A

COMPREHENSIVE PROJECT REPORT

ON
“A STUDY ON PRIVATE BANKING SECTOR AND ITS SERVICES”
Submitted to

HASHMUKH GOSWAMI COLLEGE OF ENGEENERING (718)

IN PARTIAL FULLFILLMENT OF THE
REQUIREMENT OF THE AWARD
FOR THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
UNDER
GUJARAT TECHNOLOGICAL UNIVERSITY
UNDER THE GUIDANCE OF
Dr. DEEPAK TEKWANI

Submitted by
MISHRA SHAILJA 167180592009

M.B.A – SEMESTER IV
Affiliated to
GUJARAT TECHNOLOGICAL UNIVERSITY
May - 2018
 CERTIFICATE

Certified that this comprehensive project report titled “A study on private banking sector and its
services” is bonafide work of Ms, shailja mishra, who carried out the research under my supervision. I also
further, that to the best of my knowledge the work reported herein does not from part of any project report or
dissertation on the basis of which a degree or award was conferred on an earlier occasion on this or any
other candidate.

Signature of the faculty guide

Signature of the Principal

i
 DECLARATION

I, Shailja mishra, hereby declare that the report for “Comprehensive Project” entitled on “A study on
private banking sector and its services” is the result of my own work and my indebtedness to other work
publications, references, if any, have been duly acknowledged.

Place: Vahelal

Date:

Shailja Mishra (167180592009)

ii
 PREFACE

This projects provides an opportunity to demonstrate application of our knowledge, skill and
competitions required during the human resource session. This project helps me to devote my skill
to analyze the problem to suggest alternative solutions and to evaluate them

I have worked on the topic is “A STUDY ON PRIVATE BANKING SECTORS AND ITS SERVICES”.

This project report attempt to bring under one cover the entire hard work and dedication
put in by use in the complication of the project work on factor affecting on customer satisfaction in
private banking sector.

I have expressed my experience in my own simple way. I hope who goes thought it will find it
interesting and worth reading. All constrictive feedback is cordially invited.

iii
 ACKNOWLEDGEMENT

Knowledge in itself is a continuous process. At this moment of my substantial enhancement i rarely

find enough words to express my gratitude towards those who was constantly involved with me during my
project and making it a success. Men become good through practice than by nature.

I would like to express my profound gratitude to all those who have been instrumental in the
preparation of this report which has been prepared in partial fulfilment of Comprehensive Project in the
Semester iii of an MBA programme.

I wish to thank Dr. Deepak Tekwani, who is Head of MBA Department in Hasmukh Goswami
College of Engineering (718).

I am also thankful to all the faculty members of Hashmukh Goswami College of Engineering and
Management, for all their suggestions and help that I obtained from them and I am thankful for all the
support they extended to me. I would also like to thank my parents and all my friends who have helped me,
though indirectly, throughout the project duration and always have been a source of encouragement.

iv
 EXECUTIVE SUMMERY

Banking system occupies an important place in nation's economy.A banking institution is indispensable in a modern
society. It plays a pivotal role in the economic development of a country. Thus, economic development of a country
depends upon success of banking industry and success of banking Industry is determined to a large extent by now
well then needs of its customers have been understood and satisfied. The Indian banking industry has come a long
way from being a sleepy business institution to a highly proactive and dynamic entity. The liberalization and
economic reforms have largely brought about this transformation. The entry of private banks has revamped the
services and product portfolio of nationalized banks. With efficiency being the major focus, the private banks are
leveraging on their strengths. To compete with the private banks, the public sector banks are now going in for major
image changes and customer friendly schemes. Increasing competition and technology driven products are some of
the trends which the banking industry is currently experiencing. The technology oriented banking has become one of
the latest success mantra in market especially to win over the customers. Due to entry of private banks which are
known for technical and financial innovation their professional management has gained a remarkable position in
banking sector.

The dissertation entitled “Impact of Privatization on Public Sector Banks” is focused to study:

• Changes made in Public Sector Banks in terms of arrival of new products and services.

• Employees satisfaction in Public Sector Banks i.e. how they feel being working in Public Sector Banks. For this SBI
and PNB are involved in study.

• Customers preference towards Public & Private Sector Banks i.e. which sector they prefer.

v
 TABLE OF CONTENT

CHAPTER
NO. PARTICULARS PAGE NO.
Certificate I
Declaration II
Preface III
Acknowledgement IV
Executive Summary V
Part - 1 General Information 1
1 Private banking of Indian and local market 2
1.1 Old private sector banks 3
1.2 New private sector Bank 9
1.3 Private sector banks evaluation 12
1.4 Overview of the world market 16
1.5 Recent developments in private banking 19
2 Private banking ranking 23
3 RESERVE BANK OF INDIA 27
3.1 Brief History 28
3.2 Structure of organized India Banking System 34
3.3 Role of Private Banks in the Growth of the
Indian Economy 38
3.4 ICICI Bank 40
3.5 HDFC Bank 42
Part - 2 Primary Study 53
4 INTRODUCTION OF THE STUDY 54
4.1 Literature review 55
4.2 Background of the study 59
4.3 Problem statement of the study 60
4.4 Objectives of the study 61

5 RESEARCH METHODOLOGY 64
5.1 Research Design 65
9 5.2 Sources of data 65
5.3 Data collection instrument 65
5.4 Population 66
5.5 Data collection instruments 67
5.6 Data collection instruments 67
6 DATA INTERPRETATION 68
7 Findings 79

vi
8 Limitation of the study 82
9 Conclusion and Suggestion 85
Bibliography 88
Annexure 90

vii
 Part :1

General information

viii
 Chapter 1

Overview of private banking of Indian and local market

This section is devoted to evaluate the performance of domestic private sector banks during the
period 1992-93 to 2002-03 in which reform measures are under implementation. The same
parameters are used to measure the efficiency and profitability of private sector banks, which are
used for Public Sector Banks. This section is also divided in to Three Parts.

Part –I Deals with the evolution of domestic private sector banks in India.
Part-II Analyses the performance of private sector banks-old and new-during the study
period 1992-93 to 2002-03.
Part-III Is devoted to period wise analysis of performance of Private Sector Banks in
terms of efficiency and profitability. Grouping of banks is done based on
composite score arrived at through principle component analysis.

1
The list of Private Sector Banks is as follows:

1.1 Old Private Sector Banks

1. Bank of Rajasthan Ltd.

2. Catholic Syrian Bank Ltd.
3. City Union Bank Ltd.
4. Dhanlakshmi Bank Ltd.
5 Federal Bank Ltd.
6. ING Vysya Bank Ltd.
7. Jammu and Kashmir Bank Ltd.
8. Karnataka Bank Ltd.
9. Karur Vysya Bank Ltd.
10. Lakshmi Vilas Bank Ltd.

1.2 New Private Sector Banks

1. Bank of Punjab Ltd. (since merged with Centurian Bank)

2. Centurian Bank of Punjab (since merged with HDFC Bank)
3. Development Credit Bank Ltd.
4. HDFC Bank Ltd.
5. ICICI Bank Ltd.
6. Induslnd Bank Ltd.
7. Kotak Mahindra Bank Ltd.
8 Axis Bank (earlier UTI Bank)
9. Yes Bank Ltd

1.3 Private sector banks evaluation

Historically, the private sector banks played a crucial role in the growth of joint stock banking in
India. The first half of the 20th century witnessed phenomenal growth of private sector banks. As
a result in 1951, there were 566 private banks of which 474 were non-scheduled and 92
scheduled classified on the basis of their capital size. The role of private sector banking started
declining when the Government of India entered banking business with the establishment of
State Bank of India in 1955 and subsequently two rounds of bank nationalization one in July
1969 (14 major banks), another in April 1980 (take over of 6 banks). Consequently, the presence
of public sector banks has increased.

At present, there are 32 private banks comprising of 24 old banks, which existed prior to 1993-94
and eight new private banks, which were established during 1993-94 and onwards after the RBI
announced guidelines.
2
In January 1993 for establishment of new banks in private sector following there commendations
of Narasimhan Committee-I (1991). Compared to New private sector banks, the old banks are
smaller in size. For example, at end March 2000, the average net worth of the 24 Old Private
Banks (OPBs) wasRs.179.67 Crore per OPB compared to that of the New Private Bank (NPB) at
Rs. 479.88 Crore per NPB. The OPBs are essentially regional in character though some of them
have scattered presence in areas other than in and around the areas of their origin. The number of
branches of the NPBs was999 at end March 2003, while those of OPBs 3491. The NPBs are
extremely cautious in expanding their branch network and business because their managers
mostly drawn from the public sector banks, know very well the ill of unbridled expansion of
branches by public sector banks in the post nationalization.

The Narasimha Committee-I, that advocated competition in the banking industry, made
unequivocal recommendation to allow private and foreign banks into the industry. Acting on the
recommendations of the committee, the RBI laid down guidelines for the establishment of the
private191sector banks on January 1993. The guidelines prescribed that the private banks should
be established as public limited companies under the Indian Companies Act: 1956. The paid-up
capital shall not be less than Rs. 100Crore. The new guidelines issued in 2001 raised the
minimum paid-up capital to Rs. 200 Crore, which shall be enhanced to Rs. 300 Crore within
three years after the commencement of business. The promoters' share shall not be less than 40
per cent and the voting right of a shareholder shall not exceed10 per cent. The new banks should
avoid shortcomings such as unfair preemption, concentration of credit, cross-holding of
industrial groups, etc. Those banks which intent to establish main office in a center where no
banking is having such office is to be preferred. These banks are required to observe priority
sector lending targets as applicable to other domestic banks. The guidelines aim at ensuring that
the new entrants are ab initio financially via bleand technologically up-to-date. While granting
approvals for OPBs, one of the considerations before the RBI was that the new banks would start
function a professional manner giving clear signals to the effect that would improve the image of
commercial banking system and give confidence to the depositing public.

Accordingly, nine banks were set-up in private sector including some by development financial
institutions. Prominent among them are ICICI Bank, GTB, HDFC and IDBI bank. Another
interesting development was merger of some banks. Barely Corporation Ltd merged with Bank
of Baroda in 1999, Times Bank merged with HDFC Bank in 1996, Bank of Madura Ltd merged
with ICICI bank in 2001 and Nedungadi Bank Ltd merged with Punjab National Bank in 2003.
With regard to branch expansion, banks attaining capital adequacy norms and prudential
accounting standards can set up new branches without the prior approval of RBI. Banks have the
freedom torationalize their existing branch network by relocating branches, opening of
specialized branches, spinning off business, setting up of controlling offices.

In terms of size, there are Goliaths and Davies among the banks. On one extreme, there is the
omnipresent big bank like the SBI (Public Sector Bank)192with 9017 branches. On other
extreme, there is the small private sector bank;

3
The Ganesh Bank of Kurundwad Ltd. located in an obscure town in Maharashtra operating with
only 30 branches. The youngest bank is the United Bank of India established in 1950. It has been
struggling to improve its market share. The Benares State Bank Ltd. is the oldest. bank
established in1871 in the holy city of Varanasi. It remained smaller in size compared to the
youngest NPBs. The Bharat Overseas Bank Ltd, which came into being in1973 is the only
private bank having a branch abroad. Between the two extremes, there are 21 banks, which are
regional in character and operate with different levels of efficiency.

The New Private Sector Banks started publishing balance sheets since1995-96. In that year the
share of OPBs in total assets was 6.2 per cent while that of NPBs was 1.4 per cent. The NPBs
had improved their market share to5.3 per cent by 1999-2000 at the cost of PSBs. The share of
private sector banks in the total number of branches in 1992-93 was only 8.33 percent. In2002-
03, the share of private sector banks in total bank branches is 8.75 percent. Table 6.1 shows the
trend in the number of branches of PBs , during the period 1992-93 to 2003

1.4 Overview of the world market

Private banking is the way banking originated. The first banks in Venice were focused on
managing personal finance for wealthy families. Private banks became known as ‘Private’ to
stand out from the retail banking & savings banks aimed at the new middle class. Traditionally,
private banks were linked to families for several generations. They often advised and performed
all financial & banking services for families. Historically, private banking has developed in
Europe. Some banks in Europe are known for managing assets of some royal families. The assets
of the Princely Family of Liechtenstein are managed by LGT Group (founded in 1920 and
originally known as The Liechtenstein Global Trust). The assets of the Dutch royal family are
managed by MeesPierson(founded in 1720) The assets of the British Royal Family are managed
by Coutts (founded in 1692).
Historically, private banking has been viewed as a very exclusive niche that only caters to
HNWIs with liquidity over $2 million, though it is now possible to open private banking
accounts with as little as $250,000 for private investors. An institution's private banking division
provides services such as wealth management, savings, inheritance, and tax planning for their
clients. For private banking services clients pay either based on the number of transactions, the
annual portfolio performance or a "flat-fee", usually calculated as a yearly percentage of the total
investment amount.
"Private" also alludes to bank secrecy and minimizing taxes through careful allocation of assets,
or by hiding assets from the taxing authorities. Swiss and certain offshore banks have been
criticized for such cooperation with individuals practicing tax evasion. Although tax fraud is a
criminal offense in Switzerland, tax evasion is only a civil offence, not requiring banks to notify
taxing authorities.
In Switzerland, there are many banks providing private banking services. Since the Congress of
Vienna in 1815, Switzerland has remained neutral until now, including the time of two World
Wars. After World War I, the former nobles of Austro-Hungarian Empire moved their assets to
Switzerland for fear of confiscation by new governments.
4
During World War II, many wealthy people, including Jewish families and institutions, moved
their assets into Switzerland to protect them from Nazi Germany. However, this transfer of
wealth into Switzerland had mixed and controversial results, as beneficiaries had difficulties
retrieving their assets after the world.
After World War II, in east Europe, assets were again moved into Switzerland for fear of
confiscation by communistic governments. Today, Switzerland remains the largest offshore
center, with about 27 percent ($2.0 trillion) of global offshore wealth in 2009, according
to Boston Consulting Group.
(Offshore wealth is defined as assets booked in a country where the investor has no legal
residence or tax domicile)

In England, private banks were established in the 17th century, in parallel with the development
of agriculture, managing the assets of the royal family, nobility and the landed. The United States
has one of the largest private banking systems in the world, in part due to the 3.1 million HNWIs
accounting for 28.6% of the global HNWIs population in 2010, according to the co-research
of Cap Gemini and Merrill Lynch. Some American banks that specialize in private
banking date back to the 19th century, such as U.S. Trust (founded in 1853) and Northern
Trust (founded in 1889).

5
1.5 Recent developments in private banking

The internationalization of the economy, technological developments such as the Internet and
mobile phones ensure that banks have to innovate their value proposition and look for
new markets. For example, the growth of HNWIs is low in traditional private banking markets
like Europe, compared to Asia where the number of millionaires has grown to 3.6 million.
Technological developments have made sure that online banks can offer banking services
without an extensive network of offices. The regulation of rewards and the regaining of
confidence after the banking crisis require a new level of transparency and different methods of
charging for services.

6
 CHAPTER -2

Private banking rankings

Results from Euro money’s annual private banking and wealth management ranking in 2016,
which consider, amongst other factors, assets under management (AUM), net income and net
new assets. The rankings report on $14.4 trillion in AUM.
7
"Best private banking services overall 2016". This table displays results of one category of the
Private banking ranking.

Rank 2017 Company Rank 2016

1 UBS 2

2 banque syz 3

3 citi 1

4 UOB 4

5 BNY MELLON 8

6 ITAU 6

7 MORGAN STANLEY 9

8 DBS 5

9 SANTANDER 10

10 J.P. MORGAN 7

UBS took the top spot in Euro money’s 2017 survey for "Best private banking services overall
2017."

8
CHAPTER 3

9
3.1 Brief History
The Reserve Bank of India is the central bank of the country. Central banks are a relatively
recent innovation and most central banks, as we know them today, were established around the
early twentieth century.

The Reserve Bank of India was set up on the basis of the recommendations of the Hilton Young
Commission. The Reserve Bank of India Act, 1934 (II of 1934) provides the statutory basis of
the functioning of the Bank, which commenced operations on April 1, 1935.

The Bank was constituted

1. To Regulate the issue of banknotes

2. Maintain reserves with a view to securing monetary stability and

10
 3. To operate the credit and currency system of the country to its advantage.

The Bank began its operations by taking over from the Government the functions so far being performed
by the Controller of Currency and from the Imperial Bank of India, the management of Government
accounts and public debt. The existing currency offices at Calcutta, Bombay, Madras, Rangoon, Karachi,
Lahore and Cawnpore (Kanpur) became branches of the Issue Department. Offices of the Banking
Department were established in Calcutta, Bombay, Madras, Delhi and Rangoon.

Burma (Myanmar) seceded from the Indian Union in 1937 but the Reserve Bank continued to act
as the Central Bank for Burma till Japanese Occupation of Burma and later upto April, 1947.
After the partition of India, the Reserve Bank served as the central bank of Pakistan upto June
1948 when the State Bank of Pakistan commenced operations. The Bank, which was originally
set up as a shareholder's bank, was nationalized in 1949.

An interesting feature of the Reserve Bank of India was that at its very inception, the Bank was
seen as playing a special role in the context of development, especially Agriculture. When India
commenced its plan endeavors, the development role of the Bank came into focus, especially in
the sixties when the Reserve Bank, in many ways, pioneered the concept and practise of using
finance to catalyze development. The Bank was also instrumental in institutional development
and helped set up institutions like the Deposit Insurance and Credit Guarantee Corporation of
India, the Unit Trust of India, the Industrial Development Bank of India, the National Bank of
Agriculture and Rural Development, the Discount and Finance House of India etc. to build the
financial infrastructure of the country.

With liberalization, the Bank's focus has shifted back to core central banking functions like
Monetary Policy, Bank Supervision and Regulation, and Overseeing the Payments System and
onto developing the financial markets.

3.2 Structure of Organized Indian Banking System

The organized banking system in India can be classified as given below:

11
12
 3.3 “Role Of Private Banks In The Growth Of Indian Economy”

INTRODUCTION

In 1969, the Banks were nationalized by the then Govt. of India. This step has changed
the paradigm shift of priority sector of banks from Class banking to Mass Banking. The
Banking should reach to poor sector of the society. The 14 Indian commercial banks in
private sector were nationalized in July 1969 and some others thereafter were not
sufficient for Inclusive Financial Growth and to extend credit to the rural and urban
poor.

Accordingly private banking sector entered into banking scenario for further financial
growth. The inclusion of weaker section of the society in financial aspects shall be the
top priority of Indian economy. Merely nationalized or cooperative sector banking
cannot help to serve this purpose. Accordingly private sector banks have to play vital
role in the development of Indian economy like ours. Presently the private sector Banks
are working only in Urban or Semi urban areas but if they need to hold and sustain the
business it is important for them to go to the rural Indian sector. The large number of
excluded group from structural financial institutions such as poor and unprivileged
sector is an opportunity for banking business. The Banks must draft their strategies
and policies suited to reach to the excluded customers from banking arena. The need
base banking produces will help to increase contribution of private sector banks in the
Indian banking scenario. Technology and expertise is not the problem for Indian
banking sector and especially for the private banking sector. it must be properly
concentrated.

The private sector banks are subject to the provisions of the banking Regulation Act,
1949. The public sector banks are governed by their respective funding status and by
those provisions of Banking Regulation Act, which is specifically applicable for them
only. The Urban Cooperative Banks on the other hand are governed by the provisions of
cooperative societies Act of the respective states and certain provisions of Banking
Regulation Act are also applicable to them. The Banking sector policies introduced by
the Govt. of India help to promote Pvt. Banking in India.

Growth of Deposits & Advances of Private Sector Banks (Rs. In

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crores)

DEPOSITS 2015 2016 2017

TOTAL OF 13 PVT BANKS [I] 10,560,161.05 12,193,298.41 14,073,204.56
TOTAL OF 7 NEW PVT BANKS [II] 10,562,174.05 12,195,312.41 14,075,219.56
TOTAL OF 20 PVT BANKS [I+II] 14,762,849.46 17,048,598.87 19,690,669.40
TOTAL OF 13 PVT BANKS [I] 269,937.30 299,262.32 288,853.29
TOTAL OF 7 NEW PVT BANKS [II] 873,311.28 1,043,672.29 1,255,063.92
TOTAL OF 20 PVT BANKS [I+II] 1,143,248.58 1,342,934.62 1,543,917.21

Old Private Sector Banks:

The old private sector banks were those banks which were working in the private sector
before the great depression. The old private sector banks have been operating since a
long time and may be referred to those banks, which are in operation from before 1991.
These banks are more than 50 years old. The banks, which were not nationalized at the
time of bank nationalization that took place during 1969 and 1980 are known to be the
old private sector banks.

New Private Sector Banks:

The new private sector banks are those that have come into operation very recently. The
banks, which came in operation after1991, with the introduction of economic reforms
and financial sector reforms are called as new private sector banks. Banking regulation
act was then amended in 1993, which permitted the entry of new private sector banks in
the Indian banking sector. However there were certain criteria set for the establishment
of the new private sector banks.

 The bank should have a minimum net worth of 100 crores.

 The promoters holding should be a minimum of 25% of the paid up capital.
 Within 3 years of the starting of the operations, the bank should offer shares to public.

The new private sector banks that were established in the private sector after the Second
World War actually escaped from the conditions of nationalization. There are seven new
generation private sector banks in India. They are Axis Bank, Development Credit Bank,
HDFC Bank, ICICI Bank, Indusind Bank, Kotak Mahindra Bank and Yes Bank.

Rural Banking and Private Sector Banks

14
 Commercial bank like ICICI Bank Ltd. is now expanding its business to rural Banking
sector. The Bank is operating the small office in village to interact between villager and
Banking business. The crop loans, housing loans, automobile loans, farm equipment
loans, seed financing and insurance products are some of the private banking business
priorities in rural sector. The Borrowers from private banks like ICICI Bank has increased
to 97000 today from 45000 of the year ended 31.3.2012 and the rural loan amount has
increased to Rs.32000 crores today from 17000 crores as on 31.3.2012. The rate of NPA
is also as per the norms laid down by RBI. Thus the private banking business in India is
helping to grow rural Indian economy.

Micro financing is one of the important tools for inclusive growth. The Banks like
ICICI bank are trying to collaborate their services with Self Help Group in order to
extend credit to these groups. Along with private banks the leading foreign commercial
banks like Citibank, HSBC and the Standard Chartered Bank are also looking for the
business in rural India. The Banks presently are moving on the line of Agent base
model than branch base model. This helps banks to operate with economy. The banks
are now introducing mobile based services concept for the rural sector also to reach to
the rural customers directly.

Accordingly the private Banks and finance companies are becoming specialized to offer
their financial services to the rural people and farmers. This is resulting in economic
growth of the rural sector in India. The financial assistance to the farmers is the path of
progress of the country like ours. The private Banks are hence to play important role in
economic development of the country.

Bank Group wise Deposits and Advances

There has been noticeable variation in credit expansion across bank groups. The credit
extended by public sector banks was much higher during 2015 as compared to 2016. As
compared to public sector banks the credit extended by foreign and private sector banks
was very lower. This does not mean private sector banks have not contributed to the
economic development but it should be considered in terms of number of branches of
public sector banks and the private sector banks. The relatively slower pace of credit
expansion by foreign and private sector banks has also added the perception of
inadequate credit flow in the system. The deposits of foreign and private sector banks
however has been increasing and showing consistent growth.

Bank Group wise Deposits & Advances

15
 Bank Group Annual growth (Y-o-Y% wise)
Jan. 2015 Jan. 2016
A) Deposits
Public Sector Banks 24.2 24.2
Foreign Banks 34.1 12.1
Pvt. Sector Banks 26.9 13.4
Scheduled Commercial Banks* 25.1 21.2
B) Advances
Public Sector Banks 19.8 28.6
Foreign Banks 30.7 16.9
Pvt. Sector Banks 24.2 11.8
Scheduled Commercial Banks* 21.4 24.0

Including Regional Rural Banks

Source: R.B.I. Third Quarter Review of Monetary Policy 20.12.2015
The above table explains that the year to year wise growth in percentages related to
Deposits and advances shows significant growth. The credit expansion by Private
Sector banks and foreign banks is considerably increasing and also contributing for
economic growth of the country.

Technology adopted by Private Sector Banks

The New Generation Private Sector Banks are experiencing the positive change in their
work and performance. This change is welcome by the customers of the banks. Quick
decisions, paperless transactions, Electronic media for transactions, core banking
system are some of the areas which make private sector banking more relevant to the
changing era of globalization.

Customer Relationship and Private Banks

The new generation private sector banks have with a view to increasing their
16
 profitability resorted to outsourcing of number of routine banking operations. The
customers have no personal touch with the private banks. The staff cannot have direct
relationship with the customers. The customers should get extra personalized services.
This is now missing in the new generation banks. So even then there is competition the
new generation private sector banks are showing good growth of the business.

Competition Among Private & Public sector Banks

The banks are presently having the stiff competition as private, public and foreign
banks. The banks are now reaching to the door steps of the customers and yet there is a
very stiff competition and every organization has to be competitive in nature and well
equipped with efficient staff members.

Apart from various modern technologies used, the private sector banks are approaching
for debit and credit cards, wise product range, suitable for customers (need base
products),infrastructure and other facilities are thus available. The E-Banking facilities
are provided by the banks.

Although there is phenomenal improvement in the services offered by these banks there
is abnormal growth in transaction cost.

Problems of Growth (Spread up) of private sector banking

1. These private banks are asking for abnormal minimum balance in the savings and
17
 current accounts, which an ordinary customer finds it difficult to maintain. The
ordinary customers are in impression that these are for rich class and he shifts
himself to cooperative banks working in urban areas.
2. To some extent public sector banks and old generation banks offer personalized
services to its customers. So in spite of competition new generation private sector
banks and the public sector banks are showing better growth in their business.
3. The Banking sector policies pursued by the Finance Ministry and the reserve Bank of
India are as per the overall framework of the economic policies of privatization and
liberalization as well as globalization. The policy framework does not take into
consideration the special type of task performed by private banks.
4. All the financial factors are mounting pressure on performance of banks and in their
quest to remain competitive, Indian banks are now more concerned for enhanced
profitability and they have become even more accountable to their stakeholders.
5. As a result of globalization there is emergence of new banks, new financial
institutions, new instruments and new opportunities in the environment. The
mergers of banks have also resulted in the various problems to be faced by the
existing private banks. Even the Indian Banking industry is one of the best in Asia in
terms of efficiency the industry has to go long way to compete with other New Asian
Banks.

Product Innovations (suited to satisfy local needs)

Because of the great competition in the market the banking sector, it has become the
need of bankers for innovative new financial products. Banks are facing competition
from many and varied financial institutions. Accordingly the financial products suited
to the local needs are to be innovated. New products and services include opportunities
in credit cards, consumer finance and wealth management as a retail business and fee
based revenue and investment banking as a who9lesale banking business. The products
must suit individual requirement, banks hence must opt for the product innovations.
Thus banks especially private banks are to get engage in product innovation concept to
become customer friendly working in the changing banking scenario.

Utilization of Skillful and Technically Qualified

As compared to public sector banks where staff recruitment process is rigid and the
structured framework is complex, private sector banks have an advantage to recruit skill
18
 & technically sound personnel. So the private sector banks can get efficient and good
quality human resources for them. However, they are to face the problem of sustaining
the quality human resources in their banks for longer time.

Retaining the Customers

Customer Relationship Management is the tool to acquire new customers and to retain old
customers and to provide the quality service to new as well as existing customers. Banks are to
gain customer’s loyalty as it becomes a positive strength of the bank. Consistent study of
market by market survey and study of customer behavior will help the banks to assess the
needs of customers. This will further help in retaining the customers. It will further grow the
banking business.

3.4 ICICI Bank

Acquisition

1996: SCICI Ltd. A diversified financial institution with headquarters in Mumbai

19
 
1997: ITC Classic Finance. incorporated in 1986, ITC Classic was a non-bank financial
firm that engaged in hire, purchase, and leasing operations. At the time of being acquired,
ITC Classic had eight offices, 26 outlets, and 700 brokers.

1998: Anagram(ENAGRAM) Finance. Anagram had built up a network of some 50
branches in Gujarat, Rajasthan, and Maharashtra that were primarily engaged in retail
financing of cars and trucks. It also had some 250,000 depositors.

2001: Bank of Madurai

2002: The Darjeeling and Shimla branches of Grindlays Bank

2005: Investitsionno-Kreditny Bank (IKB), a Russian bank ]

2007: Sangli Bank. Sangli Bank was a private sector unlisted bank, founded in 1916, and
30% owned by the Bahte family. Its headquarters were in Sangli in Maharashtra, and it
had 198 branches. It had 158 in Maharashtra and 31 in Karnataka, and others in Gujarat,
Andhra Pradesh, Tamil Nadu, Goa, and Delhi. Its branches were relatively evenly split
between metropolitan areas and rural or semi-urban areas.

2010: The Bank of Rajasthan (BOR) was acquired by the ICICI Bank in 2010 for ₹30
billion (US$450 million). RBI was critical of BOR's promoters not reducing their
holdings in the company. BOR has since been merged with ICICI Bank.

Role in India financial infrastructure

The bank has contributed to the set-up of a number of Indian institutions to establish
financial infrastructure in the country over the years:

 National Stock Exchange - The National Stock Exchange was promoted by India's
leading financial institutions (including ICICI Ltd.) in 1992 on behalf of the Government
of India with the objective of establishing a nationwide trading facility for equities, debt
instruments and hybrids, by ensuring equal access to investors all over the country
through an appropriate communication network.
 Credit Rating Information Services of India Limited (CRISIL) - In 1987, ICICI Ltd along
with UTI set up CRISIL as India's first professional credit rating agency. CRISIL offers a
comprehensive range of integrated products and service offerings which include credit
ratings, capital market information, industry analysis and detailed reports
 National Commodities and Derivatives Exchange Limited - NCDEX is an online multi-
commodity exchange, set up in 2003, by ICICI Bank Ltd, LIC, NABARD, NSE, Canara
Bank, CRISIL, Goldman Sachs, Indian Farmers Fertiliser Cooperative Limited (IFFCO)
and Punjab National Bank
 Financial Innovation Network and Operations Pvt Ltd. - ICICI Bank has facilitated
setting up of "FINO Cross Link to Case Link Study" in 2006, as a company that would
provide technology solutions and services to reach the underserved and under
banked population of the country. Using technologies like smart cards, biometrics and a
basket of support services, FINO enables financial institutions to conceptualise, develop
and operationalize projects to support sector initiatives in microfinance and livelihoods.
20
  Entrepreneurship Development Institute of India - Entrepreneurship Development
Institute of India (EDII), an autonomous body and not-for-profit society, was set up in
1983, by the erstwhile apex financial institutions like IDBI, ICICI, IFCI and SBI with the
support of the Government of Gujarat as a national resource organisation committed to
entrepreneurship development, education, training and research.
 North Eastern Development Finance Corporation - North Eastern Development Finance
Corporation (NEDFI) was promoted by national level financial institutions like ICICI Ltd
in 1995 at Guwahati, Assam for the development of industries, infrastructure, animal
husbandry, agri-horticulture plantation, medicinal plants, sericulture, aquaculture, poultry
and dairy in the North Eastern states of India. NEDFI is the premier financial and
development institution for the North East region.
 Asset Reconstruction Company India Limited - Following the enactment of the
Securitisation Act in 2002, ICICI Bank, together with other institutions, set up Asset
Reconstruction Company India Limited (ARCIL) in 2003, to create a facilitative
environment for the resolution of distressed debt in India. ARCIL was established to
acquire non-performing assets (NPAs) from financial institutions and banks with a view
to enhance the management of these assets and help in the maximisation of recovery. This
would relieve institutions and banks from the burden of pursuing NPAs, and allow them
to focus on core banking activities.
 Credit Information Bureau of India Limited - ICICI Bank has also helped in setting
up Credit Information Bureau of India Limited (CIBIL), India's first national credit
bureau in 2000. CIBIL provides a repository of information (which contains the credit
history of commercial and consumer borrowers) to its members in the form of credit
information reports. The members of CIBIL include banks, financial institutions, state
financial corporations, non-banking financial companies, housing finance companies and
credit card companies.
 Institutional Investor Advisory Services India Limited (IiAS) – ICICI Bank has indirectly
invested in Institutional Investor Advisory Services, through ICICI Prudential Life
Insurance Company, in IiAS. IiAS is a voting advisory firm aka proxy firm, dedicated to
providing participants in the Indian market with data, research and commentary. It
provides recommendations on resolutions placed before shareholders of over 300
companies.

Product
iMobile SmartKeys
To make mobile payments easier, ICICI Bank has launched a payment service using a
smartphone keyboard named ‘iMobile SmartKeys’. Users will be able to make quick and
secure payments on any mobile application, including chat, messenger, email, games or
search browser, without having to exit their current application on their smartphone. This
reduces the time taken by customers having to switch tabs or applications within their
smartphone to access the bank’s application ‘iMobile’.

21
 This solution was developed by one of the winners of the bank’s app developing
competition - ICICI Apothem.
ICICI Merchant Services
ICICI Merchant Services represents an alliance formed in 2009 between ICICI Bank,
India’s largest private sector bank, and First Data, a global leader in electronic commerce
and payment services. First Data is the majority stakeholder in the alliance with ICICI
Bank holding 19%
Money2India
Money2India (www.money2India.com) is an online money transfer tracking service
offered to Non-Resident Indians by ICICI Bank Ltd. With an ever-expanding base since
its launch, it is the preferred mode of online money transfers to India, facilitating
seamless money transfers with round the clock customer service availability. To use this
service, a user needs to complete a simple one-time online registration by accessing
www.money2India.com and can thereafter, start sending money from any bank in 9
countries (USA, Canada, UK, Singapore, Australia, UAE, Sweden, Switzerland and
Hong Kong) to any beneficiary account with over 100 banks in India.
Money2India Europe
ICICI Bank UK PLC, Germany branch provides money transfer and tracking service
(Money2India Europe, Money2India.EU) in 20 European countries. The platform
facilitates money transfer to India by allowing remitter to initiate money transfer
instruction on M2E. Depending on the country of residence and the financial institution
with which the user is holding the bank account, he / she has an option to transfer money
through payment gateway integrated with the platform—with guaranteed exchange rate.
The Money2India Europe Mobile App is a full-fledged remittance platform for the
customer, who prefers to use mobile device to handle the transactions.
Extra home loans
‘ICICI Bank Extra Home Loans’ are 'mortgage-guarantee' backed loans for retail
customers who aspire to purchase their first homes in the affordable housing segment.
This was introduced in August 2015 in association with India Mortgage Guarantee
Corporation (IMGC). IMGC is a joint venture between National Housing Bank (NHB),
an RBI subsidiary which regulates Home Finance Companies in India; NYSE-
listed Genworth Financial Inc., a Fortune 500 company; International Finance
Corporation (IFC) and Asian Development Bank (ADB).
Smart Vault
‘Smart Vault’ are fully automated lockers available 24x7, including weekends and post
banking hours were launched in August 2015. The ‘Smart Vault’ uses robotic technology
to access the lockers from the safe vault conveniently at any time of their preference in
total privacy, without any intervention of the branch staff.

Saral Loans
22
 In August 2015, ICICI Bank introduced ‘Saral-Rural Housing Loan’. Applicants from
rural areas including women borrowers as well as seekers from weaker sections can now
avail home loans at the ICICI Bank Base Rate (“I-Base”) which is currently at 9.70%. An
eligible borrower can take up to ₹1.5 million (US$22,000) under the ‘ICICI Bank Saral–
Rural Housing Loan’.

ICICI Bank Unifare Bangalore Metro Card

ICICI Bank and Bangalore Metro Rail Corporation Limited (BMRCL) in April 2015,
announced the launch of the ‘ICICI Bank Unifare Bangalore Metro Card’ to offer the
commuters dual benefits of an ICICI Bank credit or debit card and BMRCL’s smart card,
called Namma Metro Smart Card
'Touch n Remit' facility for NRIs in Kingdom of Bahrain
In March 2015, ICICI Bank tied up with SADAD Electronic Payments WLL to offer
remittance service for NRIs based in Bahrain, enabling them to transfer monies instantly
to India from the latter’s kiosks spread across the Kingdom of Bahrain. This facility has
been named as ‘Touch n Remit’.

ICICI Bank Ltd launches 'Video Banking' for NRI

In February 2015, ICICI Bank announced the launch of 'Video Banking' for all its NRI
(Non Resident Indian) customers. Using this service, the customers can now connect with
a customer care representative over a video call, round-the-clock, on all days from
anywhere using their smart phone.

Pockets by ICICI Bank

In February 2015, ICICI Bank Re-Launched POCKETS, now working as a "Digital
wallet" for everyone (Android OS users only). The Wallet can be opened by anyone and
can conduct transactions like recharge, shopping, transfer money using the virtual visa
card which is issued when signing up for the wallet.

ICICI Bank Pay on Twitter

ICICI Bank in January, 2015 launched banking services on Twitter, christened as 'ICICI
bank Pay'. This service in India enables ICICI Bank customers to transfer money to
anyone in the country who has a Twitter account, check account balance, view last three
transactions and recharge prepaid mobile in a completely secure manner.

Contactless Credit and Debit Cards

23
 ICICI Bank in January, 2015 announced the launch of the country’s first ‘Contactless’
debit and credit cards, enabling its customers to make electronic payments by just waving
the cards near the merchant terminal in lieu of dipping or swiping them. These cards are
based on the near field communication (NFC) technology, which provides customers the
improved convenience of speed as these cards require significantly less time than
traditional cards to complete a transaction along with enhanced security as they remain in
control of the customer.
My Savings Rewards
ICICI Bank has rolled-out the programme 'My Savings Rewards' from 1 September 2012,
where reward points are offered to individual domestic customers for a variety of
transactions done through the savings bank account. Reward points are offered
automatically to customers for activating Internet banking, shopping online/ paying
utility bills with Internet banking and auto-debit from savings account towards equated
monthly instalments for home/ auto/ personal loan/ recurring deposit. Customers are
required to maintain a monthly average balance of ₹15,000 (US$220) or more. the Indian
bank will require 5.5% interest on short term loans and long term bonds and mortgages
loans up to $2 million up to 20 years to pay back annual interest of 5.5% short term loans
from 3 months up to 3years at 5.5% .credit interest is reduced to 10% annually.
Software robotics
ICICI on 10 Sep 2016 announced 'software robotics' initiative—a first by any Indian
bank. Over 200 software robots are now performing over 1 million transactions per day
for the bank which comprises 10% of its total transactions. The bank will engage 500
software robots by the end of the year which will help it to automate 20% of its total
transactions.
Block chain technology
In October 2016, ICICI Bank, in partnership with Emirates NBD, became the first Indian
Bank to successfully execute transactions in international trade finance and remittance
using block chain technology. The block chain technology replicates the paper-intensive
international trade finance process as an electronic decentralised ledger that gives all the
participating entities including banks the ability to access a single source of information.
It has enabled the Bank to exchange and authenticate remittance transaction messages as
well as original international trade documents related to purchase order, invoice, shipping
& insurance, among others, electronically on block chain in real time In addition, ICICI
Bank is currently working to put together programs that will let people transfer money
inside and outside the country through the Stellar (payment network) block chain
platform.

Initiatives

24
100 Digital Villages
ICICI Bank has continuously taken steps to promote the digital ecosystem across the
country including rural India. In November 2016, in the wake of the ban on high
denomination notes, the Bank announced that it will aid the transformation of 100
villages, across India, into ‘ICICI Digital Villages’ in 100 days. This will enable villagers
to use digital channels for banking, payments transactions and cashless payments to retail
stores.
Go Green
The Go Green Initiative is an initiative that moves beyond people, processes and
customers to cost effective automated channels to build awareness of our environment,
nation and society. The various green products and services are Instabanking (alternate
banking options like- Internet banking, i-Mobile banking, & IVR Banking. On 22
September 2014 ICICI Bank launched Four New Next Gen Mobile Banking Apps),
Vehicle Finance for car models which use alternate modes of energy (50% waiver on
processing fee of auto loans.
Literary Endeavours
ICICI Bank launched the ‘Jiyo Khulke’ contest on March 16, 2015 wherein ICICI
customers were invited to write their Jiyo Khulke moment – their most cherished moment
of life – in a choice of 11 languages. In 2016 the efforts of ICICI enters Limca Book of
Records.
Subsidiaries
Domestic

 ICICI Prudential Life Insurance Company Limited

 ICICI Lombard General Insurance Company Limited
 ICICI Prudential Asset Management Company Limited
 ICICI Prudential Trust Limited
 ICICI Securities Limited
 ICICI Securities Primary Dealership Limited
 ICICI Venture Funds Management Company Limited
 ICICI Home Finance Company Limited
 ICICI Investment Management Company Limited
 ICICI Trusteeship Services Limited
 ICICI Prudential Pension Funds Management Company Limited

25
International

 ICICI Bank USA

 ICICI Bank UK PLC
 ICICI Bank Canada
 ICICI Bank Germany
 ICICI Bank Eurasia Limited Liability Company
 ICICI Securities Holdings Inc.
 ICICI Securities Inc.
 ICICI International Limited.

Awards of Achievements of ICICI

2003

 "The Asian Banker Excellence in Retail Financial Services Program" by The Asian
Banker

2004

 Best Bank in India Award presented by Euro money Magazine

2006

 Bank of the Year 2006 India by the Banker

2007

 ICICI Bank has been conferred the Euro money Award 2007 for the Best Bank in the
Asia-Pacific Region
 ICICI Bank wins the Excellence in Remittance Business award by The Asian Banker
 ICICI Bank was got the awards for 'Best Transaction Bank' in India 'Best Domestic Bank'
in India, 'Best follow-on offering'(US$4.94 billion), 'Best Investment Grade Bond'(US$2
billion, three-tranche bonds), Best Syndicated Loan Managers by Asset.

2009

 ICICI Bank bags the "Best bank in SME financing (Private Sector)" at the Dun &
Bradstreet Banking awards

26
  ICICI Bank won the Best Banking Security Systems Project Award and Best E-Banking
Project Implementation Award by The Asian Banker

2010

 ICICI Bank won the Best Banking Security System by The Asian Banker.

2011

 ICICI Bank is the only Indian brand to figure in the Brands Top 100 Most Valuable
Global Brands Report, second year in a row
 ICICI Bank won the 'Best CRM Project' and 'Best Banking Security Systems' by The
Asian Banker

2012

 Airtel, ICICI among 'top 100 global brands

 ICICI Bank received the Golden Peacock Innovative Product / Service Award.
 ICICI Bank received the Dataquest Technology Innovation Awards 2012 for Data canter
migration by Dataquest.
 ICICI Bank was conferred the Best Performance Award for Self Help Group (SHG) Bank
Linkage Programme in NABARD's State Level Awards announced by their Maharashtra
Regional Office. The Bank received the first prize for the year 2010–11 in the Private
Sector Bank category and 2nd runner up for the year 2011–12 in the Commercial Bank
category.

2013

 ICICI Bank has been adjudged winner at the Express IT Innovation Award under the
Large Enterprise category
 ICICI Bank won the RMAI received the "Gram Samvad", Service for Low cost/Small
budget marketing initiative Award by Rural Marketing Association of India (RMAI)
 ICICI bank won the 'Next Generation Banking solution' award by Celent
 ICICI bank won the Best Domestic Trade Finance Bank and Best Financial Supply Chain
Project Award in India by The Asian Banker
 ICICI Bank won the honours of the Medici Innovation Hall of Fame Award, instituted by
The Medici Institute in collaboration with the Medici Group, USA

2014

 According to the Brand Trust Report 2014, ICICI Bank was ranked 28th among India's
most trusted brands, a research conducted by Trust Research Advisory.

27
  ICICI Bank was ranked second at the 'National Energy Conservation Award 2014' under
the office buildings (less than 10 lakh kWh/year consumption) category
 ICICI Bank was fifth in the world and second in India on the 'Top Companies for
Leaders' in a study conducted by Aon Hewitt.
 ICICI bank won the Best Private Sector Bank - Global Business Development by Polaris
Financial Technology Banking Awards 2014.
 IDBRT awarded ICICI for 'Best Bank Award for Business Intelligence Initiatives among
Large Banks' and 'Best Bank Award for Social Media and Mobile Banking Among Large
Banks'.
 ICICI bank was awarded the Certificate of Recognition as one of the Top 5 Companies in
Corporate Governance in the 14th The Institute of Company Secretaries of India National
Awards for Corporate Governance. They were honoured by Arun Jaitley
 ICICI Bank has been honoured as The Best Service Provider - Risk Management, India at
The Asset Triple A Transaction Banking, Treasury, Trade and Risk Management Awards
2014.
 ICICI Bank was awarded the 'Best Retail Bank in India', 'Best Microfinance Business'
and 'Best Retail Banking Branch Innovation' under the 'Excellence in Retail Financial
Services awards 2014' and Technology Implementation Award for Lending Platform
Implementation by The Asian Banker.

2015

 ICICI Bank won an award in the BFSI Leadership Summit & Awards in the 'Best Phone
Banking for End-users' category
 ICICI Bank won in six categories and was the first runner-up in one category among
Private Sector Banks at IBA Banking Technology Awards, 2015. The bank was declared
winner in the six categories of Best Technology Bank of the Year, Best use of Data, Best
Risk Management Initiatives, Best use of Technology in Training, Human Resources and
e-Learning initiatives, Best Financial Inclusion Initiative and Best use of Digital and
Channels Technology. ICICI Bank was the first runner-up in Best use of Technology to
Enhance Customer Experience
 ICICI Bank has been declared as the first runner up at Outlook Money Awards 2015 in
the category of ‘Best Bank’
 ICICI Bank has been adjudged the ‘Best Retail Bank in India’ by The Asian Banker. It
has also emerged winners in the categories of ‘Best Internet Banking Initiative’ and ‘Best
Customer Risk Management Initiative’ awards given by The Asian Banker.
 ‘Best Local Trade Finance Bank in India’ at Global Trade Review Asia Leaders in Trade
Awards 2015.
 ‘Best Foreign Exchange Bank’ in India, at Finance Asia’s 2015 Country Banking
Achievement Awards.

28
  ‘Best Private Sector Bank’ under ‘Global Business’ category at the Dun & Bradstreet
Banking Awards 2015.
 ‘Best Website Design’ in Asia-Pacific at Global Finance 2015 World’s Best Digital Bank
Awards.
 Winner at the National Energy Conservation Awards 2015 under the ‘Office Buildings’
category (energy consumption of over 1 million units per annum).
 First among private sector banks in The Economic Times Brand Equity’s Most Trusted
Brands survey 2015.
 Runner up in the categories of ‘Immediate Payment Service’, ‘Cheque Truncation
System’ and ‘National Financial Switch’ at the National Payments Excellence Awards
2015 organised by the National Payments Corporation of India. The Bank was also
felicitated with a special award for issuing the largest number of RuPay Platinum cards.

2016

 ‘Best Retail Bank in India’ at the Asian Banker International Excellence in Retail
Financial Services Awards 2016. ICICI Bank has won this award three years in a row.
 Gold awards in the ‘Bank’ and ‘Credit card issuing Bank’ segments under Finance
category in the Reader’s Digest Trusted Brand 2016 Survey.
 First in The Brand Trust Report, India Study 2016 by Trust Research Advisory under the
‘Banking Financial Services and Insurance’ category.
 Winner at the ‘Global Safety Awards 2016’ organised by the Energy and Environment
Foundation. This award is sponsored by Ministry of Petroleum & Natural Gas and
Ministry of Coal, Government of India.

2017

 ICICI Bank received a citation at the fifth edition of The Financial Inclusion Agenda organised by
CNBC-TV18 in the ‘Impactful Financial Inclusion Initiatives’ category

 Ms. Chanda Kochhar emerged 5 on Forbes list of ‘The World's Most Powerful Women in Finance
th

2017’ and is the only Indian leader to be featured in this list

 ICICI Bank won two awards at The Asset Triple A Private Banking, Wealth Management,
Investment and ETF Awards 2017. The Bank has won these awards in the ‘Derivatives House of
the Year, India’ and ‘Best Structured Products House, India’ categories

 ICICI Bank recognised as the ‘Best Foreign Exchange Provider in India’, by Global Finance
magazine as part of their list of ‘The World’s Best Foreign Exchange Providers 2017’

29
 ICICI Bank was declared winner in three categories at the BFSI Digital Innovation Awards 2017
organised by the Indian Express Group, on October 7, 2017. The Bank has won these awards in
'Data Centers’, 'Internet of Things (IoT)' and 'Storage' categories

 Ms. Chanda Kochhar ranked 32 in Forbes list of ‘The World’s 100 Most Powerful Women 2017’.
nd

She is the highest ranked Indian woman business leader and the only Indian woman to feature in
the top 50

 Ms. Chanda Kochhar was featured on Fortune India’s list of ‘The 50 Most Powerful Women
2017’. She was ranked as the second most powerful woman Indian leader

2018

 ICICI Bank was selected as the winner in the ‘Service’ category of the MQH Best Practices
Competition organised by IMC Chamber of Commerce & Industry.

 ICICI Bank was declared winner in the ‘Most Innovative ATM Project’ category in India at The
Asset Digital Awards 2017. The awards were organised by The Asset, a publication
headquartered in Hong Kong.

 ICICI Bank was declared the Best Bank in the ‘Fintech Engagement’ category at the Business
Today – KPMG Best Bank Awards 2018. The awards were organised by the Business Today
magazine.

 ICICI Bank won the 'Best Company to Work For' Award in the Banking, Financial Services and
Insurance sector for the second year in a row. The award was organised by the Business Today
magazine. The Bank’s overall ranking was four across sectors. It is also the first time a Bank has
entered the Top 5 list in the past 5 years.

Social responsibility programmes for elementary Education

 Read to Lead Phase I:

Read to Lead is an initiative of ICICI Bank to facilitate access to elementary education

for underprivileged children in the age group of 3–14 years including girls and tribal
children from the remote rural areas. The Read to Lead initiative supports partner NGOs
to design and implement programmes that mobilise parent and community involvement
in education, strengthen schools and enable children to enter and complete formal
elementary education. Read to Lead has reached out to 100,000 children across 14 states
of Andhra Pradesh, Bihar, Delhi, Gujarat, Haryana, Jharkhand, Karnataka, Maharashtra,
Orissa, Rajasthan, Tamil Nadu, Tripura, Uttar Pradesh and West Bengal.

 Read to Lead Phase II:

30
 In Phase II of the Read to Lead programme, ICICI Bank has supported the establishment
of 63 libraries that will reach out to approximately 7,200 children in the rural areas of
Jagdalpur block of Bastar district in Chhattisgarh. The programme includes building
libraries, sourcing books and conducting various interactive activities to make the library
a dynamic centre for learning.
Controversies
Inhumane debt recovery methods
A few years after its rise to prominence in the banking sector, ICICI bank faced
allegations on the recovery methods it used against loan payment defaulters. A number of
cases were filed against the bank and its employees for using "brutal measures" to
recover the money. Most of the allegations were that the bank was using goons to recover
the credit card payments and that these "recovery agents" exhibited inappropriate and in
some cases, inhuman behaviour. Incidents were reported wherein the defaulters were put
to "public shame" by the recovery agents.
The bank also faced allegations of inappropriate behaviour in recovering its loans. These
allegations started initially when the "recovery agents" and bank employees started
threatening the defaulters. In some cases, notes written by the bank's employees asking
the defaulters to "sell everything in the house including family members", were found.
Such charges faced by the bank rose to a peak when suicide cases were reported wherein
the suicide notes spoke of the Bank's recovery methods as the cause of the suicide. This
led to a lot of legal battles and the bank paying huge compensations.

Money laundering allegations

ICICI Bank was one of the leading Indian banks accused of blatant money
laundering through violation of RBI guidelines in the famous Cobra Post sting operation
which shook up Indian banking industry during April–May 2013.
On 14 March 2013 the online magazine Cobra post released video footage
from Operation Red Spider showing high-ranking officials and some employees of ICICI
Bank agreeing to convert black money into white, an act in violation of Money
Laundering Control Act. The Government of India and Reserve Bank of India ordered an
inquiry following the exposé. On 15 March 2013, ICICI Bank suspended 18 employees,
pending inquiry. On 11 April 2013 Deputy Governor of RBI, H R Khan reportedly told
that the central bank is initiating action against ICICI Bank in connexion with allegations
of money laundering

31
 Axis bank
History
UTI Bank opened its registered office in Ahmedabad and corporate office in Mumbai in
December 1993.[7] The first branch was inaugurated on 2 April 1994 in Ahmedabad by
Dr. Manmohan Singh, the Finance Minister of India. UTI Bank began its operations in
1993, after the Government of India allowed new private banks to be established. The
Bank was promoted in 1993 jointly by the Administrator of the Unit Trust of India (UTI-
I), Life Insurance Corporation of India (LIC), General Insurance Corporation, National
Insurance Company, The New India Assurance Company, The Oriental Insurance
Corporation and United India Insurance Company.
In 2001 UTI Bank agreed to merge with and amalgamate Global Trust Bank, but
the Reserve Bank of India (RBI) withheld approval and nothing came of this. In 2004 the
RBI put Global Trust into moratorium and supervised its merger into Oriental Bank of
Commerce.
In 2003 Axis Bank became the first Indian bank to launch the travel currency card.
In 2005, Axis Bank got listed on London Stock Exchange.

32
 UTI Bank opened its first overseas branch in 2006 Singapore. That same year it opened a
representative office in Shanghai, China. UTI Bank opened a branch in the Dubai
International Financial Centre in 2007. That same year it began branch operations in
Hong Kong. In 2008 it opened a representative office in Dubai.
Axis Bank opened a branch in Colombo in October 2011, as a Licensed Commercial
Bank supervised by the Central Bank of Sri Lanka Also in 2011, Axis Bank opened a
representative offices in Abu Dhabi. In 2011, Axis bank inaugurated Axis House, its new
corporate office in Worli, Mumbai.
In 2013, Axis Bank's subsidiary, Axis Bank UK commenced banking operations. Axis
Bank UK has a branch in London.
Deepika Padukone, a Bollywood actress is the brand ambassador of Axis Bank.
In 2015, Axis Bank opens its representative office in Dhaka.
The bank has over 50,000 employees (as of 31 March 2016). The bank incurred ₹26.7
billion (US$400 million) on employee benefits during the FY 2012–13. The average age
of an Axis Bank employee is 29 years. [he attrition rate in Axis Bank is approx. 9% per
year

Operations
Indian Business
As of 12 Aug 2016, the bank had a network of 3,120 branches and extension counters and
12,922 ATMs. Axis Bank has the largest ATM network among private banks in India and
it operates an ATM at one of the world’s highest sites at Thegu, Sikkim at a height of
4,023 meters (13,200 ft) above sea level
International Business
The Bank has nine international offices with branches at Singapore, Hong Kong, Dubai
(at the DIFC), Shanghai,Colombo and representative offices at Dhaka, Dubai and Abu
Dhabi, which focus on corporate lending, trade finance, syndication, investment banking
and liability businesses In addition to the above, the Bank has a presence in UK with its
wholly owned subsidiary Axis Bank UK Limited
Services
Retail Banking
In the retail banking category, the bank offers services such as lending to
individuals/small businesses subject to the orientation, product and granularity criterion,
33
 along with liability products, card services, Internet banking, automated teller
machines (ATM) services, depository, financial advisory services, and Non-resident
Indian (NRI) services.[19]Axis bank is a participant in RBI's NEFT enabled participating
banks list.
Corporate Banking
Credit:
The Bank offers various loan and fee-based products and services to Large and Mid-
corporate customers and Small and Medium Enterprise (SME) businesses. These
products and services include cash credit facilities, demand and short-term loans, project
finance, export credit, factoring, channel financing, structured products, discounting of
bills, documentary credits, guarantees, foreign exchange and derivative products.
Liability products including current accounts, certificates of deposits and time deposits
are also offered to large and mid-corporate segments.
Transaction Banking:
Formed in April 2015, TxB provides integrated products and services to customers in
areas of current accounts, cash management services, capital market services, trade,
foreign exchange and derivatives, cross-border trade and correspondent banking services
and tax collections on behalf of the Government and various State Governments in India.
Treasury:
The Treasury manages the funding position of the Bank and also manages and maintains
its regulatory reserve requirements. It invests in sovereign and corporate debt instruments
and engages in proprietary trading in equity and fixed income securities, foreign
exchange, currency futures and options. It also invests in commercial papers, mutual
funds and floating rate instruments as part of the management of short-term surplus
liquidity. In addition, it also offers a wide range of treasury products and services to
corporate customers.
Syndication:
The Bank also provides services of placement and syndication in the form of local
currency bonds, rupee and foreign term loans and external commercial borrowings.
Investment Banking and Trustee Services:
The Bank provides investment banking and trusteeship services through its owned
subsidiaries. Axis Capital Limited provides investment banking services relating to equity
capital markets, institutional stock broking besides M&A advisory. Axis Trustee Services
Limited is engaged in trusteeship activities, acting as debenture trustee and as trustee to
various securitization trusts.
International Banking
The Bank continues to offer corporate banking, trade finance, treasury and risk
management solutions through the branches at Singapore, Hong Kong, DIFC, Shanghai
and Colombo, and also retail liability products from its branches at Hong Kong and
Colombo. The representative office at Dhaka was inaugurated during the current financial
year. Through the Representative Office at Dhaka.
34
Controversies related to Ethics
2016 Demonetisation related Money Laundering
Following the 2016 Indian Banknote Demonetisation, a number of Axis Bank employees
were arrested for facilitating money laundering activities. Some media outlets highlighted
the disproportionate amount of cases involving the bank, and claimed that the bank's
aggressive performance targets and internal culture fostered such activities and that the
blame does not lie solely in the hands of arrested employees.
Operation Red Spider
An Indian online magazine conducted a sting operation which was publicised along with
2013 videos evidence showing a wide range of violations and money-laundering schemes
by top officials at a number of Indian banks, including Axis Bank. Consequently, penalty
of Rs 5 crore on Axis Bank, Rs 4.5 crore on HDFC Bank and Rs 1 crore on ICICI Bank
was imposed by Reserve Bank of India.
Initiatives
Axis Pay
The newly introduced UPI will facilitate banking transactions using only a single 'Virtual
Payment Address' (VPA).  While transferring money to an account, the sender will not be
forced to feed the slew of details like the account number and bank's IFSC Code, but can
transact using only the VPA.

Ping Pay
The bank launched Ping Pay in 2015, which is a multi-social payment solution that
allows customers to transfer funds using their smart phones to both Axis Bank accounts
and other banks' account holders.
Augmented Reality
Axis Bank augmented reality feature within its mobile app which lists all the dining
destinations, property lists, shopping centres, bank ATMs, branches and many other
things not only as a location on GPS but also in real life pictures along with distance and
directions.
Axis Thought Factory
The innovation hub located in Bengaluru, has an in-house innovation team and an
accelerator programme. The Innovation Lab work closely with the startup community
that is redefining banking in the digital era. With this launch, Axis Bank becomes the first
Indian bank to introduce a dedicated innovation lab in the country.
Insta Personal Loan
Axis Bank provide a ‘24X7 Instant Personal Loan’ on smartphones and ATM kiosks.
Customers can get instant loan approval and disbursement, which gets credited directly
into their account
35
Locker Booking
The Bank has launched an online locker booking facility through the Mobile App; allow
customers to check availability from their homes and book instantly.
Microfinance Institutions (MFI) Lending
A new tablet based Loan Origination System developed to digitize the entire lending
process of MFI business. This will replace the existing paper based loan sanctioning
process
Multicurrency Forex Cards
Axis Bank offer contactless Multicurrency Forex Cards to Indian travellers enabling
faster and more convenient transactions while abroad The same technology has also been
extended to the Bank’s Debit and Credit card platforms The Bank has setup an in-house
Payment Gateway that allows for secure ecommerce transaction processing capability
and reduces the cost incurred on using external gateways.
Asha Home Loans
Asha home loans, our home loan product, caters to the first time home buyers in the
lower income segment; and helps them by providing affordable EMI options. The product
offers loans from ₹100,000 (US$1,500)–₹1.5 million (US$22,000) in small towns
(population less than 1 million) and up to ₹2.5 million (US$37,000) in larger towns
(population over 1 million), to customers with family incomes of ₹8,000 (US$120)–
₹10,000 (US$150) per month and above.
ISIC Forex Card
ISIC Forex Card' for students, is the first photo Travel Currency Card available in USD,
EUR, GBP and AUD currencies. It can be used across 34 million merchant locations and
at over 2 million MasterCard ATMs globally

EKYC
EKYC is an online/paperless Aadhaar card based process for fulfilling KYC requirements
to start investing in Mutual Funds without submission of any documents. SEBI has
recently allowed Aadhaar based KYC to be used for MF investments, for the convenience
of investors.
The first step in starting your investment in mutual fund is KYC compliance. KYC
verification enables you to open new accounts with all SEBI registered intermediaries
such as the Mutual Funds, Stock Brokers, Portfolio Managers, Depository Participants,
Venture Capital Funds and Collective Investment Schemes eliminating the need to repeat
standard KYC. The normal KYC process requires submission of KYC form along with
investor signature and additional documents for ID and address proof. In-person
verification (IPV) and sighting the original documents needs to be completed by a
competent person. EKYC completely eliminates paperwork and IPV to complete the
KYC process.

36
 Axis Bank has partnered with Visa to launch 'eKYC' (electronic Know your customer)
facility, first organisation in India to introduce Biometrics based KYC, offering
convenience, speed and ease to Aadhaar-registered individuals to open bank accounts

Subsidiaries The Bank has ten wholly owned subsidiaries:

 Axis Capital Ltd.

 Axis Private Equity Ltd.
 Axis Trustee Services Ltd.
 Axis Asset Management Company Ltd.
 Axis Mutual Fund Trustee Ltd.
 Axis Bank UK Ltd.
 Axis Securities Ltd.
 Axis Direct
 Axis Finance Ltd.
 Axis Securities Europe Ltd.
 A.Treds Limited

Awards And Recognition

2010

 Best Debt House in India - Euro money

 Best Domestic Debt House in India - Asia money
 Overall Winner & Consistent Performer -(Large Banks Category) - Business Today Best
Bank Awards 2010

2011

 Bank of the Year – India –The Banker Awards 2011

2012

 Bank of the Year - Money Today FPCIL Awards 2012-13

37
  Best Private Sector Bank - CNBC-TV18 India’s Best Bank and Financial Institution
Awards 2012
 Consistent Performer - India’s Best Banks – 2012 Survey by Business Today & KPMG
 Gold Shield for Excellence in Financial Reporting in the Private Banks category - 2011-
12 - ICAI (Institute of Chartered Accountants of India)

2013

 Axis Bank ranked No 1 company to work for in the BFSI sector - 'The Best Companies to
Work for' survey by Business Today.
 Ranked No 1 in the IT Biz Award - large enterprises category by Express IT Award
 Innovation for 2013 for Ladies First card under ‘the Most Innovative Broad Based
Product Offering’ category- IBA Innovations Award

2014

 Axis Bank Foundation conferred Outstanding Corporate Foundation at Forbes India,

Philanthropy Awards, 2014
 Best Domestic Bank in India- Asia money Best Banks 2014
 Best Bank Award among Large Banks for IT For Business Innovation- IDRBT Banking
Technology Excellence Awards 2014
 Axis Bank featured for the fourth time in Asia's Fab50 companies for 2014 by Forbes
Asia
 Best Bank for Rural Reach in the Private Sector and Best Retail Growth Performance in
the Private Sector category- Dun & Bradstreet-Polaris Financial Technology Banking
Awards 2014

2015

 Axis Bank has been adjudged winner in the Best Bank Category, Outlook Money Awards
2015
 Axis Bank awarded for the Best Security among Private Sector Banks in India by Data
Security Council of India (DSCI).
 Axis Bank conferred the Certificate of Recognition for excellence in Corporate
Governance by the Institute of Company Secretaries of India (ICSI), for the year 2015
 Best Domestic Bank in India- Asia money Best Banks 2015
 Axis Bank's Mobile App tops Forrester Research's review of Smartphone Mobile
Banking Apps in India.
 Axis Bank was selected as the Best Private Sector Bank under the category Rural Reach
at the Dun & Bradstreet Banking Awards 2015

38
  Axis Bank has been conferred with IDRBT Best Bank Award for Digital Banking,
Analytics & Big Data among large banks
 Axis Bank has been featured in Limca Book of Records 2015 for creating a National
Record for its campaign - 'Plant a Sapling
 Axis bank has been awarded the title of Super brand 2014-2015, by Super brands
 No. 1 Promising Banking Brand of 2015, Economic Times Awards 2015
 Winner in the 'Best Payment Initiatives' category amongst Private Sector
Banks, IBA Banking Technology Awards 2015

2016

 Awarded the Bank of the Year in India at The Banker Awards 2016.

 Recognised as the 'Socially Aware Corporate of the Year' by Business Standard’s Corporate
Social Responsibility Awards 2016.

 Awarded the Best Digital Bank at the Business Today Money Today Financial Awards 2016.

 Received award for Excellence in Corporate Social Responsibility by CII-ITC Sustainability

Awards 2016.

2017
 Won the 'Best Rewards Programme' for the third consecutive year at the Loyalty Awards
2017.

 Winner of 'Best Use of Partnership in a Loyalty Programme' at the Loyalty Awards 2017.

 Runner-up in the Best Payments Initiatives among Large Banks by the IBA Banking Technology
Awards 2017.

Listing and Shareholding

Axis Banks's equity shares are listed on the Bombay Stock Exchange and National Stock
Exchange of India. The company's global depository receipts (GDRs) are listed on
the London Stock Exchange. The Bonds issued by the Bank under the MTN programme
are listed on the Singapore Stock Exchange.

3.5 - HDFC bank

Background
39
 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 RBI’s liberalisation 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.
Promoter
HDFC is India’s premier housing finance company and enjoys an impeccable track
record in India as well as in international markets. Since its inception in 1977, the
Corporation has maintained a consistent and healthy growth in its operations to remain
the market leader in mortgages. Its outstanding loan portfolio covers well over a million
dwelling units. HDFC has developed significant expertise in retail mortgage loans to
different market segments and also has a large corporate client base for its housing
related credit facilities. With its experience in the financial markets, strong market
reputation, large shareholder base and unique consumer franchise, HDFC was ideally
positioned to promote a bank in the Indian environment.
Business focus

HDFC Bank’s mission is to be a World Class Indian Bank. The objective is to build
sound customer franchises across distinct businesses so as to be the preferred provider of
banking services for target retail and wholesale customer segments, and to achieve
healthy growth in profitability, consistent with the bank’s risk appetite. The bank is
committed to maintain the highest level of ethical standards, professional integrity,
corporate governance and regulatory compliance. HDFC Bank’s business philosophy is
based on five core values: Operational Excellence, Customer Focus, Product Leadership,
People and Sustainability.

Capital structure

As on 31st March, 2015 the authorized share capital of the Bank is Rs. 550 crore. The
paid-up share capital of the Bank as on the said date is Rs501,29,90,634/- ( 2506495317 )
equity shares of Rs. 2/- each). The HDFC Group holds 21.67 % of the Bank's equity and
about 18.87 % of the equity is held by the ADS / GDR Depositories (in respect of the
bank's American Depository Shares (ADS) and Global Depository Receipts (GDR)
Issues). 32.57 % of the equity is held by Foreign Institutional investors and investors and
Investors (FIIs) and the Bank has 4,41,457 shareholders.
The shares are listed on the Bombay Stock Exchange Limited and The National Stock
Exchange of India Limited. The Bank's American Depository Shares (ADS) are listed on
the New York Stock Exchange (NYSE) under the symbol 'HDB' and the Bank's Global
Depository Receipts (GDRs) are listed on Luxembourg Stock Exchange under ISIN No
US40415F2002.

Amalgamation PF times bank & Centurion bank of Punjab with HDFC bank

40
 On May 23, 2008, the amalgamation of Centurion Bank of Punjab with HDFC Bank was
formally approved by Reserve Bank of India to complete the statutory and regulatory
9approval process. As per the scheme of amalgamation, shareholders of CBoP received
1share of HDFC Bank for every 29 shares of CBob.

The amalgamation added significant value to HDFC Bank in terms of increased branch
network, geographic reach, and customer base, and a bigger pool of skilled manpower.

In a milestone transaction in the Indian banking industry, Times Bank Limited (another
new private sector bank promoted by Bennett, Coleman & Co. / Times Group) was
merged with HDFC Bank Ltd., effective February 26, 2000. This was the first merger of
two private banks in the New Generation Private Sector Banks. As per the scheme of
amalgamation approved by the shareholders of both banks and the Reserve Bank of India,
shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 shares of
Times Bank.

Distribution network

HDFC Bank is headquartered in Mumbai. As of March 31, 2015, the Bank’s distribution
network was at 4,014 branches in 2,464 cities. All branches are linked on an online real-
time basis. Customers across India are also serviced through multiple delivery channels
such as Phone Banking, Net Banking, Mobile Banking and SMS based banking. The
Bank’s expansion plans take into account the need to have a presence in all major
industrial and commercial centres, where its corporate customers are located, as well as
the need to build a strong retail customer base for both deposits and loan products. Being
a clearing / settlement bank to various leading stock exchanges, the Bank has branches in
centres where the NSE / BSE have a strong and active member base.

The Bank also has a network of 11,766 ATMs across India. HDFC Bank’s ATM network
can be accessed by all domestic and international Visa / MasterCard, Visa Electron /
Maestro, Plus / Cirrus and American Express Credit / Charge cardholders.

Management

Mrs. Shyamala Gopinath holds a Master’s Degree in Commerce and is a CAIIB. Mrs.
Gopinath has 39 years of experience in financial sector policy formulation in different
capacities at RBI. As Deputy Governor of RBI for seven years and member of the Board.
Mrs. Gopinath had been guiding and influencing the national policies in the diverse areas
of financial sector regulation and supervision, development and regulation of financial
markets, capital account management, management of government borrowings, forex
reserves management and payment and settlement systems.

The Managing Director, Mr. Aditya Puri, has been a professional banker for over 25 years
and before joining HDFC Bank in 1994 was heading Citibank's operations in Malaysia.

41
 The Bank's Board of Directors is composed of eminent individuals with a wealth of
experience in public policy, administration, industry and commercial banking. Senior
executives representing HDFC are also on the Board.

Senior banking professionals with substantial experience in India and abroad head
various businesses and functions and report to the Managing Director. Given the
professional expertise of the management team and the overall focus on recruiting and
retaining the best talent in the industry, the bank believes that its people are a significant
competitive strength.

Business profile

HDFC Bank caters to a wide range of banking services covering commercial and
investment banking on the wholesale side and transactional / branch banking on the retail
side. The bank has three key business segments.

Wholesale Banking

The Bank’s target market is primarily large, blue-chip manufacturing companies in the
Indian corporate sector and to a lesser extent, small & mid-sized corporates 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, etc. The bank is also a leading provider of
structured solutions, which combine cash management services with vendor and
distributor finance for facilitating superior supply chain management for its corporate
customers. Based on its superior product delivery / service levels and strong customer
orientation, the Bank has made significant inroads into the banking consortia of a number
of leading Indian corporates including multinationals, companies from the domestic
business houses and prime public sector companies. It is recognised as a leading provider
of cash management and transactional banking solutions to corporate customers, mutual
funds, stock exchange members and banks.

Treasury

Within this business, the bank has three main product areas - Foreign Exchange and
Derivatives, Local Currency Money Market & Debt Securities, and Equities. With the

42
 liberalisation of the financial markets in India, corporates need more sophisticated risk
management information, advice and product structures. These and fine pricing on
various treasury products are provided through the bank’s Treasury team. To comply with
statutory reserve requirements, the bank is required to hold 25% of its deposits in
government securities. The Treasury business is responsible for managing the returns and
market risk on this investment portfolio.

Retail Banking

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
delivered to customers through the growing branch network, as well as through
alternative delivery channels like ATMs, Phone Banking, Net Banking and Mobile
Banking.

The HDFC Bank Preferred program for high net worth individuals, the HDFC Bank Plus
and the Investment Advisory Services programs have been designed keeping in mind
needs of customers who seek distinct financial solutions, information and advice on
various investment avenues. The Bank also has a wide array of retail loan products
including Auto Loans, Loans against marketable securities, Personal Loans and Loans for
Two-wheelers. It is also a leading provider of Depository Participant (DP) services for
retail customers, providing customers the facility to hold their investments in electronic
form.

HDFC Bank was the first bank in India to launch an International Debit Card in
association with VISA (VISA Electron) and issues the MasterCard Maestro debit card as
well. The Bank launched its credit card business in late 2001. By March 2015, the bank
had a total card base (debit and credit cards) of over 25 million. The Bank is also one of
the leading players in the “merchant acquiring” business with over 235,000 Point-of-sale
(POS) terminals for debit / credit cards acceptance at merchant establishments. The Bank
is well positioned as a leader in various net based B2C opportunities including a wide
range of internet banking services for Fixed Deposits, Loans, Bill Payments, etc.

Rating / Awards

Credit Rating

43
 HDFC Bank has its deposit programmes rated by two rating agencies - Credit Analysis &
Research Limited. (CARE) and Fitch Ratings India Private Limited. The bank's Fixed
Deposit programme has been rated 'CARE AAA (FD)' [Triple A] by CARE, which
represents instruments considered to be "of the best quality, carrying negligible
investment risk".

CARE has also rated the bank's Certificate of Deposit (CD) programme "PR 1+" which
represents "superior capacity for repayment of short term promissory obligations". Fitch
Ratings India Pvt. Ltd. (100% subsidiary of Fitch Inc.) has assigned the "tAAA (ind)"
rating to the bank's deposit programme, with the outlook on the rating as "stable". This
rating indicates "highest credit quality" where "protection factors are very high".

HDFC Bank also has its long term unsecured, subordinated (Tier II) Bonds of Rs.4
billion rated by CARE and Fitch Ratings India Private Limited. CARE has assigned the
rating of "CARE AAA" for the Tier II Bonds while Fitch Ratings India Pvt. Ltd. has
assigned the rating "AAA (ind)" with the outlook on the rating as "stable". In each of the
cases referred to above, the ratings awarded were the highest assigned by the rating
agency for those instruments.
Corporate Governance Rating:

The bank was one of the first four companies, which subjected itself to a Corporate
Governance and Value Creation (GVC) rating by the rating agency, The Credit Rating
Information Services of India Limited (CRISIL). The rating provides an independent
assessment of an entity's current performance and an expectation on its "balanced value
creation and corporate governance practices" in future. The bank was assigned a 'CRISIL
GVC Level 1' rating in January 2007 which indicates that the bank's capability with
respect to wealth creation for all its stakeholders while adopting sound corporate
governance practices is the highest.

Awards and Accolades

HDFC Bank began operations in 1995 with a simple mission: to be a "World-class Indian
Bank". We realized that only a single-minded focus on product quality and service
excellence would help us get there. Today, we are proud to say that we are well on our
way towards that goal.
Over the years, the Bank has received recognition and awards from several leading
organizations and publications, both domestic and international (details are available
http://www.hdfcbank.com/aboutus/awards/default.htm)

Some important awards that the Bank won:

2015

44
AIMA Managing India Awards 2015 - Business Leader of the Year - Aditya Puri
Barron's - World's 30 Best CEOs - Mr Aditya Puri
Finance Asia poll on Asia's Best - Best Managed Public Company - India' Best CEO-
Companies 2015 Aditya Puri
-Best Corporate Governance- Rank 3
-Best Investor Relations- Rank 3
J. P Morgan Quality Recognition Award -Best in class straight Through Processing Rates

2016

Institutional Investor All-Asia Executive Mr. Aditya Puri ranked Best CEO
Team ranking 2016 -HDFC Bank ranked Best Company in Banks sector of Asia ex-Japan

Asiamoney FX Poll 2016
-Ranked No. 1 in the Best Domestic Provider for FX Products and
Services in India
-Ranked No.2 in the Best Domestic Provider of FX Services and for
FX Research and Market Coverage
-Ranked No. 1 in the Best Local Cash Management Bank in India

BrandZ Top 50 Most Valuable Indian HDFC Bank has been ranked India's most valuable brand for the 3rd
Brands consecutive year

CNBC-TV18 India Business Leader Outstanding Business Leader of the year

Awards (IBLA) 2015-16

The Financial Express India's Best Banks Lifetime Achievement Award to Mr. Aditya Puri
Awards

IDRBT Banking Technology Excellence Best Bank in Banking Technology Excellence for the year 2015-16
Awards 2016

Cisco-CNBC TV 18 Digitizing India Award for Innovations in the Financial Industry & Digital Banking
Awards

Dun & Bradstreet Corporate Awards 2016 HDFC Bank wins Dun & Bradstreet Corporate Award 2016 in the
Banking sector

2017

45
Business India 19th Best Bank survey Best Bank for the year 2017 - HDFC Bank

The Asset Triple A Country Awards 2017 Best IPO, India

Fortune HDFC Bank MD Aditya Puri on Fortune Businessperson

of the year list

Forbes Asia's 13th Fab 50 Companies List HDFC Bank in Forbes Asia's Top 50 List

Forbes' List of 5 Companies That Have Shaped Asia, HDFC Bank in Top 5 companies that have shaped Asia,
And The World and the World

IDRBT Banking Technology Excellence Awards 2016- 1) Best Bank - Use of Technology for Fraud Prevention
17 (Large Banks)
2) Best Bank - Cyber Security and Defense (Large Banks)
3) Best Bank - Innovative Use of Technology (Large
Banks)

BrandZ Top 50 Most Valuable Indian Brands Ranked India's Most Valuable Brand for 4th year in a row

2018

Business Today Best Bank Awards Bank of the Year

Best in Innovation
Best Large Bank
Fastest Growing Large Bank

Dun & Bradstreet BFSI Awards 2018 India's Leading Bank - Private sector

Euromoney Private Banking and Wealth Management - Net-worth-specific services (High Net Worth Clients US
survey 2018 $ 5-30 MN)
- Asset Management
- SRI/Social Impact Investing
- International Clients

46
Part: II
Primary study

47
 CAPTER 4

INTRODUCTION OF THE STUDY

47
4.1 LITERATURE REVIEW

INTRODUCTION
In this chapter, we define some concepts which related to this study such as: Customer
Satisfaction, Customer Satisfaction and Banking Sector, Customer Satisfaction and Customer
Loyalty, Customer Satisfaction and Service Quality, Consumer Perceptions and behavior:
relationships between service satisfaction, quality and loyalty and bank selection criteria.
1. Customer satisfaction
Significant level of customer satisfaction is among the most critical indicators of the business’s
future. Customers who are satisfied are also loyal and this ensures a consistent cash-flow for the
business in the future. In addition, satisfied customers are often characterized as less-price
sensitive and they are more partial to spend more on the products they have tried and tested
before. Moreover, stability in business relations is also beneficial where the positive quality
image minimizes the cost for a current customer (Matzler, Hinterhuber, Bailom & Sauerwien,
1996). According to Hom (2000), satisfaction refers to a feeling or a short term attitude that can
change owing to various circumstances. It exists in the user’s mind and is unlike 17 observable
behaviors like product choice, complaint or repurchase. In a related study, John and Linda
(1976), investigated A the relationship between expectations, performance and satisfaction. The
findings revealed that when a customer judges the performance of a product, he usually
compares a set of performance outcomes that are expectations. The product is then likely to be
considered as dissatisfactory or satisfactory. In another related study, Johnson, Anerson and
Fornell (1995) developed and tested alternative models of market-level expectations, perceived
product performance, and customer satisfaction. They revealed that in a particular period,
satisfaction is positively impacted by performance and expectations where performance effects
reveal the impact that experiences of the product or service have upon satisfaction and
expectation effects reveal the impact that past performance information has upon satisfaction.
They stated that managers inclined to maximize market satisfaction for the purpose of enhancing
future profitability is better off investing in long-run quality improvement strategies and methods
as short-term techniques only leads to temporary performance or benefits per customer and will
be negligible in the long-run. Similarly, Anderson and Sullivan (1993) examined the antecedents
and outcome of firms’ customer satisfaction and found that quality falling short of expectations
have higher impact on satisfaction and retention compared to those exceeding expectations. They
also revealed that satisfaction positively affects repurchase intentions and both positive and
negative disconfirmations increase with the ease of quality evaluation.
2.Customer satisfaction and banking sector
Among the many studies in literature dedicated to customer satisfaction in banks, Albro’s (1999)
study in the context of Washington, U.S., utilized a benchmark involving bank customers from
all geographic areas and bank assets. The study involved asking customers various questions
48
concerning their satisfaction with the banks. Data collected was utilized to benchmark customer
satisfaction scores of banks participating in the financial client satisfaction index. The findings
revealed that the most significant attributes that results in satisfaction include human interaction
issues like ‘correcting errors promptly’, ‘courteous employees’ and ‘professional behavior’.
Moreover, the findings also revealed that the provision of good, personal service is considered by
the clients as more important more than convenience or products.
The above findings were consistent with Wan, W.W., Luk C.L and Chow (2005)
findings. The latter study was also conducted in Washington and it revealed that customers
taking the customer satisfaction survey bought more products compared to the control group that
were not participants to the survey. According to the authors, survey participation is what led the
customers to develop more positive perceptions towards the company and it convinced them that
the firm values and cares about its customers and their feedback.
In another study, Bennett (1992) claimed that the key to obtaining competitive advantage
in the banking business is to be customer-driven. In other words, the entire aspects of the
institution should concentrate on the factors that the customers hold dear and it should be willing
to exceed customer expectations. Several studies evidenced 19 that by concentrating on and
delivering excellent customer satisfaction outcome, firms achieve superior profitability. Hence,
improving customer service may entail training procedure or enhancement of computer
information systems of the bank.
While improving customer service may lead to increased tangible accounting costs, it
may also steer clear of the occurrence of intangible costs. Bankers can develop quantitative data
through researching customer satisfaction, in the hopes of stressing that the emphasis and
delivery of exceptional customer satisfaction can lead to improved revenues that are higher than
increased costs.
Similarly, Anwyll (2005) stated that customer service and satisfaction are the factors
differentiation a firm from its large, national competitors. Moreover, the banks branding message
reads, “Great Rates. Friendly Service” and through ongoing sales and service training, it attempts
to deliver what it promises to. Also, Mothey (1994) revealed that in order to achieve customer
satisfaction, it is imperative for banks to make use of different tools that varies from re-
engineering of service to focusing on specific tasks. In addition, Albro’s (1999) study involved a
national survey of the customers patronizing 814 banks in an attempt to determine customer
satisfaction. He revealed that cross selling hinges on high level of customer satisfaction. The
study also revealed a very high correlation between satisfaction scores and customer’s
predisposition to repurchase. In short, for happy customers to provide recommendations through
word-of-mouth to others, they must be satisfied. 20 On the contrary, if the firm is derelict in
serving the customer, they will not hesitate to switch to another financial institution. According
to Aldisert (1994), customer satisfaction is not becoming significant in a way that some banks
view it as a main element in their marketing strategies.
The term ‘after marketing’ has also been commonly utilized to reflect the concentration
on expending effort to cater to current customers in an attempt to increase their satisfaction and
to retain them (Vavra, 1995). This section stressed on the importance of customer satisfaction
49
which is considered to be the basis of banks’ development of strategies. As such, it is important
for current financial institutions to shift towards customer management for their satisfaction of
the services provided. It is also imperative for banks to develop a system that continuously
measures customer satisfaction (Chitwood, 1996).
4.2 . Customer satisfaction and customer loyalty
Customer loyalty is defined as “the market place currency of the twenty-first century” (Singh &
Sirdesh, 2005). Similarly, Foss and Stone (2001) related customer loyalty to the customer’s
thoughts and actions. Several customer loyalty experts describe loyalty as a state of mind and a
set of beliefs. Among the main elements of loyalty are the information exchange and the relation
between the state of mind and behavior. For instance, loyal customers often provide information
to service providers because of their sense of trust in them and they expect the service providers
to utilize the pro- 21 vided information to their advantage. Moreover, customer satisfaction leads
to customer loyalty which in turn, leads to profitability (Hallowell, 1996).
4. Customer satisfaction and service quality
In the current dynamic and competitive business world, sustainable competitive advantage is
driven by the delivery of high quality service that will result in customer satisfaction. In other
words, customer satisfaction is a condition to achieving customer retention and loyalty and it can
assist in boosting profitability, market share and return on investment. In a related study, Suresh
chandar, Rajendran and Anantharman (2002) conducted an in-depth investigation of the relation
between service quality and customer satisfaction. They concluded by identifying five factors of
service quality that are considered by customers as critical. They are enumerated as follows;
1. Core service or service product – service content,
2. The human elements of the service delivery including reliability, responsiveness,
assurances, empathy, and service recovery – all a part of the human element when
delivering the service,
3. Service delivery systemization which refers to the processes, procedures, systems and
technology that helps in making the provision of service in a seamless manner, 22 4.
Service tangibles which refers to equipment, signage, employees’ appearance and the
man-made physical environment characterizing the service – commonly called the
‘service space’, and finally.

5. Social responsibility which is the service provider’s ethical behavior and activities
The above study indicated the close relation between service quality and customer satisfaction in
a way that an increase in one factor leads to the increase in the other. Viewed from another
perspective, Johnston (1995) investigated the relation between the determinants of service
quality and outcomes of the zone of tolerance. He revealed that there are some determinants that
are more likely to be a source of dissatisfaction while others to be a source of satisfaction. He
demonstrated the following;
1. Some determinants of quality are superior to others,

50
 2. The key sources of satisfaction of the bank’s customers include attentiveness,
responsiveness, care and friendliness while the key sources of dissatisfaction include
issues pertaining to integrity, reliability, responsiveness, availability and functionality,
3. The sources of satisfaction enumerated above are not necessary the opposite of the
sources of satisfaction,
4. The intangible aspects of the staff-customer relation significantly impact service quality
in a negative and positive way, 23
5. Responsiveness is a key determinant of quality and is a key element in the provision of
satisfaction while the lack of it is a main source of dissatisfaction, and
6. Issues of reliability are a source of dissatisfaction as opposed to satisfaction. From the
above, it is evident that satisfaction can be achieved by providing the service in a timely
and efficient manner.

The presence of satisfying factors may also lead to positive, virtuous circles, supporting contact
staff-customer relationship. Another study related to customer satisfaction in business service is
the one by Nawak and Washburn (1998).
They revealed that service quality has a highly significant relationship with overall
customer satisfaction. First, they revealed that product quality is a critical element of
presentation. Second, the significant relation between timeliness and cost management could
support the saying “time is money” in the context of business response to market changes. The
third most critical contributor to overall customer satisfaction was revealed to be service quality.
Moreover, Rod, Ashill, Carruthers and Shao (2009) stated that overall internet banking service
quality is significantly related to overall customer satisfaction in New Zealand banks. They
added that the delivery of high quality online service is called for, for the maintenance or
enhancement of the banks’ customer satisfaction.
24 Also, Maddern (2007) revealed that the role of staff satisfaction and service quality
are both main drivers of customer satisfaction of the technical service quality (TSQ) in the U.K.
In addition, TSQ was revealed to be a key determinant of customer satisfaction. In a related
study, Isa and Amin (2008) claimed that most of the Islamic Bank’s customers were satisfied
with the banks’ overall service quality. The findings also indicated that the standard model of
Islamic banking service quality dimensions should include the following six dimensions;
tangible, reliability, empathy, responsiveness, assurance and compliance along with the good
determinants of satisfaction. They also revealed a significant relationship between service quality
and customer satisfaction.
6.Consumer perception and behavior: Relationships between service satisfaction, quality
Widespread support has been dedicated to the general notion that customer satisfaction is a key
variable for evaluating and controlling bank marketing management (Moutinho & Bronwlie,
1989; Howcroft, 1991; Moutinho, 1992). Additionally, the main role of service quality in the
realm of financial service delivery has been stressed by authors (e.g. Smith & Lewis, 1989;
Avkiran, 1994). Despite the fact that the constructs of both service quality and satisfaction are
often interchangeable, the significant body of research has attempted to clarify the nature of the

51
relationship be- 25 tween them (e.g. Bitner, 1990; Cronin and Taylor, 1992; Parasuraman et al.,
1994).
Moreover, based on Oliver’s (1993) review of the issues, service quality is an antecedent
to satisfaction and it is by nature, non-experiential, which is not unlike attitude in nature that can
be developed from other sources like word of mouth. Despite the acknowledgement of the multi-
attribute nature of both constructs, over the years, researchers have been focusing on the
identification of the attributes and expansive dimensions of service quality.
Prior works in the topic differentiated between technical and functional quality
(GroEnroos, 1984) and stressed on the significance of the functional or service delivery as an
element of consumer evaluations. This distinction has influenced later works where researchers
(e.g. Parasuraman, et al., 1988, 1991, 1994; Babakus & Boller, 1992; Mels et al., 1997; Carman,
1990) investigated the dimensionality of service quality.
Other later works like Smith (2000), provided the following three elements of the service
process in addition to outcome; access/convenience, human elements comprising of the
combination between instrumental and expressive qualities and finally, tangibles. The effect of
consumer’s service evaluation (implicit or explicit) in service quality and satisfaction literature
indicates the relation between the constructs and consumer behavior.
Researchers have attempted to define the relationship between behavioral intentions and
satisfaction (e.g. Oliver, 1980; Mittal et al., 1999) and between behavioral intentions and service
quality (Parasuraman et al., 1994; Boulding et al., 1993). Meanwhile other researchers
investigated the antecedent relation between all three constructs with conflicting findings (e.g.
Cronin & Taylor, 1992; Liljander & Strand- 26 vik, 1992; Taylor & Baker, 1994). Moreover, the
relationship between intentions and actual behavior is still unconfirmed (Keaveney, 1995) as
research has mostly concentrated on studying the relationships between customer satisfaction
and loyalty (Hallowell, 1996; Yi, 1990). Loyalty is defined as repeat purchase intention, attitudes
or other alternative measures of actual behavior like repeat purchase, recommendation among
others. The complex relation between consumers various degrees or conditions of loyalty (Dick
& Basu, 1994) and their shift or ‘exit’ behavior has been extensively studied (see Stewart, 1998).
2.7 BANK SELECTION CRITERIA Several studies have been dedicated to customer bank
selection decision.
Most of these studies made use of the questionnaire method of data collection to evaluate
the relative importance of specific selection attributes. Among these studies is Che Wel and
Mohd. Noor’s (2003) study whose sample comprised of 578 bank customers to determine the
impact of personal and sociological factors upon customer bank selection criteria in the context
of Malaysia. The findings revealed that personal factors are more influential compared to
sociological factors. Hence, to attract a customer over, banks must employ a strategy to satisfy
the needs of the target market and they can do this by focusing on personal factors but also
keeping the sociological factors in mind. In addition, convenience was revealed to be an
important factor in bank selection. 27 In a related study, Anderson, Cox III and Fulcher
(1976)attempted to determine the bank selection decision and market segmentation. They

52
revealed that bank selection decisions are carried out based on conscious deliberation with
convenience being a dominant factor in customer patronage.
They added that image of bank and financial consideration are principal determinants of
bank patronage among customers who are service-oriented and it is a significant criterion for
both market segmentation and design of patronage attraction. On the other hand, in the context of
Hong Kong, Wan, Luk and Chow (2005) investigated the factors influencing bank customers’
adoption of four major banking channels namely branch banking, ATM, telephone banking and
Internet banking.
Their study specifically focused on the impact of demographic variables and
psychological notions concerning positive attributes characterizing the channels. They revealed
that ATM was the most often adopted channel followed by Internet banking and branch banking.
Telephone banking was the least often utilized channel. Similarly, Jones, Nielsen and Trayler’s
(2002) study made use of the Australian Competition and Consumer Commissions (ACCC)
method in an attempt to determine criteria of bank selection of Australian 2,500 business firms.
They revealed that for large firms, the following factors are the selection criteria (in order of
importance); 28 Bank charges competitive prices for both products and services The bank’s
ability to provide long-term business relations Bank is efficient in its daily activities. The above
factors indicate that larger firms require a range of choices in financial services.
On the other hand, for small firms, the selection criteria include (in order of importance);
Banks are able to provide long-term business relations Banks are inclined to provide customer’s
credit requirements Bank charges competitive prices for both products and services. It is evident
from the above that large firms hold competitive prices as the most significant factors in their
criteria indicating that decisions are made at the level of individual product. As such, specialist
financial service providers may be able to gain market share at the expense of full service
providers if they can provide competitive prices. On the other hand, small firms are more
desirous of having long-term business relations with banks which provides banks the opportunity
to make use of customer loyalty to bundle services. Also, small firms are less swayed by the
price and are hence less inclined to search for the cheapest price of any service. 29 In a related
study, Zine din’s (1996) attempted to determine bank selection and customers’ perceptions of a
bank and the products it offers.
He revealed that the factors impacting functional quality include friendliness, helpfulness,
accuracy in account transaction management, efficiency in rectifying mistakes, speed of service
and decision making – all of these factors were revealed to be critical determinants of bank
selection. But based on the above results, functional quality is superior to traditional marketing
activities comprising of location, price and advertising.
Price competitiveness was also a less important criterion than speed of service and
decision making. On the other hand, designing a high quality and effective delivery system mix
may impact bank’s competitive edge both in short and long-term. He also added that
performance of contact personnel, word-of-mouth and technological based services may
compensate for overall lower factor scores. Finally, Dusuki and Abdullah (2007) investigated the
pertinent factors that customers of Islamic banks perceive as affecting their selection criteria of
53
banks. They revealed that the most important factor is customer satisfaction which hinges on
quality of service by Islamic banks. This includes factors such as, treating customers courteously
and respectfully, conveying trust and confidence, efficient and effective handling of transactions
and inclination and preparedness to provide solutions and answers concerning the products.

54
Statement of problem
The challenge here is that they won't provide services to rural sector and lower middle class
people.They end up financing big corporates and if any default they will be at huge loss,also
corruption may be involved at higher levels.Cancellation of license if any illegal thing

55
4.3 Objective of study

 To analysis why people choose private banks.

 To know which service people, get from bank.
 To know satisfaction level of customer with the services provided by the
 private bank.
 To know how many people, use online banking.
 To study various private banking.

56
 CHAPTER 5

Research Methodology:

57
5.1 Research design:
Descriptive research includes surveys and fact finding enquires of different kinds.
The major purpose of descriptive research is description of the state of affairs as it
exists at present. Researcher has no control over the variables of this type of
research.
5.2 Sources of data collection:
Questionnairewe have made questionnaire consisting twelfth questions toget
customer’s view about private banking sector.
5.3 Data collection method:
* Primary data: -
I have taken great care while collecting primary data to answer that it is relevant,
accurate, current and unbiased. I have taken a sample of 250 people.I have visited
them personally to get data.
* Secondary data: -
Secondary data consist of information that already exists somewhere,having been
collected for another purpose. I have gathered secondary datafrom website of
different operators, different magazines, newspapers andlibraries.
5.4 Population: Ahmedabad city

5.5 Data collection instrument:

We used closed-end questions, which provide answers that are easier to interpret
and tabulate. We have taken care in the wording and ordering of questions. we
have used simple, direct, unbiased wording questions, which are arranged in a
logical order

58
 CHAPTER 6

DATA ANALYSIS & INTERPRETATION

59
1 . Describe classification of age group in bank account.
Age

Below 20 14
20-30 134
30-40 48
>40 54

Below 20 people is 14 they are junior account in a bank. Under 21-30 there are 134
people this people mostly have salary accounts. In 31-40 there are 48 people. And 40 and
above 40 there are 54 people.

60
2. Describe the gender ratio in bank account.
Gender

MALE 184
FEMALE 66

In over survey there are 184 men and 66 women.

61
3. Describe the types of bank accounts by the occupation.
Occupation

A. Student 46
B. Job 125
C. Businessmen 68
D. Housewife 11

There are 46 students. 125 person who are doing job 68 businessmen and 11
housewife.

62
 4. Describe the income according to age

Income

A. Below 100000 38
B. 100000-200000 72
C. 200000-500000 41
D. Above 500000 43

63
5. Do you have bank account?

YES 250

NO 0

From the survey of private banking sector, most of people have bank account in
private banks. Because of private banks gives quick and fast services in short time and private
banks easily solve the problem of customer. Private banks have highly qualified person.

6. which bank do you have account from following?

A. ICICI 80
64
 B. AXIS 68

C. KOTAK 45

D. HDFC 30

E. OTHER 27

In the mentioned survey of private banks, most of the people have bank account in ICICI
bank. Because this banks gives quick and fast services.

7. Reason for choosing private bank?

65
 A. Trust/Reliability 32
B. . Location 79
C. Friendly behavior of staff 52
D. Quick and fast service 87

The customers choose ICICI bank due to its fast and secure services in its net
banking and other banking services. ICICI bank does not charge unnecessarily to customers
for minimum balance, even banks send texts to the customer if their banking transactions
limits reached to the free transactions entitled to customer. While some choose the banks for
location. Women choose banks on the basis of location.

8. which type of account do you have in this Bank?

A. Saving A/C 113

66
 B. Loan A/C 25
C. Fixed A/C 57
D. . Current A/C 55

Most of the people have Salary/Savings bank account in ICICI bank due to fast
banking services, friendly and supportive nature of bank staff in every prospect. In ICICI
bank you can get instant loan approvals. HDFC banks gives loan with short time. Most of
businessmen chooses private banks for current account because they easily debit or credit the
amount.

9. Which service you get from bank?

A. Online banking 185/250

B. Mobile banking 150
C. Credit card 70
D. ATM 230
67
 E. Telephone banking 100
F. OTHER

Amongst all other banking services provided by ICICI bank, the most common
services are ATM services and other services are net banking, online banking , credit card
services.

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Other services provided by the banks are telephone banking services, through which you can
use banking services at ease.

10. Are you satisfied with the service provided by your private bank?

YES 245
NO 5

Most of people are satisfied with banking services and very few people are not
satisfied with the same due to some issues with banking services. Because private banks have
highly qualified staffs which helps to solve the problem.
Few people are not satisfied because of banks charges unnecessary charges like if u
have not sufficient balance in your account then there are some penalty from banks.
69
11. Are you satisfied with the SMS services of your bank?

YES 240
NO 10

Sometimes due to network issues and technical errors in SMS facility few people are
not satisfied with the same. While most of people are satisfied because of when the amount
is debited or credited SMS is arrive the person.

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12. Are you satisfied with the customer care service of your bank?

YES 243
NO 7

People are satisfied with customer care service of ICICI bank which have unique
feature for customer, which is while you have called up customer care executive and if they
are engaged with other customer, the system automatically asks you to choose calling you in
few hours. Same in HDFC bank, AXIS banks KOTAK.

71
13. Do they charge unnecessarily for not maintaining minimum balance in your account?

YES 205
NO 45

The review which I got from the survey is ICICI bank does not charge unnecessarily
to customers for minimum balance, even banks sends texts to the customer if their banking
transactions limits reached to the free transactions entitled to customer.

72
14. Do you think your bank offers competitive interest rate?

YES 211
NO 39

People agree with the fact that private banks provide higher interest rates in
comparison of public sector banks. Remaining 16% thinks that there money is safe in public
banks so that they invest in public sector banks.

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15. Do you use the service of alternative bank?

YES 178
NO 72

People have alternate bank accounts in public sector banks likes of SBI, BANK OF
BARODA and other leading banks as well as private sector because private company’s salary
account is always in private banks. Not every person maintains the balance required by
private banks so that they prefer to use alternate bank.

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 CHAPTER-7

FINDINGS

75
 FINDINGS

1. To find out the differences in perception of customers on the Service Quality dimension Public
Sector Banks and Private Sector Banks. Significant differences emerged between the Public Sector
Banks and Private Sector Banks on the Service Quality dimensions.
2. Customers of Private Sector Banks are highly satisfied in comparison to Public Sector Banks on the
Service Quality dimensions.
3. Customers of Public Sector Banks are not as much satisfied on the ground of Tangibility, Reliability,
Responsiveness and Assurance on the Service Quality which shows the difference in the percent
Service Quality of the customers in Public Sector Banks and Private Sector Banks.
4. Customers of the bank have different perception and expectation regarding the Service Quality of
their banks.
5. The customers of Private Sector banks have positive attitude towards the physical facilities of
their banks in comparison to the customers of Public Sector Banks.
6. The Service Quality dimension 'reliability' means the 'Service offered by banks', 'problem solving',
on time service, error free service'.
7.The perception of customers regarding the dimension 'reliability' between Public Sector Banks and
Private Sector Banks differs.

76
8. The service quality dimension 'responsiveness' measures the response of the employees
regarding the prompt services, willingness to help, respond to request and bank’s behavior with their
customers.
9. The perception of customers of Public and Private sector Banks is different regarding the service
quality dimension of responsiveness.
10. It is found that the customers of Private Sector Banks have more satisfaction towards the
‘responsiveness’ attribute of their bank employees in comparison to the customers of Public sector
Banks.
11. The satisfaction level of customers regarding service quality dimensions 'Assurance' is different in
Public sector Banks and Private Sector Banks.
12. The service quality dimensions 'ATM service quality’ measures the 'quick cash withdrawal
through ATM’, ATM location, safe and secure ATM transaction, ATM machine, Attractive appearance
of ATM, excellent quality of currency.
13. The satisfaction level of customers regarding the service quality dimensions 'ATM service quality’
is same in both the Public Sector Banks and Private Sector Banks.

77
 CHAPTER-8

LIMITATION OF THE STUDY

78
 LIMITATION OF THE STUDY

LIMITATIONS OF THE STUDY

• It is only covering global banks.

• The sample is limited to North India.

• The data of only 2years has been used.

• The responded very not very much keen to discloses personal information and decision
making process.

79
• The customer base of high and product like high value residential property has not been taken into
consideration.

• The financial performance of the banks is depending on customers however , the customer do not
adequate understanding for the performance of banks

80
Chapter- 9

81
 CONCLUSION AND SUGGESTION

conclusion

The study is based on the comparative analysis of service quality dimensions both in public sector
banks and private sector banks. The study has tried to find out the perception of customers regarding
the various service quality dimensions (Tangibles, Reliability, Responsiveness, Assurance and ATM
Service Quality) between public sector banks and private sector banks in retail banking. For this
purpose primary data was collected from various cities of U.P. and Delhi. From the analysis it has
been found out that there exists a gap in the perception of customers regarding the service quality
dimensions between public sector banks and private sector banks. Perception of customers varies
between public sector banks and private sector banks. The analysis further reveals that customers of
public sector banks are highly satisfied regarding the service quality dimension that is Tangibles,
Reliability, Responsiveness and Assurance as compared to public sector banks. However, there is no
variation in the perception of customers regarding the service quality dimensions ‘ATM service
quality’ between public sector banks and private sector banks. The results of the analysis have
proved that there is significant difference between the public sector banks and private sector banks
regarding the service quality dimensions. The study concludes that: (1) There is significant difference
in the perception of customers regarding the service quality dimension of Tangibles (Physical
features, physical equipments) between public sector banks and private sector banks. (2) The
customers of private sector banks have greater satisfaction regarding the service quality dimension
of reliability (service offered by banks, problem solving, error free records) as compared to public

82
sector banks. (3) The customers of private sector banks are highly satisfied regarding the service
quality dimension of responsiveness (Prompt service, willingness to help, respond to request) as
compared to public sector banks. (4) The customers of private sector banks are highly satisfied
regarding the service quality dimensions of Assurance (behavior of employees, politeness of
employees) as compared to public sector banks.

Suggestion
1) There is difference of opinion among the customers of public sector banks and private sector
banks regarding the service quality dimensions. Although customer is the king in the present day
market, their opinion is more important compared to profitability of the banks. They regard the
objectives of retail banking achievable on the service quality dimensions. It is necessary for PSBs and
private sector banks to increase the motivational powers of the customers by satisfying them
through well organized efforts, especially by providing confidence that the working and products of
retail banking are highly useful for the customers.

2) The need for retail banking services provided by public sector banks is to improve their speed and
efficiency of service delivery in a secure environment. There is need to improve the quality of service
delivery in such areas as accuracy in customer accounts management and, excellent and cordial
banker-customer relationships by public sector banks.

3) It is felt that the retail banks to embark upon confidence building of their customers, so that both
the parties would grow simultaneously in the process.

83
4) The public sector banks can improve quality through tangible means to attract attention of
customers to the smallest details of the banks. This visible detail can add up for customers and signal
a message of caring and competence. The public sector banks should bring out new schemes from
time-to time so that more people can be attracted. Even some gifts and prizes may be offered to the
customers for their retention.

84
 BIBLIOGRAPHY

 Gaganjot, Singh. (1998). New Innovations in Banking Industry – A study of New Private Sector
Banks.

 Hajeja, T. N. (2010). Money and Banking. Ane Books Pvt.Ltd, New Delhi.

 Institute of Banking and Finance. (2010). Principles and Practices of Banking. The Mac million
Co. India Ltd., New Delhi.

 Indian Institute of Banking and Finance. (2010). Retail Banking. The Mac million Co. India
Ltd., New Delhi.

 Jha, Probodh Kumar. (1985). Banking and Economic growth. Deep Publications, New Delhi.

 Joshi, Manoj Kumar. (2007). Growth of Retail Banking in India. ICFAI University

 Websites:

www.banknetindia.com

https://thefinancialbrand.com

85
www.myprivatebanking.com

www.icicibank.com

www.rbi.org.in

www.thebanker.com

www.erstegroup.com

www.ibef.org

www.informationvine.com

www.hdfc.com

www.simpli.com

https://en.wikipedia.org

www.embibe.com

ANNEXURE

86
  A STUDY ON PRIVATE BANKING SECTOR

AND ITS SERVICES

I Shailja Mishra student of Hasmukh Goswami College Of Engineering (MBA)

and I am taking this survey for the purpose of MBA course. The title of my
project is “a study on private banking sector and its services.

NAME: ……………………………………………… CONTACT NO. ………………………..

PROFESSION:…………………………………………… AGE……………………………………

ANNEXURE

Q1. Do you have Bank account?

A. Yes B. No

Q2. If yes, then in which bank you have account ?

87
 A.Private B. Public

C. Both

Q3. If private ,then in which bank do you have account ?

A. ICICI B.AXIS

C. KOTAK D. HDFC

E.Others

Q4. Which type of account do you have in this particular bank?

A.Saving account B.Loan account

C.Fixed account D.Current account

Q5. If, yes than which service you get from bank ?

A. Online banking B. Mobile banking

C. Credit card D.ATM

E. Telephone banking F.Others

Q6. Are you satisfied with the services provided by the private banks ?

A. Yes B. No

Q7. Are you using online banking?

A. Yes B. No

Q8. If yes, then you are getting benefit from the online banking?

A. Yes B. No

88
Q9. In your opinion what was the reaction of customers regarding service
efficiency after the bank computerization.

A. Positive B. Negative

C. Can‘t say

10. Give the rank of the services which provided by your bank.

A. Personalized services B. Wide branch networking

C. Customer services D. Core banking

E. Computerised banking F. Problem solving

11. Is your banks have a transactions tracking system?

A. Yes B. No

12. If yes, than is it helpful for you?

A. Yes B. No

13. What do you feel about the overall service quality of bank?

A. Excellent B. Very good

C. Good D. Bad

14. What you prefer for investment?

A. Fixed deposit B. Insurance

C. Mutual fund D. Shares

E. Others
89
15. Do you think your bank offers competitive interest rate in your
investment?

A. Yes B. No

16. If, yes then for what time of period do you like to invest?

A. Less than 6 month B.6 month to 1 year

C. 1 year to 3 year D.3year to 5 year

17. Do you trust on your bank?

A. Yes B. No

18. Would you recommend this bank to your friends, relatives, associates?

A. Yes B. No

Thank you 90
91