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INTERNSHIP DISSERTATION ON “Analyzing product penetration and service positioning offered by different private commercial banks & assessing the business potential for Dhanlaxmi Bank” Acc omplished at DHANL AXMI BANK “Submitted in partial fulfillment of Post Graduation Diploma In Business Management” 1 | Page

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Page 1: final report

INTERNSHIP DISSERTATION ON“Analyzing product penetration and service positioning offered by different private commercial banks & assessing the business potential for Dhanlaxmi Bank”

Accomplished at

DHANLAXMI BANK

“Submitted in partial fulfillment of

Post Graduation Diploma In Business Management”

Submitted To: Submitted By:

Mr.Rachit Haldiya Suresh Kumar Tolani

Faculty Roll No.-1517 FMS-IRM Session-2009-2011

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CERTIFICATE

Certified that this project report entitled “Analyzing product penetration and service positioning offered by different private commercial banks & assessing the business potential for Dhanlaxmi Bank” is a record of project work done independently by Mr. Suresh Kumar Tolani under my guidance and supervision and that it has not previously formed the basis for the award of any degree, fellowship or association with him.

DATE: NAME AND SIGNATURE

Mr. Rachit Haldiya (FACULTY GUIDE)

……………………………………………………..

Mr. Anuj Dasot (CORPORATE GUIDE)

……………………………………………………..

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DECLARATION

I hereby declare that this project report entitled “Analyzing product penetration and service positioning offered by different private commercial banks & assessing the business potential for Dhanlaxmi Bank” is a bona fide record of work done by me during the course of summer project work and that it has not previously formed the basis for the award to me for any degree/diploma/association/fellowship or other similar title of any other institute/society.

DATE: Suresh Kumar Tolani

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ACKNOWLEDGEMENT

If you want your efforts to reflect, then just abide by the rules made by a perfect.

I strictly followed the above line and so I would like to express my heartfelt thanks to my Project Guide Mr. Anuj Dasot, (RELATIONSHIP MANAGER), for providing me the opportunity to step into the practical corporate world to team up my classroom learning with the exposure available in the organization, which gave me a robust opportunity to learn.

I would like to express my sincere thanks to Director FMS-IRM Brig. S. K. Gaur and Faculty Coordinator Prof. R. C. Mathur for giving me an opportunity to learn.

I am very much thankful to Mr. Rachit Haldiya (FACULTY GUIDE) for his continuous guidance and support, which proved to be very helpful throughout the project tenure.

I also take privilege to extend my earnest thanks to Mrs. Sneh Walia Garg (Operations Manager), Mr. Harsh Dube (Regional Sales Manager) and Mr. Salabh Priyadarshi (Manager, Trade & Advances Group) for sparing their precious time and providing all the needed information necessary for the accomplishment of the project.

Date: Suresh Kumar Tolani

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TABLE OF CONTENTSS.No.

Topics Page No.

EXECUTIVE SUMMARY 71 CHAPTER:-1 INTRODUCTION 81.1 STATEMENT OF THE PROBLEM 91.2 OBJECTIVE OF THE STUDY 101.3 RESEARCH METHODOLOGY 111.4 UTILITY OF THE STUDY 131.5 LIMITATIONS OF THE STUDY 141.6 REVIEW OF LITERATURE 151.7 INDUSTRY PROFILE 232 DHANLAXMI BANK PROFILE 312.1 BUSINESS MIX OF DHAN BANK 362.2 STRATEGICAL ASPECTS OF DHAN BANK 372.3 PRODUCT SUITE 402.4 COMPARISON OF PRODUCT FEATURES 422.5 MARKET SHARE ANALYSIS 453 DATA ANALYSIS AND INTERPRETATION 463.1 KIND OF BANKS OPTED BY CUSTOMERS ON THE BASIS OF THEIR NEEDS 473.2 CRITERIA OF SELECTING THE BANK FOR BANKING REQUIREMENTS 483.3 SATISFACTION LEVEL OF PUBLIC SECTOR BANK CUSTOMERS 493.4 SATISFACTION LEVEL OF PRIVATE SECTOR BANK CUSTOMERS 503.5 RELATION BETWEEN SELECTION CRITERIA AND SATISFACTION LEVEL 513.6 DOES YOUR BANK GIVES YOU REGULAR UPDATES ABOUT NEW PRODUCT

AND SERVICES 52

3.7 MOBILE BANKING AND INTERNET BANKING SERVICES: PATTERN OF USAGE 53

3.8 AWARENESS ABOUT DHANLAXMI BANK IN JAIPUR 543.9 RISK TAKING ABILITY WITH RESPECT TO DIFFERENT INCOME LEVELS 553.10 ANALYSIS OF RISK TAKING ABILITY IN INVESTMENT AT DIFFERENT LEVELS

OF AGE:-57

4 SUMMARY OF FINDINGS AND SUGGESTIONS 584.1 SWOT ANALYSIS 605 BIBLIOGRAPHY 626 APPENDIX 63

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LIST OF GRAPHS, FIGURES & TABLES

Topics PAGE FIGURE:-1 STRUCTURE OF INDIAN BANKING INDUSTRY 24FIGURE:-2TRADITIONAL BANKING 29FIGUER:.3RELATIONSHIP BANKING 30GRAPH:-2.1 BUSINESS MIX OF DHANLAXMI BANK 36GRAPH:-2.2 GEOGRAPHICAL BUSINESS MIX OF DHAN BANK 36GRAPH:-2.3 NETWORKING ANALYSIS 37GRAPH:-2.4 INCREASE IN CASA 38FIGURE:-4 PRODUCT SUITE 40TABLE:-2.1 COMPARISON OF RETAIL PRODUCTS 42TABLE:-2.2- COMPARISON OF SERVICES OFEERED 43TABLE:- 2.3 COMPETITOR ANALYSIS AT A GLANCE 33TABLE:-2.4 MARKET CAPITALIZATION OF PRIVATE BANKS 45GRAPH:-2.5 MARKET SHARE ANALYSIS 45TABLE:3.1 KIND OF BANKS OPTED BY CUSTOMERS ON THE BASIS OF THEIR NEEDS 47

GRAPH:-3.1 KIND OF BANKS OPTED BY CUSTOMERS ON THE BASIS OF THEIR NEEDS 47TABLE:3.2 CRITERIA OF SELECTING THE BANK FOR BANKING REQUIREMENTS 48GRAPH:-3.2 CRITERIA OF SELECTING THE BANK FOR BANKING REQUIREMENTS 48TABLE:3.3 SATISFACTION LEVEL OF PUBLIC SECTOR BANK CUSTOMERS 49GRAPH:-3.3 SATISFACTION LEVEL OF PUBLIC SECTOR BANK CUSTOMERS 49TABLE:3.4 SATISFACTION LEVEL OF PRIVATE SECTOR BANK CUSTOMERS 50

GRAPH:-3.4 SATISFACTION LEVEL OF PRIVATE SECTOR BANKCUSTOMERS 50

TABLE:3.5 RELATION BETWEEN SELECTION CRITERIA AND SATISFACTION LEVEL 51

GRAPH:-3.5 RELATION BETWEEN SELECTION CRITERIA AND SATISFACTION LEVEL 51

TABLE:3.6 DOES YOUR BANK GIVES YOU REGULAR UPDATES ABOUT NEW PRODUCT AND SERVICES

52

GRAPH:-3.6 DOES YOUR BANK GIVES YOU REGULAR UPDATES ABOUT NEW PRODUCT AND SERVICES

52

TABLE:3.7 MOBILE BANKING AND INTERNET BANKING SERVICES: PATTERN OF USAGE 53

GRAPH:-3.7 MOBILE BANKING AND INTERNET BANKING SERVICES: PATTERN OF USAGE 53

TABLE:3.8 AWARENESS ABOUT DHANLAXMI BANK IN JAIPUR 54GRAPH:-3.8 AWARENESS ABOUT DHANLAXMI BANK IN JAIPUR 54TABLE:3.9 RISK TAKING ABILITY WITH RESPECT TO DIFFERENT INCOME LEVELS 55GRAPH:-3.9 RISK TAKING ABILITY WITH RESPECT TO DIFFERENT INCOME LEVELS 55TABLE:3.10 ANALYSIS OF RISK TAKING ABILITY IN INVESTMENT AT DIFFERENT LEVELS OF AGE:-

57

GRAPH:-3.10 ANALYSIS OF RISK TAKING ABILITY IN INVESTMENT AT DIFFERENT LEVELS OF AGE:-

57

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EXECUTIVE SUMMARYRetail banking is a banking service that is geared primarily toward individual consumers. Retail banking entities provide a wide range of personal banking services including offering current accounts, deposit accounts and saving accounts, bill paying services, as well as debit and credit cards. Through retail banking, consumers may also obtain mortgages and personal loans.

Retail banking industry is expected to reach a position of high growth till 2011. This requires expansion and diversification of retail portfolio, better penetration and faster service mechanism.

As current market place is highly competitive and each corporate is expanding its business round the globe for its global presence so they do study related to market trend regarding to their market share in comparison to their competitors. Jaipur branch of Dhanlaxmi is functional since September 2009. They are new to Jaipur market so this study is carried out to estimate the business potential for Dhanaxmi Bank. For this, analysis of the sales trends of Financial product, ie Saving a\c , Current a\c , Fixed Deposits & investment services has completed in Jaipur city. This study is confined to some of the areas like M.I. Road, Sansar Chandra Road, Saraogi mansion etc of Jaipur city

The project entitled “ANALYZING PRODUCT PENETRATION AND SERVICE POSITIONING OFFERED BY PRIVATE BANKS & ASSESING THE BUSINESS POTENTIAL FOR DHANLAXMI BANK” helped the bank to understand the scope of retail banking in certain areas of Jaipur city. Products which have covered in the study were Saving A/c, Current A/c and Investments.

The utility of project can be derived from the fact that today banks have diversified products. Now saving accounts are of many types. Current account have new face i.e. Roaming current account.

.

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CHAPTER:-1

INTRODUCTION

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STATEMENT OF THE PROBLEM

Dhan bank is new to the Jaipur city. ICICI, HDFC, AXIS BANK & YES BANK is already in the market. These are the major players of private bank industry. The market competition is very high. Dhan bank is looking to position its products and services faster to reach their vision of being among the top five private banks.

Dhan bank is looking to tap the market around the branch in the range of five kms.

As it is their first branch, people are not aware about dhan bank. Advertisement campaign is still awaited and they have to increase the business without it.

Dhan bank is looking towards their competitors, how they have penetrated and positioned services in the market of Jaipur so that they can differentiate their products accordingly.

Knowing your customer is a key tool for market penetration. Dhan bank wants an analysis on demographics of Jaipur market to assess the business potential for them.

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OBJECTIVE OF THE PROJECT

PRIMARY OBJECTIVES

To judge the business potential for DHANLAXMI BANK,

JAIPUR. To compare products and services offered by major

Private Banks. To judge the level of competition at specified market

around 5 Kms. area of the branch office.

To judge the awareness level of Dhanlaxmi Bank in Jaipur.

SECONDARY OBJECTIVES

To promote the products and services offered by Dhanlaxmi Bank.

To increase the awareness level of Dhan Bank in Jaipur.

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RESEARCH METHODOLOGY

This section deals with the methodology employed to carry out the project. A well structured process is important for the successful execution of a good field work. It is important to develop good background information before actually interviewing the respondents.

1. Research Design:-After analyzing problem statement and objectives of the study the design of research was set to be exploratory research.

2. Sampling Design:-

UNIVERSE:- huge customer base in Jaipur city availing public or private sector banks for their banking requirements.

SAMPLING UNIT:-comprised of retail store owners and salaried persons over there.

SOURCE LIST:-the sample frame was drawn by short listing the markets around 5 Kms. of branch.

RESEARCH LOCATION:-survey was conducted in Jaipur city at M.I.Road, Sansaar Chandra Road, Ganpati plaza, Saraogi mansion.

SAMPLING METHOD:-sampling technique applied for conduction of the survey is Non Probability Sampling. The units were selected on the basis of Convenient Sampling. Convenience in terms of proximity, communication, interest of respondents was preferred.

SAMPLE SIZE:-sample size for the study is taken 100.

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3. DATA COLLECTION:- PRIMARY DATA COLLECTION:-Primary data was collected with

the help of a set of questions, and interviewing the customers. The questionnaire contained brief customer profile and followed by 8 questions regarding respondent’s banking activities and rest 5 regarding their investment activities. All the questions were closed ended. Customer interview also provided important information required for study.

SECONDARY DATA COLLECTION:-Secondary data is collected via internet, books, journals company website and brochures etc. which provided adequate information for comparative study of products and services offered by private banks.

4. DATA ANALYSIS AND REPRESENTATION TOOLS:-MS-Excel and MS-Access are the software used to find out the important relationships. Pie charts, bar diagram, tables are used to represent the results of survey conducted.

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UTILITY OF THE STUDY:

Utility of the study can be derived from following facts:

Current market situation is highly competitive where products are diversified. Every player has different types of current and saving accounts as well as attractive fixed deposit schemes. This study can help Dhan bank to know the needs and requirements of customers.

This study can help Dhan bank to evaluate the marketing and sales strategies of competitors as how they have positioned their products in the customer mindset.

Survey results can help to modify their upcoming products according to customer needs and requirements.

Execution of survey has helped to increase awareness of Dhanlaxmi Bank among the customers surveyed.

Study can help the bank to judge the required service quality and benchmarks in Jaipur market.

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LIMITATIONS OF THE STUDY

Sample Size

The sample size for customer survey taken 100 was not enough as compared to huge customer base of private banks. The findings based on this sample size might not provide accurate results.

Respondent Unawareness

This is the first branch of dhanlaxmi bank in Jaipur. People are not aware of the bank. Advertisement campaign has not started.

Respondent Non Co-operation

Many respondents were unwilling to disclose information about their banking and investment due to suspicion, lack of time, lack of interest.

Reliability of Competitor Details

Most of competitor details were gathered through secondary data sources other than linked directly to competitor. The data collected through these sources might not be reliable which can deviate the analysis results.

Time Shortage

The project duration of 45 days proved to be insufficient to attend to all the components of research problem. Occasionally compromises over quality and quantity were made due to time acuteness.

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REVIEW OF LITERATURE:RETAIL BANKING

DEFINITION:

“Retail banking is typical mass-market banking where individual

customers use local branches of larger commercial banks. Services

offered include: savings and checking accounts, mortgages, personal

loans, debit cards, credit cards, and so”

The Retail Banking environment today is changing fast. The changing

customer demographics demands to create a differentiated application based

on scalable technology, improved service and banking convenience. Higher

penetration of technology and increase in global literacy levels has set up the

expectations of the customer higher than never before. Increasing use of

modern technology has further enhanced reach and accessibility.

The market today gives us a challenge to provide multiple and innovative

contemporary services to the customer through a consolidated window as so

to ensure that the bank’s customer gets “Uniformity and Consistency” of

service delivery across time and at every touch point across all channels. The

pace of innovation is accelerating and security threat has become prime of all

electronic transactions. High cost structure rendering mass-market servicing is

prohibitively expensive.

Present day tech-savvy bankers are now more looking at reduction in their

operating costs by adopting scalable and secure technology thereby reducing

the response time to their customers so as to improve their client base and

economies of scale.

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The solution lies to market demands and challenges lies in innovation of new

offering with minimum dependence on branches – a multi-channel bank and to

eliminate the disadvantage of an inadequate branch network. Generation of

leads to cross sell and creating additional revenues with utmost customer

satisfaction has become focal point worldwide for the success of a Bank.

Today’s retail banking sector is characterized by three basic characteristics:

Multiple products (deposits, credit cards, insurance, investments and

securities)

Multiple channels of distribution (call center, branch, internet)

Multiple customer groups (consumer, small business, and corporate).

STRATEGIES FOR INCREASING RETAIL BANKING BUSINESS

Constant product innovation to match the requirements of the customer

segments

The customer database available with the banks is the best source of their

demographic and financial information and can be used by the banks for

targeting certain customer segments for new or modified product. The

banks should come out with new products in the area of securities, mutual

funds and insurance.

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Quality service and quickness in delivery

As most of the banks are offering retail products of similar nature, the

customers can easily switchover to the one, which offers better service at

comparatively lower costs. The quality of service that banks offer and the

experience that clients have, matter the most. Hence, to retain the

customers, banks have to come out with competitive products satisfying

the desires of the customers at the click of a button.

Introduction of new delivery channels

Retail customers like to interface with their bank through multiple

channels. Therefore, banks should try to give high quality service across all

service channels like branches, Internet, ATMs, etc.

Tapping of unexploited potential and increasing the volume of business

This will compensate for the thin margins. The Indian retail banking market

still remains largely untapped giving a scope for growth to the banks and

financial institutions. With changing psyche of Indian consumers, who are

now comfortable with the idea of availing loans for their personal needs,

banks have tremendous potential lying in this segment. Marketing

departments of the banks be geared up and special training be imparted to

them so that banks are successful in grabbing more and more of retail

business in the market.

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Infrastructure outsourcing

This will help in lowering the cost of service channels combined with quality

and quickness.

Detail market research

Banks may go for detail market research, which will help them in knowing

what their competitors are offering to their clients. This will enable them to

have an edge over their competitors and increase their share in retail

banking pie by offering better products and services.

Cross-selling of products

PSBs have an added advantage of having a wide network of branches,

which gives them an opportunity to sell third-party products through these

branches.

Business process outsourcing

Outsourcing of requirements would not only save cost and time but would

help the banks in concentrating on the core business area. Banks can

devote more time for marketing, customer service and brand building. For

example, Management of ATMs can be outsourced. This will save the banks

from dealing with the intricacies of technology.

Tie-up arrangements

PSBs with regional concentration can reap the benefit of reaching

customers across the country by entering into strategic alliance with other

such banks with intensive presence in other regions. In the present regime

of falling interest and stiff competition, banks are aware that it is finally the

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retail banking which will enable them to hold the head above water. Hence,

banks should make all out efforts to boost the retail banking by recognizing

the needs of the customers. It is essential that banks would be imaginative

in predicting the customers' expectations in the ever-changing tastes and

environments. It is the innovative and competitive products coupled with

high quality care for clients will only hold the key to success in this area. In

short, bankers have to run very fast even to stay where they are now. It is

the survival of the fastest now and not only survival of the fittest.

EMERGING ISSUES IN HANDLING RETAIL BANKING

KNOWING CUSTOMER

‘Know your Customer’ is a concept which is easier said than practiced. Banks

face several hurdles in achieving this. In order to that the product lines are

targeted at the right customers-present and prospective-it is imperative that

an integrated view of customers is available to the banks. The benefits

flowing out of cross-selling and up-selling will remain a far cry in the absence

of this vital input. In this regard the customer databases available with most

of the public sector banks, if not all, remain far from being enviable.

What needs to be done is setting up of a robust data warehouse where

from meaningful data on customers, their preferences, there spending

patterns, etc. can be mined. Cleansing of existing data is the first step in this

direction. PSBs have a long way to go in this regard.

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TECHNOLOGY ISSUES

Retail banking calls for huge investments in technology. Whether it is setting

up of a Customer Relationship Management System or Establishing Loan

Process Automation or providing anytime, anywhere convenience to the vast

number of customers or establishing channel/product/customer profitability,

technology plays a pivotal role. And it is a long haul. The Issues involved

include adoption of the right technology at the right time and at the same

time ensuring volumes and margins to sustain the investments.

It is pertinent to remember that Citibank, known for its deployment of

technology, took nearly a decade to make profits in credit cards. It has also to

be added in the same breath that without adequate technology support, it

would be well nigh possible to administer the growing retail portfolio without

allowing its health to deteriorate. Further, the key to reduction in transaction

costs simultaneously with increase in ability to handle huge volumes of

business lies only in technology adoption.

PSBs are on their way to catch up with the technology much required

for the success of retail banking efforts. Lack of connectivity, stand alone

models, concept of branch customer as against bank customer, lack of

convergence amongst available channels, absence of customer profiling, lack

of proper decision support systems, etc., are a few deficiencies that are being

overcome in a great way. However, the initiatives in this regard should

include creating flexible computing architecture amenable to changes and

having scalability, a futuristic approach, networking across channels,

development of a strong Customer Information Systems (CIS) and adopting

Customer Relationship Management (CRM) models for getting a 360 degree

view of the customer.

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ORGANIZATIONAL ALIGNMENT

It is of utmost importance that the culture and practices of an institution

support its stated goals. Having decided to take a plunge into retail banking,

banks need to have a well defined business strategy based on the competitive

of the bank and its potential. Creation of a proper organization structure and

business operating models which would facilitate easy work flow are the

needs of the hour. The need for building the organizational capacity needed

to achieve the desired results cannot be overstated.

This would mean a strong commitment at all levels, intensive training

of the rank and file, putting in place a proper incentive scheme, etc. As a part

of organizational alignment, there is also the need for setting up of an

effective Corporate Marketing Division. Most of the public sector banks have

only publicity departments and not marketing setup. A fully fledged

marketing department or division would help in evolving a brand strategy,

address the issue of alienation from the upwardly mobile, high net worth

customer group and improve the recall value of the institution and its

products by arresting the trend of getting receded from public memory. The

much needed tie-ups with manufacturers/distributors/builders will also

facilitated smoothly. It is time to break the myth PSBs are not customer

friendly. The attention is to be diverted to vast databases of customers lying

with the PSBs till unexploited for marketing.

PRODUCT INNOVATION

Product innovation continues to be yet another major challenge. Even

though bank after bank is coming out with new products, not all are

successful. What is of crucial importance is the need to understand the

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difference between novelty and innovation? Peter Drucker in his path

breaking book: “Management Challenges for the 21st Century” has in fact

sounded a word of caution: “innovation that is not in tune with the strategic

realities will not work; confusing novelty with innovation (should be avoided),

test of innovation is that it creates value; novelty creates only amusement”.

The days of selling the products available in the shelves are gone. Banks need

to innovate products suiting the needs and requirements of different types of

customers. Revisiting the features of the existing products to continue to

keep them on demand should not also be lost sight of.

PRICING OF PRODUCT

The next challenge is to have appropriate policies in place. The industry

today is witnessing a price war, with each bank wanting to have a larger slice

of the cake that is the market, without much of a scientific study into the cost

of funds involved, margins, etc. The strategy of each player in the market

seems to be: ‘under cutting others and wooing the clients of others’. Most of

the banks that use rating models for determining the health of the retail

portfolio do not use them for pricing the products. The much needed

transparency in pricing is also missing, with many hidden charges. There is a

tendency, at least on the part of few to camouflage the price. The situation

cannot remain his way for long. This will be one issue that will be gaining

importance in the near future.

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INDUSTRY PROFILE

BANKING BASICS

The Indian banking industry which is governed by the Banking Regulation Act of India, 1949 can be broadly classified into two major categories.

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Scheduled Banks Non-scheduled Banks

FIGURE:-1 STRUCTRE OF INDIAN BANKING INDUSTRY

Scheduled banks comprise commercial banks and the co-operative banks. In terms of ownership commercial banks can be further grouped into nationalized banks, the State Bank of India and its group banks, regional rural banks and private sector banks(old/new domestic and foreign)

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RESERVE BANK OF INDIA (CENTRAL BANK AND SUPREME MONETORY AUTHORITY)SCHEDULED BANKS(96)COMMERCIAL BANKSFOREIGN BANKS(40)REGIONAL RURAL BANKS(196)PUBLIC SECTOR BANKS(27)SBI & ASSOCIATE BANKS(8)OTHER NATIONALIZED BANKS(19)PRIVATE SECTOR BANKS(30)OLD PRIVATE BANKS(22)NEW PRIVATE BANKS(8)CO-OPERATIVE BANKSURBAN CO-OPERATIVE BANKS(52)STATE CO-OPERATIVE BANKS(16)

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Banking regulation act of India, 1949 defines banking as “accepting, for the purpose of lending or investment of deposits of money from the public, repayable on demand or otherwise and withdraw able by cheques, draft and order or otherwise.”

In addition, Banks are allowed to perform certain activities which are ancillary to this business of accepting deposits and lending. A bank’s relationship with the public, therefore, revolves around accepting deposit and lending money. Another activity which is assuming increasing importance is transfer of money, both domestic and foreign, from one place to another. This activity is generally known as “Remittance Business” in banking parlance. The so called forex (foreign exchange) is largely a part of remittance. It involves buying and selling o0f foreign currencies.

The law governing Banking Activities in India is called “Negotiable Instrument Act 1881”. The banking activities can be classified as:

Accepting deposits from public/others Transferring money from one place to another Acting as trustees Keeping valuable in safe custody Collection business Deposits Loans Lending money to public

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HISTORY

Banking in India originated in the last decades of the 18th century with The General Bank of India which came into existence in 1786. This was followed by The Bank of Hindustan. Both of these are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the Bank of Calcutta (later Bank of Bengal) in June 1806. A couple of decades late, foreign banks like Credit Lyonnais started their Calcutta operations in 1850s. The first fully Indian owned bank was The Allahabad Bank, which was established in 1865.

By the 1900s, the market expanded with the establishment of banks such as Punjab National Bank, in 1895 in Lahore and Bank of India in 1906, in Mumbai. Both these were founded under private ownership. The Reserve Bank of India formally took on the responsibility of regulating the Indian banking sector from 1935. After India’s independence in 1947, the Reserve Bank of India was nationalized and given broader powers.

POST-INDEPENDENCE

The partition of India in 1947 adversely impacted the economies of Punjab and West Bengal, paralyzing banking activities for months. India's independence marked the end of a regime of the Laissez-faire for the Indian banking. The Government of India initiated measures to play an active role in the economic life of the nation. This resulted into greater involvement of the state in different segments of the economy including banking and finance. The major steps to regulate banking included:

In 1948, the Reserve Bank of India, India's central banking authority, was nationalized, and it became an institution owned by the Government of India.

The Banking Regulation Act also provided that no new bank or branch of an existing bank could be opened without a license from the RBI, and no two banks could have common directors.

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However, despite these provisions, control and regulations, banks in India except the State Bank of India, continued to be owned and operated by private persons. This changed with the nationalization of major banks in India on 19 th

July 1969.

NATIONALIZATION

By the 1960s, the Indian banking industry had become an important tool to facilitate the development of the Indian economy. At the same time, it had emerged as a large employer, and a debate had ensued about the possibility to nationalize the banking industry. The Prime Minister of India expressed the intention of the GOI in the annual conference of the All India Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalization."

After this, until the 1990s, the nationalized banks grew at a pace of around 4%, closer to the average growth rate of the Indian economy.

LIBERALISATION

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

This move, along with the rapid growth in the economy of India, revitalized the banking sector in India, which has seen rapid growth with strong contribution from all the three sectors of banks, namely, government banks, private banks and foreign banks.

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CURRENT SITUATION

Currently, India has 96 scheduled commercial banks (SCBs) - 27 public sector banks (that is with the Government of India holding a stake), 31 private banks (these do not have government stake; they may be publicly listed and traded on stock exchanges) and 38 foreign banks. They have a combined network of over 53,000 branches and 49,000 ATMs.

The industry is currently in a transition phase. On the one hand, the Public Sector Banks which are the mainstay of Indian banking system, are in the process of shedding their flab in terms of excessive manpower, excessive Non Performing Assets (NPAs) and excessive governmental equity, while on the other hand the private sector banks are consolidating themselves through mergers and acquisitions.

With he growth in the Indian economy which is expected to be strong for services sector, the demand for the banking services, especially retail banking, mortgages and investment services are expected to be strong. One may also expect mergers and acquisitions, takeovers and asset sales.

Banking industry has completely moulded the system with some great technological developments and few revolutionary thoughts. Introduction of MIS (MANAGEMENT INFORMATION SYSTEM), HRIS (HUMAN RESOURCE INFORMATION SYSTEM), ERP SYSTEMS has made this system quick and efficient.

Investment is the part of services sector which is facing a tough competition these days. Both the public and private sector banking institutions are the major players.

The scenario which they have brought up in the market through their unpretentious hardworking and high quality work, has made a cluster breaking entry in the era of competition.

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Customer Customer Customer

Bank Branch

Clearing Decision

Bank Branch

Clearing Decision

Bank Branch

Clearing Decision

Central clearing Central clearing

TRADITIONAL BANKING

Traditionally the relationship between bank and its customer has been

on a one-to-one level via the branch network. This was put into operation with

clearing and design making responsibilities at the individual branch level. The

head office had the responsibility for the overall clearing network, the size of

the branch network and the training of staff in the branch network. The branch

monitored the organizations performance and set the decision making

parameters, but the information available to both branch and their customers

was limited to one geographical location.

FIGURE:-2 Traditional banking structure

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RELATIONSHIP BANKING

The modern bank cannot rely on its branch network alone. Customers

are now demanding new, more convenient, delivery systems. And services

such as internet banking have a dual role for the customer thus increasing the

productivity of this sector. They provide traditional banking service, but

additionally offer much greater access to information on their account and on

the banks many other services. To do this banking has to create information

layers, which can be accessed both by bank staff as well as by the customers

themselves.

The use of interactive electronic links via the internet can go a long way

in providing the customers with greater deal of information about both their

financial situation and about the services offered by the bank.

FIGURE:-3-RELATIONSHIP BANKING

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Customers

Telephone, Branch, Electronic Banking, etc.

Shared Information

Clearing systems Head Office Risk Monitoring

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CHAPTER:-2 DHANLAXMI BANK PROFILE

COMPANY PROFILE:

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Dhanalakshmi Bank Ltd was incorporated on 14th November 1927 by a group of enterprising entrepreneurs at Thrissur city, the "Cultural Capital of Kerala" with a capital of Rs 11,000 and 7 employees. It became a Scheduled Commercial Bank in the year 1977. It has now attained national stature with 181 branches and 26 Extension Counters spread over the states of Kerala, Tamil Nadu, Karnataka, Andhra Pradesh, Maharashtra, Gujarat, Delhi and West Bengal. in 2010 they were started the six branch in Gujarat[Vadodata, Ahmedabad, Veraval, Palanpur, Bardoli]

The Dhanalakshmi Bank has deployed technology widely as an instrument for enhancing the quality of customer service. It has introduced Centralized Banking Solution (CBS) on the Flexcube Platform at all its branches for extending anywhere/anytime/anyhow banking to its clientele through multiple delivery channels. The bank has set-up a state-of-the-art Data Centre in Bangalore, to keep the networked system operational round the clock. A Disaster Recovery Centre is also operational at Thrissur for meeting various contingencies.

Vision & Mission

To be amongst the top 5 Private Sector Banks in terms of

Bank’s Balance sheet size Profits Branch network Asset Quality

To be a large profitable “A” rated bank.

 

Achievements, Affiliations and Milestones

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Achievements Serviced business worth Rs. 8,212 crores as on 31 March 2009,

comprising deposits worth Rs. 4,969 crores and advances worth Rs. 3,245 crores.

Earned a net profit of Rs. 57.45 crores for the financial year ended 31st March 2009, with a capital adequacy ratio of 14.44% during the same period.

Put in place the Real Time Gross Settlement (RTGS) and National Electronic Fund Transfer (NEFT) systems to facilitate large value payments and settlements online in real time, on a transaction-by-transaction basis.

Set up NRI Boutiques (Relationship Centres) across nine locations in Kerala and Tamil Nadu, with plans to open specialized NRI outlets at potential locations with emphasis on impeccable service levels.

Dispensed Micro Credit among private and public banks in Kerala, the Bank's outstanding under micro credit was Rs. 124.40 crores at the end of March 2009.

Attained ISO 9001-2000 certification for the Bank's corporate office at Thrissur and industrial finance branch at Kochi.

Affiliations

Major Exchange Houses UAE Exchange Centre LLC Al Ahalia Money Exchange Bureau UAE Exchange Centre WLL

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Foreign Correspondent Banks Deutsche Bank Trust Company Americas Wachovia Bank NA - A Wells Fargo Company Commerzbank AG National Westminister Bank PLC

Insurance Partner Bajaj Allianz

Milestones

1927 - Founded on 14 November, 1927, at Thrissur, Kerala

1975 - Set up the first branch outside the home state of Kerala, at Chennai Mount Road

1977 - Designated as Scheduled Commercial Bank by the Reserve Bank of India (RBI)

1980 - 100-strong branch network

1986 - Total business of Rs. 100 crores

1996 - First public issue. Total business of Rs. 1,000 crores

2000 - Installed the first ATM

2002 - First Rights Issue

2002 - Platinum Jubilee year

2007 - Total business of Rs. 5,000 crores. 80th Anniversary year

2008- Total business of Rs. 7,500 crores. Second Rights Issue

2009- Expanded branch network by 27 branches. Total business of Rs. 10,000 crores

Financial Inclusion Initiatives

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Surpassed the RBI's benchmark of priority sector lending of 40% by advancing Rs. 1,148 crores as on 31 March 2009, representing 53.48%.

Surpassed RBI's recommended norm of 18% advances with respect to agricultural credit by lending Rs. 557 crores as on 31 March 2009, representing 21.40%.

Outstanding of Rs. 22.29 crores were under weaker sections, representing 10.31% as against the RBI benchmark of 10% as on 31 March 09.

Outstanding in the area of micro credit totalled Rs. 125 crores as on 31 March 2009.

The number of Savings Bank accounts maintained by Self Help Groups (SHGs) numbered 20,740 while credit facilities availed by SHGs stood at Rs. 35 crores as on 31 March 2009.

Kissan Credit Cards for Rs. 5.06 crores were issued to 1,717 farmers as at the end of March 2009.

Opened 83,046 ‘no-frills’ accounts with outstanding of Rs. 22.22 crores as on 31 March 09, as part of financial inclusion initiatives.

BUSINESS MIX OF DHANLAXMI BANK:-

Graph:-2.1 BUSINESS MIX OF DHANLAXMI BANK

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31/03/2009 15/02/20100%

10%

20%

30%

40%

50%

60%

70%

80%

44%

30%

56%

70%

GEOGRAPHICAL BUSINESS MIX

KERALA NON KERALA

Graph:-2.2 GEOGRAPHICAL BUSINESS MIX OF DHANLAXMI BANK

STRATEGICAL ASPECTS OF DHAN BANK:-

1. MARCH TOWARDS PAN INDIA EXPANSION:-

Dhanalakshmi Bank Ltd. (Dhanbank) has vision to be one of the top 5 Indian private banks in the near future. To attain this goal. Dhanbank has huge expansion plans to tap the potential lying in other places outside Kerala. Dhanbank is expected to open up 66 new branches and 389 new ATMs in the current financial year. Dhanbank will convert its 26 extension counters into full fledge branches in the current year, taking the total no. of branches to 273 in the current year. Dhanbank is expected to have 400 branches & 600 ATMs by the end of FY2010-11.

.

GRAPH:-2.3 NETWORKING ANALYSIS

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Dhanbank has got a contract with a German company, AGS, to handle its new ATM opening based on “only opex no capex” model. As per this model, AGS would be responsible for setting up new ATMs at strategic locations and to maintain the ATMs. Cost incurred to Dhanbank would be on number of transactions

Dhanbank has 65% of its branches in state of Kerala. Out of the new branches few would be located in rural areas of Kerala and other would be mainly in Maharashtra & Gujarat & Northern areas, as these areas has the highest portion of deposits and loan off-take, from the total business of Indian banks. Opening of new rural branches would help Dhanbank to tap the huge potential lying in the rural areas.

Dhanbank is expecting to add 900-1000 accounts daily after achieving the 273 branches target. This would help to bring in more CASA deposits.

2. Brand Transformation:

Dhanbank is in process to strengthen its brand in the market. Ogilvy & Mather and Fitch have been appointed as marketing consultants; this would help the bank to reach to the new customers and to strengthen its brand image in the market.

Dhanbank has appointed Ogilvy & Mather as its agency for the banking business to chart out a new brand proposition and communication strategy. O&M, India’s leading communication agency will help the Bank to design and implement a comprehensive go-to market communication approach. The agency will help the Bank in its endeavor to create an entirely new customer experience and to incorporate a young and contemporary look across all customer touch-points.

3. Margins heading north:

Improvement in margins might be seen in the near future on the basis of:

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Increase in CASA: Increase in number of branches is expected to bring in 900 to 1000 accounts daily; this would help to grow the CASA deposits. Dhanbank targets to achieve CASA of 30% in medium span of time. As CASA deposits are low cost deposits this would lead to lower cost of deposits.

GRAPH:-2.4- INCREASE IN CASA

Increase in NRI deposits: At present out of the total deposits, the NRI deposits are approx. 6%. Dhanbank has its major presence in Kerala and this area has huge potential of NRI deposits. Dhanbank plans to tap as much NRI deposits as possible, as these are low cost deposits. A special NRI deposit handling team is setup to tap this category of deposits

. Yield on Investments: In FY2008-09, yield on investments went down

as Dhanbank had major holding in T-bills. Now Dhanbank plans to invest in the government securities, this is expected to increase the yield on investments, as the govt. securities yield better returns than T-bills.

Repricing of deposits to decrease cost of deposits: In the present low interest rate scenario, Dhanbank is to benefit from the repricing of deposits. This will decrease the cost. Repricing could continue benefiting bank up to 1 year.

4. Venture into new business segments:

Fee & Commission based business would be the focus of Dhanbank. This category of income leads to higher ROE & EPS as it does not require capital expenditure and it leads to regular stream of income. Dhanbank has taken various initiatives to increase its other income sources. With the increasing

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number of branches and deeper reach to retail clients would be a catalyst for the income from Fee & commission based income.

Insurance distribution: Dhanbank has got into a tie up with Bajaj Allianz for its Life Insurance & general insurance product distribution. A special team of 300 marketing officers is set-up for insurance distribution business.

Mutual fund distribution: As part of their wealth management, Dhanbank intends to distribute leading mutual fund schemes. Professional would be joining for MF product distribution and the bank would have a similar strategy as in case of its insurance distribution business.

Other Products: Dhanbank is expected to come up with new products like gold coins, Travelers cheques, and forex services. The bank plans to offer 3in1 account whereby the customer would be provided with the routine banking relationship (Savings A/C) along with Demat A/C and a trading platform.

AMC: Dhanbank is planning to get into Asset Management business. It is planning to enter the asset management business by buying into an existing fund, the investment is likely to be around Rs15-20 Cr. to buy stake in an existing AMC.

Venture Capital: The bank is also looking at setting up a wholly-owned venture capital firm soon. Bank would put in about Rs.2000 Cr. in VC to invest in new start ups. The expected annual return from VC business is approx. 25%.

PRODUCT SUITE:-

Following chart shows the various products and services offered by DHAN LAXMI BANK-

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Salary Account Forex & Trade:-Forex Services, Export Services, Import Services

3.NRI Banking

Accounts & Deposits:- NRE Account, NRO Account, Recurring & TD, FCNRY FD, Returning NRIs

Money Transfer:-Draft Drawing, Rupee Drawing, Money Transfer, Overseas Corresp.

NRI Home Loan Investments:-Portfolio, Repatriation, Non-repatriation, Immovable

properties.

4. Micro & Agri Banking

Dhanam Kissan Vahana Kissan Card Agri gold Loan Micro Credit - MFI Micro Credit - SHGs

5. Financial Planning

TABLE:2.1-COMPARISON OF RETAIL PRODUCT FEATURES:-

S.No.

FEATURE ICICI BANK HDFC BANK

AXIS BANK YES BANK

DHANLAXMI

1 AVERAGE MONTHLY BALANCE

VARY AS PER PRODUCT

VARY AS PER PRODUCT

VARY AS PER PRODUCT

VARY AS PER PRODUCT

VARY AS PER PRODUCT

2 DEBIT CARD FACILITY

FREE FREE FREE FREE FREE

3 MOBILE BANKING

CHARGEABLE CHARGEABLE CHARGEABLE CHARGEABLE

FREE

4 RTGS/NEFT ON CHARGE BASIS

ON CHARGE BASIS

ON CHARGE BASIS

ON CHARGE BASIS

BOTH 5-5 FREE PER MONTH

5 COLLECTION OF OUTSTATION

Rs. 50 PER CHEQUE

Rs. 50 PER CHEQUE

Rs. 50 PER CHEQUE

Rs. 50 PER CHEQUE

FREE 5 OUTSTATION CHEQUES PER

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CHEQUES MONTH6 DERMAND

DRAFTAS PER RBI NORMS

AS PER RBI NORMS

AS PER RBI NORMS

AS PER RBI NORMS

5 D.D. FREE PER MONTH

7 INTERNET BANKING

FREE FREE FREE FREE FREE

8 SALARY ACCOUNT

YES YES YES YES YES

9 SWEEP IN AND AWEEP OUT FACILITY

IN SOME ACCOUNTS

NO NO NO YES,FREE

10 STOP PAYMENT

CHARGEABLE CHARGEABLE CHARGEABLE CHARGEABLE

FREE TO SOME EXTENT

11 PAY ORDERS CHARGEABLE AS PER NORMS

CHARGEABLE AS PER NORMS

CHARGEABLE AS PER NORMS

CHARGEABLE AS PER NORMS

5-25 P. O .FREE PER MONTH

12 BILL PAYING FACILITY

YES YES YES YES YES

13 INTEREST ON FIXED DEPOSIT FOR LESS THAN 1.5 YR

7% 7.5% 7.25% 7% 7.75%

14 ANY BRANCH BANKING

YES YES YES YES YES

TABLE:-2.2-COMPARISON OF SERVICES OFEERED

S.No.

FEATURE ICICI BANK HDFC BANK

AXIS BANK YES BANK

DHANLAXMI

1 MUTUAL FUND INVESTMENT

YES,ICICI DYNAMIC,ICICI GROWTH etc.

YES,HDFC TOP 200

YES YES THIRD PARTY PRODUCTS

2 GENERAL INSURANCE

ICICI LOMBARD

YES YES YES THIRD PARTY PRODUCTS

3 LIFE INSURANCE ICICI LIFE INSURANCE

YES YES YES THIRD PARTY PRODUCTS

4 NRI BANKING YES YES YES YES YES5 AGRI BANKING YES YES YES YES ONLY IN SOUTH

INDIA6 HOME LOANS YES YES YES YES ONLY IN SOUTH

INDIA

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7 CORPORATE LOANS

YES YES YES YES YES

8 OTHER CREDIT SERVICES

YES YES YES YES ONLY IN SOUTH INDIA

9 CUSTOMER CARE DEPARTMENT

YES YES YES YES YES

10 CREDIT CARD FACILITY

YES YES YES YES ONLY IN SOUTH INDIA

11 ONLINE TRADING

YES YES YES YES YES, IN ALLIANCE WITH DESTIMONEY SECURITIES LTD.

12 INTERNET BANKING

YES YES YES YES YES

13 MOBILE BANKING

YES YES YES YES YES

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COMPETITOR ANALYSIS AT A GLANCE:-

S.No. FEATURE ICICI BANK HDFC BANK

AXIS BANK

YES BANK

DHANLAXMI

1 BRANCHES 1544 1725 905 150 273

2 ATM 4816 4232 3894 216 453

3 MARKET CAPITALIZATIONIN CRORE Rs.

100,180.00 94,942.22 52996.04 9762.04 1149.27

4 TOTAL ASSETS 286,059.77 139,011.39 156,748.35 31,688.89 6,795.02

5 NET SALES IN CRORE Rs.(RECENT)

25,706.93 16,332.26 11,638.02 2,369.71 534.57

6 NET PROFIT IN CRORE Rs.(RECENT)

4024.98 2244.94 2514.53 477.74 23.30

Table:- 2.3

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MARKET SHARE ANALYSIS:-

Following table represents the current market capitalization of different private commercial banks.

NAME OF COMPANY MARKET CAPITALIZATION PERCENTAGEICICI In crore Rs. 100,180.00 31%

HDFC 94,942.22 29%

AXIS 52,996.04 16%

YES 9,72.04 3%

DHANLAXMI 1149.27 .03%

OTHERS 63952.16 20.97%

TOTAL 322981.73 100%

Table:-2.4

31%

29%

16%

3%DHANLAXMI, 0.03%

21%

MARKET SHARE ANALYSIS ON THE BASIS OF MARKET CAPITALIZATION

ICICI HDFC AXIS YES DHANLAXMI OTHERS

Graph:- 2.5-MARKET SHARE ANALYSIS

Depiction:-ICICI is the market player of private commercial bank segment with highest market share of 31%. HDFC and AXIS bank are market followers with 29% & 16% market share respectively. Dhanlaxmi has very low market share in the segment (=0.03%), rest 20% share is from others including INDUSIND BANK, BANK OF RAJASTHAN, KOTAK MAHINDRA, FEDERAL BANK, KARNATAKA BANK etc.

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CHAPTER:-3

DATA ANALYSIS AND INTERPRETATION

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3.1 KIND OF BANKS OPTED BY CUSTOMERS ON THE BASIS OF THEIR NEEDS:-

KIND OF BANK NO. OF CUSTOMERS PERCENTAGEPUBLIC SECTOR BANKS 35 35%PRIVATE BANKS 55 55%OTHERS 10 10%

Table-3.1

35%

55%

10%

KINDS OF BANKS OPTEDBY CUSTOMERS

PUBLIC SECTOR BANK CUSTOMERS PRIVATE BANK CUSTOMERSOTHERS

Graph:-3.1

Depiction:-The survey depicts that around 55% customers have opted public sector banks, while 35% are the customers of private banks. Rest 10% is from others including foreign banks and cooperative banks customers.

Interpretation:- A large no. of customers still don’t have faith in private banks, they still avail public sector nationalized banks for their banking requirements. Private sector banks can target these customers with better strategies.

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3.2 CRITERIA OF SELECTING THE BANK FOR BANKING REQUIREMENTS:-

SELECTION CRITERIA NO. OF RESPONDENTS PERCENTAGEREFERENCE 19 19%PROXIMITY 30 30%BRAND IMAGE 08 08%PRODUCTS AND SERVICES 22 22%NETWORKING 21 21%Table:-3.2

19%

30%8%

22%

21%

SELECTION CRITERIA AS PER SURVEY

REFERENCE

PROXIMITY

BRAND IMAGE

PRODUCTS AND SERVICES

NETWORKING

Graph:-3.2

Depiction:-As per survey about 30% respondents selected their bank on the basis of proximity of branch. Effective networking is the reason of selecting the bank for 21% customers, while 19% and 22% customers choosed their bank due to reference of known persons and products and services of the bank respectively. Rest 8% customers considered brand image of the bank while choosing it.

Interpretation:-Survey depicts that proximity and products and services are the major factors which customer keeps in mind before selecting the bank. Some of the respondents selected the bank because it was referred to them by their relatives/friends etc.

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3.3 SATISFACTION LEVEL OF PUBLIC SECTOR BANK CUSTOMERS:-

SATISFACTION LEVEL NO. OF RESPONDENTS %VERY SATISFIED 06 17%SOMEWHAT SATISFIED 20 60%SOMEWHAT DISSATISFIED 06 19%VERY DISSATISFIED 03 4%Table:-3.3

VERY SATISFIED

SOMEWHAT SATISFIED

SOMEWHAT DISSATISFIED

VERY DISSATISFIED

18%

60%

18%

4%

SATISFACTION LEVEL

Sales

Graph:-3.3

Depiction:-Satisfaction level of public sector bank customers is about 75% as per survey.

Interpretation: - 25% respondents from public sector banks were not satisfied with the services. Some of the reasons for this dissatisfaction are as below:-

Poor customer relationship management Complex procedures.

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3.4 SATISFACTION LEVEL OF PRIVATE SECTOR BANK CUSTOMERS:-

SATISFACTION LEVEL NO. OF RESPONDENTS %VERY SATISFIED 24 47%SOMEWHAT SATISFIED 20 39%SOMEWHAT DISSATISFIED 6 12%VERY DISSATISFIED 5 2%Table:-3.4

VERY SATISFIED

SOMEWHAT SATISFIED

SOMEWHAT DISSATISFIED

VERY DISSATISFIED

47%

39%

12%

2%

SATISFACTION LEVEL

Sales

Graph:-3.4

Depiction:- Survey depicts that 47% respondents from private bank customers were very satisfied with the bank while around 40% were somewhat satisfied.

Interpretation:- As per survey satisfaction level is higher in private bank customers as compared to customers from public sector bank. following are the reasons of dissatisfaction of private bank customers:-

Process delay. Service quality. Hidden charges. Behavior of the employees at branch.

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3.5 RELATION BETWEEN SELECTION CRITERIA AND SATISFACTION LEVEL:-

SELECTION CRITERIA

NO. OF RESPONDENTS

VERY SATISFIED RESPONDENTS

PERCENTAGE

REFERENCE 19 3 16%PROXIMITY 30 6 20%BRAND IMAGE 8 4 50%PRODUCTS AND SERVICES

22 12 54%

NETWORKING 21 5 23%Table:-3.5

REFERENCE PROXIMITY BRAND IMAGE PRODUCTS AND SERVICES

NETWORKING0%

10%20%30%40%50%60%70%80%90%

100%

16% 20%

50% 54%

23%

84% 80%

50% 46%

77%

ANALYSIS OF RELATIONSHIP BERWEEN SE-LECTION CRITERIA AND SATISFACTION LEVEL

VERY SATISFIED OTHERS

Graph:-3.5

Depiction:-Survey depicts that those respondents who choosed their bank on the basis products and services, 54% out of them were very satisfied with their bank. Respondents who choosed their bank on the basis of its brand image, 50% out of them were very satisfied.

Interpretation:-As per survey results there is a relation between selection criteria and satisfaction level. A private commercial bank has to be strong in terms of following factors for 100% customer satisfaction:-

1. Brand image 2. Product differentiation 3. Network efficiency

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3.6 DOES YOUR BANK GIVES YOU REGULAR UPDATES ABOUT NEW PRODUCT AND SERVICES

REGULAR UPDATES NO. OF RESPONDENTS PERCENTAGEYES 64 64%NO 17 17%SOMETIMES 19 19%

Table:-3.6

64%

17%

19%

ANALYSIS OF REGULARPRODUCT UPDATES

YESNOSOMETIMES

Graph:-3.6

Depiction:- As per survey 65% respondents say their bank give them regular updates on new products and services launched, while about 20% say their bank does not give them regular updates.

Interpretation:-Regularly awaring the customer about new products and services or any change in existing one is an effective tool of service positioning.

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3.7 MOBILE BANKING AND INTERNET BANKING SERVICES: PATTERN OF USAGE

USE OF MODERN WAY OF BANKING

YES NO SOMETIMES

NO. OF RESPONDENTS

37 46 17

Table:-3.7

YES37%

NO46%

SOMETIMES17%

USE OF MOBILE AND INTERNETBANKING

YES NO SOMETIMES

Graph:-3.7

Depiction:- Survey depicts that only 35% respondents are using mobile banking and internet banking service regularly, whereas around 50% customers are still not using these services.

Interpretation:- The reason behind lacking no. of mobile and e-banking users are :

Hidden charges Unawareness. Complex procedures, etc

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3.8 AWARENESS ABOUT DHANLAXMI BANK IN JAIPUR:-

AWARENESS LEVEL NO. OF RESPONDENTS PERCENTAGEYES 37 37NO 54 54SOMEWHAT 9 9Table:-3.8

YES

NO

SOMEWHAT

37%

54%

9%

AWARENESS LEVEL OF DHANLAXMI

Column1

Graph:-3.8

Depiction:- As per survey 54% respondents said that they don’t know about dhanlaxmi bank . 37% respondents said that they know about dhanlaxmi bank through their personal sources.

Interpretation:- Awareness level of Dhanlaxmi Bank is not so high in Jaipur city. Advertisement campaign has not started that’s why people know about it through their personal sources.

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3.9 RISK TAKING ABILITY WITH RESPECT TO DIFFERENT INCOME LEVELS:-

RISK TAKING ABILITYINCOME GROUP

HIGH MODERATE LOW TOTAL

VERY HIGH 6 4 2 12HIGH 8 22 2 32MIDDLE 6 32 18 56

Table:-3.9

VERY HIGH(>50000 MONTHLY)

HIGH(30000-50000 MONTHLY)

MIDDLE(<30000 MONTHLY)

0

10

20

30

40

50

60

70

50%

25%

11%

34%

66%

57%

16%

9%

32%

HIGH MODERATE LOW

Graph:-3.9

Depiction:- Survey depicts that :-

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50% respondents from very high income group can take high risk while investing, whereas around 35% respondents want to invest in those options which are less risky. Around 15% respondents from very this group wants to avoid risk while investing their money’

65%customers from high income group are interested in investing those options having moderate risk whereas 20% can go for high risk categorized investment options; rest 15% wants to avoid the risk.

55% customers from middle income group can take moderate risk. Around 30% respondents want to avoid the risk of investment, rest 10% can go for high risky investment options.

Interpretation:-

As we go from very high income group to middle income group risk taking ability decreases.

Customers from middle income group want to avoid investment in ULIPS, equity market and other equity market linked investment options.

Customers from very high income can take high risk while investing their money as compared to respondents from other income groups.

3.10 ANALYSIS OF RISK TAKING ABILITY IN INVESTMENT AT DIFFERENT LEVELS OF AGE:-

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RISK TAKING ABILITY <40 YEARS >40 YEARSHIGH 15 5MODERATE 26 31AVOIDER 8 15Table:-3.10

<40 YEARS >40 YEARS0%

10%

20%

30%

40%

50%

60%

70%

31%

10%

50%

61%

19%

29%

RISK TAKING ABILITY

HIGH RISK TAKER

MODERATE RISK TAKER

RISK AVOIDER

AGE GROUPS

NO

. OF

RESP

ON

DEN

TS

Graph:-3.10

Depiction:- Survey depicts that:

31% respondents from, 40 yrs age group wants to invest money in high risky investment options. 50% wants to be in moderate risk category.

Only 10% respondents from >40 age group want to put their money in high risk categorized options whereas around 30% want to avoid risk.

Interpretation:- There is a relationship between risk taking ability and age of the respondent. Risk taking ability decreases with increasing age.

SUMMARY OF FINDINGS AND SUGGESTIONS:-

FINDINGS:-

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As per the survey conducted, it is to be noticed a good sector of the people prefer to be customers of nationalized banks. This result can be very well explained by the fact that nationalized banks are acquainted with the Government and that ups and downs in business will not affect the existence of the bank. Also the RBI too has good control over the working of these banks and there for the customers feel a sense of security in investing in these banks. However it is also seen that a good percentage of people also opt for private banks such as ICICI, HDFC, AXIS bearing in mind the amount of experience they posses in the field of banking.

Survey results show that customers from private sector banks are more satisfied as compared to customers from public sector banks. it was found that there is a direct relationship between brand image/product differentiation and satisfaction of the customer.

Customer demographic plays important role while preparing penetration

strategies.

Dhanlaxmi has the retail products with unique features which others don’t have, but some of the services it is selling in alliance with third parties. Product line of Dhan Bank is not as diversified in Jaipur as their competitors have.

Market share of Dhan Bank is not so high as compared to ICICI,HDFC,AXIS and YES BANK.

SUGGESTIONS:-

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The bank should introduce new delivery channels via opening more branches and ATMs in Jaipur to improve network efficiency..

Effective advertisement campaign can help the bank to increase business in Jaipur. TV commercials, Hoardings posters can be some of the mediums to increase the awareness of Bank in Jaipur.

Bank should launch the whole product line in Jaipur to emerge its position in competition.

Bank should target 5 km area around the branch office because survey depicts that most of the customers selected their bank on the basis of proximity.

Bank should constantly innovate their products as per customer requirements.

Dhanlaxmi Bank should maintain the consistency in service quality for total customer satisfaction.

SWOT ANALYSIS:

STRENGHTS

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Serving customers since 1927 with loyalty and total dedication to customer services.

A trusted Brand in South India.

Best F.D. rates among scheduled private commercial banks.

Empowering the investors by giving them different schemes like free mobile and internet banking.

Centralized “Flex cube” system for any branch banking.

WEAKNESS:-

Less number of branches as compared to competitors.

Less no. of ATMs.

Lack of awareness of the brand in Jaipur.

Only branch in Rajasthan.

OPPORTUNITIES:-

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Special permission from R.B.I. for unlimited free transactions from other bank’s ATM in Jaipur.

Products are with excellent features which can help them to build strong business in Jaipur.

Effective Fixed Deposit rates can help them to increase business in Jaipur.

Growing Indian banking sector.

People are becoming more service oriented

THREATS:-

Nationalized banks are growing fast.

Competitors have diversified product range.

Customers want to go with a known brand.

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BIBLIOGRAPHY:-

WEBSITES:-

www.dhanbank.com www.icicibank.com www.axisbank.com www.yesbank.com www.moneycontroll.com www.finance.india.mart.com www.banknetindia.com www.rbi.org www.moneycontrol.com www.google.com

BOOKS, JOURNALS:-

COMPANY BROCHURES ANNUAL REPORTES OF DHAN BANK BUSINESS ECONOMICS JOURNAL KOTHARI, C. R. ,RESEARCH METHODOLOGY CHAUDHARY,C.M., RESEARCH METHODOLOGY

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ANNEXURE:QUESTIONNAIRE

1. NAME- 2. AGE

3. E-MAIL- 4. CONTACT

5. EDUCATION 6. MONTHLY INCOME

7. PROFESSION-

A) SALARIED B) SELF EMPLOYED (………………………………………..)

C) OTHERS

Q. 1 WHICH BANK(S) YOU ARE USING FOR YOUR CURRENT BANKING REQUIREMENTS?

……………………………………………………………………………………………………………………………

Q. 2 WHICH BANKING PRODUCTS YOU ARE AVAILING?

A) SAVING ACCOUNT B) CURRENT ACCOUNT C) LOCKER

D) FIXED DEPOSIT E) CREDIT

Q.3 YOU CHOOSED YOUR BANK ON THE BASIS OF-

A) PROXIMITY B) NETWORKING C) PRODUCTS AND SERVICES

D) REFRENCES E) TIMING F) BRAND IMAGE

Q.4 DO YOU USE THE MODERN AND SMART WAY OF BANKING?

A) YES B) NO C) SOMETIMES

Q.5 DOES YOUR BANK GIVES YOU REGULAR UPDATES FOR NEW PRODUCTS AND SERVICES?

A) YES B) SOMETIMES C) NO D) NEVER

Q. 6 HOW MUCH YOU ARE SATISFIED WITH THE SERVICES, YOUR BANK IS PROVIDING TO YOU?

A) VERY SATISFIED B) SOMEWHAT SATISFIED C)SOMEWHAT DISSATISFIED D) VERY DISSATISFIED

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Q. 7 WOULD YOU LIKE TO GET SOME ADDITIONAL BENEFITS FROM YOUR BANK?

A) YES B) NO

IF YES WHAT KIND OF? ...................................................................................................................

Q. 8 WHAT KIND OF INVESMENT YOU ARE INTO FOR SECURING YOUR FUTURE?

A) FIXED DEPOSIT B) INSURANCE C) MUTUAL FUNDS

D) SHARES/BONDS E) REAL ESTATES F) OTHERS

Q. 9 WHAT IS THE PURPOSE OF YOUR INVESTMENT

A) PROFITABILITY B) LIQUIDITY C) SECURITY D) TAX BENIFIT

Q. 10 WHAT IS YOUR PREFERENCE FOR INVESTMENT, STARTING FROM 1ST RANK TO SUBSEQUENT RANKINGS?

MUTUAL FUNDS (….) INSURANCE (….) GOLD (….)

REAL ESTATE (….) SHARES/BONDS (….) FIXED DEPOSITS (….)

Q.11 HOW MUCH YOU SPEND YEARLY TOWARDS INVESTMENT ACTIVITIES?

A) LESS THAN 1 LAC B) B/W 1-2LACS

C) B/W 2-3 LACS D) MORE THAN 3 LACS

Q. 12 DO THE INSURANCE PLAN YOU ARE INTO COVERING YOUR RISK PROPERLY?

A) NO B) YES

IF NO / YES, HOW? .........................................................................................................

Q. 13 HAVE YOU EVER HEARD ABOUT DHANLAXMI BANK?

A) YES B) NO

IF YES, HOW DID YOU COME TO KNOW ABOUT THE BANK? ……………………………………………………………………………………………………………………………………………

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