INDEX

CHAPTER NAME PAGE NO

CHAP : 1 INTRODUCTION 1-18

1.1 Introduction Of Indian Banking System 2

1.2 Need of the Banks 3
1.3 History of Indian Banking System 4
1.4 Nationalisation 5
1.5 Liberalisation 6
1.6 Government policy on banking industry 8
1.7 Law of banking 9
1.8 Acts Regarding Banking Industry 10
1.9 Classification of Banking Industry in India 11-15
1.10 Services provided by banking organizations 16-18

CHAP : 2 REVIEW OF LITERATURE 19-20

CHAP : 3 BRIEF INTRODUCTION OF ICICI BANK 21-30

3.1 Overview of ICICI Bank 22-23

3.2 History of ICICI Bank 24-26
3.3 Key Words 27-30

CHAP : 4 CUSTOMER RELATIONSHIP MANAGEMENT 31-57

4.1 Introduction 32-34

4.2 Types Of CRM 35-37
4.3 Needs Of CRM 38
4.4 Objectives 39
4.5 Process For Delivering CRM 40-43
4.6 Research Methodology 44-47
4.7 CRM In Banking : Indian Scenario 48-51
4.8 CRM Implementation Of ICICI Bank 52-57

CHAP : 5 RESULTS AND CONCLUSIONS 58-59

CHAP : 6 REFERENCES 60

Questionnaire 61-63
 CHAPTER : 1 INTRODUCTION

Introduction Of Indian Banking System

Need of the Banks

History of Indian Banking System

Nationalisation

Government policy on banking industry

Law of banking

Acts Regarding Banking Industry

Classification of Banking Industry in India

Services provided by banking organizations

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 Introduction of Indian banking system
A bank is a financial institution that provides banking and other financial
services to their customers. A bank is generally understood as an institution which
provides fundamental banking services such as accepting deposits and providing
loans. There are also non-banking institutions that provide certain banking
services without meeting the legal definition of a bank. Banks are a subset of the
financial services industry.

A banking system also referred as a system provided by the bank which offers
cash management services for customers, reporting the transactions of their
accounts and portfolios, throughout the day. The banking system in India, should
not only be hassle free but it should be able to meet the new challenges posed by
the technology and any other external and internal factors. For the past three
decades, Indias banking system has several outstanding achievements to its credit.
The Banks are the main participants of the financial system in India. The Banking
sector offers several facilities and opportunities to their customers. All the banks
safeguards the money and valuables and provide loans, credit, and payment
services, such as checking accounts, money orders, and cashiers cheques. The
banks also offer investment and insurance products. As a variety of models for
cooperation and integration among finance industries have emerged, some of the
traditional distinctions between banks, insurance companies, and securities firms
have diminished. In spite of these changes, banks continue to maintain and
perform their primary roleaccepting deposits and lending funds from these
deposits.

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 Need of the Banks

Before the establishment of banks, the financial activities were handled by money
lenders and individuals. At that time the interest rates were very high. Again there were no
security of public savings and no uniformity regarding loans. So as to overcome such
problems the organized banking sector was established, which was fully regulated by the
government. The organized banking sector works within the financial system to provide
loans, accept deposits and provide other services to their customers. The following
functions of the bank explain the need of the bank and its importance:

To provide the security to the savings of customers.

To control the supply of money and credit

To encourage public confidence in the working of the financial system, increase

savings speedily and efficiently.

To avoid focus of financial powers in the hands of a few individuals and

institutions.

To set equal norms and conditions (i.e. rate of interest, period of lending etc) to all
types of customers

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 History of Indian Banking System

The first bank in India, called The General Bank of India was established in the year
1786. The East India Company established The Bank of Bengal/Calcutta (1809), Bank of
Bombay (1840) and Bank of Madras (1843). The next bank was Bank of Hindustan
which was established in 1870. These three individual units (Bank of Calcutta, Bank of
Bombay, and Bank of Madras) were called as Presidency Banks. Allahabad Bank which
was established in 1865, was for the first time completely run by Indians. Punjab National
Bank Ltd. was set up in 1894 with head quarters at Lahore. Between 1906 and 1913,
Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and
Bank of Mysore were set up. In 1921, all presidency banks were amalgamated to

form the Imperial Bank of India which was run by European Shareholders. After that
the Reserve Bank of India was established in April 1935.

At the time of first phase the growth of banking sector was very slow. Between 1913
and 1948 there were approximately 1100 small banks in India. To streamline the
functioning and activities of commercial banks, the Government of India came up with
the Banking Companies Act, 1949 which was later changed to Banking Regulation Act
1949 as per amending Act of 1965 (Act No.23 of 1965). Reserve Bank of India was
vested with extensive powers for the supervision of banking in India as a Central Banking
Authority. After independence, Government has taken most important steps in regard of
Indian Banking Sector reforms. In 1955, the Imperial Bank of India was nationalized and
was given the name "State Bank of India", to act as the principal agent of RBI and to
handle banking transactions all over the country. It was established under State Bank of
India Act, 1955. Seven banks forming subsidiary of State Bank of India was nationalized
in 1960. On 19th July, 1969, major process of nationalization was carried out. At the same
time 14 major Indian commercial banks of the country were nationalized. In 1980,
another six banks were nationalized, and thus raising the number of nationalized banks to
20. Seven more banks were nationalized with deposits over 200 Crores. Till the year 1980
approximately 80% of the banking segment in India was under governments ownership.
On the suggestions of Narsimhan Committee, the Banking Regulation Act was amended
in 1993 and thus the gates for the new private sector banks were opened. The following
are the major steps taken by the Government of India to Regulate Banking institutions in
the country.

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 Nationalisation
By the 1960s, the Indian banking industry has become an important tool to facilitate
the development of the Indian economy. At the same time, it has emerged as a large
employer, and a debate has ensured about the possibility to nationalise the banking
industry. Indira Gandhi, the-then Prime Minister of India expressed the intention of the
Government of India (GOI) in the annual conference of the All India Congress Meeting
in a paper entitled "Stray thoughts on Bank Nationalisation". The paper was received
with positive enthusiasm. Thereafter, her move was swift and sudden, and the GOI issued
an ordinance and nationalised the 14 largest commercial banks with effect from the
midnight of July 19, 1969. Jayaprakash Narayan, a national leader of India, described the
step as a "Masterstroke of political sagacity" Within two weeks of the issue of the
ordinance, the Parliament passed the Banking Companies (Acquisition and Transfer of
Undertaking) Bill, and it received the presidential approval on 9 August, 1969. A second
step of nationalisation of 6 more commercial banks followed in 1980. The stated reason
for the nationalisation was to give the government more control of credit delivery. With
the second step of nationalisation, the GOI controlled around 91% of the banking
business in India. Later on, in the year 1993, the government merged New Bank of India
with Punjab National Bank. It was the only merger between nationalised banks and
resulted in the reduction of the number of nationalised banks from 20 to 19. After this,
until the 1990s, the nationalised banks grew at a pace of around 4%, closer to the average
growth rate of the Indian economy. The nationalised banks were credited by some;
including Home minister P. Chidambaram, to have helped the Indian economy withstand
the global financial crisis of 2007-2009.

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 Liberalisation
In the early 1990s, the then Narsimha Rao government embarked on a policy of
liberalisation, licensing a small number of private banks. These came to be known as
New Generation tech-savvy banks, and included Global Trust Bank (the first of such new
generation banks to be set up), which later amalgamated with Oriental Bank of

Commerce, Axis Bank(earlier as UTI Bank), ICICI Bank and HDFC Bank. This move
along with the rapid growth in the economy of India revolutionized the banking sector in
India which has seen rapid growth with strong contribution from all the three sectors of
banks, namely, government banks, private banks and foreign banks. The next stage for the
Indian banking has been setup with the proposed relaxation in the norms for Foreign
Direct Investment, where all Foreign Investors in banks may be given voting rights which
could exceed the present cap of 10%, at present it has gone up to 49% with some
restrictions.

The new policy shook the banking sector in India completely. Bankers, till this time,
were used to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4) of functioning.
The new wave ushered in a modern outlook and tech-savvy methods of working for the
traditional banks. All this led to the retail boom in India. People not just demanded more
from their banks but also received more. Currently (2007), banking in India is generally
fairly mature in terms of supply, product range and reach-even though reach in rural India
still remains a challenge for the private sector and foreign banks. In terms of quality of
assets and capital adequacy, Indian banks are considered to have clean, strong and
transparent balance sheets as compared to other banks in comparable economies in its
region. The Reserve Bank of India is an autonomous body, with minimal pressure from
the government. The stated policy of the Bank on the Indian Rupee is to manage volatility
but without any fixed exchange rate-and this has mostly been true. With the growth in the
Indian economy expected to be strong for quite some time-especially in its services
sector-the demand for banking services, especially retail banking, mortgages and
investment services are expected to be strong.

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 In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its
stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an
investor has been allowed to hold more than 5% in a private sector bank since the RBI
announced norms in 2005 that any stake exceeding 5% in the private sector banks would
need to be voted by them. In recent years critics have charged that the non-government
owned banks are too aggressive in their loan recovery efforts in connection with housing,
vehicle and personal loans. There are press reports that the banks' loan recovery efforts
have driven defaulting borrowers to suicide.

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 Government Policy On Banking Industry

Banks operating in most of the countries must contend with heavy regulations, rules
enforced by Federal and State agencies to govern their operations, service offerings, and
the manner in which they grow and expand their facilities to better serve the public. A
banker works within the financial system to provide loans, accept deposits, and provide
other services to their customers. They must do so within a climate of extensive
regulation, designed primarily to protect the public interests.

The main reasons why the banks are heavily regulated are as follows:

To protect the safety of the publics savings.

To control the supply of money and credit in order to achieve a nations broad
economic goal.

To ensure equal opportunity and fairness in the publics access to credit and other
vital financial services.

To promote public confidence in the financial system, so that savings are made
speedily and efficiently.

To avoid concentrations of financial power in the hands of a few individuals and

institutions.

Provide the Government with credit, tax revenues and other services.

To help sectors of the economy that they have special credit needs for eg. Housing,
small business and agricultural loans etc.

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 Law Of Banking
Banking law is based on a contractual analysis of the relationship between the bank
and customerdefined as any entity for which the bank agrees to conduct an account.
The law implies rights and obligations into this relationship as follows:

The bank account balance is the financial position between the bank and the
customer: when the account is in credit, the bank owes the balance to the customer; when
the account is overdrawn, the customer owes the balance to the bank.

The bank agrees to pay the customer's cheques up to the amount standing to the
credit of the customer's account, plus any agreed overdraft limit.

The bank may not pay from the customer's account without a mandate from the
customer, e.g. cheques drawn by the customer.

The bank agrees to promptly collect the cheques deposited to the customer's
account as the customer's agent, and to credit the proceeds to the customer's account.

The bank has a right to combine the customer's accounts, since each account is just
an aspect of the same credit relationship.

The bank has a lien on cheques deposited to the customer's account, to the extent
that the customer is indebted to the bank.

The bank must not disclose details of transactions through the customer's account
unless the customer consents, there is a public duty to disclose, the bank's interests
require it, or the law demands it.

The bank must not close a customer's account without reasonable notice, since
cheques are outstanding in the ordinary course of business for several days.

These implied contractual terms may be modified by express agreement between the
customer and the bank. The statutes and regulations in force within a particular
jurisdiction may also modify the above terms and/or create new rights, obligations or
limitations relevant to the bank-customer relationship.

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 Acts Regarding Banking Industry

1949 : Enactment of Banking Regulation Act.

1955 : Nationalisation of State Bank of India.

1959 : Nationalization of SBI subsidiaries.

1961 : Insurance cover extended to deposits.

1969 : Nationalisation of 14 major Banks.

1971 : Creation of credit guarantee corporation.

1975 : Creation of regional rural banks.

1980 : Nationalisation of seven banks with deposits over 200 Crores.

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 Classification Of Banking Industry In India

Indian banking industry has been divided into two parts, organized and unorganized
sectors. The organized sector consists of Reserve Bank of India, Commercial Banks and
Co-operative Banks, and Specialized Financial Institutions (IDBI, ICICI, IFC etc). The
unorganized sector, which is not homogeneous, is largely made up of money lenders and
indigenous bankers.

An outline of the Indian Banking structure may be presented as follows:

1. Reserve banks of India.

2. Indian Scheduled Commercial Banks. a) State Bank of India and its associate banks.
b) Twenty nationalized banks. c) Regional rural banks. d) Other scheduled commercial
banks.

3. Foreign Banks

4. Non-scheduled banks.

5. Co-operative banks.

Reserve bank of India:

The reserve bank of India is a central bank and was established in April 1, 1935 in
accordance with the provisions of reserve bank of India act 1934. The central office of
RBI is located at Mumbai since inception. Though originally the reserve bank of India
was privately owned, since nationalization in 1949, RBI is fully owned by the
Government of India. It was inaugurated with share capital of Rs. 5 Crores divided into
shares of Rs. 100 each fully paid up.
RBI is governed by a central board (headed by a governor) appointed by the central
government of India. RBI has 22 regional offices across India. The reserve bank of India
was nationalized in the year 1949.

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 The general superintendence and direction of the bank is entrusted to central board of
directors of 20 members, the Governor and four deputy Governors, one Governmental
official from the ministry of Finance, ten nominated directors by the government to give
representation to important elements in the economic life of the country, and the four
nominated director by the Central Government to represent the four local boards with the
headquarters at Mumbai, Kolkata, Chennai and New Delhi. Local Board consists of five
members each central government appointed for a term of four years to represent
territorial and economic interests and the interests of cooperative and indigenous banks.
The RBI Act 1934 was commenced on April 1, 1935. The Act, 1934 provides the
statutory basis of the functioning of the bank. The bank was constituted for the need of
following: -To regulate the issues of banknotes. To maintain reserves with a view to
securing monetary stability To operate the credit and currency system of the country to
its advantage.

Functions of RBI as a central bank of India are explained briefly as follows:

1. Bank of Issue: The RBI formulates, implements, and monitors the monitory
policy. Its main objective is maintaining price stability and ensuring adequate
flow of credit to productive sector.

2. Regulator-Supervisor of the financial system: RBI prescribes broad

parameters of banking operations within which the countrys banking and
financial system functions. Their main objective is to maintain public
confidence in the system, protect depositors interest and provide cost effective
banking services to the public.

3. Manager of exchange control: The manager of exchange control department

manages the foreign exchange, according to the foreign exchange management
act, 1999. The managers main objective is to facilitate external trade and
payment and promote orderly development and maintenance of foreign
exchange market in India.

4. Issuer of currency: A person who works as an issuer, issues and exchanges or

destroys the currency and coins that are not fit for circulation. His main
objective is to give the public adequate quantity of supplies of currency notes
and coins and in good quality.

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5. Developmental role: The RBI performs the wide range of promotional
functions to support national objectives such as contests, coupons maintaining
good public relations and many more.

6. Related functions: There are also some of the related functions to the above
mentioned main functions. They are such as, banker to the government, banker
to banks etc.
Banker to government performs merchant banking function for the central and
the state governments; also acts as their banker.
Banker to banks maintains banking accounts to all scheduled banks.

7. Controller of Credit: RBI performs the following tasks:

It holds the cash reserves of all the scheduled banks.
It controls the credit operations of banks through quantitative and qualitative
controls.
It controls the banking system through the system of licensing, inspection and
calling for information.
It acts as the lender of the last resort by providing rediscount facilities to
scheduled banks.

8. Supervisory Functions: In addition to its traditional central banking functions,

the Reserve Bank performs certain non-monetary functions of the nature of
supervision of banks and promotion of sound banking in India. The Reserve
Bank Act 1934 and the banking regulation act 1949 have given the RBI wide
powers of supervision and control over commercial and co-operative banks,
relating to licensing and establishments, branch expansion, liquidity of their
assets, management and methods of working, amalgamation, reconstruction and
liquidation. The RBI is authorized to carry out periodical inspections of the
banks and to call for returns and necessary information from them. The
nationalisation of 14 major Indian scheduled banks in July 1969 has imposed
new responsibilities on the RBI for directing the growth of banking and credit
policies towards more rapid development of the economy and realisation of
certain desired social objectives. The supervisory functions of the RBI have
helped a great deal in improving the standard of banking in India to develop on
sound lines and to improve the methods of their operation.

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 9. Promotional Functions: With economic growth assuming a new urgency since
independence, the range of the Reserve Banks functions has steadily widened.
The bank now performs a variety of developmental and promotional functions,
which, at one time, were regarded as outside the normal scope of central

10. Banking: The Reserve bank was asked to promote banking habit, extend
banking facilities to rural and semi-urban areas, and establish and promote new
specialized financing agencies.

Indian Scheduled Commercial Banks:

The commercial banking structure in India consists of:

I. Scheduled commercial banks and
II. Unscheduled banks.

Scheduled Banks:

Scheduled Banks in India constitute those banks which have been included in the
second schedule of RBI act 1934. RBI in turn includes only those banks in this schedule
which satisfy the criteria laid down vide section 42(6a) of the Act. Scheduled banks in
India means the State Bank of India constituted under the State Bank of India Act, 1955
(23 of 1955), a subsidiary bank as defined in the s State Bank of India (subsidiary banks)
Act, 1959 (38 of 1959), a corresponding new bank constituted under section 3 of the
Banking companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980),
or any other bank being a bank included in the Second Schedule to the Reserve bank of
India Act, 1934 (2 of 1934), but does not include a co-operative bank. For the purpose of
assessment of performance of banks, the Reserve Bank of India categories those banks as
public sector banks, old private sector banks, new private sector banks and foreign banks,
i.e. private sector, public sector, and foreign banks come under the umbrella of scheduled
commercial banks.

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 Regional Rural Bank:

The government of India set up Regional Rural Banks (RRBs) on October 2, 1975 [10].
The banks provide credit to the weaker sections of the rural areas, particularly the small
and marginal farmers, agricultural labourers, and small enterpreneurs. Initially, five RRBs
were set up on October 2, 1975 which was sponsored by Syndicate Bank, State Bank of
India, Punjab National Bank, United Commercial Bank and United Bank of India. The
total authorized capital was fixed at Rs. 1 Crore which has since been raised to Rs. 5
Crores. There are several concessions enjoyed by the RRBs by Reserve Bank of India
such as lower interest rates and refinancing facilities from NABARD like lower cash
ratio, lower statutory liquidity ratio, lower rate of interest on loans taken from sponsoring
banks, managerial and staff assistance from the sponsoring bank and reimbursement of
the expenses on staff training. The RRBs are under the control of NABARD. NABARD
has the responsibility of laying down the policies for the RRBs, to oversee their
operations, provide refinance facilities, to monitor their performance and to attend their
problems.

Unscheduled Banks:

Unscheduled Bank in India means a banking company as defined in clause (c) of

section 5 of the Banking Regulation Act, 1949 (10 of 1949), which is not a scheduled
bank.

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 Services Provided By Banking Organizations

Banking Regulation Act in India, 1949 defines banking as Accepting for the
purpose of lending or investment of deposits of money from the public, repayable on
demand and withdrawable by cheques, drafts, orders etc. as per the above definition a
bank essentially performs the following functions:-

Accepting Deposits or savings functions from customers or public by providing

bank account, current account, fixed deposit account, recurring accounts etc.
The payment transactions like lending money to the public. Bank provides an
effective credit delivery system for loanable transactions.
Provide the facility of transferring of money from one place to another place.
For performing this operation, bank issues demand drafts, bankers cheques, money
orders etc. for transferring the money. Bank also provides the facility of Telegraphic
transfer or tele- cash orders for quick transfer of money.
A bank performs a trustworthy business for various purposes.
A bank also provides the safe custody facility to the money and valuables of the
general public. Bank offers various types of deposit schemes for security of money. For
keeping valuables bank provides locker facility. The lockers are small compartments with
dual locking system built into strong cupboards. These are stored in the banks strong
room and are fully secured.
Banks act on behalf of the Govt. to accept its tax and non-tax receipt. Most of
the government disbursements like pension payments and tax refunds also take place
through banks.

There are several types of banks, which differ in the number of services they provide
and the clientele (Customers) they serve. Although some of the differences between these
types of banks have lessened as they have begun to expand the range of products and
services they offer, there are still key distinguishing traits. These banks are as follows:

Commercial banks, which dominate this industry, offer a full range of services for
individuals, businesses, and governments. These banks come in a wide range of sizes,
from large global banks to regional and community banks.

Global banks are involved in international lending and foreign currency trading, in
addition to the more typical banking services.

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 Regional banks have numerous branches and automated teller machine (ATM)
locations throughout a multi-state area that provide banking services to individuals.
Banks have become more oriented toward marketing and sales. As a result, employees
need to know about all types of products and services offered by banks.

Community banks are based locally and offer more personal attention, which many
individuals and small businesses prefer. In recent years, online bankswhich provide all
services entirely over the Internethave entered the market, with some success.
However, many traditional banks have also expanded to offer online banking, and some
formerly Internet-only banks are opting to open branches.

Savings banks and savings and loan associations, sometimes called thrift
institutions, are the second largest group of depository institutions. They were first
established as community-based institutions to finance mortgages for people to buy
homes and still cater mostly to the savings and lending needs of individuals.

Credit unions are another kind of depository institution. Most credit unions are
formed by people with a common bond, such as those who work for the same company or
belong to the same labour union or church. Members pool their savings and, when they
need money, they may borrow from the credit union, often at a lower interest rate than
that demanded by other financial institutions.

Federal Reserve banks are Government agencies that perform many financial
services for the Government. Their chief responsibilities are to regulate the banking
industry and to help implement our Nations monetary policy so our economy can run
more efficiently by controlling the Nations money supplythe total quantity of money
in the country, including cash and bank deposits. For example, during slower periods of
economic activity, the Federal Reserve may purchase government securities from
commercial banks, giving them more money to lend, thus expanding the economy.
Federal Reserve banks also perform a variety of services for other banks. For example,
they may make emergency loans to banks that are short of cash, and clear checks that are
drawn and paid out by different banks.

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 The money banks lend, comes primarily from deposits in checking and savings
accounts, certificates of deposit, money market accounts, and other deposit accounts that
consumers and businesses set up with the bank. These deposits often earn interest for
their owners, and accounts that offer checking, provide owners with an easy method for
making payments safely without using cash. Deposits in many banks are insured by the
Federal Deposit Insurance Corporation, which guarantees that depositors will get their
money back, up to a stated limit, if a bank should fail.

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 CHAPTER: 2
REVIEW OF LITERATURE

Nath et.al (2001) in their study found that in every industry, E-commerce is
revolutionizing the way business is conducted. New business models are
replacing outdated ones and organizations are rethinking business process
designs and customer relationship management strategies. Banks are no
exception to this transformation. This study examines bankers' views on
providing banking services to customers using the web. Specifically, it
addresses issues such as the strategic need for Internet banking, its effect on
customer-bank relationships, and customers' experiences in Internet banking.
Data collected from 75 banks show that most banks do not yet offer full-
fledged Internet banking. However, most have plans to do so. Furthermore,
bankers see Internet banking as a strategic opportunity that can reduce
transaction costs, enhance customer service, increase the customer base and
improve cross-selling opportunities. Also, Internet banking is perceived more
favorably by banks that offer it compared to those that do not.

Bradley & Stewart (2003) conducted a research in which they studied the
factors driving the adoption of internet banking. The financial services
environment has been subject to changes on many fronts. Technological change
and the advent of the Internet are among the most dramatic and challenging
areas of change for the sector. This paper looks at retail banking and its
adoption of online banking, in particular the factors driving and inhibiting
adoption by banks. An international Delphi study confirms the high level of
importance of the Internet for retail banking. By 2011, it is expected that bank
adoption of the Internet will be near universal. The key factors that are driving
banks to adopt online banking are the adoption by other banks, competitive
forces, consumer demand and the availability of technology. Working against
adoption are banks' perceptions that the Internet does not offer enhanced ability
to deal with customers as well as bank resistance to change, their existing
legacy systems and the resources required to adopt.

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 Laukkanen & Tommi (2007) in their research aimed to compare customer
perceived value and value creation between internet and mobile bill paying
service. A qualitative in-depth interviewing design was applied in order to
ascertain the factors that create value perceptions in fund transfer service via
personal computer and mobile phone. The findings suggest that efficiency,
convenience and safety are salient in determining the differences in customer
value perceptions between internet and mobile banking. The findings of the
qualitative study, being more depth than wide in nature, deserve to be
quantitatively measured in future studies in order to provide more generalized
results. The paper provides enhanced information for business managers about
both positive and negative customer value perceptions in internet and mobile
banking. By understanding how and what kind of value different service
channels provide for customers service providers are better enabled to create
actions to enhance internet and mobile banking adoption. The contribution of
the paper lies in achieving a more profound understanding on consumer value
perceptions to internet and mobile banking. It expands the literature on
electronic and mobile commerce and on electronic banking especially.
Uppal (2009) in his study found that in the post-LPG (Liberalization,
Privatization and Globalization) era and Information Technology (IT) era,
transformation in Indian banks is taking place with different parameters and the
contours of banking services are dynamically altering the face of banking, as
banks are stepping towards e-banking from traditional banking. On the basis of
five-point likert-type scale, this paper empirically analyzes the quality of e-
banking services in the changing environment. With different statistical tools
such as weighted average method and ranking, the paper concludes that most of
the customers of e-banks are satisfied with the different e-channels and their
services, but the lack of awareness is a major obstacle in the spread of e-
banking services. The paper also suggests some measures to make e-banking
services more effective in the future.

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 CHAPTER: 3
BRIEF INTRODUCTION OF ICICI BANK

Overview of ICICI Bank

History of ICICI Bank

Key Words

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 ICICI Bank is Indias second-largest bank with total assets of Rs. 3,849.70 billion
(US$ 82 billion) at September 30, 2008 and profit after tax Rs. 17.42 billion for the half
year ended September 30, 2008. The Bank has a network of about 1,400 branches and
4,530 ATMs in India and presence in 18 countries. ICICI Bank offers a wide range of
banking products and financial services to corporate and retail customers through a
variety of delivery channels and through its specialized subsidiaries and affiliates in the
areas of investment banking, life and non-life insurance, venture capital and asset
management. The Bank currently has subsidiaries in the United Kingdom, Russia and
Canada, branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and
Dubai International Finance Centre and representative offices in United Arab Emirates,
China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary
has established branches in Belgium and Germany.

ICICI Banks equity shares are listed in India on Bombay Stock Exchange and the
National Stock Exchange of India Limited and its American Depositary Receipts (ADRs)
are listed on the New York Stock Exchange (NYSE).

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 History

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial
institution, and was its wholly-owned subsidiary. ICICIs 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 Banks 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 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 groups universal
banking strategy.The merger would enhance value for ICICI shareholders through the
merged entitys access to low-cost deposits, greater opportunities for earning fee-based
income and the ability to participate in the 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 ICICIs strong corporate

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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 January 2002, by the High Court of Gujarat at Ahmadabad 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 groups financing and banking
operations, both wholesale and retail, have been integrated in a single entity.

ICICI Bank has formulated a Code of Business Conduct and Ethics for its directors
and employees.

ICICI Bank (formerly Industrial Credit and Investment Corporation of India) is

Indias largest private sector bank in market capitalization and second largest overall in
terms of assets. Bank has total assets of about USD 100 billion (at the end of March
2008), a network of over 1,399 branches, 22 regional offices and 49 regional processing
centres, about 4,485 ATMs (at the end of September 2008), and 24 million customers (at
the end of July 2007). ICICI Bank offers a wide range of banking products and financial
services to corporate and retail customers through a variety of delivery channels and
31ember31ized subsidiaries and affiliates in the areas of investment banking, life and
non-life insurance, venture capital and asset management. (These data are dynamic.)
ICICI

-25-
Bank is also the largest issuer of credit cards in India. . ICICI Bank has got its equity
shares listed on the stock exchanges at Kolkata and Vadodara, Mumbai and the National
Stock Exchange of India Limited, and its ADRs on the New York Stock Exchange
(NYSE).

The Bank is expanding in overseas markets and has the largest international balance
sheet among Indian banks. ICICI Bank now has wholly-owned subsidiaries, branches and
representatives offices in 18 countries, including an offshore unit in Mumbai. This
includes wholly owned subsidiaries in Canada, Russia and the UK, offshore banking units
in Bahrain and Singapore, an advisory branch in Dubai, branches in Belgium, Hong Kong
and Sri Lanka, and representative offices in Bangladesh, China, Malaysia, Indonesia,
South Africa, Thailand, the United Arab Emirates and USA. Overseas, the Bank is
targeting the NRI (Non-Resident Indian) population in particular.

ICICI reported a 1.15% rise in net profit to Rs. 1,014.21 crore on a 1.29% increase in
total income to Rs. 9,712.31 crore in Q2 September 2008 over Q2 September 2007. 1955:
The Industrial Credit and Investment Corporation of India Limited (ICICI) was
incorporated at the initiative of World Bank, the Government of India and representatives
of Indian industry, with the objective of creating a development financial institution for
providing medium-term and long-term project financing to Indian businesses.
Mr.A.Ramaswami Mudaliar is elected as the first Chairman of ICICI Limited.

-26-
 Key Words

Bank:

A bank is a financial institution whose primary activity is to act as a payment

agent for customers and to borrow and lend money. It is an institution for receiving,
keeping, and lending money.

Mobile Banking:

Mobile banking (also known as M-Banking, mbanking, SMS Banking etc.) is a

term used for performing balance checks, account transactions, payments etc. Via a
mobile device such as a mobile phone. Mobile banking today (2007) is most often
performed via SMS or the Mobile Internet but can also use special programs called
clients downloaded to the mobile device.

-27-
Internet Banking:

Online banking (or Internet banking) allows customers to conduct financial

transactions on a secure website operated by their retail or virtual bank, credit union or
building society.

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Core Banking System:

Core Banking is a general term used to describe the services provided by a

group of networked bank branches. Bank Customers may access their funds and other
simple transactions from any of the 35ember branch offices.

-29-
 ATM:

An automated teller machine (ATM) is a computerized telecommunications

device that provides the customers of a financial institution with access to financial
transactions in a public space without the need for a human clerk or bank teller. On
most modern ATMs, the customer is identified by inserting a plastic ATM card with a
magnetic stripe or a plastic smartcard with a chip, that contains a unique card number
and some security information, such as an expiration date or CVC (CVV). Security is
provided by the customer entering a personal identification number (PIN).

Using an ATM, customers can access their bank accounts in order to make cash
withdrawals (or credit card cash advances) and check their account balances as well as
purchasing mobile cell phone prepaid credit. ATMs are known by various other names
including automated banking machine, money machine, bank machine, cash machine,
hole-in-the-wall, cashpoint, Bancomat (in various countries in Europe and Russia),
Multibanco (after a registered trade mark, in Portugal), and Any Time Money (in India).

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 CHAPTER: 4

CUSTOMER RELATIONSHIP MANAGEMENT

+
Introduction

Types of CRM

Needs of CRM

Objectives

Process For Delivering CRM

Research Methodology

CRM In Banking : Indian Scenario

CRM Implementation Of ICICI Bank

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-32-
 INTRODUCTION

Customer relationship management (CRM) is a system for managing a companys

interactions with current and future customers. It involves using technology to
organize, automate and synchronize sales, marketing, customer service, and technical
support. In the modern times, the existence of the civilized world cannot be imagined
without banks. The banking activities have become not only an integral part of the
human civilization but also have directed the flow of progress over the lifetime of
human civilization so far. in todays competitive world, banks, like any other industry,
are struggling hard to maintain the old clientele while attracting new customers. it is in
this scenario that establishing a relationship with the customers and managing it well
has become the need of the hour. how successful a bank is at managing a good
relationship with its customers determines how well it does.

customer relationship management (CRM) is a widely implemented strategy for

managing a companys interactions with customers, clients and sales prospects. it
involves using technology to organize, automate, and synchronize business processes
principally sales activities, but also those for marketing, customer service, and
technical support. the overall goals are to find, attract, and win new clients, nurture
and retain those the company already has, entice former clients back into the fold, and
reduce the costs of marketing and client service.

one of the largest challenges that customer relationship management systems face in
banks is poor usability. with a difficult interface for a user to navigate, implementation
can be fragmented or not entirely complete. CRM systems for marketing departments
in banks help the enterprise identify and target potential clients and generate leads for
the sales team. a key marketing capability is tracking and measuring multichannel
campaigns, including email, search, social media, telephone and direct mail. metrics
monitored include clicks, responses, leads, deals, and revenue.

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CRM can drive service revenue and profitability with support for service sales and
marketing. customer relationship management (CRM) in the banking system is
fundamental to building a customer-centric organization

Retail banks are facing greater challenges than ever before in executing their customer
management strategies. Intensifying competition, proliferating customer contact
channels, escalating attacks on customer information, rising customer expectations
and capitalizing on new market opportunities are at the top of every bank executives
agenda. In looking for ways to drive growth, banks need to evaluate their customer
management strategy.

-34-
Types of CRM

-35-
Broadly, three types of CRM are adopted by banks:

(1) Operation CRM In this, CRM software packages are used to track and
efficiently organise inbound and outbound interactions with customers including the
management of marketing campaigns and call centres. Operational CRM supports
frontline processes in sales, marketing and customer service, automating
communications and interactions with the customers. They record contact history and
store valuable customer information to ensure a consistent picture of customers
relationship with the bank that can be retrieved by staff as per requirement. The major
benefits of operational CRM to banks are:

(a) Sales Force Automation

(b) Customer Service and Support

(c) Enterprise Marketing Automation

(2) Analytical CRM It is about analysing customer information to better address

marketing and customer service objectives and deliver the right message to the right
customer at the right time through the right channel. It involves the use of data
analysis to extract knowledge for optimising customer relationships.

The major benefits of Analytical CRM to banks are :

(a) Customer Retention

(b) Fraud Detection

(c) Optimising marketing efforts as per

customer life time value

(d) Credit Risk Analysis

(e) Segmentation and targeting

(f) Development of customised new products matching the specific preferences and
priorities of customers.

-36-
(3) Collaborative CRM - These involve systems facilitating customers to perform
services on their own through a variety of communication and\ interactive channels. It
brings people process and data together and enables channeling of data and
information appropriately to bank staff for proactive decision making and enhanced
informed customer service and support activities. It provides a means of information
sharing to all concerned in timely manner and includes customer as a creator of
service. The major benefits of collaborative CRM to banks are

(a) Providing efficient customer communication across a variety of channels

(b) Online services to reduce customer service costs

(c) Providing access to customer data while interacting with customers.

Thus, CRM can be understood as a catalyst enabling transformation of Banking from

traditional

-37-
 Need of CRM in the Banking Industry
A Relationship-based Marketing approach has the following benefits: -

1. Over time, retail bank customers tend to increase their holding of the other products
from across the range of financial products / services available.

2. Long-term customers are more likely to become a referral source.

3. The longer a relationship continues; the better a bank can understand the customer
and his/her needs & preferences, and so greater the opportunity to tailor products and

services and cross-sell the product / service range.

4. Customers in long-term relationships are more comfortable with the service, the
organization, methods and procedures. This helps reduce operating cost and costs
arising out of customer error. With increased number of banks, products and services
and practically nil switching costs, customers are easily switching banks whenever
they find better services and products. Banks are finding it tough to get new
customers, and more importantly, retain existing customers.

-38-
 Objectives

To study the CRM functioning and effectiveness of the ICICI Bank in

Thiruvannamalai.

To study the advantages of CRM schemes introduced by ICICI Bank to its

customers

To study the various customers oriented schemes introduced by ICICI Bank in the
interest of its customers.

Majority of customers are satisfied with the services provided by ICICI Bank.

ICICI is always taking initiative for providing maximum satisfaction to its

customers.

-39-
The Processes for Delivering CRM

-40-
The tools and the processes are as follow

Customer application form

Centralized software where the whole data is

collected. Wide range of offerings

Cross selling

Feedback forms

1) Customer Application Forms:

Bank collects all the data from customer application form and gets the personalized
information to know which product to offer to which customer. This process helps in
collecting the data and knowing what the customer wants.

2) Centralized Software where the Whole Data is Collected:

The data collected through customer application forms is available at one server and
can be accessed anytime, anywhere. So, this helps in the further process of customized
offerings and cross selling.

3) Wide Range of Offerings:

After collecting the data from the customer, team decides what product to offer to
which customer. In case the bank recognizes you as a valuable customer then is offers
a more customized service.

4) Cross Selling:

It refers to offering another product from the service offering of the bank to the
customer which he has not gone for. For example If customer has savings account with
the bank then they offer him a insurance, fixed deposits etc. This depends on the value
of the customer to the bank. Cross selling is not offered to every customer. It depends
on how loyal the customer is to the bank. The more business he gives us, the more are
his chances of being special services offered.

-41-
5) Feedback Forms:

The bank distributes feedback forms at all its branches. The customers feedbacks on
the service, technology used, employee behavior and promptness in solving
customers problems, are taken and they are analyzed. CRM helps to know the needs
and wants of the customer .So, on the basis of this company can decide which product
to offer to which customer. It has been observed that cross selling is the best weapon.
It enhances the relationship value with the customer. This satisfies the customer and
that is the reason why the customer keeps on coming again and again to the company.
This helps in retaining the market share. Now ,the satisfied customers help in the
word- of mouth promotion of the bank, which eventually increases our market share.

-42-
 Additional Features of CRM in ICICI Bank

Most banks have their own databases but because of the huge technological
investments done by ICICI the databases in all the branches are integrated, which
means they can be accessed from anywhere and at anytime. ICICI bank has tied up
with Terra data Company for making their software and is the only bank doing this.
The difference can be known through matching tool parameter. This refers to; on the
server of ICICI sum standards are set in terms of value of the customer and whenever
the customer reaches the set standard, the server automatically informs the department
to offer him another product .

The bank has successfully leveraged the power of Financial and has deployed the
solution in the areas of core banking, consumer e-banking, corporate e-banking and
CRM. with Financial , ICICI Bank has also gained the flexibility to easily develop
new products targeted at specific segments such as ICICI Bank Young Stars- a product
targeting children, Women's Account addressing working women and Bank@campus
targeting students.

ICICI Bank is today recognized as a clear leader in the region and has won numerous
accolades worldwide for its technology-driven initiatives. In 2003, the bank received
the best multi-channel strategy award from The Banker magazine and this year it was
rated as the 2nd best retail bank in Asia by The Asian Banker Journal. The bank has
effectively used technology as a strategic differentiator, thus not only redefining the
rules of banking in India, but also showcasing how technology can help in
transforming a banks business.

-43-
 Research Methodology
This research study is based on primary data collected from 260 respondents from
ICICI bank in India, 200 respondents from ICICI bank in UK. The primary data has
been collected by administering a questionnaire consisting of 44 questions, out of
which 41 are close ended questions. The questions pertaining to CRM items have been
designed using the five point Likert scale. 7 questions have been used to create the
demographic profile of customers, 3 questions pertain to the particular bank services
used by the customer; and 33 questions to gauge the perception about customer
relationship management programme of the bank and the customers loyalty towards
the bank.

Scope and Utility

This study has concentrated all the services in general. One can also do comparative
study of various banks and their approach towards the customers. In the present
competitive business world it becomes necessary to align organization towards
customers, Integrate customerstouch points, Knowing and understanding customers
and potential customers, Establishing and managing relationships with customers.
Thus CRM is need of this hour.

-44-
 Limitations
This project concentrates on the services given to customer in general. Therefore it
is difficult to study the view of the customers towards one particular service.

It was difficult to study what happens to customer satisfaction when we initially

perceive a service provider as being less than general then over time, that service
provide warms up unexpectedly?

Finally, this study did not examine whether courteous expressions on

personalconnections play a role in other customer outcomes such as loyalty and word-
of-mouth referrals.

-45-
 Analysis
This project wish to study the customer relationship management in ICICI Bank and
how this concept would help to maintain long term customer loyalty with the bank.
This would help

ICICI bank to emerge as no one private sector bank in the country.

CRM, according to ICICI consists of the following approaches:

1. Getting personalized information on customers.

2. What is the value of the relationship?

3. Customized offerings to the customers.

4. Converting a prospective customer into a true customer.

1) Getting personalized information on customers:

The bank collects all the information about the customers for processing. ICICI bank
has mainly 4 service offerings viz: loan account, saving account, current account and
fixed deposits. Moreover, the bank has many customers in each category. So, they
collect the data on one server and thus the company gets the personalized information
on each customer by asking them to fill the information in customer application form.

2) What is the value of the relationship?

After the collection of the personalized information on every customer, the

department checks out the value of the relationship with each and every customer.
Later, they decide how to approach the customer for knowing what his needs and
wants are? After this is done, the company offers him the customized product.

3) Customized offering to the customers:

The step which comes after deciding the value of the customer is that the company
offersthe person the customized product. Moreover, they also practice a concept called

-46-
crossselling over here. Cross selling refers to offering another product from the
service offering of the bank to the customer which he has not gone for. Example If
customer has saving account with the bank then we offer him loan, insurance and
other investments.

4) Converting a prospective customer in to a true customer:

The last approach of CRM according to ICICI bank is that they try to convert the
prospective customer into a true customer. Right from the moment the inquiry comes,
they follow- up the customer and then make him to come to the bank occasionally and
then regularly.

-47-
 CRM In Banking: Indian Scenario
Although significance of Relationship Marketing practices and optimising and
maintaining customer relationships across diverse customer segments has been
realised and practiced by all banks in India, the technology enabled CRM is still at a
developing stage. Different Banks are at different levels of CRM adoption and
implementation and majority of them can be considered to be at preliminary stages.
Operational CRM is the most wide spread, but collaborative CRM is most evident in
internet banking, mobile banking, ATM functions, POS devices and initiatives like
availability of pass book printing machines to enable customers to update their
passbooks themselves. Also SMS alerts at various significant customer service events
are proliferating. Analytical CRM is being utilised but not by all banks. Here also a
few illustrations of Indian banks using CRM will define a clearer picture of CRM in
Indian banking.

ICICI identified five functional areas which when integrated will give Bank its
CRM Business Transformation Map. Core areas of transformation were business
focus, organisation structure, business matrix, marketing focus and technology. The
pay offs were : lower total cost of ownership, efficient management of volume growth,
greater responsiveness to market needs, improved operations, decrease in operational
costs, reduction in turnaround time, and integrated platform for all applications of
bank. The recent CRM application is enabling ICICI customers to perform
transactions via the platform of face book, a social networking site. This brings the
bank one step ahead in providing convenience and service through CRM.

-48-
 Benefits Of A CRM Solution
Faced with these numerous and varied trends, retail banks are reshaping the way
they must interact with their customers. A fully integrated, enterprisewide CRM
platform ensures banks have the core capabilities to take full advantage of their
customer relationships and capitalize on these market dynamics, rather than losing out
because of them.

Gaining Sales Momentum

In todays increasingly competitive environment, where maximizing organic
growth is a banks priority, sales momentum is essential. To build this momentum,
banks need to focus simultaneously on:

Increasing acquisition rates of new and emerging customer segments.

Improving retention of existing customers and saving at risk customers
Increasing profitability of customer relationships, either at the top-line through
increased sales, or at the bottom line through more cost-effective services.
Improving integrated channel distribution strategies to get the right product, to
the right client, at the moment the customer has the need.
Maximizing the value and return from CRM investments that have already been
made.

-49-
 Increasing Acquisition Of New Customers
A CRM solution should help a bank target customers based on the value they
bring to the bank, now and throughout the life of the customer (and beyond through
next generation marketing). Banks need to ensure that their value propositions have
traction with the right market segments. This will enable the bank to identify, target
and capture new customers. Clearly, customer insight and strategy are the core
differentiators for the bank. CRM solutions (people, applications, systems and
processes) must support these strategies to get the right products and services to the
right customers.

Improving Retention Of Existing Customers

Customer retention can be achieved by enhancing customer satisfaction and
loyalty, improving problem resolution, and creating the ability to identify and save
at-risk customers. In fact, an at-risk customer actually represents a major
opportunity for additional revenue if handled correctly. However, the greatest danger
for banks is either not identifying at risk customers or not having the capabilities to
do anything to recover them.

For example, a customer makes a large withdrawal from his or her account. This
may signal that the customer is switching funds to another bank. Or the customer may
be buying a house, a boat, or paying college tuition, in which case there are clear
opportunities to sell additional products or investments. The identification and
treatment of this customer should reflect his or her lifetime value. CRM-driven
techniques will help retain customers and can migrate mere account holders into
loyal, long-term, profitable customers.

-50-
 Increasing The Profitability Of Customer Relationships
Boosting revenues requires improving the product pipeline and close rates, while
reducing sales and service costs. On the revenue side, the banks CRM solution should
use customer intelligence to target specific offers and manage marketing campaigns
for a high likelihood of acceptance. Customer treatment strategies should be fully
integrated with a CRM platform and the processes to support them. On the cost side,
better channel management, CRM automation and integration will help increase the
efficiency and effectiveness of sales and service.

Improving Distribution And Channel Management

To win profitable customers and build longterm relationships with them, banks
need to have the right insight, products and services for the right customer at the
lowest possible cost. From call centers to Web sites, every one of a banks multiple
channels must be scalable, flexible, low-cost and fully integrated with all the other
channels. This is the only way to consolidate customer information and provide
consistent treatment across the enterprise. Each of the banks channels must also be
able to accommodate change and adapt to future trends in the marketplace.

-51-
 CRM Implementation Of ICICI Bank

ICICI has transformed itself into a technology intensive financial services

group in the last decade. To achieve its long term goal of being in a position to
practice One-to-One marketing. ICICI has taken a series of initiatives. As 0part of the
plans, it is implementing various projects to establish world-class CEM practices
which would provide0 an integrated view of its customers to everyone in the
organization. The paper discusses some of the lessons learnt while implementing these
projects.

Introduction
ICICI set up as a Development bank over four decades ago to provide products
and services for the corporate segment, diversified into retail segment of the financial
markets in the early 1990s. In the last decade it has transformed itself to a technology
intensive financial services group. The first such move came in the mid-nineties when
ICICI raised debt from the retail market. Since then, ICICI has been increasing its
reach to this segment in terms of resources mobilization, and by offering quality
investor services through ICICI Infotech services, its subsidiary. In 1994, it established
ICICI Bank as a commercial bank that is flexible, in addition to the bank, the retail
initiative include

(a) Prudential ICICI AMC- a tie up with the prudential Group of UK for its foray
into the mutual funds business.
(b) ICICI Personal finance services (PFS) to offer retail assets products like home
finance, automobile finance, durables finance ets.
(c) ICICI Capital services to services retail liability products like bonds and
deposits.
(d) ICICI web trade to facilitate end to end integrated web based trading services
through the web site www.icicidirect .com

-52-
(e) Prudential ICICI life insurance to offer the insurance services, and
(f) ICICI Lombard General Insurance the latest venture to offer non-life
insurance services. This apart the retail initiatives of ICICI also inc;lude a
plethora of web-based businesses including cith portals and various other utility
sites such as billjunction.com, icicimoneymanager.com, magiccart.com, among
others. All these group companies are jointly spearheading ICICI Groups foray
into th retail market.

-53-
 ICICI- Retail Strategy
ICICIs retail strategy was centered around intensive deployment of technology to
help reduce cost of service, increase customer retention, help in cross selling and
up-selling while improving process efficiencies.

The bank looked towards allowing the customers use multiple electronic channels
including internet, ATMs, call centers, contact centers, desktops, kiosks, mobiles
and other hand held devices for conducting financial transactions.

ICICI has ambitious plans for its retail business initiatives. The retail strategy
revolves around intensive deployment of technology. Information technology will help
reduce cost of service, increase customer retention, help in cross-selling and up-selling
while improving process of efficiencies. Electronic channels including internet, ATMs,
call centers, contact centers, desktops, kiosks, mobiles and other hand held devices
will perform financial activities while ensuring that customer has multiple options for
access and transaction.

The group has adopted a click and brick strategy to leverage the power of
electronic channels and physical presence to ensure rapid product delivery, fulfillment
of financial deals and documentation.

As part of the plans, it is implementing various projects to establish world

class CRM practices, which would provide an integrated view of its customer to
everyone in the organization. CRM at ICICI involves increased communication
between the virtual universal banks and its customer and prospects, as well as
within the group itself. The underlying idea is to enhance every instance of contact
with the customer. ICICI believes that a true customer - centric relationships can
only be accomplished by considering the unique perspectives of every single
customer of the organization. Hence the pressing need to put in place a technology
enabled CRM solution.

-54-
 CRM Road Map Of ICICI

CRM is viewed as a discipline as well as a set of discrete software technologies,

which will focus on automating and improving the business processes associated
with managing customer relationships in the areas of sales, marketing, customer
service and support.

The organizations aims to achieve the end goal of one-to-one marketing.

The CRM Software applications will facilitate the coordination of multiple

business functions.

Coordinate multiple channels of communication with the customer to carry out

customer management more efficiently.

It should allow ICICI to engage in one-to-one marketing by tracking complete

customer life-cycle history.

To begin with, it will automate process-flow tracking in the product sales process,
and be able to generate customized reports and promote cross selling.

It will also enable efficient campaign management by providing a software

interface for definition, tracking, execution and analysis of campaigns.

-55-
 Implementing CRM

A very detailed and comprehensive CRM actions plan was developed based on
the understanding that CRM will require an enterprises wide transformation.

The CRM Business Transformation Map below shows the various aspects of
that change. There are five inter-related areas. These include:

1. Business Focus
2. Organizational structure
3. Business Metrics
4. Marketing Focus
5. Technology

The key to building the CRM action plan was in understanding where the organization
stood relative to each of the five aspects of change. Interviews with key individuals
throughout the organization helped identify different initiatives that have been
launched, al focused on CRM. While all of these initiatives may have merit, failure to
address the total business transformation requirements can lead to very short - lived
success.

The next step in the planning process was a Gap Analysis. This analysis essentially
and specifically describes the gaps. In addition to the more obvious gaps, this analysis
helped identify the CRM organizational holes:

1. Marketing Sales and services practices

2. Collections, capture, processing and development of customer information.
3. Distribution and operations effectiveness at customer touch points

-56-
 Another key factor I n identifying gaps is to understand how the organization
functions relative to the CRM Business Cycle. There is a universal, underlying cycle
of activity that should drive all CRM initiatives and infrastructure development. All
initiatives and infrastructure development should somehow be tied to this core cycle of
activity. Careful evaluation of the organizations ability to execute this cycle will
pinpoint and qualify additional organizational gaps.

-57-
 CHAPTER: 5

RESULTS & CONCLUSIONS

The extensive analysis of data collected from the ICICI banks has revealed that
the independent variables in the study, namely the various CRM practices, such
as providing a personal assistant, timely and reliable complaint handling,
empathetic bank employees, timely and understandable information regarding
the banks products and services, provisions of adequate number of branches,
facilities of online and mobile banking, efficient and fair business practices, all
influence the dependent variable, i.e. customer loyalty.
The customer loyalty can be measured in terms of customer retention,
customer spreading word of mouth publicity about the bank, customer willing
to buy other products and services from the bank and staying with the bank
despite increase in service charges. All these constitute and strengthen
customer reinforcement, i.e. choosing the bank amongst other competitors.
Commendable CRM practices by various banks include provision of
personal banking assistants, mobile and e-banking services, prompt and
timely completion of baking transactions, helpful and understandable written
information about banks products and services, personalised services and a
choice of channels through which the customer can access the banking
services.
The unique CRM practices adopted by ICICI bank in India and the UK through
the implementation of CRM next have not only won them laurels from the
industry but also increased their customer base, lead generation and lead
conversion rates significantly.
The ICICI bank in India as well as UK is recognized by the consumer as
having good CRM practices, but should extend these into the rural banking in
India as well in order to further cement the relationship with the majority
Indian customers who could bring sound business growth to the bank.

-58-
 Customers are not only demanding the best interest rates and security in their
banking transactions, but also expect their banks to display personalised service
with an aim at establishing a trustworthy relationship with their banks.
Good CRM implementation is possible through adequate training and
empowerment of the bank staff, as shown by ICICI in India and UK.
In developed countries like the UK, customers are much more demanding
and aware of their consumer rights and hence the level of customer services
also matches their expectations.
In developing countries like India, the level of customer services are
satisfactory, but need further implementation and penetration from the niche to
other segments of the market.
CRM has to be seen as an essential technology-driven tool which
integrates technology with people and serves to make the banking practices
more accessible, understandable and personal to their customers.

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 CHAPTER 6

REFERENCES

BOOK:
Customer Relationship Management

Website :
www.icicibank.com
www.thebanker.com
www.shartermpapers.com
www.wikipedia.com
www.scribd.com
www.managementparadise.com

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 Questionnaire

Personal details

1. Name: ______________________________________

2. Age: 25yrs- 35 yrs

36 yrs - 45yrs

46 55 yrs

Above 55 yrs

3. Gender: Male

Female

4. Educational Qualification: Illiterate

School

UG

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 PG

Professional Course

Others

5. Occupation: House wife

Students

Salaried person

Business man

Professionals

Supervisor

Managerial

Pensioner

6. Income level: Rs.5,000 Rs.15,000

Rs.15,001-Rs.25,000

Rs.25,001- Rs.35,000

Rs.35,001-Rs.45,000

Above Rs. 45,000

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7. In which bank do you have an account?

ICICI bank

SBI bank

Other Specify___________________

8. What is the reason to choose the services of the bank?

Efficient customer service

Efficient complaints handling

Time saving

Transaction costs

Technology

Others _________ please specify

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