily on twins -- siblings
whose names are different, but are identical in every other way. This
campaign will run on

Television
Outdoor
Print
Radio and other 360-degree media.

Some interesting innovations are planned in the print medium. On

radio, the name change is being expressed in a slightly different
manner, in keeping with the nature of the medium.

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 Banks fast pace of growth is expected to sustain over

the next couple of years.

Marketing Objectives

Axis Bank wants 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

Net Revenue Segmentation (FY 10)

In FY10, treasury operations contributed ~54% of total revnue, retail bankin

g ~23% and corporate/ wholesale banking ~23%. In December 2008, the bank laun
ched its new investment advisory service exclusively for high networth clients.
In January 2009, the bank set up Axis Asset Management Company to carry on the
activities of managing a mutual fund business. Alsoit incorporated Axis Mutual

Fund Trustee Ltd to act as the trustee for the mutual fund business.
In February 24, 2010, the bank launched Call & Pay,a mobile payments solution
using Axis debit cards.

Axis is the countrys first bank to provide a secure debit cardbased payment
service over interactive voice response (IVR).

March 2011

September 2009

March 2008

September 2007

July 2007

July 2007

June 2007

April 2007

April 2007

March 2007

March 2007

August 2006

July 2006

May 2006

Bank launches e-Wallet

Card
Bank launches private
banking business in the
domestic market to
cater to highly affluent
individuals and families
Axis Bank launches
Platinum credit card,
Indias first EMV chip
based card
Axis Bank ties up with
Privee Edmond de
Rothschild Europe for
Wealth Management
UTI Bank re-brands
itself as Axis Bank
UTI Bank ties up with
Tata Motors Ltd. for Car
Loans
UTI Banks expansion
into Asia supported by
FRS
UTI Bank opens a
Financial Services
Category I Branch in
the DIFC in Dubai
UTI Bank ties up with
Hyundai Motor India Ltd.
for Car loans
UTI Bank ties up with
IIFCL to provide finance
for infrastructure
projects in the country
UTI Bank launches Car
Loans in association
with Maruti Udyog Ltd.
UTI Bank becomes the
first Indian bank to
successfully issue
Foreign Currency Hybrid
Capital in the
International Market
UTI Bank opens
Representative Office in
Shanghai
UTI Bank and LIC join
hands to launch an
Annuity Card for group
pensioners of LIC

 ACHIEVEMENTS / AWARDS

December 2005

May 2005

March 2005

February 2005

February 2004

December 2003

August 2003

August 2003

UTI Bank wins

International Financing
Review(IFR) Asia India
Bond House award for
the year 2005
UTI Bank and Bajaj Allianz
join hands to distribute
general insurance
products
UTI Bank gets listed on
London Stock Exchange,
raises US$ 239.30 million
UTI Bank appointed by
Govt. of Karnataka as the
sole banker for the
Bangalore One (B1)
project
UTI Bank (by pursuing a
proactive strategy of
forging bilateral
agreements and being a
progressive player in the
multi-lateral consortiums
for shared ATM network)
offers its customers
access to over 7000 ATMs
across the country the
largest to be offered by
any
Bank inaugurated its ATM
at Thegu near the Nathula
Pass in Sikkim. This ATM
is at the highest altitude
in India
The Banks Debit Card
crosses 1 million mark
Total advances crosses
Rs. 7000 crore

May 2003

February 2003

February 2003

August 2002

March 2002

January 2002

January 2002

Banks declares a net

profit of Rs. 192.18 crores
for FY 03, a growth of
43% over the previous
year
Bank in a pioneering
move, launches the AT
PAR Cheque facility, free
of cost, for all its Saving
Bank customers
Bank wins mandate to set
up 14 ATMs at the
Western Railway Stations
along the Mumbai division
Bank signs MoU with
BSNL regarding bill
collection services across
the country through both
online and offline
channels
Deposits Cross Rs. 12000
crore
The Banks 100th branch
opens at Tuticorin, Tamil
Nadu
The Bank opens an ATM
at Gol Dak-Khana, i.e. the
New Delhi GPO, making it
the first instance of a
commercial bank setting
up an ATM at any postoffice in the country.

July 2001

Bank ties up with Govt. of

Andhra Pradesh for
collection of commercial
tax

December 2000

October 2000

April 2000

March 1995

April 1994

December 1993

Bank opens its 200th ATM.

It becomes the 2nd largest
ATM network in the
country , a position held
even today
Bank becomes fully
networked
UTI Bank calls off its
proposed merger with
Global Trust Bank and
surges ahead on its own
Completes first profitable
year in operation
First branch of UTI Bank
inaugurated at
Ahmedabad by Dr.
Manmohan Singh, Honble
then Finance Minister of
India
Registered office at
Ahmedabad; Head office
in Mumbai

CHAPTER III

ANALYSIS AND
INTERPRETATION
OF DATA

Some ratios that are relevant for

evaluating banks include

Credit to deposit ratio

Capital adequacy ratio

Non-performing asset ratio

Provision coverage ratio

Return on assets ratio

We thought it would be an interesting idea to look and compare these

numbers for the leading private (HDFC Bank, ICICI Bank and Axis Bank)
and public sector (SBI, Punjab National Bank and Bank of Baroda)
banks. In addition, we will also see how the same ratios have changed
over the past few years.

Credit to deposit ratio: This ratio indicates how much of

the advances lent by banks is done through deposits. It is the
proportion of loan-assets created by banks from the deposits received.
The higher the ratio, the higher the loan-assets created from deposits.
Deposits would be in the form of current and saving account as well as
term deposits. The outcome of this ratio reflects the ability of the bank
to make optimal use of the available resources.

If we see the following chart, ICICI Bank distinctly stands out from its
peers. A strong reason for the same would be its aggressive nature.
Further, PSU banks and Axis Bank have seen their ratios increase
gradually over the years. The credit to deposit ratio of HDFC Bank on
the other hand, has been fairly stable.

Capital adequacy ratio: A bank's capital ratio is the ratio

of qualifying capital to risk adjusted (or weighted) assets. The RBI has
set the minimum capital adequacy ratio at 9% for all banks. A ratio
below the minimum indicates that the bank is not adequately
capitalized to expand its operations. The ratio ensures that the bank do
not expand their business without having adequate capital.

It must be noted that it would be difficult for an investor to calculate

this ratio as banks do not disclose the details required for calculating
the denominator (risk weighted average) of this ratio in detail. As such,
banks provide their CAR from time to time.

Considering that the Indian banking sector has been growing at a

strong pace, all the leading banks, both private and public have been
expanding operations at a strong pace. As such, their CAR ratios are
well above the prescribed limit of 9%. Private Banks such as HDFC
Bank, Axis Bank and ICICI Bank have in fact increased their CAR over
the past four to five years.

As for the public banks, SBI and Punjab National Bank (PNB) have seen
their CAR steadily expand over the past few years as well. However,
this ratio for Bank of Baroda has been fairly stable.

Non-performing asset ratio: The net NPA to loans

(advances) ratio is used as a measure of the overall quality of the
banks loan book. An NPA are those assets for which interest is overdue
for more than 90 days (or 3 months). Net NPAs are calculated by
reducing cumulative balance of provisions outstanding at a period end
from gross NPAs. Higher ratio reflects rising bad quality of loans.

The NPA ratio is one of the most important ratios in the banking sector.
It helps identify the quality of assets that a bank possesses. If we look
at the chart below, we can clearly see a differentiation between Indias
largest banks. A bank such as ICICI Bank would garner one of the
highest NPA ratios amongst private banks on the back of its aggressive
nature. As the banks lends out strongly to customers, the chances of
them defaulting also rises. Plus, considering that private banks charge
higher interest costs would only make things more difficult for its
customers. At the same time, the NPA ratio of a relatively much
conservative bank such as HDFC Bank would remain low. It is clearly
evident from the above chart. The marginal spurt in this ratio during
FY09 is due to its acquisition of Centurion Bank of Punjab.

Further, Axis Bank has done well in the recent past to bring down its
NPA ratio. So is the case for Bank of Baroda (BoB). PNB has done well
to keep its NPA levels low as well. As for Indias largest bank SBI, its

NPAs are relatively much higher than that of its PSU peers. This can
also be attributed to its aggressive period over the past few years.

Provision coverage ratio: The

key

relationship

in

analyzing asset quality of the bank is between the cumulative

provision balances of the bank as on a particular date to gross NPAs. It
is a measure that indicates the extent to which the bank has provided
against the troubled part of its loan portfolio. A high ratio suggests that
additional provisions to be made by the bank in the coming years
would be relatively low (if gross non-performing assets do not rise at a
faster clip).

On observing the above chart, we can notice that private banks such
as HDFC Bank & ICICI Bank as also PNB and Bank of Baroda have been
quite conservative when it comes to covering their NPAs. Axis Bank on
the other hand has been extra conservative in the past few years. This
explains the reason for the sharp improvement in the NPA ratio as well.
The same can however, not be said about SBI, which is the only large
bank which has seen its provision coverage ratio deteriorate over the
past four years.

Return on assets ratio: Returns

on asset (ROA) ratio is

the net income (profits) generated by the bank on its total assets
(including fixed assets). The higher the proportion of average earnings
assets, the better would be the resulting returns on total assets.

While HDFC Bank has done well to maintain its ROAs over the past few
years, that of ICIC Bank has been gradually on a decline. The other
banks, has however done well to improve their return ratio over the
past few years.

Conclusion

Looking at the above mentioned parameters, it would be quite easy to

differentiate the aggressive banks from the conservative ones. During

good times and bad, banks such as HDFC Bank have managed to keep
things under control. Relatively aggressive banks such as ICICI Bank
and SBI have been facing some problems. Further, PNB, Axis Bank and
Bank of Baroda have done well to improve their asset quality, return
ratios over the past few years as well.

The Most Social Media Friendly Private

Bank in India

Although HDFC Bank is ahead of the competition, Indias number one

private sector bank; ICICI is giving it a tough fight in the social media
space too. Axis Bank and Yes Bank are at third and fourth spot,

respectively. The detailed numbers are in the table below

Competitive Position

Fixed Deposit Rates of Various Banks

Base Rates

Balance Sheet

------------------- in Rs. Cr. ------------------

K
ot
a

k
M
a

hi
n
dr
a

M
ar
'1

Capital and Liabilities:

Total Share Capital

36

8.

44

Equity Share Capital

36

8.

44

Share Application Money

Preference Share Capital

Reserves

0.

0.

0.
00

0.
00

6,
46

4.

95

Revaluation Reserves

Net Worth

0.

0.
00

6,
83

3.

39

Deposits

29

,2

60

.9
7

Borrowings

11,
72

3.

95

Total Debt

40

,9

84

.9
2

Other Liabilities &

Provisions

3,
03

2.

36

Total Liabilities

50

,8

50

.6
7

K
ot

ak
M
ah

in
dr
a

ar

'11

Assets

Cash & Balances with RBI

2,
10

7.

72

Balance with Banks,

Money at Call

4,

Advances

3.

26

36

29

,3

29

.3
1

Investments

17

,1

21

.4
4

Gross Block

5,

83

1.

80

Accumulated Depreciation

3,

40

6.

20

Net Block

2,

42

5.

60

Capital Work In Progress

Other Assets

0.

0.
00

1,
50

3.

33

Total Assets

50

,8

50

.6
6

Contingent Liabilities

12

,2

91

.3
0

Bills for collection

4,
47

0.

06

Book Value (Rs)

92

.7


Comparison of various Banks

Name

Ma

Ne

rke

et

In

Ca

te

p.

re

(Rs.

st

cr.)

In

co

e
t
s

2
7

4
7

110

HDFC

,16

Bank

7.8

19
,9

28

3,9

,
3
5

.2

.
6
1

ICICI
Bank

94,

25

5,1

607

,9

.93

74

.0

3
3
0

.
6
7

,
0

Axis

Bank

15

43,

,1

283

54

3,3

.77

.8

7
1
3

3
7

Kotak

Mahindr

5
0

37,

8
81

3.

.96

4,
30

105

5
0

56

6
6

IndusInd
Bank

12,

3,

202

58

.94

9.

36

57

4
5

.
8
5

2
9

YES

BANK

10,

04

308

0
72

1.

.46

4,

0
7

74

0
0

3
9

Federal

Bank

6,6

05

82.

4
58

2.

83

4,

5
6

03

3
7

ING

4,7

2,

Vysya

95.

69

Bank

15

4.

06

31

3
9

3
.
9

3
7

Karur

Vysya

4,0

21

56.

2
41

7.

24

2,

2
4

69

8
4

JK Bank

8
1

3,9

71

61.

5
61

3.

85

3,

0
8

13

1
5

3
2

2
3

South
India Bk

2,5

99.

26

2,
44

8
29

6.

2
0

01

.
2
1

StanCha

1,9

,
9
4
5

1
rt IDR

57.

20

,
-

7
2

5
.
8
0

1
4

City

1,7

Union

89.

Bank

54

1,
21

5
21

8.

9
1

41

.
5
2

3
1

7
9

Karnatak
a Bank

1,5

01.

98

2,
37

6
20

0.

9
3

84

.
0
1

Lakshmi

955

1,

3
,
7
.

Vilas

06
.59

10

4.

0
1

84

.
1
9

DCB

4
0
.

802

.99

53

6.

21.

7
2

26

3
3

1
4

6
3

Dhanlax

mi Bank

544

.45

90

6.

26.

42

.
1
6

Goldma
n BEES

2
,
7
7
4
.

284
.66

3
5

Financial Performance of Axis Bank

The net interest income (NII) of Axis Bank, over the last 10 years, has rocketed
by 54.8% CAGR from Rs. 98 Cr. in FY01 to Rs. Rs. 5004 Cr. in FY10; and its
total income has grown by 34.9% CAGR. During the same period its book value
and EPS have jumped by 37% and 28% resp.

The bank has maintained its net profit to total fund ratios between 1 and 1.25
during FY05 to FY08, whereas in the last two financial years, this ratio has been
above 1.25. This increasing trend of net profit to total fund ratio shows that it has
continuously increased its efficiency of utilizing funds. The non-performing assets
(NPA) to net advances ratio has also shown a decreasing trend from 3.46% in
FY02 to 0.4% in FY10 which shows the bank has continuously increased its
assets quality. It has also maintained a very good capital adequacy ratio (CAR) of
15.8% at the end of FY10, well above the RBI guide line of 9%, which indicates
that it can easily cover all the associated risks.

Hence, the 10 YEAR X-RAY of Axis Bank is Green (Very

Good).

Analysis of Axis Bank Ltd

In the short-term

Axis Banks target for FY11: -

Business growth (Advances + Deposits) of 25%

Opening 200-250 new branches and 1000 new ATMs

Axis Bank has reported a strong performance in December,

2010 quarter:

It has shown a 36% jump in the Net Profit at Rs. 891.36 Cr. and a

28% rise in the Net Interest Income to Rs. 1733.12 Cr. on the back of
robust 46% credit growth.

The other income of the Bank inched up by 16% to Rs. 1147.71 Cr.

mainly on the back of 21% jump in the fee income at Rs. 968 Cr.

CAR has decreased to 12.46% in Q3 FY11, compared to 16.8% in

the same quarter last year.

Its Net Interest Margin (NIM) stood at 3.81% during Q3 FY11,

compared to 4% during Q2FY10 (much higher than the industry

standard of 2-2.5%).

The net NPAs of Axis Bank stood at 0.29% in Q3 FY11, which is

amongst the lowest in the banking industry; the provision coverage

ratio stood at 82.69%, much higher than the regulatory requirement of
70%.

Advances of the Bank have reported a strong growth of 46% on

y-o-y basis and 12% on q-o-q basis to Rs. 123547 Cr. in the
December 2010 quarter. The growth in the advances was driven by
69% jump in the corporate segments at Rs. 70518 Cr. and 33% rise in
the retail segment at Rs. 25204 Cr. Agri & microfinance loan book grew
by 24% to Rs. 10772 Cr. and SME by 9% to Rs. 17053 Cr. Exposure to
the Microfinance institutions is around 1% of advance book and that of
telecom (mainly 2G license advances) constitutes 6% of total advance
book.

For the nine months ended December 2010, Axis Bank has reported
37% rise in the NII at Rs 4861.99 Cr., 19% in fee-based income at Rs.
2559 Cr., and 6% in the other income at Rs 3181.73 Cr. compared to
that of corresponding quarter last year respectively. In FY11, so far, it

has opened 142 branches and 1010 ATMs. Thus, the bank is on line to
achieve its target for FY11.

Increasing cost of funds is a cause for concern:

The RBI has increased the Repo rate, Reverse repo rate, and CRR in the
last one and a half year in several phases to control inflation. This has
lead to lower loan able fund availability in the bank and continuous
increase in cost of funds, which can be seen in the chart. As, the
inflation rate is still on the higher side, tight monetary policy is
expected to continue in the short-term. So, we expect that the cost of
funds will also increase further in the short-term, which will keep
margins under pressure.

RBI, recently, has increased provisioning percentage on housing, real

estate, and many other types of loans. This will affect the profitability
of the bank because, in the retail segment, it finances almost 70%
advances in housing.

Considering above factors, we expect that the short-term

future prospects of Axis Bank will be Orange (somewhat
good)

Strength of Axis Bank:

It is Indias third largest private bank, with 1281 branches and

5303 ATMs, and a customer base of over 150 Lakh as on 31st Dec,
2010

It has the largest EDC network, the third largest ATM

network, and the fourth largest base of debit cards in India.

It already has branches in Singapore, Hong Kong and Dubai

International Financial Centre. About 14% of the banks asset book is

from international operations. It is further going to set up a
subsidiary in London and upgrade its representative office in
Shanghai to a branch.

100% core banking facilities with advanced technology

On-line trading facilities in alliance with Geojit BNP Paribas

In Jan 2011, Axis Bank, , announced the launch of AxisDirect, an

online trading platform a product of its wholly-owned subsidiary,
Axis Securities and Sales Ltd. AxisDirect will offer trading in cash,
derivatives, IPO segments through NSE and BSE; and provide wellresearched information about various corporate, access to independent
third-party research, stock research and analysis tools.

Axis Bank has maintained a very good Current Account Savings

Account (CASA) ratio, above 40% in the last three years, which
is higher than the industry standard of 35-40%. CASA plays a
very significant role in keeping cost of funds low and margins
high. Only four other banks SBI, PNB, HDFC Bank, and ICICI
Bank have more that 40% CASA ratio.

Product strategy designed to benefit customers:

To beat the market, Axis Bank is adopting different product strategies.

Recently, it has extended the repayment period of the standard home
loan to the maximum tenure of 25 years. In the step down product (a
type of home loan product), the customer has to pay a higher EMI
when the combined family income is higher and a lower EMI when the
family income has reduced over a period of time. Apart from this, the
Bank has given option to its customers to close the loan before its
maturity with no prepayment penalty.

Banking Sector Heading towards a high-performing sector:

The banking sector is poised to grow in line with the growth of the
economy. The Indian economy is expected to have a high growth in the
long-term and so is the Indian banking sector, which is currently in
consolidation stage. According to Mckinsey Report on India Banking
2010, The banking index has grown at a compounded annual rate of
over 51% since April 2001 as compared to a 27% growth in the market
index for the same period (2001 to 2010). The report says that the
Indian banking sector is heading towards a high-performing sector. Axis
Bank, being the third largest private bank in India, is ready to take full
advantage of this growth opportunity.

Financial Inclusion Program:

Under Financial Inclusion Program, RBI is taking initiative to provide

banking services at affordable costs to the weaker sections of society
or the unbanked segment, which does not have any access to the
formal banking system. As of now, it is estimated that 60% of the
Indian population does not have access to formal banking facility and
RBI is keen on achieving 100% financial inclusion for sustaining
equitable growth. Axis Bank is taking following initiatives under this
Program:

Targets to cover 12,000 villages in the next 5 years: Axis Bank plans to
cover 5,500 villages for financial inclusion by March 2011 and scale it up to 12,000
villages in five years time. It is looking at opening 18-lakh no-frills accounts, Rs. 40
Cr. of deposits, and Rs. 10 Cr. of advances. The 18-lakh account would include 12lakh accounts that they have already opened for government-sponsored scheme.
The bank is looking at several low-cost delivery models such as smart card, mobile
banking and point of transaction device.

Tie up with Janalakshmi Social Services to tap urban poor: To tap

unbanked population in urban areas, Axis Bank has tied up with a Bangalore-based
microfinance institution, Janalakshmi Social Services. Janalakshmi will use its client
base to provide banking services of Axis Bank and will work as business
correspondent to sell other products of the Bank. This service would be spread from
Bangalore to 50 other cities in the near future.

MoU with Idea to test a Branchless Banking Model: Axis Bank has
signed a Memorandum of Understanding with Idea Cellular to test a Branchless
Banking model through a mobile enabled remittance pilot. Idea will act as a
Business Correspondent of Axis Bank to provide an entire range of financial
products and services offered by the Bank, through the mobile operators retail
outlets. Ideas network will help Axis Bank gain access to widespread distribution
reach and a low-cost delivery channel for offering financial products and services,
based on the mobile platform. On the other hand, Idea can offer value-added
services to its customers by offering financial products and services.

There is still a question mark on the viability of Financial

Inclusion Program which primarily targets the low-income
group. This leaves little scope of high margins under this

program. However, this initiative is expected to help in

economic development, and hence is expected to be fruitful in
the long-term.

Diversified into non-banking financial services:

Axis Bank has started non-banking financial services to carry out

investment and lending activities with a focus on infrastructure and
other activities. It has five wholly-owned subsidiaries:
1. Axis Securities and Sales Ltd. to market credit cards , retail
asset products and online trading facilities
2. Axis Private Equity Ltd to manage equity investments &
provide venture capital to support businesses
3. Axis Trustee Services Ltd to engage in trusteeship activities
4. Axis Asset Management Companies Ltd. to carry on the
activities of managing mutual fund business
5.

Axis Mutual Fund Trustee Ltd. to act as the trustee for the

mutual fund business

Acquisition of Enams investment banking business expected

to fill the gap in their portfolio:

Axis Bank has acquired Enams investment banking and institutional

broking businesses for R.s 2,064 Cr. in a stock-swap deal. Pursuant to
the scheme and in consideration for the proposed demerger, Enam
shareholders will receive 5.7 shares of Axis Bank for every 1 share held
in Enam; translating into an approximately 3.37% shareholding in Axis
Bank. While the acquisition appears to be at a slight premium, it will
help Axis Bank fill a key gap in portfolio, increase fee-based income
and bring significant long-term benefits. Also, as these businesses are

profit-making and enjoy one of the highest margins in the industry,

they will contribute to Axis Banks profits and will be earnings
accretive.

SWOT ANALYSIS OF AXIS BANK

 STRENGTHS:

WEAKNESS:

Brand Name

Not having good

Support of various

image.
Market

promoters.
High level of services.

capitalization is

Knowledge of Indian

very low.

market.

SWOT

Not been capable

to position itself
correctly.

OPPORTUNITIES:

Growing Indian
banking sectors.
People are becoming
more service oriented.
In the global market.

Dissatisfied
customers.

THREATS:

Advent of MNC
banks.
Foreign banks
Government
banks

Future market
trends.


Risks & Concerns

a) Low exposure in high-margin retail banking.

b) New Bank License would hamper banks profits: RBI is
providing banking licenses to selected NBFCs from 2011. This would
increase competition among banks which would consequently hampers
their profits.
c) RBI, in Bancon 2010 held in Mumbai, has indicated that
Indian Banks should operate at lower margin, in line with
global standard. They should decrease lending rate and increase
savings rate to help in achieving double digit economic growth. RBI
may also increase Capital Adequacy Ratio benchmark from 2013.
d) As the banks have mainly financial assets, they have to manage
several risks such as credit risk, market risk, liquidity risk, country risk
etc. So, banking business, as a whole, is considered as risky business.

e) Government regulation increases uncertainty in the banking

sector: The Government of India frequently changes monetary policies
by changing CRR, repo rate, reverse repo rate etc. to maintain stability
in the economy. It increases uncertainty in the banking sector.
Considering the strong position that Axis Bank has established
for itself in the banking industry and its recent acquisition of
Enam, we can expect that the long-term future prospects of
Axis Bank will be Green (Very Good).

CHAPTER IV

CONCLUSION AND
RECOMMENDATION

So, is it an investment-worthy Bank?

The economy is expected to grow roughly by 5-7% in

the next 5 years. The banking sector is poised to grow
in line with the growth of the economy. Considering the
banks large size and its strengths, we can expect this
economic growth to have a positive impact on Axis
Banks growth.
Yes, Axis Bank is an investment worthy bank, but
only at the right price. Currently, it is trading at a
price of Rs. 1304.65.

But, does this price offer an

attractive discount to its right value (MRP) or is it overpriced? It is always best to invest at an attractive
discount to its MRP, to get maximum returns at
minimum

risk.

Become

member

of

MoneyWorks4me.com to know its sensible buy-

price and hence take the right action for this

company.

Conclusion & Recommendation

Axis Bank is one of the few clean (in terms of asset

book),

rapidly

growing,

profitable,

&

competitive

private-sector banks in India; thus it will be a major

beneficiary of the favorable banking environment. The
Indian banking sector is in a sweet spot: consumer and
corporate lending is strong, asset quality is improving
and fee-income opportunities are growing. We expect
this favorable environment to continue in the medium
term but recognize that a key challenge for banks will
be funding growth. Looking at its profile, I believe Axis

Bank stands to gain disproportionately from existing

opportunities in the sector. The bank has strong
technology

&

products,

an

expanding

distribution

franchise, adequate scale, a strong service culture, and

management enterprise -features that should help it
stay ahead of the dominant government banks to win
market share.
Private players such as Axis Bank that offer a multitude
of delivery channels and have an integrated technology
platform

could

potentially

achieve

comparable

distribution reach in the top 200 cities to government

banks

with

substantially

fewer

branches.

With

presence in the top 150 cities, I think Axis Bank is very

well positioned to rapidly reap the benefits of the
expanded reach by scaling up its retail foray.
Moreover, earnings CAGR is likely to be stronger than
the larger private peers as it begins to benefit from the
distribution expansion.

BIBLIOGRAPHY

 The following books and websites have been

consulted for the preparation of this project.
Books:
Philip Kotlers Marketing Management. Twelfth
edition
Journal:
Business & Economics (September/October)
Web sites:
www.google.co.in
www.axisbank.com
www.slidworld.com

Annex: Glossary

ATM

An automated teller machine (ATM) is a machine in which a customer

can use his card along with PIN to get cash, information and other
services.

Bank Guarantee

Bank guarantee is a promise by a bank on behalf of its customer to a

third party to pay an amount specified in the guarantee deed in case
the customer fails to perform the obligation as stipulated in the deed.

Banking Ombudsman

Banking Ombudsman is an independent dispute resolution authority

set up by Reserve Bank of to deal with disputes between the bank and
individual / small businesses.

Bills

Bills are financial negotiable instruments such as Bills of Exchange or

Promissory Notes. Bill of Exchange is issued by a seller to his buyer
directing him to make payment for the goods supplied / services
rendered. Bill in the form of a promissory note is issued by a buyer to
his seller undertaking to make payment for the goods received /
service rendered.

Bill discounting

In case of discounting of a bill, a bank buys a bill (i.e. Bill of Exchange

or Promissory Note) before it is due and credits the value of the bill
after discount charges to the customers account. The transaction is
practically an advance against the security of the bill and the discount
represents the interest on the advance from the date of purchase of
the bill until it is due for payment. Only usance bills are discounted.

Card

Card is a general term for any plastic card, which a customer may use
to pay for goods and services or to withdraw cash. In this Code, it
includes ATM / Debit / Credit Cards.

Cash Credit / Overdraft

Cash credit / overdraft is a form of credit facility in which a borrower is

sanctioned a pre-arranged limit with the freedom to borrow as much
money as he requires. In case of flow of credit to the account, he can
withdraw afresh subject to the limit sanctioned. As such, the limit
works as a revolving line of credit. Bank charges interest on the
outstanding balances.

Cash losses

Cash loss mean net losses minus depreciation.

Cheque Collection Policy

Cheque Collection Policy refers to the policy followed by a bank in

respect of various local and outstation cheques and instruments
deposited with the bank for credit to an account. The policy, inter alia,
deals with

Cheque purchase requests.

Time frame for credit of cheques
Payment of interest in case of delay in collection of cheques
Instant credit of local and outstation cheques
Cheque instruments lost in transit

Collateral Security / Security

Collateral are assets pledge / hypothecated / mortgaged by a borrower

as a security for a credit facility. In the event of the borrower
defaulting on the loan, the lender bank can claim these assets in lieu of
the sum owed.

Compensation Policy

Compensation Policy refers to the policy followed by a bank for

compensating its customers for the financial losses incurred by them
(the customers) due to the acts of omission or commission on the part
of the bank.

Credit facilities / Bank Loan

Credit facilities from the bank may be in the form of a term loan or in
the form of overdraft or cash credit, that is extended by a bank to its
customer for a specified period and he is charged interest on the
outstanding balances.

Credit reference agencies

Credit reference agency means a credit information company formed

and registered under the Companies Act, 1956 that has been granted a
Certificate of Registration under the Credit Information Companies
(Regulation) Act, 2005.

Current Account

A form of demand deposit wherefrom withdrawals are allowed any

number of times depending upon the balance in the account or up to a
particular agreed amount.

Customer

An MSE or its authorized representative who has an account with a

bank or who avails of other products / services from a bank.

Deceased account

A Deceased account is a deposit account in which case either the

single account holder has deceased or in case of joint accounts one or
more of joint account holders has / have deceased.

Demat accounts

A Demat account refers to dematerialized account and is an account in

which the stocks of investors are held in electronic form.

Deposit Accounts:

Savings deposits" means a form of demand deposit which is subject to restrictions as to

the number of withdrawals as also the amounts of withdrawals permitted by the Bank

during any specified period;

"Term deposit" means a deposit received by the Bank for a fixed period withdraw able
only after the expiry of the fixed period and includes deposits such as Recurring / Double
Benefit Deposits / Short Deposits / Fixed Deposits /Monthly Income Certificate

/Quarterly Income Certificate etc.

"Notice Deposit" means term deposit for specific period but withdraw able on giving at
least one complete banking day's notice;

Electronic Clearing System

The Electronic Clearing System (ECS) is an online transmission system

which permits the electronic transmission of payment information by
the banks / branches to the Automated Clearing House (ACH) via a
communication network.

Equity

Equity means a part of capital of a corporate entity which is

represented by the shares of the company whether in physical or in
dematerialized form

Factoring

Factoring is a financial option for the management of receivables. It is

the conversion of credit sales into cash.

Government Bond

Government bond means a security, created and issued, by the Central

or State Government for raising a public loan.

Guarantee

A promise given by a person

Letter of Credit

A letter of credit is a document issued by a bank, which usually

provides an irrevocable undertaking for payment to a beneficiary
against submission of documents as stated in the Letter of Credit.

Mail

Mail is a letter in a physical or electronic form.

Merchant Services

Merchant services generally refer to merchant accounts allowed to

trading and service establishments for acceptance of payments
through credit / debit cards. The cards may be accepted over the
counter through card terminals i.e. Point of Sale (POS) machines or
over phone or through internet.

Micro and Small Enterprises

Micro and Small Enterprises are those enterprises engaged in

manufacturing or rendering services.

A micro enterprise is defined as:

An enterprise engaged in the manufacture or production of goods

pertaining to any industry where the investment in plant and
machinery does not exceed Rs. 25 lakh.

Or

An enterprise engaged in rendering services where investment in

equipment does not exceed Rs. 10 lakh.

A small enterprise is defined as:

An enterprise engaged in manufacture or production of goods

pertaining to any industry where the investment in plant and
machinery is more than Rs. 25 lakh but does not exceed Rs. 5 crore.

Or

An enterprise engaged in rendering services where investment in

equipment is more than Rs. 10 lakhs but does not exceed Rs. 2 crore.

Net worth

Net worth means sum of Capital and free reserves minus accumulated
losses.

Nomination facility

The nomination facility enables the bank to : make payment to the

nominee of a deceased depositor, of the amount standing to the credit
of the depositor, return to the nominee, the articles left by a deceased
person in the bank's safe custody, release to the nominee of the hirer,
the contents of a safety locker, in the event of the death of the hirer.

Non-fund based facility

Non-fund based facilities are such facilities extended by banks which

do not involve outgo of funds from the bank when the customer avails
the facilities but may at a later date crystallize into financial liability if
the customer fails to honor the commitment made by availing these
facilities. Non-fund based facilities are generally extended in the form
of Bank Guarantees, Acceptances and Letters of Credit.

Non-Performing Asset

A Non-Performing Asset (NPA) is a loan or an advance where

Interest and / or installment of principal remain overdue for a period of

more than 90 days in respect of a term loan.

The account remains out of order in respect of an Overdraft / Cash

Credit (OD/CC).

The bill remains overdue for a period of more than 90 days in the case
of bills purchased or discounted.

Originator

An organization which collects payments from a customers account in

line with customers instructions.

Other security information

A selection of personal facts and information [in an order which the

customer knows],which may be used for identification when using
accounts.

Out-of-date [stale] cheque

A cheque, which has not been paid because the date written on the
cheque is of a date exceeding six months from the time of its
presentation.

PAN

The Permanent Account Number is an all India unique Number having

ten alphanumeric Characters allotted by the Income Tax Department,
Government of India. It is issued in the form of a laminated card. It is

permanent and will not change with change of address of the assessee
or change of Assessing Officer.

Password

A word or numbers or a combination or an access Code, which the

customer has chosen, to allow them to use a phone or Internet
banking service. It is also used for identification.

Payment and Settlement Systems

Payments and Settlement Systems mean financial system creating the

means for transferring money between suppliers and user of funds
usually by exchanging debits or credits among financial institutions.

PIN [personal identification number]

A confidential number, use of which along with a card allows customers

to pay for articles/ services, withdraw cash and use other electronic
services offered by the bank.

Repossession

Repossession is the process by which a creditor with a loan secured on

house or goods (e.g. car) takes possession of the security, if the debtor
does not repay as per the terms of the loan agreement.

Rehabilitation Package

Rehabilitation package is the package drawn for the rehabilitation of a

sick unit. The package has to be drawn in accordance with RBI
stipulations and it usually consists of

i.
ii.
iii.
iv.
v.

Working Capital with relaxation in the rate of interest in terms of regulatory guidelines.
Funded Interest Term Loan
Working Capital Term Loan
Term Loan
Contingency Loan Assistance

Security

Represents assets used as support for a loan or other liability.

i.

Services

In respect of small and micro service enterprises, services refer to small road and
water transport operators, small business, professional and self-employed persons,

ii.

and all other service enterprises.

Services rendered by the banks include various facilities like remittance (issue of
DDs, MTs, TTs, etc.), receipt and payment of cash, exchange of notes and foreign
exchange, etc. provided by the banks to the customers.

Sick Unit

Sick unit refers to a unit whose account has remained substandard for
more than six months or there has been erosion in net worth due to
accumulated cash losses to the extent of 50% of the net worth during
the previous accounting year and the unit has been in commercial
product for at least two years.

Substandard

A substandard asset would be one, which has remained NPA for a

period less than or equal to 2 months.

Tariff Schedule

The charges levied by a bank on the products and services offered by it

to its customers

Unpaid Cheque

This is a cheque, which is returned 'unpaid' [bounced] by the bank.

ANNEXURES

QUESTIONNAIRE

Section A: Personal Information

1. NAME:

2. GENDER:

a) Male

b)

Female

3. MARTIAL STATUS:

a) Single

b) Married

4. AGE:

a) 15-20 yrs

b) 21-30

yrs

c) 31- 40 yrs
e) >50 yrs

5. OCCUPATION:

d) 41-50 yrs

a) Government

b) Private

Service
c) Business

d) other

6. ANNUAL INCOME:

a) Up to 2 lacs

b) Between 2-3

lacs
c) 3-5 lacs

d) Above 5 lacs

7. If given an option, which bank will you prefer to deal with as a customer?

a) Axis Bank

b) HDFC Bank

c)SBI

d) Other______

8. In terms of saving bank account opening, which bank would you prefer?

a) Axis Bank

b) HDFC Bank

c)SBI

d) Other______

9. What are the services you use of a bank, in saving account?

a) ATM/Debit Card

b) Internet Banking

c)

Cheque book at Par

d) Mobile Banking

f) Relationship

Manager

10. Which bank as per your experience provides the best customer service when you
personally visit the Bank?

a)

Other______

Axis Bank

b) HDFC Bank

c) SBI

d)

11. What average balance account services you usually avail from
your existing bank?

a) < = Rs. 1000

b) = > Rs. 5000

c) = > Rs.10000

d) = > Rs. 25000

e) = > Rs.

100000

12. Which Banks ATM you use the most for cash withdrawal?
a) Axis Bank
b) HDFC Bank
c) SBI

d)

Other______

13. Which is the most customer friendly Bank in terms of charges as per you?

a) Axis Bank

b) HDFC Bank

c) SBI

d)

Other______

14. Are all the Bank informed to you at the time of Saving Bank
Account opening

a)

Yes

b) No

15. If you have to do an investment, which Bank would you consult for Portfolio
Management?
a) Axis Bank

b) HDFC Bank

c)SBI

d) Other______

16. Kindly rate the below mentioned banks as per the ambience and infrastructure facilities provided to the
customers? NOTE: in Ranking 1 being the Best and 5 being the Last preference.

a)
b)
c)
d)
e)

Axis Bank Ltd.

HDFC Bank
SB I
ICICI
PNB

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