axis bank

Performance Appraisal of Axis Bank

CHAPTER I

BANKING IN INDIA

Without a sound and effective banking system in India it cannot have a healthy economy. The

banking system of India should not only be hassle free but it should be able to meet new

challenges posed by the technology and any other external and internal factors. For the past

three decades India's banking system has several outstanding achievements to its credit. The

most striking is its extensive reach. It is no longer confined to only metropolitans or

cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners

of the country. This is one of the main reasons of India's growth process.

HISTORY:

The first bank in India, though conservative, was established in 1786. From 1786 till today,

the journey of Indian Banking System can be segregated into three distinct phases. They are

as mentioned below:

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

· PHASE II - Nationalization of Indian Banks and up to 1991

· PHASE III - Indian Financial & Banking Sector Reforms after 1991.

PHASE I:

The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and

Bengal Bank.

The East India Company established

Bank of Bengal (1809),

Bank of Bombay(1840) and

Bank of Madras (1843) as independent units and called it Presidency Banks.

These three banks were amalgamated in 1920 and Imperial Bank of India was

established which started as private shareholders banks, mostly Europeans shareholders.

During the first phase the growth was very slow and banks also experienced periodic failures

between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline

the functioning and activities of commercial banks, the Government of India came up with


The Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949

as per amending Act of 1965 (Act No.23 of 1965). Reserve Bank of India was vested with

extensive powers for the supervision of banking in India as the Central Banking Authority.

During those day’s public has lesser confidence in the banks. As an aftermath deposit

mobilization was slow. Abreast of it the savings bank facility provided by the Postal

department was comparatively safer. Moreover, funds were largely given to the traders.

PHASE II:

Government took major steps in this Indian Banking Sector Reform after independence. In

1955, it nationalized Imperial Bank of India with extensive banking facilities on a large scale

especially in rural and semi-urban areas. Second phase of nationalization Indian Banking

Sector Reform was carried out in 1980 with seven more banks. This step brought 80% of the

banking segment in India under Government ownership.

The following are the steps taken by the Government of India to Regulate Banking

Institutions in the Country:

· 1949: Enactment of Banking Regulation Act.

· 1955: Nationalization of State Bank of India.

· 1959: Nationalization of SBI subsidiaries.

· 1961: Insurance cover extended to deposits.

· 1969: Nationalization of 14 major banks.

· 1971: Creation of credit guarantee corporation.

· 1975: Creation of regional rural banks.

· 1980: Nationalization of seven banks with deposits over 200 crores.

After the nationalization of banks, the branches of the public sector bank India raised to

approximately 800% in deposits and advances took a huge jump by 11,000%.Banking in the

sunshine of Government ownership gave the public implicit faith and immense confidence

about the sustainability of these institutions.


PHASE III

This phase has introduced many more products and facilities in the banking sector in its

reforms measure. In 1991, under the chairmanship of M Narasimham, a committee was set up

by his name which worked for the liberalization of banking practices.

The country is flooded with foreign banks and their ATM stations. Efforts are being put to

give a satisfactory service to customers. Phone banking and net banking is introduced. The

entire system became more convenient and swift. The financial system of India has shown a

great deal of resilience. It is sheltered from any crisis triggered by any external

macroeconomics shock as other East Asian Countries suffered. This is all due to a flexible

exchange rate regime, the Foreign Reserves are high, the capital account is not yet fully

convertible, and banks and their customers have limited foreign exchange exposure.

NATIONALIZED BANKS IN INDIA

Banking System in India is dominated by nationalized banks. The nationalization of banks in

India took place in 1969 by Mrs. Indira Gandhi the then prime minister. The major objective

behind nationalization was to spread banking infrastructure in rural areas and make available

cheap finance to Indian farmers. Fourteen banks were nationalized in 1969.

Before 1969, State of India (SBI) was only public sector bank in India. SBI was nationalized

in 1955 under the SBI Act of 1955. The second phase of nationalization of Indian banks took

place in the year 1980. Seven more banks were nationalized with deposits over 200 crores

PRIVATE BANKS

All the banks in India were earlier private banks. They were founded in the pre-independence

era to cater to the banking needs of the people. But after nationalization of banks in 1969

public sector banks came to occupy dominant role in the banking structure. Private sector

banking in India received a fillip in 1994 when Reserve Bank of India encouraged setting up

to private banks as part of its policy of liberalization of the Indian Banking Industry. 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.

Private Banks have played a major role in the development of Indian banking industry. They

have made banking more efficient and customer friendly. In the process they have jolted

public sector banks out of complacency and forced them to become more competitive.


COMPANY DESCRIPTIONV AXIS BANK

Axis Bank India, the first bank to begin operations as new private banks in 1994 after the

Government of India allowed new private banks to be established. Axis Bank was jointly

promoted by the Administrator of the specified undertaking of the

Unit Trust of India (UTI-I)

Life Insurance Corporation of India (LIC)

General Insurance Corporation Ltd.

Also with associates viz. National Insurance Company Ltd., the New India Assurance

Company, The Oriental Insurance Corporation and United Insurance Company Ltd.

EVOLUTION:

UTI was established in 1964 by an Act of Parliament; neither did the Government of India

own it nor contributes any capital. The RBI was asked to contribute one-half of its initial

capital of Rs 5 crore, and given the mandate of running the UTI in the interest of the unit-

holders. The State Bank of India and the Life Insurance Corporation contributed 15 per cent

of the capital each, and the rest was contributed by scheduled commercial banks which were

not nationalized then. This kind of structure for a unit trust is not found anywhere else in the

world. Again, unlike other unit trusts and mutual funds, the UTI was not created to earn

profits.

In the course of nearly four decades of its existence, it (the UTI) has succeeded phenomenally

in achieving its objective and has the largest share anywhere in the world of the domestic

mutual fund industry. '' The emergence of a "foreign expert" during the setting up of the UTI

makes an interesting story. The announcement by the then Finance Minister that the

Government of India was contemplating the establishment of a unit trust caught the eye of

Mr. George Woods, the then President of the World Bank. Mr. Woods took a great deal of

interest in the Indian financial system, as he was one of the principal architects of the ICICI,

in which his bank, First Boston Corporation Bank, had a sizeable shareholding. Mr. Woods

offered, through Mr. B.K. Nehru, who was India's Executive Director on the World Bank, the

services of an expert. The Centre jumped at the offer, and asked the RBI to hold up the

finalization of the unit trust

Proposals till the expert visited India. The only point Mr. Sullivan made was that the

provision to limit the ownership of units to individuals might result in unnecessarily

restricting the market for units. While making this point, he had in mind the practice in the

US, where small pension funds are an important class of customers for the unit trusts. The


Centre accepted the foreign expert's suggestion, and the necessary amendments were made in

the draft Bill. Thus, began corporate investment in the UTI, which received a boost from the

tax concession given by the government in the 1990-91 Budget. According to this

concession, the dividends received by a company from investments in other companies,

including the UTI, were completely exempt from corporate income tax, and provided the

dividends declared by the investing company were higher than the dividends received.

The result was a phenomenal increase in corporate investment which accounted for 57 per

cent of the total capital under US-64 scheme. Because of high liquidity the corporate sector

used the UTI to park its liquid funds. This added to the volatility of the UTI funds. The

corporate lobby which perhaps subtly opposed the establishment of the UTI in the public

sector made use of it for its own benefits later. The Government-RBI power game started

with the finalization of the UTI charter itself. The RBI draft of the UTI charter stipulated that

the Chairman will be nominated by it, and one more nominee would be on the Board of

Trustees. While finalizing the draft Bill, the Centre changed this stipulation. The Chairman

was to be nominated by the Government, albeit in Consultation with RBI. Although the

appointment was to be made in consultation with the Reserve Bank, the Government could

appoint a person of its choice as Chairman even if the Bank did not approve of him.Later on

in 2002 the UTI was renamed to Axis Bank.


BUSINESS DESCRIPTION

The Bank's principal activities are to provide commercial banking services which include

merchant banking, direct finance, infrastructure finance, venture capital fund, advisory,

trusteeship, forex, treasury and other related financial services.

CORPORATE PROFILE

Axis Bank is the third largest private sector bank in India. Axis Bank offers the entire

spectrum of financial services to customer segments covering Large and Mid Corporates,

SME, Agriculture and Retail Businesses.

The Bank has a large footprint of 1787 domestic branches (including extension counters) and

10,363 ATMs spread across 1,139 centres in the country as on 31st December 2012. The

Bank also has 7 overseas branches / offices in Singapore, Hong Kong, Shanghai, Colombo,

Dubai, DIFC - Dubai and Abu Dhabi.

Axis Bank is one of the first new generation private sector banks to have begun operations in

1994. The Bank was promoted in 1993, jointly by Specified Undertaking of Unit Trust of

India (SUUTI) (then known as Unit Trust of India),Life Insurance Corporation of India

(LIC), General Insurance Corporation of India (GIC), National Insurance Company Ltd., The

New India Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India

Insurance Company Ltd. The shareholding of Unit Trust of India was subsequently

transferred to SUUTI, an entity established in 2003.

With a balance sheet size of Rs.2,85,628 crores as on 31st March 2012, Axis Bank is ranked

9th amongst all Indian scheduled banks. Axis Bank has achieved consistent growth and stable

asset quality with a 5 year CAGR (2007-12) of 31% in Total Assets, 30% in Total Deposits,

36% in Total Advances and 45% in Net Profit.

The Corporate Office of Axis Bank is located at Axis House Mumbai. Axis House has

received the ‘Platinum’ rating awarded by the US Green Building Council for its

environment friendly facilities and reduction of carbon emission.


SUBSIDIARIES

The Bank has set up six wholly-owned subsidiaries:

Axis Securities and Sales Ltd. (Since renamed Axis Capital Ltd.)

Axis Private Equity Ltd.

Axis Trustee Services Ltd.

Axis Asset Management Company Ltd.

Axis Mutual Fund Trustee Ltd.

Axis U.K. Ltd.

PROMOTERS:

UTI Bank Ltd. has been promoted by the largest and the best Financial Institution of the

country,UTI. The Bank was set up IN 1993 with a capital of Rs. 115 crore, with

UTI contributing Rs. 100 crore,

LIC - Rs. 7.5 crore

GIC and its four subsidiaries contributing Rs. 1.5 crore each.

Axis Bank is today one of the most competitive and profitable banking franchise in India.

Which can be clearly seen by an analysis of its comprehensive portfolio of banking services

including Corporate Credit, Retail Banking, and Business Banking,Capital Markets, Treasury

and International Banking.

CAPITAL STRUCTURE

The Bank has authorized share capital of Rs. 500 crores comprising 500,000,000 equity

shares of Rs.10/- each. As on 31st March, 2012 the Bank has issued, subscribed and paid-up

equity capital of Rs. 413.20 crores, constituting 413,203,952 shares of Rs. 10/- each. The

Bank’s shares are listed on the National Stock Exchange and the Bombay Stock Exchange.

The GDRs issued by the Bank are listed on the London Stock Exchange (LSE).


BUSINESS OVERVIEW

An overview of various business segments

RETAIL BANKING

Axis Bank has developed a strong retail banking franchise over the years. Retail

Banking is one of the key drivers of the Bank’s growth strategy and it encompasses a

wide range of products delivered to customers through multiple channels. The Bank

offers a complete suite of products across deposits, loans, investment solutions,

payments and cards to help customers achieve their financial objectives. The Bank

focuses on product differentiation as well as a high level of customer-service to

enable it to build its retail business.

The Bank has continued to develop its risk management capabilities in Retail

business, both from a credit and operations risk standpoint. The branch channel is

effectively utilised for growing the retail assets business, with loan and card products

being offered to existing clientele.

The growth areas identified by the Bank are in the areas of residential mortgages and

passenger car loans. Of the total retail loans portfolio, 88.47% is in the form of

secured loans (residential mortgages and auto loans).

The Bank offers a wide range of payment solutions to its customers in the form of

debit cards, prepaid cards and credit cards. As on 31st March 2012, the Bank has a

base of approximately 124.99 lac debit cards, placing it among the leading players in

the country. The Bank is also a dominant player in prepaid cards. Axis Bank has over

2 lakh installed EDC machines - a highest for any bank in India.

Axis Bank Privée’, an exclusive private banking service offers advisory, investment

and lending solutions to its customers across 10 cities in the country. Privée follows a

client-focused investment process and a team-based approach for managing client

relationships. The relationship management team is supported by a team of product

specialists, client servicing teams, investment consultants and research experts. The

private banking business focuses on addressing both the personal and corporate

advisory needs of an entrepreneur or business family by bringing solutions offered by

various business groups across the retail and corporate businesses within the Bank

under an integrated platform.


The Bank launched ‘Axis Bank Wealth’ in 2008-09 targeting customers who have a

total relationship value with the Bank of between Rs.30 lacs and Rs.200 lacs. The

value proposition aims at delivering a ‘One Bank’ experience to such customers and

is positioned as a complete solution involving banking, investment and asset needs.

The Bank also distributes third party products such as mutual funds, Bank assurance

products (life and general insurance), online trading, Gold and Silver coins through its

branches.

The retail business of the Bank is supported by innovative services and alternate

channels which provide convenience of transactions to customers. These channels

include an extensive ATM network, internet banking, mobile banking and phone

banking.

International Retail

International Retail Business focuses specifically on the overseas sales channel, retail

foreign exchange business, remittances and retail businesses in overseas centres such

as Hong Kong and Sri Lanka, where the Bank has a presence. The products offered in

the area of retail Forex and remittances include travel currency cards, inward and

outward wire transfers, traveller’s cheques and foreign currency notes, remittance

facilities through online portals as well as through collaboration with correspondent

banks, exchange houses and money transfer operators. The Bank continued to have a

market leadership position in Travel Currency Cards with 11 currency options other

than INR being offered. The aggregate spends on Travel Currency Cards have crossed

USD 3 billion during the year 2012-13.

BUSINESS BANKING

Business Banking leverages the Bank’s strengths – a well distributed network of

branches and a strong technology platform to offer the best in transaction banking

services. The Bank offers a range of current account products and cash management

solutions across all business segments covering corporates, institutions, central and

state government ministries and undertakings as well as small and retail customers.

The Bank is one of the top CMS providers in the country. The Bank acts as an agency

bank for transacting government business offering services to various Central


Government Ministries / Departments and other State Governments and Union

Territories.

In order to provide solutions for business to effectively manage their funds flow, the

Bank has introduced liquidity management solution for corporate customers.

Similarly, a single window for all payment requirements was launched with several

advanced features such as setting a daily transaction limit for corporate users, setting

transaction limits for individual beneficiaries, prioritising payment methods, online

stop payment and cancellation facilities.

CORPORATE CREDIT

Axis Bank has built a strong corporate banking franchise across corporate, liability

and asset businesses. Axis Bank provides customized structuring and financing

solutions in a timely and comprehensive manner to its corporate customers with a

focus on building out a high quality credit portfolio. The Bank is a market leader in

Debt Capital Markets and loan syndication business across segments, sectors and

geographies. The Bank also provides full range of Treasury and Trade Finance

solutions to its corporate clients. The Bank offers technology enabled transaction

banking and cash management services to customers across Government, financial

institutions and corporate segments.

Bank’s infrastructure business includes project and bid advisory services, project

lending, debt syndication, project structuring and due diligence, securitisation and

structured finance. During the year the Bank launched its first ever ‘D&B-Axis Bank

Infra Awards 2011’ in association with Dun & Bradstreet. The award felicitates

leading infrastructure projects and infrastructure companies. In October 2010, the

Bank launched the Axis Infra Index (AII) with the primary objective of conveying a

sense of investment conditions in the infrastructure sector. The Index, as a composite

measure of investor confidence, comprises four components: flow of equity and debt

funds into infrastructure sectors, project completion and commencement of

operations, output related to infrastructure segments and regulatory and policy

developments relevant for the sector. It is designed to capture the evolving

fundamentals of the sector and is updated and disseminated on a quarterly basis.


TREASURY

The Bank has an integrated Treasury, covering both domestic and global markets,

which manages the Bank’s funds across geographies. The Bank’s treasury business

has grown substantially over the years, gaining market share and continuing to be

among the top five banks in terms of forex revenues. The Treasury plays an important

role in the sovereign debt markets and participates in the primary auctions held by

RBI. It also actively participates in the secondary government securities and corporate

debt market. The foreign exchange and money markets desk is an active participant in

the inter-bank/ FI space. The Bank has been exploring various cross-border markets to

augment resources and support customer cross-border trade. The Bank has emerged as

one of the leading providers of foreign exchange and trade finance services. It

provides a gamut of products for exports and imports as well as retail services. Its

cutting edge technology provides comprehensive and timely customer services.

INTERNATIONAL BANKING

The international operations of the Bank form a key enabler in its strategy to partner

with the overseas growth potential of its domestic clientele, who are venturing abroad

or require non-rupee funds for domestic projects. The Bank now has a foreign

network of four branches (Singapore, Hong Kong, DIFC (Dubai) and Colombo (Sri

Lanka)) and three representative offices (Shanghai, Dubai and Abu Dhabi) with

presence in six countries. While corporate banking, trade finance, treasury and risk

management solutions are the primary offerings through the branches at Singapore,

Hong Kong, DIFC (Dubai) and Colombo, the Bank also offers retail liability products

from its branches at Hong Kong and Colombo. Further, the Bank’s Gulf Co-operation

Council (GCC) initiatives in the form of representative offices in Dubai and Abu

Dhabi, and alliances with banks and exchange houses in the Middle East provide the

support for leveraging the business opportunities emanating from the large NRI

diaspora present in these countries.

SMALL AND MEDIUM ENTERPRISES

The Small and Medium Enterprises (SME) segment is a thrust area of the Bank. The

business approach towards this segment, which is expected to contribute significantly

to economic growth in future, is to build relationships and nurture the entrepreneurial

talent available. The relationship based approach enables the Bank to deliver value


through the entire life cycle of SMEs. The Bank has segmented its SME business in

three groups: Small Enterprises, Medium Enterprises and Supply Chain Finance. The

Bank extends working capital, project finance as well as trade finance facilities to

SMEs. The Bank has launched ‘Business Gaurav SME Awards’ in association with

Dun & Bradstreet to recognize and award achievers in the SME space.

INFORMATION TECHNOLOGY

Technology is one of the key enablers for business and delivery of customized

financial solutions. The Bank continues to focus on introducing innovative banking

services through investments in scalable and robust technology platforms that delivers

efficient and seamless services across multiple channels for customer convenience

and cost reduction. The Bank has also focused on improving the governance process

in IT. The Bank has launched the Business Process Management System, a reusable

system, which helps to build process efficiencies across various areas of operations.

The Bank has undertaken various steps in order to align itself towards RBI guidelines

on security and governance, including setting up of Board and Executive level

committees and working on IT operations and other key areas.

AGRICULTURE

The Bank continues to drive and expand the flow of credit to the agricultural sector.

401 branches of the Bank have dedicated officers for providing farm loans. Products

and solutions are created specifically with simple features and offered at affordable

rates to rural customers. The Bank has also adopted a value-chain approach, wherein

end-to-end solutions are being provided for various stakeholders. It also offers various

customized solutions to meet the regional requirements.

FINANCIAL INCLUSION

The Bank perceives financial inclusion (FI) not as a corporate social responsibility or

a regulator driven initiative but as a large business opportunity that lies untapped in

the rural and unexplored section of the urban market. Till March 2012, the Bank has

opened over 4.4 million No-Frills accounts in over 7,607 villages through a network

of 15 Business Correspondents and nearly 6,000 customer service points. The Bank


has a strong presence in the Electronic Benefit Transfer (EBT) space and has covered

around 6,800 villages across 19 districts and 9 states till date with over 3.7 million

beneficiaries.

In the urban space, the Bank has launched financial inclusion initiatives in Bangalore,

Chennai and Delhi targeting migrant labourers, slum dwellers and other under-banked

sector of the urban population and has opened over 3.5 lac No Frill accounts. The

Bank’s financial inclusion efforts are not merely restricted to launching of financial

inclusion initiatives and sourcing basic No Frill accounts, but to also promote the

savings habits and enable the customers to obtain customized solutions for their

financial needs.

The Bank also has a range of other customised products for this customer segment

like different variants of Axis Uday No Frills Savings Accounts, Chhota RD, Chhota

FD, and Chhota SIP. The Bank has been one of the first few banks to have tied-up

with telecom companies to offer remittance led financial inclusion services on the

mobile platform.

HUMAN RESOURCES

The Bank aims in creating and developing human capital to realise its vision of

nurturing a mutually beneficial relationship with its employees. Employee

engagement and learning, leadership development, enhancing productivity and

building multiple communication platforms thus occupied centre stage in the Bank’s

HR objective. The Bank continues to maintain a strong employer brand in the

financial services sector especially on the campuses of the premier business schools of

the country. In a major initiative, the Bank launched Axis Academic Interface

Program (AAIP) with Institutions to offer youngsters an understanding about the

financial services industry, and creating ‘Axis Bankers’. So far, the Bank has tied up

with Manipal University, NIIT, IFBI and Guwahati University.

Axis Bank has a young workforce with an average age of 29 years. The equal

opportunity employer policy of the Bank contributes strongly to the Axis Bank brand


RETAIL BANKING SERVICES:

The objective of the Retail Bank is to provide its target market customers a full range of

financial products and banking services, giving the customer a one-stop window for all

his/her banking requirements. The products are backed by world-class service and delivered

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

channels like

ATMs,

Phone Banking,

Net Banking

Mobile Banking.

TREASURY:

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

Foreign Exchange and Derivatives,

Local Currency Money Market & Debt Securities,

Equities.

With the liberalization of the financial markets in India, corporate 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.


DETAILED DESCRIPTION OF PRODUCTS AND SERVICES:

PERSONAL ACCOUNTS:

PRIME SAVINGS ACCOUNT

Axis Bank, we have always strived to pace our products with the growing needs of

our customers. The Prime Savings account has therefore been created with your

specific financial requirements in mind.

Wider Accessibility: 500 branches and one of the largest ATM networks in

India.

Greater Convenience: International Debit Card with withdrawal limit of Rs

40,000 per day facilitating transfer of funds, deposits of cash/cheques and

payment of insurance premium (LIC).

More Comfort: 24 hr Internet Banking and Tele Banking services

Enhanced Privileges: provide you a passbook and monthly statement of

account to keep you updated on all your transactions

Added Speed: 'At Par' cheque facility, you have the unique advantage to

encash your cheques as a local cheque at more than 330 centers where the

bank has a presence at no extra cost

Other Accounts in this category:

SALARY POWER

SMART PRIVILEGE ACCOUNT

SENIOR PRIVILEGE

PENSION SAVINGS ACCOUNT

DEPOSITS

Fixed Deposits

Axis Bank offers a simple reinvestment Fixed Deposits (at very competitive interest

rates), which can be opened with a minimum investment of Rs 10,000.

Reinvestment Deposits:

In a reinvestment deposit, the interest accrued to your deposit at the end of each

quarter is invested along with the principal. The tenure of your deposit must be a

minimum of 6 months.

Automatic Rollover:

As a Fixed Deposit holder, you can avail of the facility for automatic rollovers on


maturity (for both the principal and interest). You can select this option in the

Account Opening Document (AOD). The options available are:

RECURRING DEPOSITS

Power of compounding

Axis Bank's Recurring Deposit scheme will allow you with an opportunity to build up

Your savings through regular monthly deposits of fixed sum over a fixed period of

time.

Features:

Recurring deposits are accepted in equal monthly installments of minimum Rs 1,000

and

Above in multiples of Rs 500 thereafter. The fixed number of installments for which a

Depositor can opt are 12, 24, 36, 39, 48, 60, 63, 72, 84, 96, 108 and 120 months.

Transfer of Accounts - a recurring deposit account can be transferred from one office

of

the Bank to another branch.

Encash 24

The ENCASH 24 (Flexi Deposits) gives you the liquidity of a Savings Account

coupled

with high earnings of a Fixed Deposit. This is achieved by creating a Fixed Deposit

linked to your Savings Account providing you the following unique facilities.

LOANS

POWER HOUSE:

Axis Bank's Power Home puts an end to your Real Estate troubles.

Features:

Attractive interest rates

Balance Transfer facility

Doorstep service

Option to choose from floating rate or fixed rate Free Property & Personal accident

insurance.

PERSONAL POWER:


Features:

Loans for salaried and self employed individuals

Special loans for doctors, chartered accountants, engineers, architects, CS and ICWA

.

Loans are available from Rs 50,000 to Rs 20 lacs

Repayment tenures from 12 to 60 months

Attractive interest rates Free personal accident insurance cover with personal loan

Loans can be used for any purpose with no questions asked regarding the end use of

the loan A balance transfer facility available for those who want to retire any higher

cost debt Loans available against repayment track record of any existing auto,

personal or home loan Loans available against proof of life insurance policy or

premium receipts

Zero balance SB account facility for personal loan customer’s Simple procedure,

minimal documentation and quick approval.

ASSET POWER (Loan Against Property)

A take-over of your existing loan with refinancing is also possible with Asset Power.

Features

Attractive interest rates

Balance Transfer facility available with additional finance

Doorstep service

Four products under Asset Power

Loan against property - Residential

Loan against property - Commercial

Loan for purchase of commercial property

Take-over of existing loan with additional refinance (Balance Transfer)

Lease Rental Discounting (LRD)

CORPORATE BANKING

Working Capital Finance

. These products are designed to ease the liquidity position of the client and come with

a number of other facilities such as Internet Banking, Phone Banking etc.

Trade Services


Axis Bank has emerged as one of the leading banks in providing trade finance

services, providing a gamut of products for both exports and imports, with dedicated

Front-Desk and Specialists, speedy processing of documents and provide

comprehensive and timely MIS.

Structured Finance

Axis Bank provides tailor made solutions to meet our clients' requirements, while

mitigating the credit and price risk at the same time.

Supply Chain Management

Axis Bank provides integrated commercial and financial solutions to the supply and

distribution channels of a corporate. The products are designed to add value to supply

and distribution channels by providing unique solutions to meet their working capital

requirements.

CAPITAL MARKETS

Debt Solutions

Axis Bank is a leading provider of debt solutions in the form of bond or debenture issuances

and loan syndication. The Bank has successfully managed various debt issuances of mid and

large size which includes plain vanilla loans or bonds, and structured term loans to meet the

specific requirements of the clients and the projects. The Bank is the largest bond house in

the country and has been ranked first in respect of various domestic and international league

tables in respect of domestic debt issuances.

Equity Solutions

We are SEBI registered Category I Merchant Banker. The Bank's Capital Markets

Department has developed significant expertise in the area of public or rights issue

management, private placement of equity, overseas fund raising through FCCB and GDR and

debt syndication.

The Bank has acted as Lead Book Running Managers, co-arrangers and advisors to a number

of equity issuances or offers.

Trusteeship Services

Axis Bank Ltd. is a SEBI registered Debenture Trustee in the business of Debenture

Trusteeship, Security Trusteeship, Monitoring Agency and Facility Agency and

predominantly acts as Trustee to privately placed debt issuances, domestic borrowings and

external commercial borrowings.


At present the aggregate value of the Trusteeship portfolio is approximately Rs 1,

00,000 crores. The Trusteeship Group presently services over 150 clients including leading

public and private sector corporate as well as Banks and Financial Institutions including

international funding agencies in respect of various debt instruments issued within the

country and also for various secured Foreign Currency Convertible Bonds and External

Commercial Borrowings.

EDepository Services

With the introduction of settlement on T+2 basis, instruction for delivery of securities to

broker's account is required immediately after sale of securities. Hence time available for

submission of delivery instructions is limited. Axis Bank now permits submission of delivery

instructions in electronic form using Internet based service called Speed-e. Physical delivery

instructions need not be submitted in case you are submitting the instructions on Speed-e.

CAPITAL MARKET FUNDING:

Axis Bank is a clearing bank for following exchanges:

National Stock Exchange of India Limited (NSE)

The Stock Exchange, Mumbai (BSE)

National Commodity and Derivative Exchange (NCDEX)

Multi Commodity Exchange (MCX)

All the Settlement related activities for these exchanges are carried out through its

Capital Market Division, Fort Branch, and Mumbai.


COMPETETIVE ANALYSIS AND ADVANTAGES OF AXIS BANK:

Below in the table is shown a comparative analysis of AXIS Bank with the other major

players in the banking industry.

Bank

No of No of

Business

Per

Profit

Per

Capital

Reserve

s

Interes

t

Deposit

s

Investment

s

Branche

s

Employee

s

Employe

e

employe

e

&

Surplus Income

ICICI 563 24479 905 10 22556 13784 165083 717547

HDFC 515 14878 758 7.39 5300 4475 55797 28394

AXIS/

UTI 348 6553 1022 8.69 2886 2889 40114 21527

YES 6 4189 677.86 8.56 573 190 2910 1350

Kotak

Mahindra 78 3597 352 4.15 865 694 6566 2856

DATA: 2005-2006

From the above data it is clear that AXIS bank is among the top three private players in the

banking industry.


CHAPTER II

Literature Review

Prashanta Athma (2000), in his Ph D research submitted at Usmania University

Hyderabad, “Performance of Public Sector Banks – A Case Study of State Bank of

Hyderabad, made an attempt to evaluate the performance of Public Sector

Commercial Banks with special emphasis on State Bank of Hyderabad. The period of

the study for evaluation of performance is from 1980 to 1993-94, a little more than a

decade. In this study, Athma outlined the Growth and Progress of Commercial

Banking in India and. analyzed the trends in deposits, various components of profits

of SBH, examined the trends in Asset structure, evaluated the level of customer

satisfaction and compared the performance of SBH with other PSBs, Associate Banks

of SBI and SBI. Statistical techniques like Ratios, Percentages, Compound Annual

rate of growth and averages are computed for the purpose of meaningful comparison

and analysis. The major findings of this study are that since nationalization, the

progress of banking in India has been very impressive. All three types of Deposits

have continuously grown during the study period, though the rate of growth was

highest in fixed deposits. A comparison of SBH performance in respect of resource

mobilization with other banks showed that the average growth of deposits of SBH is

higher than any other bank group. Profits of SBH showed an increasing trend

indicating a more than proportionate increase in spread than in burden. Finally,

majority of the customers have given a very positive opinion about the various

statements relating to counter service offered by SBH.

Zacharias Thomas(1997)Ph D Thesis, ‘Performance effectiveness of Nationalised

Bank- A Case Study of Syndicate Bank’, submitted to Kochin University (1997),

Thesis studied the performance effectiveness of Nationalized Bank by taking

Syndicate Bank as case study in his Ph.D thesis. Thomas has examined various

aspects like growth and development of banking industry, achievements of Syndicate

Bank in relation to capital adequacy, quality of assets, Profitability, Social Banking,

Growth, Productivity, Customer Service and also made a comparative analysis of 'the

performance effectiveness of Syndicate Bank in relation to Nationalized bank. A

period of ten years from 1984 to 1993-94 is taken for the study. This study is


undertaken to review and analyze the performance effectiveness of Syndicate Bank

and other Nationalized banks in India using an Economic Managerial-Efficiency

Evaluation Model (EMEE Model) developed by researcher. Thomas in this study

found that Syndicate Bank got 5th Position in Capital adequacy and quality of assets,

15th in Profitability, 14th Position in Social Banking, 8th in Growth, 7th in

Productivity and 15th position in Customer Service among the nationalized banks.

Further, he found that five nationalized banks showed low health performance, seven

low priority performance and eleven low efficiency performance in comparison with

Syndicate Bank.

Singh R (2003), in his paper Profitability management in banks under deregulate

environment, IBA bulletin, No25, has analyzed profitability management of banks

under the deregulated environment with some financial parameters of the major four

bank groups i.e. public sector banks, old private sector banks, new private sector

banks and foreign banks, profitability has declined in the deregulated environment.

He emphasized to make the banking sector competitive in the deregulated

environment. They should prefer non-interest income sources.

Singla HK (2008), in his paper,’ financial performance of banks in India,’in

ICFAI Journal of Bank Management No 7, has examined that how financial

management plays a crucial role in the growth of banking. It is concerned with

examining the profitability position of the selected sixteen banks of banker index for a

period of six years (2001-06). The study reveals that the profitability position was

reasonable during the period of study when compared with the previous years. Strong

capital position and balance sheet place, Banks in better position to deal with and

absorb the economic constant over a period of time.

Das and Udaykumar Lal (2002), in his book Banking Reforms in Lead Bank

Scheme, (Deep and Deep Publication, new Delhi) was the critical evaluation of the

lead bank scheme in the light of banking sector reforms. Das in this book observed

that high level of NPAs, large number of un-remunerative branches, low productivity,

overstaff and archaic methods of operations have affected the profitability of public

sector banks. Das sincerely felt that the whole banking sector in India is to be


revolutionized to cope with the changing dimensions of the satellite one world.

Further, he felt that the backward areas should be given more funds for investment in

priority sectors and more and more people should be brought under its coverage and

the procedures of extending credit should be simplified and there should be least

hassle cost.

Subramanian and Swami (1994) in their paper, Comparative performance of

publc sector banks in india” Prjanan, Vol. XXII, have analyzed and compared the

efficiency in six public sector banks, four private sector and three foreign banks for

the year 1996-97. Operational efficiency is calculatedin terms of total business and

salary expenditure per employee. The analysis revealed that higher per employee

salary level need not result in poor efficiency and business per employee efficiency

co-efficient was also calculated. Among the PSBs, Bank of Baroda registered the high

efficiency and operating profit per employee. Among the private sector banks Indus

Bank followed by Citibank Registered highest and second highest operating profit per

employee respectively. However, among the Nationalized Banks there existed wide

variations in efficiency. Frequent changes are order of the day for the topics of this

nature. Therefore, one should rely on latest information. Some organizations like,

RBI, IBA, SBI and ICRA have carried out several research studies on various issues

relating to banking and exclusive banking journals/periodicals like Bank Quest, The

Bankers, RBI occasional papers, RBI bulletins and general magazines like Business

Today, Business India, Finance India, have been publishing papers on various aspects

like NPAs, capital adequacy, branch expansion, credit dispensation, deposit

mobilization, service quality, technology, performance evaluation, etc. Same studies

and papers suitable to this study are being reviewed here.

SBI Research Department in 2000, through its paper “Performance analysis of

27 Public sector banks” published in SBI monthly review performance, Vol

XXXIX, was prepared by Economic Research Department of State Bank of India,

is to analyze the Performance of the 27 Public Sector Banks for the year 1999-2000

vis-a-vis the preceding year. Selecting four different categories of indicators-Business

Performance, Efficiency, Vulnerability and labor productivity indicators, carried out

the analysis. Altogether, 39 indicators were selected for this purpose. For the purpose


of analysis, 27 PSBs disaggregated into four groups, namely, the SBI, ABs (7), the

SBGs (8), the NBs (19). During 1999-2000, the PSBs exhibited better show in terms

of several parameters studied above. Nevertheless, the problems of NPAs and capital

adequacy remain to be taken care of. Researchers in this paper opinioned that greater

operational flexibility and functional autonomy should be given to PSBs especially to

strengthen their capital base. Further, they felt that since net interest margin will

continue to remain compressed in a deregulated interest rate regime, a lot of effect

would have to be made to mitigate this through generation of non-interest income. As

far as NPAs are concerned, they believe' that, the outdated laws and regulations that

pose hindrance to banks in getting back their dues need to be suitably amended.

In a paper published in the Financial Express in 2004, titled “India’s Best

Banks” has been doing for several years through its annual exercise to evaluate and

rate Indian banks. They claim that this survey is a comprehensive one, which

evaluates the performance of private, public, Indian, and foreign Banks operating in

India. With the objective of making the comparison more meaningful, Banks were

categorized into Public Sector Banks, New Private Sector Banks and Foreign Banks.

Financial information for the year ending March 31st, 2002 and March 31, 2003

relating to each of the banks falling into the aforesaid categories was collected from

the data available from RBI. Five major criteria were identified against which the

banks were ranked. 'These criteria are (1) Strength and soundness (ii) Growth, (iii)

Profitability, (iv) Efficiency/Productivity, and (v) Credit quality. Considering the

current banking, industrial and over-all economic scenario, pertinent weights were

assigned to each of the major criteria. In the first category of "State-Run" or Public

Sector Banks, State Bank of Patiala and Andhra Bank is the top two. In the category

of best old private sector banks, the magazine ranks the Jammu and Kashmir Bank

and Karur Vysya Bank as the first best and second best. In the category of 'New'

Private Banks, HDFC as number one and ICICI Bank at number two. Finally, in the

category of Foreign Banks, the magazine ranks Standard Chartered Bank and Citi

Bank at the top two slots.


CHAPTER III


Management Performance appraisal is a method of evaluating the evaluating the

behavior of employees Performance appraisal or merit rating is one of the oldest and most

universal practices of in the work spot, Normally including both the quantitative and

qualitative aspects of job performance. Performance appraisal can be an effective

instrument for helping people grow and develop in organizational setting. Through a Well

organized appraisal system. An employee can create learning spaces for himself in an

organization.Effectively practiced and development oriented performance appraisal &

Review system, substantially contribute to the organization health. Organization cannot do

away with PERFORMANCE APPRAISAL. Some form of assessment of performance on a

continuing basis is essential for survival as well as growth of an organization. If and develop

yardsticks to measure it, if you want to improve performance. The performer has to be able to

understand it.

Performance appraisal is a systematic appraisal of the employee’s personality traits and

performance on the job and is designed to determine his contribution and relative worth to the

firm. A formal definition of performance appraisal is that, it is the systematic evolution of

the individual with respect to his or her performance on the job and his or her potential for

development“Performance appraisal is a formal structured system of measuring and

evaluating an employee’s job, related behaviors and out comes to discover how and why the

employee is presently performing on the job an how the employee can perform effectively in

the future so that the employee, organization and society all benefit.” Under performance

appraisal, we evaluate not only the performance of a worker but also his potential for

development.


COMPONENTS OF APPRAISAL EVALUATION

As we have seen performance evolutions can be made a verity of reasons- counseling,

promotion, research, salary, administration or a combinations of these therefore it is

necessary to begin by stating very clearly the objectives of the evolution program. Having

done this, the personal evolution system should address the questions, who, what, when,

where, how? Of performance appraisal

“WHO”

The appraisal can be accomplished by one or more individuals involving a combination of the

immediate supervisor, a higher level manager, a personal manager, the assessee’s peers, the

assessee himself and the assessee’s subordinates.

Usually the immediate supervisor must be interested with the task of rating the assessee

because he his most familiar with his work, and because he is also responsible for

recommending or approving personal action based on the performance appraisal. The staff

specialists, i.e. the personal officer also do appraisal.

They may advise the supervisor while evaluating their subordinates stressing the need for

evidence for making specific appraisal judgments and comparing a particular subordinate’s

evolution with those of others.

The appraisal of an individual may also be done by his peers such appraisal proves effective

in predicting future management success.

This approach has its disadvantage that the individual may rate himself excessively high then

it would be if his superior rated him. Many companies use rating committees to evaluate

employees. These committees consist of supervisors, peers, and subordinates.

“WHAT”

The “what” of the performance appraisal consists in appraising non supervisory employees

for their current performance and managers for potential? It also includes evaluation of

human trades.

“WHY”

The “why” of an appraisal is concerned with –

a) Creating and maintaining a satisfactory level of performance of employees in there

present jobs.


b) Highlighting employee needs and opportunities for personal growth and development.

c) Promoting understanding between the supervisor and his subordinates.

d) Providing a useful criterion for determining the validity of selection and training

methods and techniques and forming concrete measures for attracting individual of

higher caliber to the enterprise.

“WHEN”

The ‘when’ answers the query about the frequency of appraisal? It has been suggested in

formal counseling should occur continuously. The manager should discuss an employee’s

work as soon as possible after he has judged it.

“WHERE”

The where indicates the lo0cation where an employee may be evaluated. It is usually done at

the place of work or office of the supervisor.

“HOW”

Under how the company must decide what different methods are available and which of these

may be used for performance appraisal. Based on the comparative advantages and

disadvantages it is decided which method suit the propose best.

PURPOSE OF PERFORMANCE APPRAISAL

To create and maintain a satisfactory level of performance.

To provide information making decision for rewardingly of retrenchment etc.

To guide the job changes with the help to continuous ranking.

To contribute to the employee growth and development through training, self and

management development program.

To facilitate for testing and validating selection tests, interview techniques through

compeering there scores with performance appraisal ranks.

To facilitate fair and equitable compensation based on performance.

To help the superiors to have proper understanding about there subordinates.


WHAT SHOULD BE RATED

The seven criteria for assessing performance are:

1. Quality : the degree to which the process or result of carrying out an activity approach

perfection

2. Quantity : the amount produce expressed in monetary terms number of units, or

number of completed activity cycles

3. Timeliness: the degree to which an activity or an result produced

4. Cost effectiveness : the degree to which the use of the organizations resources (e.g.

human, monetary, technological, material) is maximized in the séance of waiting the

highest gain

5. Need for supervision : the degree to which a job performer can carry out job function

without supervisory assistance

6. Interpersonal impact : the degree to which performer promotes feeling of self –

esteem, goodwill and cooperation among co- workers and subordinates.

7. Training: need for training of improving his skills knowledge.

OBJECTIVE OFPERFORMANCE APPRAISAL

A good performance appraisal has following objectives:-

Help employee to Krishak Bharti Coperative Ltd. His weaknesses, and improve his

strengths, and thus enable him to improve his performance and that of the department.

Generate adequate feedback and guidelines from the reporting officers to the

employee.

Contribution to the growth and development of the employee thru helping in realistic

goal setting

Help identifying employees for the porpoise of motivating, training and developing

them.


METHODS OF APPRAISAL

Broadly all the approaches to appraisal can be classified into:-

Past-oriented:

Rating scales

Checklist

Forced choice method

Forced distribution

Critical incident method

Behaviorally anchored’ scales

Field review method

Annual confidential report

Essay method

Cost accounting approaches

Comparative evolution approach

Ranking method

Paired – comparison method

Future – oriented:

Management by objectives

Psychological appraisals

Assessment center

METODS OF PERFORMANCE APPRAISALS

Past Oriented Methods

Rating scales:

This is the simplest and the most popular technique for employee performance. The

typical rating – scales system consists of several numerical scales, each representing

job related performance criterion such as dependability, initiative output, attendance,

attitude, co-operation and the like. Each scales ranges from excellent to poor. The

rater checks the appropriate performance level on each criterion, and then computes

the employees total numerical scores.

Checklist:

In this method, the raters don’t evolutes employee performance, he supplies reports

about it and the personal department does the final rating a series of question are

presented concerning and employee to his behavior. The rater, then, to indicate if the


answer to a question about an employee in positive or negative. Generally , the

questions are on yes/no pattern.

Forced choice method:

In this the rater is given a series of statements about employee. These statements are

arranged in block of two or more, and the rater indicates which statements is most or

least disruptive of the employee

Critical incident method

The, approaches focus on certain critical behaviors of an employee that makes all the

difference between effective and non effective performance of a job. Such incidents

are recorded by the superiors as and when they occur.

Behaviorally Anchored Rating Scales

Sometimes this is called behavioral expectation scales, are rating scales whose scale

point are determined by statements of effective and ineffective behaviors. A rater

must indicates which behavior on each scale best describes an employee’s

performance.

Field review method

This is an appraisal by someone outside the assesses on department usually someone

from the corporate office or H.R department. The outsider review employee records

and holds interviews with the rate and his or her superior . the method is primarily

used for make promotional decision at the managerial level.

Annual confidential report method

In this method each employee is rated confidentially by one or more senior officers

for his performance. The report deals with the years work and general opinion of the

rater towards the employee. The main problem with his method is that it is not data

based and the appraisal is done the bases of impression.

Easy method


In the essay method, the rater must describe the employee with in a number of broad

categories such as-

a) The rater’s overall impression of the employee’s performance

b) The promotability of the employee

c) The jobs that the employee is now able or qualified to perform

d) The strength and weaknesses of the employee and the traning and the development

assistant required the employee.

Comparative Evolution Approaches

These are a collection of a different methods that compare one worker’s performance

with that his / her co-workers. Supervisors usually conduct comparative appraisals. As

these appraisals can results in a ranking from best to worst they are useful on deciding

merits-pay increases promotions and organizational rewards. We can classify it into-

a) Ranking method

In this, the superior his or her subordinates in the order of there merits starting from

the best to the worst,. This method is subject to the hallo and Recency effects,

although ranking by two or more raters can be averaged to help reduce biases. It

advantages include ease of administration and explanation.

b) Paired – Comparison method :-

Under this method the appraiser compares each employee with every other employee,

one at a time. The number of comparisons may be calculated with the help of formula,

which reads thus-:

N (N-1)/2

360 DEGREE PERFORMANCE APPRAISAL

Typical appraisers are: supervisors, peers, subordinates employees themselves users of

service and consultants. Performance appraisal by all these parties is called” 360 DEGREE

PERFORMANCE APPRAISAL”

1. Supervisors:

Supervisors include superiors of the employee other superiors having knowledge

about the work of the employee and department head or manager. General practices is

that immediate superiors appraise the performance, hitch in turn reviewed by the

departmental head /manager.

2. Peers:-


Peer appraisal may be reliable if the work group is stable over a reasonably long

period of time and perform tasks that require integration.

3. Subordinates:-

The concept of having superiors rated by

subordinates is being used in most organizations today especially in developed

countries. Such a novel method can be useful in other organizational settings too

provided the relationship between superiors and subordinates are coordinal.

4. Self-Appraisal:-

In individuals understand the objective they are expected to achieve and the

standard by which they are to be evaluated, they are to a great extend in the best

position to appraise their own performance.

5. Users of Service Customers:-

Employee performance in service organization relating to behaviors, promptness,

speed in doing the job and accuracy, can be better judged by the customers or users of

services.

6. Consultants:-

Sometimes consultants may be engaged for appraisal when employees or

employers not trust supervisor and management does not trust the self-appraisal a peer

appraisal or subordinate appraisal.

THE POST APPRAISAL INTERVIEW

This interview provides the employee the feedback information, and an opportunity to the

appraiser to employee his rating, the trail and behavior he has taken into consideration etc.

Further it helps both the parties to review standards, set new standards based on the reality

factors and helps the appraisal to offer his suggestion, help, guide and coach the employee for

his advancement . Thus, the post appraisal interview is designed to achieve the following the

objectives.

To let employee know where stand

To help employee do better job by clarifying what is expected of them


To plan opportunities for development and growth

To provide an opportunity for employees to express themselves on performance

related issue.

Thus, post appraisal interview is most helpful to the employee as well as his superior.

KEY ELEMENTS OF PA SYSTEMS

1) Performance Improvement:-

Performance feedback allows the employee, manager, and personnel

specialists to interview with appropriate action to improve performance.

2) Compensation Adjustments:-

Performance evaluations help decision – makers determine who should

receive pay raises.

Many firms grants part or all of their pay increase and bonuses based upon merit,

which is determine mostly through performance appraisal.

3) Placement Decisions:-

Promotions, transfers, and demotions are usually based on past on

anticipated performance.

4) Training and Development Needs:-

Poor performance may indicate the need for retraining. Likewise, good

performance indicate untapped potential that should be developed.

5) Career Planning And Development:-

Performance feedback guides career decisions about specific career paths.

6) Information Inaccuracies:-

Poor performance indicate errors in job analysis information’s human

resource plan, or other parts, or the personal management information’s systems.

Reliance on inaccurate information may have led to inappropriate hiring, training,

or counseling decisions.

STAGES OF PERFORMANCE APPRAISAL PROCESS


Performance Appraisal is a Nine-Step Process:-

At the First stage, performance standards are established based on job description

and job specification. The standard should be clear, objective and incorporate all the

factors.

The Second stage, is to inform these standards to all the employees including

appraisers.

1 PERFOMANCE STANDEARDS ARE ESTABLISHED

2 INFORM THESE STANDARDS

3 INSTRUCTION GIVEN FOR APPRAISAL

4 FINDIND OUT THE INFLUENCE

5 COMPARING THE PERFORMANCE

6 FINDING OUT DEVIATION

7 COMMUNICATING, THE ACTUAL PERFORMANCE

8 SUGGESTING NECESSARY CHANGES

9 FOLLOW-UP OF PERFORMANCE APPRAISAL REPORT


The Third stage is following the instruction given for appraisal measurement of

employee performance by the appraisers through observations interview, records and

reports

The Fourth stage is finding out the influence of various internal and external factors

on actual performance.

The Fifth stage is comparing performance with that of other employee and previous

performance .

The Sixth stage is comparing the actual performance with the standards and finding

out deviations.

The Seventh stage is communicating, the actual performance of the employee and

other employees doing the same job and discuss with him the reasons for positive or

negative deviations from the preset standards as the case may be.

The Eighth stage is suggesting necessary changes in standards, job analysis internal

and external environment.

The Ninth stage is fallow up performance appraisal report. This stage includes

guiding, counseling coaching and directing the employee or making arrangements for

the training and development of the employee.

PROBLEMS OF PERFORMANCE APPRAISAL

The major problem in performance appraisal :-

1) Rating Biases:-

The problem subjective measure (is that rating which is not verifiable

by others) has the opportunity for biases include:-

a) Halo effect

b) The error of central tendency

c) The leniency and strictness biases

d) Personal prejudice

e) The Recency effect

Halo Effect :-

It is the tendency of the raters to defend excessively on the rating of one trait

or behavioral consideration in rating all other traits or behavioral consideration.


One way of minimizing the halo effect is appraising all the employee by one trait

before going to rate basis of another trait.

The Error Central Tendency:-

Some raters fallow play safe policy in-rating-by-rating all the employee on

the middle point of the rating scale and they avoid rating the p[people at both the

extremes of the scale. They fallow play safe policy because of a answerability to

management or lack of knowledge about the job and person he is rating or least

interest in his job.

The leniency and Strictness:-

The leniency bias crops when some raters have an tendency to be liberal in

their rating by assigning higher rates consistently such rating do not several any

purpose equally damaging one is assigning consistently low rates.

d) Personal Prejudice : -

If the rater dislike any employee or any group, he may rate them at the

lower them which may distort the rating purpose affect the career of these

employee.

The Recency Effect:-

The raters generally remember the recent actions of the employee at the time

of rating and rate on the basis of this recent action.

1) Favorable or unfavorable rather than on the whole activities.

2) Failure of the superior in conducting performance appraisal and post

performance appraisal interview.

3) Most part of the appraisal is based on subjectivity.

4) Less reliability and validity of the performance appraisal technique.

5) Negative ratings affect interpersonal relations system.

WHY APPRAISAL TECHNIQUES PROVE FAILURE

Performance appraisal techniques techniques have often failed to give a correct assessment of

the employee. The causes of such failure are:-


1) The supervisor plays dual and conflicting role of the both the judge and the helper.

2) Too many objectives often cause confusion.

3) The supervisor feels that subordinate appraisal is not rewarding.

4) A considerable time gap exist between two appraisal programs.

5) The skills required for daily administration and employee development are in

conflict.

6) Poor communication keeps employees in the dark about what is expected of them.

7) There is the difference of opinion between a supervisor and a subordinate concerning

the liter’s performance.

8) Feedback on appraisal is generally unpleasant for both supervisor and subordinate.

9) Unwillingness on the part of supervisor to tell employee plainly how to improve their

performance.

About Employee:-

Safe and Friendly Work Environment-:

What sort of environment are you providing your employees.

Use of Employees-:

Is the business maximizing it’s use of employee to best suit the business needs?

Employee Knowledge-:

How familiar (what knowledge) are your employee with the running of

machine/equipments, products of the companies? Does employee require training?

Employee Happiness-:

Are the employees happy with their wages, rewards and hours of work given?


CHAPTER IV

Data Analysis

1. Are you aware of the objective of the performance appraisal system?

OPTIONSNO OF

RESPONDENT(SAMPLE SIZE 50)

PERCENTAGE

VERY MUCH42 84%

SOME WHAT7 14%

DON’T KNOW1 2%

very much some what don't know0

10

20

30

40

50

60

70

80

90

INTERPRITATION- 84% Employees are aware of the object of the performance appraisal system.


2. Performance appraisal helps the organization in achieving goal.

OPTIONSNOS OF RESPONDENT(Sample size 50)

PERCENTAGE

YES 38 76%

NO 10 20%

DON’T KNOW 2 4%

yes no don't know0

10

20

30

40

50

60

70

80

INTERPRITATION - 76% Employees say yes that performance

appraisal helps the organization in achieving goal.


3. Hold meeting in the beginning of the year to explain & clarify activity task & goals to be achieved.


PERCENTAGE

YES 39 78%

NO 11 22%

yes no0

10

20

30

40

50

60

70

80

90

INTERPRITATION-: 78% Employees say that yes organized meetings helps goal and task. While the other 22% employees that is not very much helpful.


4. Organization has to make a fixed duration for performance appraisal.

OPTIONSNOS OF RESPONDENT (Sample size 50)

PERCENTAGE

YES 40 80%

NO 10 20%

yes no0

10

20

30

40

50

60

70

80

90

INTERPRITATION -: 80% Employees agree with that is organization should have

to make a fixed duration for performance appraisal. While the other 20% employees

do not agree with this statement.


5. Satisfied for point allocation on the basis of KRA’s & managerial dimension.


PERCENTAGE

FULLY SATISFIED 20 40%

SATISFIED 26 52%

DISSATISFIED 2 4%

UNCERTAIN 2 4%

fully satisfied satisfied dissatisfied uncertain0

10

20

30

40

50

60

INTERPRITATION-: 40% Employees are fully satisfied for point allocation on the

basis of KRA’s and managerial dimension.


6. Performance appraisal affects the working efficiency of employees.


PERCENTAGE

YES 42 84%

NO 8 16%

yes no0

10

20

30

40

50

60

70

80

90

INTERPRITATION-: 84% Employees say that yes performance appraisal system affect the working efficiency of employee. While the other 16% employees do not agree with this statement.


7. Appraisal system is able to develop high result orientation approach.


PERCENTAGE

YES 47 94%

NO 3 6%

yes no0

10

20

30

40

50

60

70

80

90

100

INTERPRITATION-: 94% Employees say that yes the appraisal system is able to

develop high result orientation approach. While the other 6% employees do not agree

with us.


8. The systems will also contribution in potential appraisal.


PERCENTAGE

YES36 72%

NO10 20%

DON’T KNOW4 8%

yes no don't know0

10

20

30

40

50

60

70

80

INTERPRITATION-: 72% employees think that the systems will also Contribution

in potential appraisal.


9. Promotion process in the organization is based on –


PERCENTAGE

PERFORMANCE 2 4%

EXPERIENCE 6 12%

BOTH 42 84%

Performance experience both0

10

20

30

40

50

60

70

80

90

INTERPRITATION-: 4% employees say that promotion says that process in the organization is based on performance, 12% employees say that based on experience and 84% say both.


10 .The present performance appraisal system is transparent & Free from bias.


PERCENTAGE

YES 42 84%

NO 8 16%

YES NO0

10

20

30

40

50

60

70

80

90

INTERPRITATION-: 84% Employees agree with this statement that the

present performance appraisal system is transparent and free from bias.


11 .Satisfied with the current performance appraisal system.

OPTIONSNOS OF

RESPONDENT(Sample size 50)

PERCENTAGE

HIGHLY SATISFIED 27 54%

SATISFIED 18 36%

DISSATISFIED 1 2%

JUST SATISFIED 4 8%

Highly satisfied Satisfied Dissatisfied Just satisfied0

10

20

30

40

50

60

INTERPRITATION-: 54% Employees are highly satisfied with the current Performance

appraisal system. While 36% employees are satisfied with the current performance appraisal

system.


CHAPTER V

Conclusion

Axis Bank is one of the few clean (in terms of asset book), rapidly growing, profitable, &

competitive private-sector banks in India; thus it will be a major beneficiary of the favorable

banking environment. The Indian banking sector is in a sweet spot: consumer and corporate

lending is strong, asset quality is improving and fee-income opportunities are growing. We

expect this favorable environment to continue in the medium term but recognize that a key

challenge for banks will be funding growth. Looking at its profile, I believe Axis Bank stands

to gain disproportionately from existing opportunities in the sector. The bank has strong

technology & products, an expanding distribution franchise, adequate scale, a strong service

culture, and management enterprise -features that should help it stay ahead of the dominant

government banks to win market share.

Private players such as Axis Bank that offer a multitude of delivery channels and have an

integrated technology platform could potentially achieve comparable distribution reach in the

top 200 cities to government banks with substantially fewer branches. With a presence in the

top 150 cities, I think Axis Bank is very well positioned to rapidly reap the benefits of the

expanded reach by scaling up its retail foray.


Bibliography

www.infoindia.com

www.proindia.co.in

www.sipnsurf.com

www.7506259405.com

http://www.7506259405.com/

http://www.sipnsurf.com/

http://www.proindia.co.in/

http://www.infoindia.com/


Annexure

QUESTIONNAIRE

(PERFORMANCE APPRAISAL SYSTEM AT AXIS BANK.)

1) Are you aware of the objective of the performance appraisal system?

a) Very much

b) Some what

c) Don’t know

2) Performance appraisal helps the organization in achieving goal?

a) Yes

b) No

c) Can’t say

3) Do you hold meeting in the beginning of the explain & clarify activity task & goals to be

achieved?

a) Yes

b) No

4) Should organization have to make a fixed duration for performance appraisal?

a) Yes

b) No

5) To what extent are you satisfied for point allocation on the basis of KRA’s & managerial

dimension?

a) Fully satisfied

b) Satisfied

c) Dissatisfied

d) Uncertain


6) Do performance appraisal affect the working efficiency of employee?

a) Yes

b) No

7) Whether the appraisal system is able to able to develop high result

a) Yes

b) No

8) Do you think that the system wills also contribution in potential appraisal?

a) Yes

b) No

c) Can’t say

9) Promotion process in the organization is based on-

a) Performance

b) Experience

c) Both

10) Do you think that the present that the present performance appraisal system is transparent &

free bias?

a) Yes

b) No

11) Are you satisfied with the current performance appraisal system?

a) Highly satisfied

b) Satisfied

c) Just satisfied

d) Dissatisfied

axis bank

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