“The Comparative Study Of Factors Influencing Employee

Retention In Few Selected Private Banks At Gurdaspur

In partial fulfillment of the

Requirements for the Award of Degree of

Master of Business Administration

Submitted by:

Navdeep Kaur

Submitted To:

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CERTIFICATE

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DEPARTMENT OF MANAGEMENT

DECLARATION

I, "NAVDEEP KAUR”, hereby declare that the work presented by me is genuine work

done originally by me and has not been published or submitted elsewhere for the

requirement of a degree program me. Any literature, data or works done by others and

cited within this dissertation has been given due acknowledgement and listed in the

reference section.

_______________________

(Student's name & Signature)

_______________________

(Registration No.)

Date:__________________

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ACKNOWLEDGEMENTACKNOWLEDGEMENT

My immense faith in and gratitude to the helping hands continue to growMy immense faith in and gratitude to the helping hands continue to grow

unabated. The way they have borne with me is a reason strong enough tounabated. The way they have borne with me is a reason strong enough to

extend my heartfelt thanks with immense regards to them.extend my heartfelt thanks with immense regards to them.

I am gratified to Mr. Tarun Vashisht I am gratified to Mr. Tarun Vashisht ((Sr. Lecturer (HR & OB) LSB, LPU)

for bearing confidence in my abilities and giving me an opportunity tofor bearing confidence in my abilities and giving me an opportunity to

pursue this project. This project would not have been possible without hispursue this project. This project would not have been possible without his

cooperation. I have tried in to put in the best of my efforts to make thecooperation. I have tried in to put in the best of my efforts to make the

project quite comprehensive, illustrative and informative.project quite comprehensive, illustrative and informative.

NAVDEEP KAURNAVDEEP KAUR

MBA MBA

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INDEX

(a)Introduction to subject

What is employee retention?

Myths related to employee retention

Strategies related to employee retention

Factors that affect employee retention

Importance of employee retention

(b) Objectives,

(c) Methodology

Chapter -2: Introduction to the banks

Chapter -3: Review of Literature

Chapter -4: Data Interpretation

Chapter -5: Findings, Conclusion, recommendations

Chapter -6: Miscellaneous (references)

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EXECUTIVE SUMMARY

Corporate Training in an organization is an integral and inseparable part of technical

education syllabi; it provides an opportunity and practical exposure to the students who

are the future professional captains or leaders of the industry. There is a definite gap

between theoretical knowledge/information imparted in classes and practical

happenings/ground realities in any industrial organization. This gap is bridged by

practical training, which also strengthens the process of communication between the

future professionals and corporate world .Someone has rightly said that practical

experience is far better and closer to the real world than more theoretical exposure. The

practical experience helps the students to view the real business world closely, which in

turn widely influences their perceptions and arguments their understanding of the real

situation

The topic of my project is “comparative study of factors influencing employee retention

in few selected private banks at GURDASPUR”. As for collecting information regarding

factors influencing employee retention; I have planned to concern the four banks such as

ICICI, AXIS, KOTAK MAHINDRA and HDFC banks. And the objectives of my study are

as follows:

1. To develop a hierarchy of factors influencing employee retention in banks

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2. To compare the importance of different factors governing employee retention in

private banks

3. To study the different factors governing employee retention in light of demographic

factors

In this project, I have considered five factors compensation, development and career

options, work life balance ,recognition ,involvement in decision making .I have prepared

a questionnaire for collecting the information regarding which factor influenced

employee retention in these selected banks. Employees are very much cooperative as they

fill the questionnaire any provide me information which is required by me in order to

complete my project.

I have taken sample size of 100 employees from these selected banks. I have taken

sample size of 25 employees from each bank after collecting the data what I have found

is that out of four selected banks highest rank (R1) is given to work life balance and

lowest rank (R5) is given to recognition in order of importance in retaining the

employees. And on the other hand,(R1) is given to compensation and (R5) is given to

involvement in decision making in order of makes the employees dissatisfied to stay with

the bank due to lack of given factor.

And these four banks are well known brand in itself. They have got a good position in

market .But still there are some factors due to which employees are not satisfied with the

banks. Finally, I have got the data and information and find the result up to the mark.

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INTRODUCTION

Employee Retention involves taking measures to encourage employees to remain in the

organization for the maximum period of time. Corporate is facing a lot of problems in

employee retention these days. Hiring knowledgeable people for the job is essential for

an employer. But retention is even more important than hiring. There is no dearth of

opportunities for a talented person. There are many organizations which are looking for

such employees. If a person is not satisfied by the job he’s doing, he may switch over to

some other more suitable job. In today’s environment it becomes very important for

organizations to retain their employees The top organizations are on the top because they

value their employees and they know how to keep them glued to the organization.

.Employee retention is a process in which the employees are encouraged to remain with

the organization for the maximum period of time or until the completion of the project.

Employee retention is beneficial for the organization as well as the employee. Employees

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today are different. They are not the ones who don’t have good opportunities in hand. As

soon as they feel dissatisfied with the current employer or the job, they switch over to the

next job. It is the responsibility of the employer to retain their best employees. If they

don’t, they would be left with no good employees. A good employer should know how to

attract and retain its employees. The process of retention is not as easy at it seems. There

are so many tactics and strategies used in retention of employees by the organizations.

The basic purpose of these strategies should be to increase employee satisfaction, boost

employee morale hence achieve retention. But some times these strategies are not used

properly or even worse, wrong strategies are used. Because of which these strategies fail

to achieve the desired results.

There are many myths related to the employee retention process. These myths exist

because the strategies being used are either wrong or are being used from a long time:.

1).Employees leave an organization for more pay: Money may be the motivating factor

for some but for many people it is not the most important factor. Money matters more to

the low-income-employees for whom it’s a survival issue. Money can make an employee

stay in an organization but not for long. The factors more important than money are job

satisfaction, job responsibilities, and individual’s skill development. The employers

should understand this and work out some other ways to make employees feel satisfied.

When employees leave, management tries to retain them by offering more money. But

instead they should try to figure out the main reason behind it. Issues that are mainly the

cause of dissatisfaction are organization’s policies and procedures, working conditions,

relationship with the supervisor and salary, etc. For such employees, achievement,

growth, respect, recognition, is the main concern

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2). Incentives can increase productivity: Incentives can surely increase productivity but

not for long term. Cash incentives, volume work targets and speed awards are old

management beliefs. They can generate work speedily and in volumes but can’t boost

employee commitment. Rather speed can hamper the quality of work produced. What

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really glues employees to their work and organization is quality work, meaningful

responsibilities, recognition, respect, growth opportunities and friendly supervisors

3). Loyalty is a thing of the past: Employees can be loyal but what they need is an

employer for whom they can be loyal. There is no reason for the employee to hop jobs if

he’s satisfied with the employer.

4.) Taking measures to increase employee satisfaction will be expensive for the

organizations: The things actually required improving employee satisfaction like respect,

career growth and development, appreciation, etc. can’t be bought. They are free of cost.

An employer or management that reacts well to the employee’s ideas and suggestions is

enough for the employees to be retained.

Employee Retention Strategies

The basic practices which should be kept in mind in the employee retention strategies are:

1) Hire the right people in the first place.

2) Empower the employees: Give the employees the authority to get things done

3) Make employees realize that they are the most valuable asset of the organization.

4) Have faith in them, trust them and respect them.

5) Provide them information and knowledge.

6) Keep providing them feedback on their performance.

7) Recognize and appreciate their achievements

8).Keep their morale high.

9) Create an environment where the employees want to work and have fun.

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These practices can be categorized in 3 levels: Low, medium and high level.

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Importance of Employee Retention:

The process of employee retention will benefit an organization in the following

ways:

1. The Cost of Turnover: The cost of employee turnover adds hundreds of

thousands of money to a company's expenses. While it is difficult to fully

calculate the cost of turnover (including hiring costs, training costs and

productivity loss), industry experts often quote 25% of the average employee

salary as a conservative estimate.

2. Interruption of Customer Service: Customers and clients do business with a

company in part because of the people. Relationships are developed that

encourage continued sponsorship of the business. When an employee leaves, the

relationships that employee built for the company are severed, which could lead

to potential customer loss.

3. Turnover leads to more turnovers: When an employee terminates, the effect is

felt throughout the organization. Co-workers are often required to pick up the

slack. The unspoken negativity often intensifies for the remaining staff.

4. Goodwill of the company: The goodwill of a company is maintained when the

attrition rates are low. Higher retention rates motivate potential employees to join

the organization.

5. Regaining efficiency: If an employee resigns, then good amount of time is lost in

hiring a new employee and then training him/her and this goes to the loss of the

company directly which many a times goes unnoticed. And even after this you

cannot assure us of the same efficiency from the new employee.

Factors That Affect Employee Retention

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Most managers understand the importance of employee retention and its impact on the

overall health and vitality of an organization. The importance of retaining top

organizational talent will only increase over the coming years as the massive cohort of

baby boomers begin to reach retirement age making it easy for younger employees to find

work.In a previous article we identified some useful tips to help improve employee

retention in your organization. Given the importance of employee retention, we have

compiled another list of important factors that can affect employee retention in your

organization.

1. Offer a competitive compensation package –

Any team member wants to feel that he or she is being paid appropriately and fairly for

the work he or she does. Be sure to research what other companies and organizations are

offering in terms of salary and benefits. It is also important to research what the regional

and national compensation averages are for that particular position. You can be sure that

if your compensation package is not competitive, team members will find this out and

look for employers who are willing to offer more competitive compensation packages.

2. Balance work and personal life –

Family is incredibly important to team members. When work begins to put a significant

strain on one's family no amount of money will keep an employee around. Stress the

importance of balancing work and one's personal life. Small gestures such as allowing a

team member to take an extended lunch once a week to watch his son's baseball game

will likely be repaid with loyalty and extended employment with an organization.

3. Development and career options –

Offer opportunities for team members to acquire new skills and knowledge useful to the

organization. If an employee appears to be bored or burned out in a current position offer

to train this individual in another facet of the organization where he or she would be a

good fit.

4. RECOGNITION

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Employee recognition is not just a nice thing to do for people. Employee recognition is a

communication tool that reinforces and rewards the most important outcomes people

create for your business. When you recognize people effectively, you reinforce, with your

chosen means of recognition, the actions and behaviors you most want to see people

repeat. An effective employee recognition system is simple, immediate, and powerfully

reinforcing.When you consider employee recognition processes, you need to develop

recognition that is equally powerful for both the organization and the employee. You

must address five important issues if you want the recognition you offer to be viewed as

motivating and rewarding by your employees and important for the success of your

organization.

5. Involvement in decision making

Employee involvement is creating an environment in which people have an impact on

decisions and actions that affect their jobs. Employee involvement is not the goal nor is it

a tool, as practiced in many organizations. Rather, employee involvement is a

management and leadership philosophy about how people are most enabled to contribute

to continuous improvement and the ongoing success of their work organization.

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OBJECTIVE:

1. To develop a hierarchy of factors influencing employee retention in banks

2. To compare the importance of different factors governing employee retention in

private banks

3. To study the different factors governing employee retention in light of demographic

factors

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Research Methodology

Methodology:

There is no significant difference in the importance of factors influencing employee

retention

There is no significant difference in importance of factors influencing employee retention

among targeted banks.

There is no significant difference in importance of factors influencing employee retention

vise versa age of employees

There is no significant difference in importance of factors influencing employee retention

gender of employees

There is no significant difference in importance of factors influencing employee retention

work experience of employees

Research Design: Methodology is the proper use of different methods to collect the

required data, which is to help us in the analysis and to arrive at the ultimate conclusion.

The research design constitutes the blue print for collection s, compilations and analysis

of data. Salter defined research design as” The arrangement of condition for collection

and analysis of data in a manner that aims to combine relevance to the search purpose

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with economy in procedure.” Hence, this part explains the sampling procedure, sample

size, data collection, method analysis and limitations of the study.

Sample Design: A sample of bank employees from different hierarchical level chosen

from private sector banks following Quota (non-random) sampling technique..

Sample size: sample size is of 100 employees (25 from each bank) will be taken in

suitable rate from hierarchical level.

SAMPLE AREA

Sample area means area in which research is conducted. For my project urban is

undertaken. For studying urban market areas covered is Gurdaspur.

Data collection:

For the research, a study was conducted and for the same, data was collected from both

Primary as well as Secondary sources.

Primary data :

Questionnaire

Secondary Data :

Secondary Data are those, which have already been collected by someone else and which

have already been passed through the statistical process. This data is collected from the

following sources.

Reports

Magazines

Journals

Newspapers

Internet websites

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Data analysis:

The data collected thereby will be analyzed by using different statistical tools like Chi-

square, factor analysis & Mann- whiteness; the data will be analyzed through a statistical

package using SPSS. The data will be plotted analyzed on population parameter,

compared with norms, and the result will be interpreted.

Hypothesis if any will be validated by hypothesis testing and conclusion will be drawn.

Discussion will be made on the basis similar kinds of studies done on similar area and the

differences will highlighted

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INTRODUCTION OF BANKS

HDFC BANK

Introduction

The Housing Development Finance Corporation Limited (HDFC) was amongst the first

to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a

bank in the private sector, as part of the RBI's liberalization of the Indian Banking

Industry in 1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank

Limited', with its registered office in Mumbai, India. HDFC Bank commenced operations

as a Scheduled Commercial Bank in January 1995.

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, a strong market reputation, large

shareholder base and unique consumer franchise, HDFC was ideally positioned to

promote a bank in the Indian environment.

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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 four core values - Operational Excellence, Customer Focus, Product Leadership

and People.

Capital Structure

The authorized capital of HDFC Bank is Rs.450 crore (Rs.4.5 billion). The paid-up

capital is Rs.311.9 crore (Rs.3.1 billion). The HDFC Group holds 22.1% of the bank's

equity and about 19.4% of the equity is held by the ADS Depository (in respect of the

bank's American Depository Shares (ADS) Issue). Roughly 31.3% of the equity is held

by Foreign Institutional Investors (FIIs) and the bank has about 190,000 shareholders.

The shares are listed on the The Stock Exchange, Mumbai and the National Stock

Exchange. The bank's American Depository Shares are listed on the New York Stock

Exchange (NYSE) under the symbol "HDB".

Times Bank Amalgamation

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. 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. The

acquisition added significant value to HDFC Bank in terms of increased branch network,

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expanded geographic reach, enhanced customer base, skilled manpower and the

opportunity to cross-sell and leverage alternative delivery channels.

Distribution Network

HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable network

of over 748 branches spread over 316 cities across India. All branches are linked on an

online real-time basis. Customers in over 120 locations are also serviced through

Telephone Banking. The Bank's expansion plans take into account the need to have a

presence in all major industrial and commercial centers 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 the centres where the NSE/BSE has a strong and active member

base. The Bank also has a network of about over 1,740 networked ATMs across these

cities. Moreover, 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

Mr. Jadish Capoor took over as the bank's Chairman in July 2001. Prior to this, Mr.

Capoor was a Deputy Governor of the Reserve Bank of India. 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.

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.

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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.

Technology

HDFC Bank operates in a highly automated environment in terms of information

technology and communication systems. All the bank's branches have online

connectivity, which enables the bank to offer speedy funds transfer facilities to its

customers. Multi-branch access is also provided to retail customers through the branch

network and Automated Teller Machines (ATMs).

The Bank has made substantial efforts and investments in acquiring the best technology

available internationally, to build the infrastructure for a world class bank. In terms of

software, the Corporate Banking business is supported by Flex cube, while the Retail

Banking business by Fin ware, both from i-flex Solutions Ltd. The systems are open,

scaleable and web-enabled.

The Bank has prioritized its engagement in technology and the internet as one of its key

goals and has already made significant progress in web-enabling its core businesses. In

each of its businesses, the Bank has succeeded in leveraging its market position, expertise

and technology to create a competitive advantage and build market share.

Businesses

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HDFC Bank offers a wide range of commercial and transactional banking services and

treasury products to wholesale and retail customers. The bank has three key business

segments:

Wholesale Banking Services

The Bank's target market ranges from large, blue-chip manufacturing companies in the

Indian corporate to 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 recognized as a leading provider of cash management and

transactional banking solutions to corporate customers, mutual funds, stock exchange

members and banks.

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 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

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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 September 30, 2005, the

bank had a total card base (debit and credit cards) of 5.2 million cards. The Bank is also

one of the leading players in the "merchant acquiring" business with over 50,000 Point-

of-sale (POS) terminals for debit / credit cards acceptance at merchant establishments.

Within this business, the bank has three main product areas - Foreign Exchange and

Derivatives, Local Currency Money Market & Debt Securities, and Equities. With the

liberalization 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.

Ratings

Credit Rating

The Bank has its deposit programs rated by two rating agencies - Credit Analysis &

Research Limited (CARE) and Fitch Ratings India Private Limited. The Bank's Fixed

Deposit programmed 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)

programmed "PR 1+" which represents "superior capacity for repayment of short term

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promissory obligations". Fitch Ratings India Pvt. Ltd. (100% subsidiary of Fitch Inc.) has

assigned the "tAAA ( ind )" rating to the Bank's deposit programmed, with the outlook on

the rating as "stable". This rating indicates "highest credit quality" where "protection

factors are very high".

The Bank also has its long term unsecured, subordinated (Tier II) Bonds rated by CARE

and Fitch Ratings India Private Limited and its Tier I perpetual Bonds and Upper Tier II

Bonds rated by CARE and CRISIL Ltd. CARE has assigned the rating of "CARE AAA"

for the subordinated Tier II Bonds while Fitch Ratings India Pvt. Ltd. has assigned the

rating "AAA (ind)" with the outlook on the rating as "stable". CARE has also assigned

"CARE AAA [Triple A]" for the Banks Perpetual bond and Upper Tier II bond issues.

CRISIL has assigned the rating "AAA / Stable" for the Bank's Perpetual Debt

programmed and Upper Tier II Bond issue. 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 has been assigned a

'CRISIL GVC Level 1' rating 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.

CORPORATE GOVERNANCE

The Bank believes in adopting and adhering to best recognized corporate governance

practices and continuously benchmarking itself against each such practice. The Bank

understands and respects its fiduciary role and responsibility to shareholders and strives

25

hard to meet their expectations. The Bank believes that best board practices, transparent

disclosures and shareholder empowerment are necessary for creating shareholder value.

The Bank has infused the philosophy of corporate governance into all its activities. The

philosophy on corporate governance is an important tool for shareholder protection and

maximization of their long term values. The cardinal principles such as independence,

accountability, responsibility, transparency, fair and timely disclosures, credibility etc.

serve as the means for implementing the philosophy of corporate governance in letter and

spirit.

Rating

The bank was amongst 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 has been assigned a

'CRISIL GVC Level 1' rating for the second consecutive year, 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.

Composition of the Board

The Composition of the Board of Directors of the Bank is governed by the Companies

Act, 1956, the Banking Regulation Act, 1949 and the listing requirements of the Indian

Stock Exchanges where the securities issued by the Bank are listed. The Board has a

strength of 9 Directors as on March 31, 2007. All Directors other than Mr Aditya Puri are

non-executive directors. The Bank has four independent directors and five non-

independent directors. The Board consists of eminent persons with considerable

professional expertise and experience in banking, finance, agriculture, small scale

industries and other related fields.

26

None of the Directors on the Board is a member of more than 10 Committees and

Chairman of more than 5 Committees across all the companies in which he/she is a

Director. All the Directors have made necessary disclosures regarding Committee

positions occupied by them in other companies.

Mr. Jag dish Capoor, Mr. Aditya Puri, Mr. Keki Mistry, Mrs. Renu Karnad and Mr.

Vineet Jain are non-independent Directors on the Board.

Mr. Arvind Pande, Mr. Ashim Samanta, Mr. Gautam Divan and Mr. C. M. Vasudev are

independent directors on the Board.

Mr. Keki Mistry and Mrs. Renu Karnad represent HDFC Limited on the Board of the

Bank.

Mr. Vineet Jain is nominated by the Bennett, Coleman Group on the Board of the Bank.

The Bank has not entered into any materially significant transactions during the year,

which could have a potential conflict of interest between the Bank and its promoters,

directors, management and/or their relatives, etc. other than the transactions entered into

in the normal course of business. The Senior Management have made disclosures to the

Board confirming that there are no material, financial and/or commercial transactions

between them and the Bank which could have potential conflict of interest with the Bank

at large.

Board Committees

The Board has constituted committees of Directors to take informed decisions in the best

interest of the Bank. These committees monitor the activities falling within their terms of

reference. Various committees of the Board were reconstituted during the year due to

resignation of Mr. Bobby Parikh and induction of additional directors namely; Mr. C. M.

Vasudev and Mr. Gautam Divan

The Board's Committees are as follows:

• Audit and Compliance Committee

• Compensation Committee

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• Investors' Grievance (SHARE) Committee

• Risk Monitoring Committee

• Credit Approval Committee

• The Premises Committee

• Nomination Committee

• Fraud Monitoring Committee

• Customer Service Committee

• Audit and Compliance Committee

The Audit and Compliance Committee of the Bank is chaired by Mr. Arvind Pande. The

other members of the Committee are Mr. Ashim Samanta, Mr. C. M. Vasudev and Mr.

Gautam Divan. Mr. Bobby Parikh and Dr. V. R. Gadwal ceased to be members of the

Committee w. e. f. October 17, 2006 and March 14, 2007 respectively. Mr. C. M.

Vasudev and Mr. Gautam Divan were inducted as members of the Committee w.e.f.

October 17, 2006. All the members of the Committee are independent directors and Mr.

Gautam Divan is a financial expert.

The Committee met 9 (nine) times during the year.

The terms of reference of the Audit Committee are in accordance with Clause 49 of the

Listing Agreement entered into with the Stock Exchanges in India, and interalia includes

the following:

Overseeing the Bank's financial reporting process and ensuring correct, adequate and

credible disclosure of financial information;

Recommending appointment and removal of external auditors and fixing of their fees;

Reviewing with management the annual financial statements before submission to the

Board with special emphasis on accounting policies and practices, compliance with

accounting standards and other legal requirements concerning financial statements;

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Reviewing the adequacy of the Audit and Compliance functions, including their policies,

procedures, techniques and other regulatory requirements; and

Any other terms of reference as may be included from time to time in clause 49 of the

listing agreement. The Board has also adopted a charter for the audit committee in

connection with certain United States regulatory standards as the Bank's securities are

also listed on New York Stock Exchange.

Compensation Committee

The Compensation Committee reviews the overall compensation structure and

policies of the Bank with a view to attract, retain and motivate employees, consider grant

of stock options to employees, reviewing compensation levels of the Bank's employees

vis-à-vis other banks and industry in general.

The Bank's compensation policy is to provide a fair and consistent basis for motivating

and rewarding employees appropriately according to their job / role size, performance,

contribution, skill and competence.

Mr. Jag dish Capoor, Mr. Ashim Samanta and Mr. Gautam Divan are the members of the

Committee.

Mr. Bobby Parikh and Dr. V. R. Gadwal ceased to be members of the Committee w. e. f.

October 17, 2006 and March 14, 2007 respectively. The Committee is chaired by Mr.

Jagdish Capoor. All the members of the Committee other than Mr. Capoor are

independent directors.

The Committee met 3 (three) times during the year.

Investors' Grievance (SHARE) Committee

29

The Committee approves and monitors transfer, transmission, splitting and consolidation

of shares and bonds and allotment of shares to the employees pursuant to Employees

Stock Option Scheme. The Committee also monitors redressal of complaints from

shareholders relating to transfer of shares, non-receipt of Annual Report, dividends etc.

The Committee consists of Mr. Jagdish Capoor, Mr. Aditya Puri and Mr. Gautam Divan.

Mr. Gautam Divan was inducted as member of the Committee w.e.f. October 17, 2006.

The Committee is chaired by Mr. Capoor and met 13 times during the year. The powers

to approve share transfers and dematerialization requests have been delegated to

executives of the Bank to avoid delays that may arise due to non-availability of the

members of the Committee.

As on March 31, 2007, 54 instruments of transfer representing 4571 shares were pending

and since then the same have been processed. The details of the transfers are reported to

the Board of Directors from time to time.

During the year, the Bank received 206 complaints from shareholders, which have been

attended to.

Risk Monitoring Committee

The committee has been formed as per the guidelines of Reserve Bank of India on the

Asset Liability Management / Risk Management Systems. The Committee develops

Bank's credit and market risk policies and procedures, verify adherence to various risk

parameters and prudential limits for treasury operations and reviews its risk monitoring

system. The committee also ensures that the Bank's credit exposure to any one group or

industry does not exceed the internally set limits and that the risk is prudentially

diversified.

The Committee consists of Mrs. Renu Karnad, Mr. Aditya Puri and Mr. C. M. Vasudev

and is chaired by Mrs. Renu Karnad. Mr. Bobby Parikh ceased to be member of the

Committee w.e.f. October 17, 2006 and Mrs. Renu Karnad was inducted as

30

Chairperson of the Committee on October 17, 2006.

The Committee met 6 (six) times during the year.

Credit Approval Committee

The Credit Approval Committee approves credit exposures, which are beyond the powers

delegated to executives of the Bank. This facilitates quick response to the needs of the

customers and speedy disbursement of loans.

The Committee consists of Mr. Jagdish Capoor, Mr. Aditya Puri, Mr. Keki Mistry and

Mr. Gautam Divan. The Committee is chaired by Mr. Capoor. The Committee met 2

(two) times during the year.

The Premises Committee

The Premises Committee approves purchases and leasing of premises for the use of

Bank's branches, back offices, ATMs and residence of executives in accordance with the

guidelines laid down by the Board. The committee consists of Mr. Aditya Puri, Mr.

Ashim Samanta and Mrs. Renu Karnad. Dr. V. R. Gadwal ceased to be member and

chairman of the Committee w. e. f. March 14, 2007.

The Committee is chaired by Mrs. Renu Karnad.

The Committee met 3 (three) times during the year.

Nomination Committee

The Bank has constituted a Nomination Committee for recommending the appointment

of independent / non-executive directors on the Board of the Bank. The Nomination

Committee scrutinizes the nominations for independent / non-executive directors with

reference to their qualifications and experience. For identifying 'Fit and Proper' persons,

31

the Committee adopts the following criteria to assess competency of the persons

nominated: Corporate Governance HDFC Bank Limited Annual

Report 2006-07

Academic qualifications, previous experience, track record; and Integrity of the

candidates.

For assessing the integrity and suitability, features like criminal records, financial

position, civil actions undertaken to pursue personal debts, refusal of admission to and

expulsion from professional bodies, sanctions applied by regulators or similar bodies and

previous questionable business practice are considered.

The members of the Committee are Mr. Arvind Pande and Mr. Ashim Samanta. Dr. V. R.

Gadwal ceased to be member of the committee w.e.f. March 14, 2007. All the members

of the Committee are Independent directors.

The Committee met 3 (three) times during the year

Fraud Monitoring Committee

Pursuant to the directions of the Reserve Bank of India, the Bank has constituted a

Fraud Monitoring Committee, exclusively dedicated to the monitoring and following up

of cases of fraud involving amounts of Rs.1 crore and above. The objective of this

Committee is the effective detection of frauds and immediate reporting thereof to

regulatory and enforcement agencies and actions taken against the perpetrators of frauds.

The terms of reference of the Committee are as under:

Identify the systemic lacunae, if any, that facilitated perpetration of the fraud and put in

place measures to plug the same;

Identify the reasons for delay in detection, if any, reporting to top management of the

Bank and RBI;

Monitor progress of CBI / Police Investigation and recovery position;

32

Ensure that staff accountability is examined at all levels in all the cases of frauds and staff

side action, if required, is completed quickly without loss of time.

Review the efficacy of the remedial action taken to prevent recurrence of frauds, such as

strengthening of internal controls.

Put in place other measures as may be considered relevant to strengthen preventive

measures against frauds.

The members of the Committee are Mr. Jagdish Capoor, Mr. Aditya Puri, Mr. Keki

Mistry and Mr. Arvind Pande. Mr. Bobby Parikh has ceased to be member of the

Committee w. e. f. 17th October, 2006.

The Committee is chaired by Mr. Capoor and met 3 (three) times during the year.

Customer Service Committee

The Committee monitors the quality of services rendered to the customers and also

ensures implementation of directives received from RBI in this regard. The terms of

reference of the Committee are to formulate comprehensive deposit policy incorporating

the issues arising out of death of a depositor for operations of his account, the product

approval process, the annual survey of depositor satisfaction and the triennial audit of

such services.

The members of the Committee are Mr. Keki Mistry and Mr. Arvind Pande. Dr. Venkat

Rao Gadwal ceased to be member of the Committee w. e. f. March 14, 2007.

The Committee met 4 (four) times during the year.

33

Axis Bank

Axis Bank was the first of the new private banks to have begun operations in 1994, after

the Government of India allowed new private banks to be established. The Bank was

promoted jointly by the Administrator of the specified undertaking of the Unit Trust of

India (UTI - I), Life Insurance Corporation of India (LIC) and General Insurance

Corporation of India (GIC) and other four PSU insurance companies, i.e. National

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

Insurance Company Ltd. and United India Insurance Company Ltd.The Bank today is

capitalized to the extent of Rs. 358.97 crores with the public holding (other than

promoters) at 57.59%.The Bank's Registered Office is at Ahmedabad and its Central

Office is located at Mumbai. Presently, the Bank has a very wide network of more than

729 branch offices and Extension Counters. The Bank has a network of over 3171 ATMs

providing 24 hrs a day banking convenience to its customers. This is one of the largest

ATM networks in the country. The Bank has strengths in both retail and corporate

banking and is committed to adopting the best industry practices internationally in order

to achieve excellence.

Promoters

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

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

Rs. 100 crore, LIC - Rs. 7.5 crore and GIC and its four subsidiaries contributing Rs. 1.5

crore each Erstwhile Unit Trust of India was set up as a body corporate under the UTI

Act, 1963, with a view to encourage savings and investment. In December 2002, the UTI

Act, 1963 was repealed with the passage of Unit Trust of India (Transfer of Undertaking

and Repeal) Act, 2002 by the Parliament, paving the way for the bifurcation of UTI into 2

entities, UTI-I and UTI-II with effect from 1st February 2003. In accordance with the

Act, the Undertaking specified as UTI I has been transferred and vested in the

34

Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI), who

manages assured return schemes along with 6.75% US-64 Bonds, 6.60% ARS Bonds

with a Unit Capital of over Rs. 14167.59 crores.

Board of Directors

Shri N.C. Singhal Director

Shri J.R. Varma Director

Dr. R.H. Patil Director

Smt. Rama Bijapurkar Director

Shri R.B.L. Vaish Director

Shri M.V. Subbiah Director

Shri Ramesh Ramanathan Director

Shri K. N. Prithviraj Director

MISSION

Customer Service and Product Innovation tuned to diverse needs of individual and

corporate clientele.

Continuous technology upgradation while maintaining human values.

Progressive globalization and achieving international standards.

35

Efficiency and effectiveness built on ethical practices.

CORE VALUES

Customer Satisfaction through

Providing quality service effectively and efficiently

"Smile, it enhances your face value" is a service quality stressed on Periodic Customer

Service Audits

Maximisation of Stakeholder value

Success through Teamwork, Integrity and People

MILESTONES

Dec Bank opens its 200th ATM. It becomes the 2nd largest ATM network in the

country, a position held even today.

Oct Bank becomes fully networked

July E-commerce initiatives announced

Jul Financial Advisory Services offered beginning with marketing of US 64

Apr UTI Bank calls off its proposed merger with Global Trust Bank and surges

ahead on its own.

Apr Bank launches its Internet banking module, iConnect Retail loans introduced for

the first time by the Bank

Mar Profits cross Rs 50 crore mark for the first time.

Feb Bank adopts Finacle software from Infosys for core banking

36

Jan Dr.P.J Nayak takes over as Chairman and Managing Director from Shri Supriya

Gupta.

Sep-

99

Cash management services (CMS) launched, Co branded credit card launched

Mar-

99

Deposits cross Rs.3000 crores

Sep-

98

UTI Bank goes public with a Rs. 71 crore public issue; Issue over-subscribed

1.2 times, over 1 lakh retail investors. UTI holding reduces to 60.85%

Jun-

96

Crosses Rs.1000 crore deposit mark

Mar-

95

Completes first profitable year in operation

Apr-

94

First branch of UTI Bank inaugurated at Ahmedabad by Dr. Manmohan Singh,

Hon'ble Finance Minister, Government of India.

Dec-

93

UTI Bank comes into being

Dec-

93

Registered office at Ahmedabad; Head office at Mumbai

37

ICICI Bank

The Industrial Credit and Investment Corporation of India Limited (ICICI) incorporated

at the initiative of the World Bank, the Government of India and representatives of Indian

industry, with the objective of creating a development financial institution for providing

medium-term and long-term project financing to Indian businesses. Mr.A.Ramaswami

Mudaliar elected as the first Chairman of ICICI Limited.

ICICI emerges as the major source of foreign currency loans to Indian industry. Besides

funding from the World Bank and other multi-lateral agencies, ICICI was also among the

first Indian companies to raise funds from international markets. Introduced a new

product - 'NRI smart save Deposits' – a unique fixed deposit scheme for nonresident

Indians.Representative offices opened in Thailand, Indonesia and Malaysia.

ICICI Bank became the largest retail player in the market to introduce a biometric

enabled smart card that allow banking transactions to be conducted on the field. A low-

cost solution, this became an effective delivery option for ICICI Bank's micro finance

institution partners.Financial counseling centre Disha launched. Disha provides free

credit counseling, financial planning and debt management services.

Bhoomi puja conducted for a regional hub in Hyderabad, Andhra Pradesh.

ICICI Bank's USD 2 billion 3-tranche international bond offering was the largest bond

offering byan Indiabank. SangliBank amalgamated with ICICI Bank.

ICICI Bank raised Rs 20,000 crore (approx $5 billion) from both domestic and

internationalmarketsthrougafollow-onpublicoffer.

38

ICICI Bank's GBP 350 million international bond offering marked the inaugural deal in

the sterling market from an Indian issuer and also the largest deal in the sterling market

from Asia.Launched India's first ever jewellery card in association with jewelry major

Gitanjali Group.ICICI Bank became the first bank in India to launch a premium credit

card –

In a first of its kind, nation wide initiative to attract bright graduate students to pursue a

career in banking, ICICI Bank launched the "Probationary Officer Programme".

Launched Bank@home services for all savings and current a/c customers residing in

India ICICI Bank Eurasia LLC inaugurated its first branch at St Petersburg, Russia.

ICICI Bank enters US, launches its first branch in New York.

ICICI Bank enters Germany, opens its first branch in Frankfurt.

ICICI Bank launched immobile, a breakthrough innovation in banking where practically

all internet banking transactions can now be simply done on mobile phones.

ICICI Bank concluded India's largest ever securitisation transaction of a pool of retail

loan assets aggregating to Rs. 48.96 billion (equivalent of USD 1.21 billitranche isbacked

by four different asset categories. It is also the largest deal in Asia (ex-Japan) in 2008 till

date and the second largest deal in Asia (ex-Japan & Australia) since the beginning of

2007.

ICICI Bank offers wide variety of Deposit Products to suit your requirements.

Convenience of networked branches/ ATMs and facility of E-channels like Internet and

Mobile Banking, Select any of our deposit products and provide your details online and

our representative will contact you. Savings Account for everyone with a host of

convenient features and banking channels to transact through. So now you can bank at

your convenience, without the stress of waiting in queues. We service savings accounts

with 8 to 8 banking and ‘out of branch’ bankingWe understand that a Savings Account

needs to do more after you reach the age of seniority; we understand your concerns for

safety and security. We have an ideal Savings Bank Service for those who are 60 years

and above. The Senior Citizen Services from ICICI Bank has several advantages that are

tailored to bring more convenience and enjoyment in your lifeA combination of

unbeatable features of the Fixed Deposit from ICICI Bank. To check our current rates

39

and experience the convenience of an ICICI Bank Fixed Deposit detailsWhen expenses

are high, you may not have adequate funds to make big investments. An ICICI Bank

Recurring Deposit lets you invest small amounts of money every month that ends up with

a large saving on maturity. So you enjoy twin advantages- affordability and higher

earningsICICI Bank Recurring Deposits are an ideal way to invest small amounts of

money every month and end up with a large kitty on maturity.

High recurring billing and recurring payments can be a drain on your finances and hence

large investments may seem a plan away.

Let us help you in processing your recurring payment through our recurring billing

software that keeps track of your investments with us. This can be easily availed of

through a recurring account online that comes with letting us serve you through Internet

banking. You may even transfer funds through Internet banking into your recurring

account. A recurring account transfer gets done in seconds through Internet bankingWith

our recurring deposits you can avail a host of facilities with ICICI Bank. You may check

on recurring account receivable, recurring account payable, recurring account fees and all

recurring debit account transactions.

A recurring deposit account with ICICI Bank allows you a loan against the deposit. Our

new recurring deposit account also has a special feature – Non-applicability of Tax

Deduction at Source (TDS).

The minimum balance of deposit is Rs.500 per month and thereafter in multiples of

Rs.100. The tenure ranges from 6 months to a maximum period, recurring deposit of 3

months thereafter.

The recurring deposit also comes with a nomination facility..

Board of Directors

40

ICICI Securities Limited.

Mr. K. V. Kamath, Chairman

Ms. Chanda Kochhar

Mr. Ketan Patel

Mr. Narendra Murkumbi

Mr. Uday Chitale

Mr Pravir Vohra

Ms. Madhabi Puri-Buch, Managing Director & CEO

Mr. A. Murugappan, Executive Director

Mr. Anup Bagchi, Executive Director

ICICI Securities Holdings, Inc.

Mr. Gopakumar P., President

Mr. A. Murugappan

Mr. Subir Saha

Mr. Anup Bagchi

Mr Charanjit Attra

Mr Hari Panday

ICICI Securities, Inc.

Mr. Gopakumar P., President & CEO

Mr. Subir Saha

Mr. A. Murugappan

Mr. Anup Bagchi

Mr Charanjit Attra

Mr Hari Panday

41

Awards & Recognition

ICICI Securities is awarded as the Best Investment Bank 2008 by Global Finance

Magazine

The Corporate Finance group also was awarded a runner-up Best Merchant Banker by

Outlook Money in 2007.

ICICI Securities (I-Sec) topped the Prime Database League Tables 2007 for money

raised through IPOs/FPOs.

The equities team was adjudged the 'Best Indian Brokerage House-2003' by

Asiamoney.

Retail

ICICI direct, the neighborhood financial superstore won the prestigious Franchise India `

Service Retailer of the Year 2008 award.

ICICI direct wins the prestigious Outlook Money - India's Best e-Brokerage House for

2008.

ICICI direct been winning the prestigious Outlook Money - India's Best e-Brokerage House

for 2003-2004, 2004-2005, 2006-2007 and 2007-2008.

ICICI direct has also won the CNBC AWAAZ Consumer Award for the Most Preferred

Brand of Financial Advisory Services.

Best Broker - Web 18 Genius of the Web Awards 2007

42

Icici venture:

ICICI Venture is one of the largest and most successful private equity firms in India with

funds under management in excess of USD 2 billion. Its investment focus areas span across

private equity, buyouts, real estate and mezzanine financing. It has several "firsts" to its

credit in the Indian Private Equity industry.

43

Kotak Mahindra

The Kotak Mahindra group is a financial organization established in 1985 in India. It was

previously known as the Kotak Mahindra Finance Limited, a non-banking financial

organization. In February 2003, Kotak Mahindra Finance Ltd, the group's flagship

company was given the license to carry on banking business by the Reserve Bank of

India (RBI). Kotak Mahindra Finance Ltd. is the first company in the Indian banking

history to convert to a bank. The bank is headed by K.M. Gherda as Chairman and Uday

Kotak as Executive Vice Chairman & Managing Director. Shankar Acharya is the

chairman of board of Directors in the company. The Bank has its registered office at

Nariman Bhavan, Nariman Point, and Mumbai

HISTORY

Established in 1985, The Kotak Mahindra group has long been one of India's most

reputed financial organizations. In February 2003, Kotak Mahindra Finance Ltd, the

group's flagship company was given the license to carry on banking business by the

Reserve Bank of India (RBI). This approval creates banking history since Kotak

Mahindra Finance Ltd. is the first company in India to convert to at Kotak Mahindra

Bank, we address the entire spectrum of financial needs for individuals and corporates.

we have the products, the experience, the infrastructure and most importantly the

commitment to deliver pragmatic, end-to-end solutions that really work.

A license authorizing the bank to carry on banking business has been obtained from the

Reserve Bank of India in terms of Section 22 if the Banking Regulation Act, 1949. It

must be distinctly understood, however, that in issuing the license, the Reserve Bank of

India does not undertake any responsibility for the financial soundness of the bank or the

correctness of any of the statements made or opinion expressed in this connection

44

Board of Directors

Dr. Shankar Acharya Chairman

Mr. Uday Kotak Executive Vice Chairman & Managing

Director

Mr. Anand Mahindra

Mr. Cyril Shroff

Mr. Pradeep Kotak

Mr. Shivaji Dam

Mr. C. Jay ram Executive Director

Mr. Dipak Gupta Executive Director

Mr. Asim Ghosh  

Ms. Bina Chandarana Secretary & Senior Vice President

KOTAK MAHINDRA GROUP

Kotak Mahindra is one of India's leading financial organizations, offering a wide range of

financial services that encompass every sphere of life. From commercial banking, to

stock broking, to mutual funds, to life insurance, to investment banking, the group caters

to the diverse financial needs of individuals and corporates.

The group has a net worth of over Rs. 6,327 crore and has a distribution network of more

than 1300 branches, franchisees, representative offices and satellite offices across cities

and towns in India and offices in New York, London, San Francisco, Dubai, Mauritius

and Singapore. The Group services around 5.9 million customer accounts

The Kotak Mahindra Group's flagship company, Kotak Mahindra Finance Ltd which was

established in 1985, was converted into a bank- Kotak Mahindra Bank Ltd in March 2003

becoming the first Indian company to convert into a Bank. Its banking operations offer a

45

central platform for customer relationships across the group's various businesses. The

bank has presence in Commercial Vehicles, Retail Finance, Corporate Banking, Treasury

and Housing Finance.

KOTAK MAHINDRA AND GROUPS

Kotak Mahindra Capital Company Kotak Mahindra Capital Company Limited (KMCC)

is India's premier Investment Bank. KMCC's core business areas include Equity

Issuances, Mergers & Acquisitions, Structured Finance and Advisory Services.

Kotak Securities Kotak Securities Ltd. is one of India's largest brokerage and securities

distribution houses. Over the years, Kotak Securities has been one of the leading

investment broking houses catering to the needs of both institutional and non-institutional

investor categories with presence all over the country through franchisees and

coordinators. Kotak Securities Ltd. offers online (through www.kotaksecurities.com) and

offline services based on well-researched expertise and financial products to non-

institutional investors.

Kotak Mahindra Prime Kotak Mahindra Prime Limited (KMP) (formerly known as

Kotak Mahindra Primus Limited) has been formed with the objective of financing the

retail and wholesale trade of passenger and multi utility vehicles in India. KMP offers

customers retail finance for both new as well as used cars and wholesale finance to

dealers in the automobile trade. KMP continues to be among the leading car finance

companies in India.

Kotak Mahindra Asset Management Company Kotak Mahindra Asset Management

Company Kotak Mahindra Asset Management Company (KMAMC), a subsidiary of

Kotak Mahindra Bank, is the asset manager for Kotak Mahindra Mutual Fund (KMMF).

KMMF manages funds in excess of Rs 13,886 crore and offers schemes catering to

investors with varying risk-return profiles. It was the first fund house in the country to

launch a dedicated gilt scheme investing only in government securities.

46

Kotak Mahindra Old Mutual Life Insurance Limited Kotak Mahindra Old Mutual Life

Insurance Limited is a joint venture between Kotak Mahindra Bank Ltd. and Old Mutual

plc. Kotak Life Insurance helps customers to take important financial decisions at every

stage in life by offering them a wide range of innovative life insurance products, to make

them financially independent.

Kotak's International Business With a presence outside India since 1994, the international

subsidiaries of Kotak Mahindra Bank Ltd. operating through offices in London, New

York, Dubai, San Francisco, Singapore and Mauritius specialize in providing asset

management services to specialist overseas investors seeking to invest into India. The

offerings are differentiated India investment solutions that span all major asset classes

including listed equity, private equity and real estate. The subsidiaries also lead manage

and underwrite international issuances of securities. With its commendable track record,

large presence on the ground and a team of dedicated staff in India, Kotak’s international

arm is suitably positioned for managing assets in the Indian Capital markets.

Review of Literature

47

Annelies Meganck (2000), focused on HR managers’ and employees’ views on the

factors affecting employee retention using the perspective of the psychological contract.

Employees are difficult to retain because they attach more importance to marking out

their own career path than to organizational loyalty; a tendency which results in increased

rates of voluntary turnover (Cappelli, 2001). Not surprisingly, then, retention

management has become a popular concept within the HRM literature. It refers to the

portfolio of HR practices that organizations develop to reduce voluntary turnover rates

(e.g. Cappelli, 2001; Mitchell et al., 2001; Steel et al., 2002). Another concept that has

gained interest as a construct relevant for understanding and managing contemporary

employment relationships is the psychological contract, which refers to employees’

subjective interpretations and evaluations of their employment deal

Ranaweera (2003), focused on the combined effects of satisfaction, trust and switching

barriers on employee retention in a continuous purchasing setting. Argues that such an

approach helps uncover hitherto neglected effects on retention and, in the process, unveils

more cost effective ways of retaining employees. Drawing on this framework develops

several hypotheses regarding the main and interaction effects of customer satisfaction,

trust and switching barriers on retention. Tests these hypotheses on data from a large-

scale mail survey of fixed line telephone users in the UK, finding that both employee

satisfaction and trust have strong positive effects on employee retention. Contrary to

some assertions in the literature, however, finds that the effect of trust on retention is

weaker than that of satisfaction. Nevertheless, the interaction between trust and

satisfaction also has a significant effect on retention, indicating that building both

employee satisfaction and trust is a superior strategy to a focus on satisfaction alone.

Qualitative evidence from the survey offers further support for this finding.

Brooke (2003), focused on the global trend of an ageing workforce and government

policy directions towards reversing early retirement trends raises the issue of the costs to

employers of an older workforce. Data on older workers human resources costs are

48

lacking generally in Australia and other countries. This analysis of human resource costs

and benefits relies on aggregate Australia national human resources benchmarking data

that are applied to older workers. The study is based on the ratio of duration of

employment of older workers compared to younger workers and uses this ratio as a

multiplier of human resource costs. The analysis considers recruitment, training,

absenteeism and work injuries of older compared to younger workers. The analysis found

that net benefits occurred through recruitment and training benefits over the costs of

absenteeism and work injuries. Further non-quantified benefits of older workers

identified in international case studies are also explained. These quantified and non-

quantified benefits of older workers suggest that identified positive inducements to

employers exist which support human resources investments in older workers.

Johnson’s, (2005) focused on Workplace violence causes extraordinary human and

monetary losses. The violence can be triggered by factors external to the organization

such as domestic violence, abusive childhood, or mental impairment. Violence can also

be caused by factors internal to the organization such as layoffs, abusive managers, and

disciplinary actions. Over 750 human lives are lost each year owing to workplace

violence. Monetary losses from such violence amount to billions of dollars. The

Workplace Institute estimates it to be $4.2 billion with each incident costing employers

around $250,000 in lost work and legal expenses.. No longer do employers simply owe

society a duty to provide employees with safe place to work; rather, employers now need

to provide society with safe workers. The torts of negligent hiring, negligent retention,

and negligent training must be addressed by employers. Consequently, management

needs to address the growing threat of violence in the workplace by adopting a series of

organizational responses. These include appointing task force which is responsible for

investigating whether violent acts are occurring in the workplace; developing policies and

procedures; instituting training programmesfocused on preventing violent incidents; and,

finally, responding rapidly should violence occur.

Appelbaum (2006), current or past working time arrangements within various countries

around the world. Berg et al. point out significant legal developments affecting flexible

49

work options and suggest three factors particular combine to determine the level of

choice employees have over the hours they work. This comprehensive article includes

many relevant examples to illustrate the discussion and makes a valuable contribution to

the topic. Cousins and Tang examine working time and the effect on family life in three

different EU countries. The authors include statistics from extensive surveys carried out

in each country and compare findings and participant preferences before concluding that

the issue remains difficult to resolve. Another enlightening piece. Tyler’s much shorter

but interesting article begins by reminding UK employers of legislation change and

warning of the need to comply with procedures when dealing with applications for

flexible workings schedules. The second part focuses on the difficulty in managing

flexibility and the article describes how organizations have utilized sophisticated IT

programs to perform the task. Various software packages are referred to and discussion of

how their capabilities benefit organizations is included.

Miller, (2006), effectively measuring and improving employee satisfaction is thus a

critical function of contemporary management. Because businesses are becoming more

competitive, and because employees with the skills and abilities needed to obtain

competitive advantages are becoming more scarce, management can no longer afford to

see employees as replaceable inputs (Miles and Creed, 1995).Management must rather

view employees as valuable contributors whose opinions and perceptions are important

sources of knowledge. This requires the development of relationships that go outside the

bounds of traditional hierarchy, as well as the acknowledgement that employee retention

is dependent on a continuing exchange of agreements and contributions between

employees and firms (Rousseau and Parks, 1992). In this sense, employees are similar to

customers; their satisfaction and retention are instrumental. Saru, (2007) managers, more

than ever, need to be aware that the employment and subsequent retention of quality

employees are fundamental and often overlooked aspects of day-to-day management.

Organizational learning through improved managerial communication, experience, and

strategic planning are ways in which current problems of HRD can begin to be addressed.

Academia does not seem, at present, to supply any real solid debate or structure to this

50

argument, it is a problem of trial-and-error management, which will, in time, generate

more substantial models of HRD for smaller firms.

Mondore, (2006), focused on retention is important for companies and organizations.

However, studying retention within an organization is not enough. Organizations have

nested relationships within them, and are part of an external environment (Raudenbush

and Bryk, 2002). Constructs measured at “higher-levels” may influence or impact other

constructs measured at “lower levels.” Managers, organizations, and researchers alike

must understand how to measure and study a construct within a nested framework,

and how to measure that construct at multiple levels of analysis simultaneously

(Raudenbush and Bryk, 2002). The study of retention is no different. It is true that

retention has been studied at different levels of analyses, such as the individual level

(Allen and Griffeth, 2001; Frone, 2000), the organizational level (Shaw et al., 1998), the

unit level (Harter et al., 2002; Koys, 2001; Ryan et al., 1996), and the sector or industry

level (Buzzelli and Harris, 2003; Fullerton, 2003). While these studies were on one

particular level of analysis, researchers (e.g. Klein et al., 1994; Klein and Kozlowski,

2000; Raudenbush and Bryk, 2002; Yammarino and Dansereau, 2004) believe that

hierarchical analysis in retention studies need to be considered. Said differently, one

must consider retention at more than just a single level of analysis because the”

influences” of retention can occur at multiple levels. Given the dearth of research

examining retention at multiple levels, managers, organizations, and organizational

researchers would benefit from an increased understanding of a more dynamic approach

to studying retention.

Pool, B. (2007), Management development professionals implementing learning

interventions in organizations need to consider practical approaches to strengthening

51

organizational commitment within business. Executive development programs must play

a key role within a continuous process that builds commitment and job satisfaction.

Alignment of values between the individual and the organization is the starting point.

Then the creation of a positive and satisfying work environment will encourage high

levels of retention. Actions taken along these lines will build trust within the

organization, and organizational commitment generally will increase as employees

operate within such an environment. A virtuous circle occurs which also has the

foundations in place for organizational learning. Within a learning organization new

knowledge is created and this must lead to behavioral change. This requires adjustment to

the external environment that must be scanned on continuous basis. This study did not

examine the relationship with the external environment. However, it did establish that

committed executives make effective organizational learning happen.

Deery (2007), emphasis on retention of good employees and the role that work-life

balance (WLB) issues have in an employee’s decision to stay or leave an organization.

The paper begins with a brief overview of the seminal material in the more generic

management literature and then tailors the discussion to the hospitality and tourism

industry using literature from the hospitality and tourism journals. Practical framework

for industry to develop strategies for reduced employee turnover, with a focus on the role

that balancing work and family plays in these strategies. Focus on job attitudes such as

job satisfaction and organizational commitment, personal attributes such as positive and

negative affectivity, the role of WLB in employee turnover and, finally, the strategies

provided to alleviate high turnover rates.

Arocas, (2007) emphasized on the most important HR variables analyzed in the strategic

literature is staff retention. The strategic connotations of staff retention in the sense used

by Hiltrop (1999), need to be clarified in an empirical way, particularly when we speak

52

about high added value staff. Much work needs to be done in that direction. Our intention

has been to advance this effort by selecting three HPWP (precursors) and one outcome

variable (turnover intentions), trying to show the mediator roll of commitment and

satisfaction in this relationship. For this we used as our source of information a sample of

198 workers. This information offers clear advantages over the more widely used

samples from managerial directors or statistical data gathered in HR practices, as in our

case we have access to the perceptions of those people upon whom these measures are

directly carried out (Guest, 1999). Following Story’s (1992) nomenclature, we have

Subsequently adopted a study in line with a “softer” vision of HR as opposed to the

More habitual “hard line” viewpoint.

Saru, (2007) managers, more than ever, need to be aware that the employment and

subsequent retention of quality employees are fundamental and often overlooked aspects

of day-to-day management. Organizational learning through improved managerial

communication, experience, and strategic planning are ways in which current problems

of HRD can begin to be addressed. Academia does not seem, at present, to supply any

real solid debate or structure to this argument, it is a problem of trial-and-error

management, which will, in time, generate more substantial models of HRD for smaller

firms.

Keiningham (2007), Enhancing customer loyalty has become a popular topic for

managers, consultants, and academics. The arguments in support of loyalty are simple to

understand. Loyal customers are reported to have higher customer retention rates, commit

a higher share of their category spending to the firm, and are more likely to recommend

others to become customers of the firm (Reichheld and Earl Sasser, 1990; Zeithaml,

2000).To monitor their performance and guide improvement efforts with regard to

customer loyalty, managers frequently rely on customer feedback systems. This feedback

typically is obtained through customer surveys that contain measures of satisfaction,

repurchase intention, and word-of-mouth intention (Morgan and Rego, 2006). The

inherent belief among managers is that these measures serve as leading indicators of

53

customers’ future firm-related behaviors (e.g., retention, share-of-wallet allocation, and

word-of-mouth).

Taylor (2008), focused on how to retain to retain the employees that were trained by

their trainer, their culture needs to be responsive and sensitive to the employees’ needs

and aspirations. The same business principles used to retain customers must also be used

to retain employees. In order to retain these employees, company must be competitive in

their wages and benefits, deliver on what was promised when they were hired, serve their

specific needs, establish a relationship with them and treat them as they would treat a

good customer. Low unemployment gives employees the luxury of shopping for a culture

that allows them to work in the area in which they were trained, as well as pursue a life

outside of work

Crush, (2008) emphasized on keeping the best employees will always be an issue for

employers, particularly in times of economic growth. It would seem however that

showing employees they are valued by affording workers a real voice in the decision-

making processes of a company is the best starting point in motivation and retention of

staff. Staff incentives must be carefully considered but it seems that in terms of perks, the

freedom to work at home, at least part of the time helps to create employees who are

healthy, happy and motivated. Global firms must treat all employees equally in terms of

making them feel valued and listened to, but incentives may need to be varied according

to cultural expectations. Young employees also need to feel valued and must be provided

with a clear route to success. This might help to avoid feelings of not being valued which

precipitate their frequent job changes. At the same time, structured mentoring can help to

provide the guidance young employees need without invoking the feeling of being

constantly criticized.

Buyens, (2008) retention measures should fit the specific needs and preferences of the

older worker, which was the focus of our second research question. The outcomes of this

study show that this can best be reached by improving older worker’s involvement with

54

their job. A higher level of job involvement was shown to be related to preferences for

career preservation or career expansion, while lower levels of job involvement were

related to career-diminishment preferences. Furthermore, the results provide indirect

support for the idea that stereotype-threat mechanisms play a role in the performance of

older workers. The extremely diverse perceptions of older workers about changes in the

level of their own performance suggest that older workers have become rather insecure

about their own capabilities. Although our research design limits our ability to draw

direct conclusions out of this finding, it does provide support for the idea that ageist

stereotypes have negatively affected the older worker.

Morgan, (2008) emphasized on reliable policy to take suggestions from top performers

as to external Recruitment. Many organizations have begun employee referral programs,

whereby if an employee makes a successful suggestion for recruitment, they will receive

windfalls such as cash prizes. This strategy has many positive effects, not least

demonstrating a trust in the judgment of your existing employee, and the creation of a

workforce that gels on a persona land professional level due to existing relationships.

Many of these points might come under the title of ‘‘Common sense solutions’’, but they

are timely reminders of the importance of recognizing and encouraging an organization’s

most crucial component: self-motivated, talented, hard-working employees. As Morgan

concludes, ‘‘it is no longer your right to get the best talent, it is increasingly a privilege’’.

An examination of this checklist will ensure that management does not relapse into a

laissez-faire attitude towards its top performers.

Fernon, D. (2008) focused on the best remuneration package. Many potential employees

– usually the ones with the best qualifications and skills to offer –do not merely want a

well-paid job; they want to be passionate about working for an organization with vision

and direction. And, just as a customer will be prepared to pay more for brand they respect

and trust, a potential employee is likely to accept a lower financial reward if it gets

him/her a job with a company which delivers respect and trust through its brands. In their

2008 ‘‘Employee Engagement Report’’, global consulting firm Blessing White say that

although North America has one of the highest proportions of engaged employees

55

worldwide, fewer than one in three employees (29 percent) are fully engaged and 19

percent are actually disengaged. Engaged employees stay for what they give (they like

their work); disengaged employees stay for what they get (favorable job conditions,

growth opportunities, and job security).

DATA ANALYSIS AND INTERPRETATION

56

Q1.Rank these factors in order of importance (R1= most important, R5= least important)

in retaining you in the bank.

0

5

10

15

20

25

30

35

1 2 3 4 5 6 7

ranks

compensation

dev & carrer

work life

recogination

involvement

57

Q2. Rank the following factors (R1=most important, R5= least important) which makes

you dissatisfied to stay with the bank due to lack of following factors.

0

5

10

15

20

25

30

1 2 3 4 5 6 7

ranks

compensation

dev & carrer

work life

recogination

involvement

58

Q1.Rank these factors in order of importance(R1= most important, R5= least important)

in retaining you in the bank (Icici)

0

1

2

3

4

5

6

7

8

9

10

1 2 3 4 5 6 7

ranks

compensation

dev & carrer

work life

recogination

involvement

Q2. Rank the following factors (R1=most important, R5= least important) which makes

you dissatisfied to stay with the bank due to lack of following factors.(ICICI)

59

0

2

4

6

8

10

12

1 2 3 4 5 6 7

ranks

compensation

dev & carrer

work life

recogination

involvement

Q1.Rank these factors in order of importance(R1= most important, R5= least important)

in retaining you in the bank (axis)

0

2

4

6

8

10

12

1 2 3 4 5 6 7

ranks

compensation

dev & carrer

work life

recogination

involvement

60

Q2. Rank the following factors (R1=most important, R5= least important) which makes

you dissatisfied to stay with the bank due to lack of following factors.(axis)

0

1

2

3

4

5

6

7

8

9

1 2 3 4 5 6 7

ranks

compensation

dev & carrer

work life

recogination

involvement

Q1.Rank these factors in order of importance(R1= most important, R5= least important)

in retaining you in the bank (Kotak)

61

0

1

2

3

4

5

6

7

8

9

10

1 2 3 4 5 6 7

ranks

compensation

dev & carrer

work life

recogination

involvement

Q2. Rank the following factors (R1=most important, R5= least important) which makes

you dissatisfied to stay with the bank due to lack of following factors.(kotak)

0

1

2

3

4

5

6

7

8

9

10

1 2 3 4 5 6 7

ranks

compensation

dev & carrer

work life

recogination

involvement

62

Q1.Rank these factors in order of importance(R1= most important, R5= least important)

in retaining you in the bank (Hdfc)

0

1

2

3

4

5

6

7

8

9

10

1 2 3 4 5 6 7

ranks

compensation

dev & carrer

work life

recogination

involvement

Q2. Rank the following factors (R1=most important, R5= least important) which makes

you dissatisfied to stay with the bank due to lack of following factors.(HDFC)

0

1

2

3

4

5

6

7

8

9

10

1 2 3 4 5 6 7

ranks

compensation

dev & carrer

work life

recogination

involvement

63

There is no significant difference in importance of factors influencing employee

retention among targeted banks.

By applying factor analysis test

FACTOR ANALYSIS

Total Variance Explained

Componen

t

Initial Eigen values Extraction Sums of Squared Loadings

Total

% of

Variance

Cumulative

% Total

% of

Variance

Cumulative

%

1 1.409 28.190 28.190 1.409 28.190 28.190

2 1.220 24.400 52.590 1.220 24.400 52.590

3 1.134 22.679 75.269 1.134 22.679 75.269

4 .945 18.893 94.162

5 .292 5.838 100.000

Extraction Method: Principal Component Analysis.

64

Communalities

Initial

Extractio

n

compensation

management1.000 .898

work life

balance1.000 .903

Recognition 1.000 .904

involvement in

decision

making

1.000 .771

development

and career

option

1.000 .288

Extraction Method: Principal Component Analysis

Interpretation

Null hypothesis is rejected because there significant difference in the importance of

factors influencing employee retention among targeted banks.

Ho: There is no significant difference in the importance of factors influencing employee

retention Vise versa gender of employees.

65

Test Statistics(a)

Compensati

on

management

development

and career

option

recognitio

n

work life

balance

involvemen

t in decision

making

Mann-Whitney U1137.000 1146.500 1005.500

1023.50

01085.500

Wilcoxon W3153.000 3162.500 1708.500

3039.50

01788.500

Z -.209 -.139 -1.168 -1.036 -.586

Asymp. Sig. (2-

tailed).834 .890 .243 .300 .558

a Grouping Variable: Gender of responden

Ranks

Gender of

respondent N

Mean

Rank

Sum of

Ranks

compensation

management

Male 63 50.05 3153.00

Female 37 51.27 1897.00

Total 100

development

and career

option

Male 63 50.20 3162.50

Female 37 51.01 1887.50

Total 100

Recognition Male 63 53.04 3341.50

Female 37 46.18 1708.50

Total 100

Work life

balance

Male 63 48.25 3039.50

Female 37 54.34 2010.50

Total 100

66

involvement in

decision

making

Male 63 51.77 3261.50

Female 37 48.34 1788.50

Total 100

There is no significant difference in the importance of the factors influencing employee

retention vise versa gender of employees.

Ho: There is no significant difference in the importance of the factors influencing

employee retention vise versa organization

Total work experience

Observed

N

Expected

N Residual

1 11 16.7 -5.7

2 27 16.7 10.3

3 39 16.7 22.3

4 16 16.7 -.7

5 6 16.7 -10.7

52 1 16.7 -15.7

Total 100

compensation management

Observed

N

Expected

N Residual

rank1 19 20.0 -1.0

67

rank2 32 20.0 12.0

rank3 16 20.0 -4.0

rank4 14 20.0 -6.0

rank5 19 20.0 -1.0

Total 100

development and career option

Observed

N

Expected

N Residual

rank1 24 20.0 4.0

rank2 17 20.0 -3.0

rank3 24 20.0 4.0

rank4 16 20.0 -4.0

rank5 19 20.0 -1.0

Total 100

work life balance

Observed

N

Expected

N Residual

rank1 23 20.0 3.0

rank2 16 20.0 -4.0

rank3 23 20.0 3.0

rank4 20 20.0 .0

rank5 18 20.0 -2.0

Total 100

68

recognition

Observed

N

Expected

N Residual

rank1 14 20.0 -6.0

rank2 21 20.0 1.0

rank3 23 20.0 3.0

rank4 20 20.0 .0

rank5 22 20.0 2.0

Total 100

Interpretation

There is no significant difference in the importance of the factors influencing employee

retention vise versa organization

69

Ho: There is no significant difference in the importance of the factors influencing

employee retention vise versa work experience

Ranks

Total work

experience N

Mean

Rank

Sum of

Ranks

compensation

management

111 10.27 113.00

5 6 6.67 40.00

Total 17

development

and career

option

1

11 8.18 90.00

5 6 10.50 63.00

Total 17

Recognition 1 11 10.91 120.00

5 6 5.50 33.00

Total 17

work life

balance

111 6.91 76.00

5 6 12.83 77.00

Total 17

involvement in

decision

making

1

11 9.05 99.50

5 6 8.92 53.50

Total17

70

Test Statistics(b)

Compensati

on

management

development

and career

option

recognitio

n

work life

balance

involvemen

t in decision

making

Mann-Whitney U 19.000 24.000 12.000 10.000 32.500

Wilcoxon W 40.000 90.000 33.000 76.000 53.500

Z -1.435 -.932 -2.159 -2.395 -.051

Asymp. Sig. (2-

tailed).151 .351 .031 .017 .959

Exact Sig. [2*(1-

tailed Sig.)].180(a) .404(a) .037(a) .020(a) .961(a)

a Not corrected for ties.

b Grouping Variable: Total work experience

71

Interpretation

There is no significant difference in the importance of the factors influencing employee

retention vise versa work experience of employees

Ho: There is no significant difference in the importance of the factors influencing

employee retention vise versa age of employees

Ranks

Age of

respondent N

Mean

Rank

Sum of

Ranks

compensation

management

25 15 8.00 120.00

35 0(a) .00 .00

Total 15

development

and career

option

25 15 8.00 120.00

35 0(a) .00 .00

Total 15

Recognition 25 15 8.00 120.00

35 0(a) .00 .00

Total 15

72

work life

balance

25 15 8.00 120.00

35 0(a) .00 .00

Total 15

involvement in

decision

making

25 15 8.00 120.00

35 0(a) .00 .00

Total 15

a Mann-Whitney Test cannot be performed on empty groups.

Interpretation: There is no significant difference in the importance of the factors

influencing employee retention vise versa age of employees

FINDINGS AND CONCLUSION

As per the data analysis hierarchy of factors is an order of compensation management,

work life balance, recognition, involvement in decision making, development and career

options.

As per the data analysis the factor which is more influenced the employees from targeted

bank is compensation management and least important is development and career

options.

73

As per the data analysis to retain an employee in the organization there is significant role

of compensation in employee retention

As per the data analysis recognition is one of the important factor but not as important as

compensation is to retain the employees.

ANNEXURE

Comparative study of the factors influencing employee retention in few selected Private

Banks at Gurdaspur.

Name (voluntary) Gender Male/Female

Age Experience

74

Hierarchical position

INSTRUCTIONS

Dear respondents,

I Priyanka, student of Lovely Professional University doing a research project on

comparative study of factors influencing employee retention in few selected private

banks at Gurdaspur. I thankful to you for taking your valuable time to fill this

questionnaire. Please read each statement carefully and rank them .There is no wrong

answer or right, be frank and chose and answer the best describe your feelings,

experience and thoughts. There is no time limit. Your answers will be kept strictly

confidential and shall not be disclosed under any conditions without your consent. The

data gathered will be used only for this research study.

1. Rank these factors in order of importance (R1=most important, R5=least important) in

retaining you in the bank?

1. Compensation.

2. Development and career options.

3. Work life balance.

4. Recognition.

5. Involvement in decision making.

2. Rank the following factor (R1=most important, R5=least important) which makes you

dissatisfied to stay with the bank due to lack of following factors?

1. Compensation.

2. Development and career options.

3. Work life balance.

4. Recognition.

5. Involvement in decision making

75

THANKS FOR COOPERATION

76

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81