summer internship report for agri-business(priority sector lending) at kotak mahindra bank ltd

“Comparative Study Of Fund Based Working Capital Facilities Offered By KMBL And Other Major Players For Agri-Business w.r.t Customers in Nayabazar and

Azadpur Markets ”

Faculty Mentor Gagnesh VarshneyDr. Ashish Bajpai MBAProfessor Roll No. : 15423MBA013IM- BHU

Flow Of Presentation

1 Industry Analysis

2 Company Analysis

3 Research Methodology

4 Data Analysis and Interpretation

5 Findings

6 Suggestions

©InterGlobe Hotels Pvt. Ltd. 2011. Confidential: Not for Distribution. www.accorhotels.com/asia

Industry Analysis

Banking Industry• The Indian banking system consists of 26 public sector banks, 25 private sector banks, 43 foreign banks, 56 regional rural banks.

• The central bank granted in-principle approval to 11 payments banks and 10 small finance banks and 2 universal banks in 2015.

• At the end of March 2015, credit of scheduled commercial banks amounted to Rs 68,784 billion registering an increase of 9.5 per cent during the year as against an increase of 13.7 per cent in the previous year.

• Share of Priority Sector Advances in Total Credit of Scheduled Commercial Banks stood at 36.6% in 2015 as compared to 36.1% in 2014.

•Bank credit to Agriculture sector witnessed a lower growth of 7.4 per cent in 2015 as compared to 24.5 per cent in 2014. .

Priority Sector Lending

•Priority sector lending scheme is a policy of providing a specified portion of bank lending to the important sectors of the economy.

•The PSL program has been implemented by the RBI since 1974, when banks were advised to raise credit to priority sectors to the level of 33.3% by March 1979.

•Today this number stands at 40%, out of which direct agriculture lending has to be 18%.

•Areas under priority sector includes agriculture, MSMEs, education, housing, social infrastructure and others.


Company Analysis

Kotak Mahindra Bank Limited

KMBL is the 4th largest private bank headquartered in Mumbai, India. The company is the part of Kotak Mahindra Group.

Mr. Uday Kotak is the Managing Director of the KMBL.

In February 2003, Kotak Mahindra Finance Ltd. (KMFL), the Group’s flagship company, received a banking license from the Reserve Bank of India (RBI).

In 2014, Kotak Bank acquired ING Vysya Bank for a deal valued at Rs.15000 crore (US$2.2 billion).

Financial Performance

KMBL Annual Report 2015-16


Kotak Mahindra Bank Ltd Agri Business

2015-16

2013-14

2011-12

2009-10

2007-08

2005-06

2003-04

1831212236

104688355

57134228

3118

In Crores

KMBL Annual Report 2015-16

• Starting from its inception in 2003, Agri Business Group provides core solutions to the Indian agricultural sector.

•The Agri Business Group aims at retaining a minimum of 20% of the total advances made by the Bank but in the FY 2015-16 they missed the target of PSL in agriculture by around Rs.3000 Crores.

• The total advances made in Agri Business by KMBL in FY 2015-16 are Rs 18,312 Crores.

SWOT Analysis

First bank to offer instant funds transfer without internet connectivity.Has over 46,500 employees.

Low publicity and marketing.Lesser penetration as being late entrant.Increase in Industry banking.Government focus on financial inclusions.New acquisitions.

Economic slowdown.Stringent Banking Norms.Increasing NPA

Strengths

Weaknesses

Opportunities

Threats


Research Methodology

Problem Statement

The Azadpur and Nayabazar mandis are the two potential markets located in

New Delhi and are the targeted markets from which KMBL intends to intensify

its measures to earn more and more profits. As the market deals with traders

who deal in retailing and exporting of agricultural products which are mostly

perishable, there is a heavy demand for bankers providing fund based working

capital financing facilities. So the number of products of working capital and

their services has become a deciding factor for the dealers in the market for

choosing the banker.

Objectives

• To find out the different types of customers of the banks in Azadpur and Nayabazar markets.

• To find out the market penetration of different banks in Azadpur and Nayabazar markets.

• To find the factor for preference of the different banks in Azadpur and Nayabazar markets.

• To recognize which WC facility is being preferred by the customers in Azadpur and Nayabazar

markets.

• To evaluate the satisfaction level of customers towards the WC financing facilities of the banks in

Azadpur and Nayabazar markets.

Research Design

1. Type of research design : Descriptive Research

2. Data collection : Primary Source and Secondary Source

3. Scaling techniques : Nominal Scale , Likert Scale

4. Questionnaire : Specific and Closed - Ended Questions

5. Sampling technique : Convenience Sampling

6. Sample Population : All traders in Nayabazar and Azadpur

7. Sample Frame :Bank Account holders in Nayabazar and Azadpur Market

8. Sample Size : 240(Nayabazar-110, Azadpur-130)


Data Analysis and Interpretation

Different customers of banks

Azadpur Market

C.A + Trader

s31%

Commission Agents

33%Ex-porter

s6%

Processors11%

Traders

19%

Nayabazar Market

C.A + Trader

s32%

Commission Agents

35%Ex-porters

7%

Processors5%

Traders

20%

Different customers of KMBL

Azadpur MarketC.A + Traders31%

Commis-sion Agen

ts24%

Ex-porte

rs10%

Processors14%

Traders21%

Nayabazar Market

C.A + Trader

s37%

Commission Agents

27%Ex-

porters

3%

Processors13%

Traders

20%

The market share of different banks

Azadpur Market

HDFC

25%

ICICI

25%

KMBL

22%

Others9%

PNB6% SBI

8%YES4%

Nayabazar Market

HDFC

20%

ICICI28%

KMBL

27%

Others8%

PNB6%

SBI6%

YES4%

Most widely used factors for the selection of bank?

1. KMBL

Azadpur Market Nayabazar Market

Rate of

inter

est

Loca

tion

CRM/Serv

ices

Leng

th of

Docum

entat

ion

Brand I

mage

0.00

1.00

2.00

3.00

4.00

5.00

3.17 3.003.45

3.12 3.14

Mea

n

Rate of

inter

est

Loca

tion

CRM/Serv

ices

Leng

th of

Docum

entat

ion

Brand I

mage

0.00

1.00

2.00

3.00

4.00

5.00

3.20 3.43 3.633.22 3.18

Mea

n

2.ICICI:


Rate of

inter

est

Loca

tion

CRM/Serv

ices

Leng

th of

Docum

entat

ion

Brand I

mage

0.00

1.00

2.00

3.00

4.00

5.00

3.383.81 3.45 3.40

4.12

Mea

nRate

of in

teres

t

Loca

tion

CRM/Serv

ices

Leng

th of

Docum

entat

ion

Brand I

mage

0.00

1.00

2.00

3.00

4.00

5.00

3.41 3.54 3.66 3.484.20

Mea

n

3. HDFC Bank:


Rate of

inter

est

Loca

tion/P

roxim

ity

CRM/Serv

ices

Leng

th of

Docum

entat

ion

Brand I

mage

0.00

1.00

2.00

3.00

4.00

5.00

3.36 3.42 3.48 3.384.12

Mea

n

Rate of

inter

est

Loca

tion/P

roxim

ity

CRM/Serv

ices

Leng

th of

Docum

entat

ion

Brand I

mage

0

1

2

3

4

5

3.422.95 3.31 3.29

4.08

Mea

n

4. SBI Bank:


Rate of

inter

est

Loca

tion/P

roxim

ity

CRM/Serv

ices

Leng

th of

Docum

entat

ion

Brand I

mage

0.00

1.00

2.00

3.00

4.00

5.00

3.82

3.00 2.733.23

3.03

Mea

n

Rate of

inter

est

Loca

tion/P

roxim

ity

CRM/Serv

ices

Leng

th of

Docum

entat

ion

Brand I

mage

0.00

1.00

2.00

3.00

4.00

5.00

3.86

3.00 2.57 3.13 3.14

Mea

n

Preferable working capital financing facility


65%

35%

WC Facilities

Cash Credit Overdraft WCDLTerm Loan Others

74%

26%

WC Facilities

Cash Credit Overdraft WCDLTerm Loan Others

How much satisfied are you with the WC financing facilities of your bank?

KMBL ICICI HDFC SBI Others0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

3.1 3.31

3.392.72

2.76

3.53.45

3.22

2.71

2.9

Satisfaction Level

azadpurnayabazar

Mea

n


Findings


Azadpur Market • Majorly the customers are commission agents and commission agents plus traders giving them 33% and 31% share respectively.

• Majorly the customers of KMBL are commission agents plus traders and commission agents giving them 31% and 24% share respectively.

• HDFC bank and ICICI bank have the highest hold giving them 25% share each and KMBL with a share of 22% is giving them tough competition.

•The factors on which the customers are choosing respective banks areKMBL- CRM/Services(3.45)ICICI Bank- Brand Image(4.2), CRM /Services(3.66)HDFC Bank- Brand Image(4.12), Location/Proximity(3.42)SBI Bank-Rate of Interest(3.82)

• 65% customers have taken WC finance in form of Cash Credit and 35% as Overdraft .• Satisfaction score among KMBL customers is 3.10 which is third highest on a scale of 1 – 5 . It is highest in HDFC bank(3.39).

Findings


Nayabazar Market • Majorly the customers are commission agents and commission agents plus traders giving them 35% and 32% share respectively.

• Majorly the customers of KMBL are commission agents plus traders and commission agents giving them 37% and 27% share respectively.

• ICICI bank has the highest hold giving it 28% share and KMBL with a share of 27% is giving tough competition.

•The factors on which the customers are choosing respective banks areKMBL- CRM/Services(3.63), Location/Proximity(3.43)ICICI Bank- Brand Image(4.12), Location/Proximity(3.81)HDFC Bank- Brand Image(4.08), Rate of Interest(3.42)SBI Bank-Rate of Interest(3.86) • 74% customers have taken WC finance in form of Cash Credit and 26% as Overdraft . • Satisfaction score among KMBL customers is 3.5 which is highest on a scale of 1 – 5 . Here ICICI bank has the second highest score of 3.39.

• KMBL can make new strategies and add customization to add more customers. • To save the customer from the exhaustive documentation at the time of

loans, KMBL can integrate its marketing team with credit team so that length of documentation can be reduced.

• KMBL should make the most of social media and digital media for the

marketing of its products because in this brand war, digital media can help in brand recognition by creating more touch points with the users.

• KMBL should try to establish an E-Banking centre near Azadpur market

keeping in view the customer needs and the market potentiality.

Suggestions

summer internship report for agri-business(priority sector lending) at kotak mahindra bank ltd

Marketing