UNIVERSITY OF MUMBAI

PROJECT REPORT ON

“COMPARATIVE STUDY OF RETAIL BANKING STRATEGIES

ADOPTED BY VARIOUS PRIVATE SECTOR BANKS”

IN PARTIAL FULFILMENT OF

BACHELORS OF FINANCIAL MARKET

SEMESTER VI – 2018-19

PROJECT GUIDE

PROF. JENNIE PRAJITH

SUBMITTED BY: STUTI MEHROTRA

ROLL NO: 3254

MAHATMA EDUCATION SOCIETY’S

PILLAI COLLEGE OF ARTS, COMMERCE & SCIENCE NEW

PANVEL
 DECLARATION

I, STUTI MEHROTRA student of T.Y.B.COM. FINANCIAL MARKETS,

3254, MAHATMA EDUCATION SOCIETY’S PILLAI COLLEGE OF ARTS,
COMMERCE & SCIENCE, hereby declare that I have completed the project
report on “COMPARATIVE STUDY OF RETAIL BANKING
STRATEGIES ADOPTED BY PRIVATE SECTOR BANKS” in the
academic year 2018-19. The information submitted by me is true and original to the
best of my knowledge.
 ACKNOWLEDGEMENTS

I am very thankful to Mahatma Education Society’s, Pillai College of Arts,

Commerce & Science and also I am thankful to the College I/C Principal Dr.
Gajanan Wader and Vice Principal Mrs. Deepika Sharma for giving me an
opportunity to work on this important project and also for the support and guidance.
This project “COMPARATIVE STUDY OF RETAIL BANKING
STRATEGIES ADOPTED BY PRIVATE SECTOR BANKS” would just
not have been complete without the able support of my Project Guide Prof. JENNIE
PRAJITH, who provided me valuable advice throughout this project work. I thank
her immensely for her guidance. I would also extend my thanks my teachers,
friends, librarian and all those who guided and helped me in the completion of this
project. I am also grateful to my Parents who always stood by me to see me
complete this project.
 INDEX

SR. CONTENTS PG.

NO NO
EXECUTIVE SUMMARY
1 INTRODUCTION
1.1 OBJECTIVES
1.2 RESEARCH METHODOLOGY
2 PROFILE
2.1 AXIS BANK
2.2 ICICI BANK
2.3 HDFC BANK
3 CONCEPTUAL FRAMEWORK
3.1 INTRODUCTION TO RETAIL BANKING
3.2 RETAIL BANKING HISTORY
3.3 SCOPE OF RETAIL BANKING
3.4 TYPES OF RETAIL BANKING
3.5 SWOT ANALYSIS OF RETAIL BANKING
3.6 PRESENT SCENARIO
3.7 ROLE OF ‘IT’ IN RETAIL BANKING
3.8 RECENT DEVELOPMENT IN BANKING SECTOR
3.9 RETAIL BANKING vs. CORPORATE BANKING
3.10 CHALLENGES FACED BY INDIAN RETAL BANKING
3.11 PRIORITIES OF THE NEW MILLENNIUM
4 DATA ANALYSIS
5 INTERPRTATION OF DATA
6 CONCLUSION
7 SUGGESTION/REVIEWS
APPENDICES
BIBLIOGRAPHY
 EXECUTIVE SUMMARY

Banking is an industry that handles cash, credit, and other financial transactions. Banks provide
a safe place to store extra cash and credit. They offer savings accounts, certificates of
deposit, and checking accounts. Banks use these deposits to make loans. These loans include
home mortgages, business loans, and car loans.

Retail banking, also known as consumer banking, is the typical mass-market banking in which
individual customers use local branches of larger commercial banks. Services offered include
savings and checking accounts, mortgages, personal loans, debit/credit cards and certificates of
deposit (CDs). In retail banking, the focus is on the individual consumer.

A comparison between Axis Bank, HDFC Bank and ICICI Bank shows that Axis Bank leaves a
lot to be desired while HDFC Bank has trumped both Axis Bank and ICICI Bank.

It involves primary research by 80 customers of the above banks in New Panvel about the retail
products through a structured questionnaire to analyze the current scenario of the knowledge
among the customers regarding the banking retail products.
 1. INTRODUCTION

A bank is a financial institution which accepts deposits, pays interest on pre-defined rates, clears
checks, makes loans, and often acts as an intermediary in financial transactions. It also provides
other financial services to its customers.

Bank management governs various concerns associated with bank in order to maximize profits.
The concerns broadly include liquidity management, asset management, liability management
and capital management. We will discuss these areas in later chapters.

One of the spectacular innovations in the commercial banking sector is the retail banking. It
refers to banking in which banks undergo transactions directly with consumers rather than with
corporate or other banks. Consumer credit is the heart of retail banking. In retail banking the
banks provide services to individuals and small business concerns and the dealings are in large
volumes and low values. The retail banking portfolio encompasses deposits and assets linked
products as well as other financial services offered to individuals for personal consumption.
Retail banking is increasingly viewed by banks as an attractive market segment with
opportunities for growth and profit. The fastest growing division in the banking sector is the
retail sector. Retail banking is a system of providing soft loans to the general public like family
loans, house loans, personal loans, loans against property, car loans, auto loans etc. The
products are backed by world-class service standards 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.

Through this medium of this project, I am bringing forward the comparison of retail products
with respect to AXIS Bank, ICICI Bank, HDFC Bank at a glance.
 1.1 OBJECTIVES

1. To study the concept of Retail Banking in India.

2. To understand the strategies of Retail Banking.
3. To analyze and compare various retail banking strategies adopted by AXIS Bank, ICICI
Bank, HDFC Bank.
 1.2 RESEARCH METHODOLOGY

Primary Data: Data which has not been previously published i.e. the data is derived from a
new or original research study & collected directly from first hand sources by means of surveys
observation or experimentation is known as Primary Data.

Secondary Data: Data which has already been collected by someone or an organization for
some other purpose or research study is known as Secondary Data.

Method of Data Collection:

Primary Data: Primary data was collection through survey of 50 people / interview
method
Secondary Data: Secondary Data was collected from various sources such as books,
internet, and newspapers.
2. PROFILE
2.1 AXIS BANK
 HISTORY OF AXIS BANK

Axis Bank established in 1993 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. 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. Axis Bank is one of the
first new generation private sector banks to have begun operations in 1994. The Bank was
promoted in 1993, jointly by Specified Undertaking of Unit Trust of India (SUUTI) (then known
as Unit Trust of India),Life Insurance Corporation of India (LIC), General Insurance Corporation
of India (GIC), National Insurance Company Ltd., The New India Assurance Company Ltd., The
Oriental Insurance Company Ltd. and United India Insurance Company Ltd. The shareholding of
Unit Trust of India was subsequently transferred to SUUTI, an entity established in 2003.
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 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.
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.
Axis Bank entered a deal in November 2010 to buy the investment banking and equities units of
Enam Securities for $456 million. Axis Securities, the equities arm of Axis Bank, will merge
with the investment banking business of Enam Securities. As per the deal, Enam will demerge its
investment banking, institutional equities, retail equities and distribution of financial products,
and non–banking finance businesses and merge them with Axis Securities.
 ABOUT AXIS BANK
Axis Bank is the third largest private sector bank in India. The Bank offers the entire spectrum of
financial services to customer segments covering Large and Mid-Corporates, MSME,
Agriculture and Retail Businesses.
With its 3,882 domestic branches (including extension counters) and 12,660 ATMs across the
country as on 30th September 2018, the network of Axis Bank spreads across 2,211 cities and
towns, enabling the Bank to reach out to a large cross-section of customers with an array of
products and services. The Bank also has ten overseas offices with branches at Singapore, Hong
Kong, Dubai (at the DIFC), Shanghai and Colombo; representative offices at Dubai, Abu Dhabi,
Dhaka and Sharjah and an overseas subsidiary at London, UK.
Axis Bank is one of the first new generation private sector banks to have begun operations in
1994. The Bank was promoted in 1993, jointly by Specified Undertaking of Unit Trust of India
(SUUTI) (then known as Unit Trust of India), Life Insurance Corporation of India (LIC),
General Insurance Corporation of India (GIC), National Insurance Company Ltd., The New
India Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India
Insurance Company Ltd. The share holding of Unit Trust of India was subsequently transferred
to SUUTI, an entity established in 2003.
With a balance sheet size of Rs. 6,91,330 crores as on 31st March 2018, Axis Bank has achieved
consistent growth and with a 5 year CAGR (2012-13 to 2017-18) of 15% in Total Assets, 12% in
Total Deposits, 17% in Total Advances.
 RETAIL PRODUCTS PROVIDED BY AXIS BANK

1. Accounts
Manage money and bank better with different types of bank accounts to cater to different
categories of industries, individuals and banking transactions.
 Savings Account
Axis bank provides its customers with an option to choose from a wide range of savings accounts
with different features and debit card options. Each savings account comes with a plethora of
offers and discounts. There are special savings accounts for women, senior citizens and younger
ones. Axis bank also provides accounts designed to meet the banking needs of people from all
walks of life. Perks like zero balance facility are provided by basic savings account.
Each online savings account is uniquely built with features like high transaction limits, free
cheque books and etc. Offers and discounts range from free subscriptions, discounted movie
tickets, Axis eDGE rewards to emergency travel allowances and a lot more

 Salary Account
Axis Bank Salary Accounts offer employees seamless and convenient access to their salaries.
Open a Salary Account that is most appropriate for your employees' job profiles and let them
enjoy a myriad of added benefits, including special debit cards. Help your employees to
conveniently keep a tab on their salary and reimbursements. There are 6 different kinds of salary
accounts depending on the nature of work. The accounts differ in various ways like the daily
withdrawal limit, shopping limit, kind of debit card and so on. The special employee delights and
added benefits are what makes Axis Bank Salary Accounts the best in class. Benefits ranging
from Senior ID cards for senior citizens, domestic travel plans and higher interests to dining
delights, cashback on movie tickets, etc. are provided to different salary bank accounts. Priority
Salary Account holders are in for special treats while defence personnel have special privileges
as well.
  Current Account
Current Account derives its name from the purpose they are most suited for: regular transactions.
And there is no limit on the on the number of transactions you can perform.
Unlike a savings account, the minimum balanced to be maintained in a current account is higher.
Moreover, the money in the account does not earn any interest (mainly because of the fluid
nature of the account i.e. frequent transactions) and for certain current accounts, there is a limit
on cash withdrawals.
A current account is a must for those in business and/or profession. Be it a proprietorship
concern, start-up, partnership firm, Limited Liability Partnership (LLP), One Person Company
(OPC), private limited company, or a public limited company, everyone needs a current account.

 Safe Deposit Locker

The Safe Deposit Locker benefits include convenient locker rent payment options and nomination
for hassle free release of locker contents. Axis Bank lockers come in various sizes and locker
facilities are available in over 2,000 branches.

2. Loans
Exploring wide range of loans that fits into the requirements and lets customers achieve their
goals.
 Home Loan
Axis Bank affordable and flexible home loans are designed to take customers closer to their
dream home. The Home Loan affordability calculator is based on their requirements, such as
tenure, loan amount and interest rates to give them an estimate of their EMI. Exploring the wide
range of products for the most competitive Home Loan interest rates, extended loan tenures and
other benefits like EMIs waivers.

 Personal Loan
Axis Bank Personal Loans are instant and come with no foreclosure and part payment charges.
Personal Loans can be used for plenty of purposes! They can be availed when customers are
planning a vacation, renovating their home or arranging a dream wedding for themselves or
somebody special in the family. They now do not need to postpone things on their bucket list!
they can get a Personal Loan from Rs. 50,000 upto Rs. 15,00,000 with minimal documentation
and speedy approval from Axis Bank. Also,they can transfer their existing high interest Personal
Loan to Axis Bank as well. With a quick approval on Personal Loans, they can turn their dreams
into reality!

 Business Loan
Axis Bank offers collateral-free, EMI-based Business Loans for professionals such as Doctors,
Engineers or Chartered Accountants. A doctor or medical practitioner can avail a Business Loan
to purchase medical equipment or renovate their clinic premises. Axis Bank’s Business Loan for
Engineers will help them to take their business to greater heights, while the Business Loan for
Chartered Accountants will help them scale up their practice.

 Car Loan
Axis Bank's Car Loans aims to ensure that customer drive around in their own vehicle! Availing
a Car Loan, or opting for a Pre-owned Car Loan and getting the best interest rates. Axis Bank’s
New Car Loan offers loans starting from Rs. 1 Lakh upto 100% on-road price along with
benefits. Before applying for a Car Loan, customers have to make sure to use the car loan
calculator to find out their EMI.

3. Deposits
If a customer is looking to invest their money, bank deposits are one of the most popular forms
of investment. And with good reason: the high interest rates and minimum risk factor ensure that
their money is in safe hands.
To help customer they get the best out of their wealth, Axis Bank offers an array of fixed and
recurring deposits with competitive rates of interest. Customer can also avail added benefits and
tax savings on their money with the Tax Saver Fixed Deposit. While the Encash 24 Flexi Deposit
scheme offers them the liquidity of a savings account and the high returns of a fixed deposit. In
keeping with Axis Bank’s aim of the customers’ ease of access, they can now create and manage
their deposit accounts online. Watch your money grow with Axis bank deposits!
  Fixed Deposits
Axis Bank's Fixed Deposit (FD) is a safe and convenient way to see customer’s savings grow.
Opening a Fixed Deposit online with Axis Bank and customer can save a minimum of Rs. 5,000
for a flexible tenure starting from a minimum of 7 days to a maximum of 10 years. Axis Bank’s
online account opening services help customer to open a Fixed Deposit account from wherever
they are. It provides easy transfers from their savings account to their Fixed Deposit. Getting the
most competitive Fixed Deposit interest rates for both long and short term investments. Axis
Bank provides customer’s automatic roll-out facility so that they can get their Fixed Deposit
interest credited to a designated account or get it paid out to a different account.

 Recurring Deposits
Axis Bank's Recurring Deposit helps customers build their savings through systematic deposits,
every month. Earning a higher interest rate depending on the amount of installment and the
depositing period, on their Recurring Deposit. Opening a Recurring Deposit online with
minimum monthly installments of Rs. 500 while the maximum can run into multiples thereof
with no maximum limit. Earning interest for a minimum tenure of 6 months or a maximum of 10
years on their Recurring Deposit.

 Tax Saver Fixed Deposits

Customers get attractive interest rates on their lump sum investment as well as the benefit of tax
saving with Axis Bank's Tax Saver Fixed Deposit. Investing from a minimum amount of Rs. 100
to a maximum of Rs. 1,50,000. The Tax Saving Fixed Deposit comes with 3 options. Choose
from Tax Saving - Reinvestment Deposit, Tax Saving - Quarterly Interest Payout or Tax Saving
– Monthly Interest Payout depending on the interest pay-out most suitable for customers.

 En-cash 24 - Flexi Deposits

At Axis Bank, they understand that saving up to invest in a Fixed Deposit may result in
customers spending the money instead. Axis Bank’s En-cash 24 Flexi Deposit links the existing
Savings Account to the Fixed Deposit. This facilitates automatic transfer of money in multiples
of Rs. 5,000 to a Fixed Deposit when the balance in the Savings Account crosses Rs. 25,000.
With En-cash 24 Flexi Deposit, customer can open a Fixed Deposit for a maximum tenure of 5
years or avail short term benefit with a minimum tenure of 6 months.

 Fixed Deposit Plus

If a customer is looking for a safe investment option with a higher rate of return for their lump
sum savings, Axis Bank’s Fixed Deposit Plus gives them a higher rate of return compared to
regular FDs and the option is available to all NRI and domestic customers. The interest rate is
available on a simple or compounding basis for a minimum amount of Rs. 15,00,001.

4. Cards
Explore quickly processed loans in different denominations, with liberal criteria that let you
choose as per your requirements and achieve your goals as planned.
 Credit Cards

Axis Bank offers a series of credit cards to choose from. Each credit card is tailor made for their
customers’ needs and desires. From Flipkart gift vouchers to eDGE points on Axis, customers
can earn them all with their credit card. Going through the detailed list of Axis Bank credit cards
to see which credit card would be a perfect fit for them. Customer can apply for their Axis Bank
Credit Card online. If customers have more queries that banks have nor addressed, customer can
feel free to get in touch with the bank.
 Debit Cards

In a world going cashless, debit cards are customers best friends! Customer can free themselves
from carrying around rolls of cash everywhere they go. Withdrawing cash from the account as
and when they require it with Axis Bank debit cards and receive exclusive benefits, from free
movie tickets to restaurant discounts. Choosing from a range of debit cards according to their
daily withdrawal needs. Customer can enjoy a secure and fast shopping experience every time.

 Prepaid Cards

Axis Bank offers Prepaid Cards which is a convenient way to gift, reward and motivate
customer, vendors and employees. There are a range of Business Gift Cards which are offered
under the umbrella of Axis Gift cards. These Prepaid Gift Cards come in a number of ranges
such as the Corporate Gift Card, Rewards Card, Smart Pay Gift Card and Meal Card. Customer
can opt for any of the prepaid cards.
 Transit Cards
Axis Bank Transit Cards are India’s first cards created for convenient shopping and travelling by
enabling hassle-free payments. Transit Cards, the all-in-one Smart Card, lets customers avail
additional offers and delights while enabling one-tap payments. The Axis Bank BMTC Smart
Card helps customers make payments for travel and shopping, while the KMRL Axis Bank
Kochi Card can be used to make payments at the Kochi Metro and online stores.
2.2 ICICI BANK
 HISTORY OF ICICI BANK

ICICI Bank was established by the Industrial Credit and Investment Corporation of India
(ICICI), an Indian financial institution, as a wholly owned subsidiary in 1994. The parent
company was formed in 1955 as a joint-venture of the World Bank, India's public-sector banks
and public-sector insurance companies to provide project financing to Indian industry. The bank
was founded as the Industrial Credit and Investment Corporation of India Bank, before it
changed its name to the abbreviated ICICI Bank. The parent company was later merged with the
bank.

ICICI Bank launched internet banking operations in 1998.

ICICI's shareholding in ICICI Bank was reduced to 46 percent, through a public offering of
shares in India in 1998, followed by an equity offering in the form of American Depositary
Receipts on the NYSE in 2000. ICICI Bank acquired the Bank of Madura Limited in an all-stock
deal in 2001 and sold additional stakes to institutional investors during 2001-02.

In the 1990s, ICICI transformed its business from a development financial institution offering
only project finance to a diversified financial services group, offering a wide variety of products
and services, both directly and through a number of subsidiaries and affiliates like ICICI Bank.
In 1999, ICICI become the first Indian company and the first bank or financial institution from
non-Japan Asia to be listed on the NYSE.

In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger of ICICI
and two of its wholly owned retail finance subsidiaries, ICICI Personal Financial Services
Limited and ICICI Capital Services Limited, with ICICI Bank. The merger was approved by
shareholders of ICICI and ICICI Bank in January 2002, by the High Court of Gujarat at
Ahmadabad in March 2002 and by the High Court of Judicature at Mumbai and the Reserve
Bank of India in April 2002.

In 2008, following the 2008 financial crisis, customers rushed to ICICI ATMs and branches in
some locations due to rumours of an adverse financial position of ICICI Bank. The Reserve Bank
of India issued a clarification on the financial strength of ICICI Bank to dispel the rumours.
 ABOUT ICICI BANK

Kundapur Vaman Kamath, commonly referred to as K. V. Kamath, is the chief of the New
Development Bank of BRICS countries, he has served as the Chairman of Infosys Limited, the
second-largest Indian IT services company, and as the Non-Executive Chairman of ICICI Bank,
India's largest private bank.

ICICI Bank Limited (Industrial Credit and Investment Corporation of India) is an Indian
multinational banking and financial services company headquartered in Mumbai, Maharashtra
with its registered office in Vadodara, Gujarat. As of 2018, ICICI Bank is the second largest
bank in India in terms of assets and market capitalisation. It offers a wide range of banking
products and financial services for corporate and retail customers through a variety of delivery
channels and specialised subsidiaries in the areas of investment banking, life, non-life insurance,
venture capital and asset management. The bank currently has a network of 4867 branches and
14367 ATMs across India and has a presence in 17 countries including India.

ICICI Bank is one of the Big Four banks of India. The bank has subsidiaries in the United
Kingdom and Canada; branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka,
Qatar, Oman, Dubai International Finance Centre, China and South Africa; and representative
offices in United Arab Emirates, Bangladesh, Malaysia and Indonesia. The company's UK
subsidiary has also established branches in Belgium and Germany.

ICICI Bank offer products and services like online money transfer & tracking service, loans,
automated lockers, credit card, debit card and digital wallet.
 RETAIL PRODUCTS PROVIDED BY ICICI BANK

1. Deposits
ICICI bank offers a range of deposit products to meet customers’ needs. They can take advantage
of the banks special interest rates and features on their deposit account (such as being able to
make a demand draft without being charged). Banks also provide customers’ with priority in
processing, for any product or service.
Consumers also get the benefit of the following:
Use of any bank’s ATM:
Customers get unlimited access to ATMs of any bank. They can withdraw cash or check their
balance free of charge at ATMs of any bank.

Other Services

 Discounted charges on the rental rates of safety lockers in our branches*

 Waiver of charges on demand drafts and pay orders
 Free multi-city cheque book

RFC Savings Account

A Resident Foreign Currency (RFC) Account is a great choice if you are a Non-Resident Indian
but have now returned to India permanently and need an account for the money you have in
foreign currencies. The interest your income earns is repatriable. You can maintain your RFC
Account in US dollars and British pounds.

RFC Accounts
If you are a Non Resident Indian who has permanently returned to India, you will find our
Resident Foreign Currency (RFC) Deposit Account ideal for managing the money you have in
foreign currencies. You can hold an RFC Deposit Account from 30 days to 3 years. The
currencies you can put into this account are US dollars, British pounds, Euros and Japanese yen.
The interest your money earns is repatriable.
 2. Loans
Banks liability management products help customers manage their borrowings without
disturbing their investments. Managing customer borrowings effectively helps strengthen the
long-term performance of their investments and easily meets customers’ short-term need for
cash.

Home Loans:
Buying a new home is an exciting experience, but also a slightly worrying one because of the
amount of knowledge needed about property to make the best choice. Banks make this process
easier for customers’ by bringing them a convenient Home Loan service.

Loan against Securities:

Bank offer customers Overdraft facilities against their investments at attractive rates. They get
access to cash instantly without having to sell their shares.

Vehicle Loans:
ICICI bank can facilitate the purchase of their vehicles through vehicle loans at attractive rates.
Personal Loans:
Banks quick Personal Loans help customers get over their cash flow problems.

3. Cards

Debit Card:

The ICICI Bank Visa Infinite Debit Card comes with Infinite privileges, conveniences and
benefits. Customers as a Private Banking Client can look forward to a premium card that brings
them a host of distinctive experiential offerings in sync with their evolving lifestyle needs.
The ICICI Bank Infinite Debit Card is designed for customers most valued Private Banking
Clients, the clients shall enjoy the best features provided by the bank along with world class
privileges: Airport Lounge Access, Complimentary Golf, Rental Cars and benefits on the
Leading Hotels.
Credit Card
ICICI Bank Credit Card entitles customers to earn PAYBACK Points on their transactions.
PAYBACK, India’s largest Reward Programme, has powered ICICI Bank Rewards to bring
them a suite of exciting rewards from their everyday spending.
Customers not only earn PAYBACK Points when they use their ICICI Bank Credit Card, but
also earn additional points from PAYBACK Partner Brands for the same purchase.
They can redeem their PAYBACK Points from many options – from movie and travel vouchers
to lifestyle products, mobiles, appliances and more. With their ICICI Bank Credit Card and
PAYBACK, shopping is truly rewarding!
2.3 HDFC BANK
 HISTORY OF HDFC BANK

HDFC Bank Ltd Was incorporated on August 30 1994 by Housing Development Finance
Corporation Ltd. In the year 1994 Housing Development Finance Corporation Ltd was amongst
the first to receive an 'in principle' approval from the Reserve Bank of India to set up a bank in
the private sector as part of the RBI's liberalization of the Indian Banking Industry. HDFC Bank
commenced operations as a Scheduled Commercial Bank in January 1995. Ramon House
Churchgate branch was inaugurated on 16 January 1995 as the first branch of the bank. In March
1995 HDFC Bank launched Rs 50-crore initial public offer (IPO) (5 crore equity shares at Rs 10
each at par) eliciting a record 55 times oversubscription. HDFC Bank was listed on the Bombay
Stock Exchange on 19 May 1995. The bank was listed on the National Stock Exchange on 8
November 1995.In the year 1996 the Bank was appointed as the clearing bank by the NSCCL. In
the year 1997 the launched retail investment advisory services. In the year 1998 they launched
their first retail lending product Loans against Shares. In the year 1999 the Bank launched online
real-time Net Banking. In February 2000 Times Bank Ltd owned by Bennett Coleman & Co. /
Times Group amalgamated with the Bank Ltd. This was the first merger of two new generation
private banks in India. The Bank was the first Bank to launch an International Debit Card in
association with VISA. In the year 2001 they started their Credit Card business. Also they
became the first private sector bank to be authorized by the Central Board of Direct Taxes
(CBDT) as well as the RBI to accept direct taxes. On 20 July 2001 HDFC Bank's American
depositary receipt (ADR) was listed on the New York Stock Exchange under the symbol HDB.
Also they made the alliance with LIC for providing online payment of insurance premium to the
customers. During the year 2002-03 the Bank increased the number of branches from 171 to 231
and the size of the Bank's ATM network expanded from 479 to 732 . They also expanded their
presence in the 'merchant acquiring' business. During the year 2003-04 the Bank expanded the
distribution network with the number of branches increased from 231 to 312 and the size of the
Bank's ATM network increased from 732 to 910 . In September 2003 they entered the housing
loan business through an arrangement with HDFC Ltd whereby they sell HDFC Home Loan
product. During the year 2004-05 the Bank expanded the distribution network with the number
of branches increased from 312 to 467 and the size of the Bank's ATM network increased from
910 to 1147 . During the year 2005-06 the Bank launched the 'no-frills account' a basic savings
account offering to the customer. Also the distribution network was expanded with the number
of branches increased from 467 (in 211 cities) to 535 (in 228 cities) and the number of ATMs
from 1147 to 1323. During the year 2006-07 the distribution network was expanded with the
number of branches increased from 535 (in 228 cities) to 684 (in 316 cities) and the number of
ATMs from 1323 to 1605 . They commenced direct lending to Self Help Groups. Also they
opened a dedicated branch for lending to SHGs in Thudiyalur village (Tamil Nadu). In
September 28 2005 the Bank increased their stake in HDFC Securities Ltd from 29.5% to 55%.
Consequently HDFC Securities Ltd became a subsidiary of the Bank. During the year 2007-08
the Bank added 77 new branches take the total to 76 branches. Also 372 new ATMs were also
added taking the size of the ATM network from 1605 to 1977 Nos. HDB Financial Services Ltd
became a subsidiary company with effect from August 31 2007. In June 2 2007 the Bank opened
19 branches in a day in Delhi and the National Capital Region (NCR).During the year 2008-09
the Bank expanded their distribution network from 761 branches in 327 cities to 1412 branches
in 528 Indian cities. The Bank's ATMs increased from 1977 to 3295 during the year. As per the
scheme of amalgamation Centurion Bank of Punjab Ltd was amalgamated with the Bank with
effect from May 23 2008. The appointed date for the merger was April 01 2008. The
amalgamation added significant value to HDFC Bank in terms of increased branch network
geographic reach and customer base and a bigger pool of skilled manpower. In October 2008 the
bank opened their first overseas commercial branch in Bahrain. The branch offers the bank's
suite of banking services including treasury and trade finance products for corporate clients and
wealth management products for Non-resident Indians. During the year 2009-10 the Bank
expanded their distribution network from 1412 branches in 528 cities to 1725 branches in 779
cities. The Bank's ATMs increased from 3295 to 4232 during the year. During the year 2010-11
the Bank expanded their distribution network from 1725 branches in 779 cities to 1986 branches
in 996 Indian cities. The Bank's ATMs increased from 4232 to 5471. In the year 2014 HDFC
Bank lunched the missed call banking service allowing customers to use banking services
without having to visit the Bank or connect online. On 16 June 2015 HDFC Bank launched the
10-second personal loan approval service thereby becoming the first in the retail lending space to
fully automate the process of loan approval and disbursement. In 2016 HDFC Bank introduced
loans at ATMs as the country's first innovation to turn ATMs into Loan Dispensing Machines
(LDMs) further extending the functionality of the Bank's ATMs.
 ABOUT HDFC BANK

HDFC Bank Ltd is one of India's premier banks. Headquartered in Mumbai HDFC Bank is a
new generation private sector bank providing a wide range of banking services covering
commercial and investment banking on the wholesale side and transactional/branch banking on
the retail side. As of 30 September 2017 the bank's distribution network was at 4729 branches
and 12259 ATMs across 2669 cities and towns. HDFC Bank also has one overseas wholesale
banking branch in Bahrain a branch in Hong Kong and two representative offices in UAE and
Kenya. The Bank has two subsidiary companies namely HDFC Securities Ltd and HDB
Financial Services Ltd.The Bank has three primary business segments namely banking wholesale
banking and treasury. The retail banking segment serves retail customers through a branch
network and other delivery channels. This segment raises deposits from customers and makes
loans and provides other services with the help of specialist product groups to such customers.
The wholesale banking segment provides loans non-fund facilities and transaction services to
corporate public sector units government bodies financial institutions and medium-scale
enterprises. The treasury segment includes net interest earnings on investments portfolio of the
Bank.The 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. The Bank's shares are listed on the Bombay Stock Exchange Limited and The
National Stock Exchange of India Ltd. The Bank's American Depository Shares (ADS) are listed
on the New York Stock Exchange (NYSE) and the Bank's Global Depository Receipts (GDRs)
are listed on Luxembourg Stock Exchange

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.
(4.3)RETAIL PRODUCTS PROVIDED BY HDFC BANK

1. Accounts

Savings Account
Whether a customer is a student, homemaker, business owner, salaried employee or a senior
citizen, an HDFC Bank Savings Account is just what they need to manage their money more
efficiently.

From regular savings accounts to premium accounts with personalised services, HDFC Bank
offers customers different types of savings accounts to cater to every customer’s unique and
diverse needs.

Getting 24x7 access to their savings bank account through bank’s unique digital platforms – Net
Banking, Mobile Banking & a network of branches and ATMs.

Salary Accounts
Keeping the employees happy by extending to them the benefits of modern, customised banking
services through HDFC Bank salary accounts.

Current Accounts
A current account is a type of deposit account that caters to professionals and businessmen alike.
Dealing largely with liquid deposits, this product allows for withdrawal of funds and cheques
being written against the balance and does not limit the number of transactions in a day. HDFC
Bank offers a number of customised current account options that can ideally serve the needs of
different businesses.
 2. Loans
Personal loan
HDFC Bank Personal Loans are designed to address diverse financial needs in an easy and
convenient manner. One of the leading providers of personal loans in India, HDFC Bank offers
flexible tenures, competitive interest rates, pocket-friendly repayments and superfast disbursals.
Pre-approved HDFC Bank customers can get an instant personal loan in less than 10 seconds.
Other customers can get a personal loan in as short a time as 4 hours. These unmatched features
and benefits make our products among the best personal loans in India.

Home Loan
Taking a step closer to customers dream home with HDFC home loans.
HDFC offers among the most feature-packed home loans in India. Besides free document
storage, get approvals on their home loan even before they choose a property. Banks also provide
guidance on buying a property when customer apply for home loans.
With quick processing and attractive interest rates, HDFC home loans are hassle-free and
customer-friendly. In addition, women who apply for home loans are eligible for lower interest
rates.

Business Loan
Growing customers’ small firm or large-scale company with business loans from HDFC Bank.
Our business loans come with a host of benefits and are tailor made to meet customers’ unique
business needs.
Banks offer among the best business loans in India, with complete transparency and competitive
interest rates. Also, their business loans do not require any security.
Applying for a business loan from HDFC Bank customer can get funds up to Rs 50 lakhs , and
enjoy easy documentation and doorstep service & fast disbursal within 48 hours*, while enjoying
unmatched benefits.
Loan against Property
With HDFC Bank’s loans against property the individual can easily for the loan against the
property. They can easily pledge their property against loan to meet the needs of business or any
personal.
Applying for loan against property by pledging their commercial or residential property as
collateral. By getting up to 60% of customers’ property’s value with loan against property.
Customers can enjoy competitive interest rates and customised options with the hassle-free
processing on loans against property.
With low EMIs and speedy loan approvals, banks loans against property are the ideal solution to
meet your immediate financial needs.

3. Cards
Credit Cards
HDFC Banks’ Credit Cards come with unmatched benefits, exciting rewards and amazing
discounts. No matter what customers’ lifestyle, banks have the best Credit Card for them --
choosing from super premium to travel, professional to classic, entertainment to rewards.
With an HDFC Credit Card, customer can earn as they spend – with Cash Backs and offers on
entertainment, dining, travel, bill payment and shopping. Rack up the rewards with every swipe
of their card and redeeming them for exclusive gifts or air miles. Enjoying special privileges at
domestic and international airports when they travel.
It’s easy to apply for a Credit Card – do it in minutes online or by visiting any of branches. If a
customer wants to go cashless, there’s no better way to do it than with HDFC Bank Credit Cards.
Debit cards
Say good-bye to the hassle of withdrawing cash every time you need to shop. Enjoy cashless,
worry-free shopping - in stores and online - with HDFC Bank Debit Cards.

 Safer
PIN based protection for all your purchases at stores View Demo
Online payments made secure by Verified by Visa / MasterCard SecureCode Password or One
Time Password (OTP).
Zero Liability Cover for all your shopping at stores Know More
Chip Cards for added security. Available on request

 Cheaper
Great discounts - fuel, shopping (at stores and online), travel, dining, entertainment and more.
Cash Back on shopping throughout the year
Free Insurance cover up to Rs 10lakh

 Smarter
No need to withdraw cash for your shopping any more
Ask your branch to help you customise your daily shopping limits
Set your own international limits on your Debit Card instantly using NetBanking
Alerts through SMS to help you track your expenses
Use your own money to shop
Prepaid cards
Receive simplicity, convenience and peace of mind when you choose from a wide array of
Prepaid Cards from HDFC Bank. Forget the hassles of carrying cash and losing out on foreign
transactions due to currency rate fluctuations.
Whether you are travelling abroad, Prepaid Forex cards and Multicurrency cards are a safe and
secure mode for fulfilling your foreign currency requirement. Accepted across millions of
merchant locations and ATMs across the globe, Prepaid Forex cards are an ideal mode of
carrying foreign currency.
One can also opt for Prepaid Gift cards for individual gifting and facilitating Corporate Gifting.
It is available in both, Physical and virtual form (eGiftPlus Card). This Virtual Gift Card benefits
the Purchaser to send Gift card instantly to the Beneficiary. This is also used by Clients for bulk
incentive payouts to employees and business associates. The other variant Food Plus cards are a
smarter alternative to meal vouchers whereas Money Plus prepaid card offers multiple corporate
solutions for disbursement of salary / wages, petty cash expenses, reimbursement of fuel
expenses and performance incentives etc.
 HDFC Bank clocks better results than ICICI Bank and Axis Bank

A comparison between Axis Bank, HDFC Bank and ICICI Bank shows that Axis Bank leaves a
lot to be desired while HDFC Bank has trumped both Axis Bank and ICICI Bank. The table
below shows the comparison of the three banks, using key parameters. The green bars indicate
the best in that category, while red indicates the opposite.

PARTICULARS AXIS BANK HDFC BANK ICICI BANK

Net Profits (consolidated) Rs4.218 cr Rs5.247 cr Rs7.643 cr
CASA Ratio 42% 48.4% 43.5%
Asset Quality (NNPA) 0.25% 0.20% 0.62%
CAR (Capital Adequacy) 13.66% 16.5% 18.52%
PCR (Provision Coverage Ratio) 80.915 82.4% 80.4%

Axis Bank’s loan growth was slower than HDFC Bank, at 19% growth (Rs1,69,760 crore). ICICI
Bank recorded the slowest credit growth, clocking only an increase of 17% (total advances at
Rs2,53,728 crore) partly because it has the largest advances portfolio. From the table above we
see that HDFC Bank is the healthiest of the lot, topping in three out of five categories, while
Axis Bank was worse in four out of five categories.
HDFC on the other hand recorded the highest Current Account-Savings Account (CASA) ratio
(48.4%) indicating that it continues to find ways to access low cost funds to ramp up its growth.
Due to higher CASA ratio and a robust 22% increase in advances, it had consolidated net profit
of Rs5247, which is higher by 31.4% over last year. It also had a higher net interest margin (for
the March 2012 quarter) of 4.2%, compared with 3.55% and 3.01% for Axis Bank and ICICI
Bank, respectively. Net interest margin is the difference between interest earned and interest
expended and is considered a key measure of a bank’s profitability. Only ICICI had highest net
profit (Rs7,643 crore) than the other two, but it came at an expense of higher bad debts.
ICICI Bank had the highest Net Non-Performing Assets (NNPA) of 0.62% compared with just
0.25% and 0.20% for Axis Bank and HDFC Bank, respectively. Despite this, its Capital
Adequacy Ratio (CAR) was a healthy 18.52%, compared to a measly 13.66% for Axis Bank and
16.5% for HDFC Bank.
It is interesting to note that Axis Bank’s bottom line was boosted by a 153% rise in trading
profits, signifying increased risk taken to earn profits. Indeed, despite this, Axis’ profits would
have stagnated but for a 10% decline in provisions, from Rs1,280 crore to Rs1,143 crore which
helped the bank’s bottom line. However, fees—the jam for a bank—has increased by 25% year-
on-year, to Rs4,727 crore. On the other hand, ICICI Bank’s fee income had declined from
Rs6,707 crore in FY10-11 to Rs6,419 crore in FY12, a decline of over 4%. While HDFC Bank’s
fees are not known from the latest filings, its “non-interest” (or “other income”) income stood at
Rs5, 243 crore, up 21% year-on-year.

Axis Bank restructured loans on its books stood at Rs3,060 crore, much of it from large and mid-
sized companies (79% of restructured assets). It also provided for higher provision coverage ratio
of 80.91%, higher than ICICI (80.4%), but lower than HDFC Bank (82.4%). ICICI Bank’s net
restructured assets stood at Rs4,256 crore which is higher than Axis Bank thanks to its larger
base. In HDFC Bank’s case, the quantum of restructured assets stood at 0.4% of the gross
advances.

The banking industry is perceived to be going through difficult times due to low credit off-take
in face of high interest rates and inflation. However, this perception could be incorrect given the
extremely robust performance of HDFC Bank and ICICI Bank. The message from Axis’
performance is less clear since it is undergoing a transformation under the current CEO.
 3. CONCEPTUAL FRAMEWORK

3.1 INTRODUTION TO RETAIL BANKING

Retail banking provides financial services for individuals and families. The three most important
functions are credit, deposit, and money management. They are a component of commercial
banking.

First, retail banks offer consumers credit to purchase homes, cars, and furniture. These
include mortgages, auto loans, and credit cards. The resulting consumer spending drives almost
70 percent of the U.S. economy. They provide extra liquidity to the economy this way. Credit
allows people to spend future earnings now. Retail banks also offer small business loans to
entrepreneurs. These small companies create up to 65 percent of all new jobs as they grow.

Second, retail banks provide a safe place for people to deposit their money. Savings
accounts, certificates of deposit, and other financial products offer a better rate of return
compared to stuffing their money under a mattress. Banks base their interest rates on the Fed
funds rate and Treasury bond interest rates. That's why they rise and fall over time. The Federal
Deposit Insurance Corporation insures most of these deposits.

Third, retail banks allow customers to manage your money with checking accounts and debit
cards. That means they don't have to do all your transactions with dollar bills and coins. All of
this can be done online, making banking an added convenience.
 3.2 RETAIL BANKING HISTORY

Before the 1980s, banks were highly regulated. Much of this came about in response to the 1929
stock market crash. In the 1930s, the Glass-Steagall Act prohibited retail banks from using
deposits to fund risky stock market purchases.

Banks also could not operate across state lines. Retail banks could not use their depositors' funds
for investments other than lending. They often could not raise interest rates. During the 1970s,
these banks lost business as double-digit inflation made customers withdraw deposits. Retail
banks' paltry interest rates weren't enough of a reward for people to save. Banks cried out to
Congress for deregulation.

The 1980 Depository Institutions Deregulation and Monetary Control Act allowed banks to
operate across state lines. Large banks began gobbling up small ones. In 1998, Nations Bank
bought Bank of America to become the first nationwide bank. The other banks soon followed.
That consolidation created the four national banking giants in operation today.

It also allowed banks to raise interest rates on deposits and loans. In fact, it overrode state limits
on interest rates. Banks no longer had to direct a portion of their funds toward specific industries,
such as home mortgages. They could instead use their funds in a wide range of loans, including
commercial investments.

The Fed lowered its reserve requirements. That gave banks more money to lend, but it also
increased risk. To compensate depositors, the Federal Deposit Insurance Corporation raised its
limit from $40,000 to $100,000 savings.

In 1982, President Reagan signed the Garn-St. Germain Depository Institutions Act. It removed
restrictions on loan-to-value ratios for savings and loan banks. It also allowed these banks to
invest in risky real estate ventures. By 1995, more than half of them had failed. The
resultant savings and loan crisis cost $160 billion.

In 1999, the Gramm-Leach-Bliley Act repealed Glass-Steagall. It allowed banks to invest in even
riskier ventures. They promised to restrict themselves to low-risk securities. That
would diversify their portfolios and lower risk. But as competition increased, even traditional
banks invested in risky derivatives to increase profit and shareholder value.

That risk destroyed many banks during the 2008 financial crisis. That changed retail banking
again. Losses from derivatives forced many banks out of business. In 2010, President Obama
signed the Dodd-Frank Wall Street Reform Act. It prevented banks from using depositor funds
for their own investments. They had to sell any hedge funds they owned. It also required banks
to verify borrowers' income to make sure they could afford loans.

All these extra factors forced banks to cut costs. They closed rural branch banks. They relied
more on ATMs and less on tellers. They focused on personal services to high net worth clients
and began charging more fees to everyone else.

How Retail Banks Work?

Retail banks use the depositors' funds to give out loans. They make money by charging
higher interest rates on loans than they pay on deposits.

The Federal Reserve, the nation's central bank, regulates most retail banks. Except for the
smallest banks, it requires all other banks to keep around 10 percent of their deposits in reserve
each night. They are free to lend out the rest. At the end of each day, banks that are short of the
Fed's reserve requirement borrow from other banks to make up for the shortfall. The amount
borrowed is called the fed funds.
 3.3 SCOPE OF RETAIL BANKING

 All round increase in economic activity.

 Increase in the purchasing power. The rural areas have the large purchasing power at their
disposal and this is an opportunity to market Retail Banking.
 India has 200 million households and 400 million middleclass population.
 More than 90% of the savings come from the house hold sector. Falling interest rates have
resulted in a shift. “Now People Want To Save Less And Spend More.”
 Nuclear family concept is gaining much importance which may lead to large savings, large
number of banking services to be provided are day-by-day increasing.
 Tax benefits are available, for example in case of housing loans the borrower can avail tax
benefits for the loan repayment and the interest charged for the loan.

MAJOR PLAYERS IN RETAIL BANKING

This section covers the key facts about major players (including Public, Private, and
Foreign sector) in the Indian Banking Industry, including
1. Bank of Baroda
2. State Bank of India
3. Canara Bank
4. Punjab National Bank
5. HDFC Bank
6. ICICI Bank
7. Kotak Mahindra Bank
8. Standard Chartered Bank
9. Citibank
10. HSBC Bank
11. ABN AMRO Bank
12. Indusind Bank
 3.4 TYPES OF RETAIL BANKS

1) Commercial Banks
One of the retail bank types is commercial banks, which offer a wide range of consumer banking
services. Typical services include certificates of deposit (CDs), savings and checking accounts,
credit and debit cards, etc. Commercial banks are for-profit institutions that generate income
through interest rate spreads and transaction fees.

The interest rate spread is the difference in interest rates that banks charge on loans and the rates
they pay on deposit accounts. The spread fluctuates greatly across various economic cycles. In
prosperous economic times, the spread is generally wider. The widened spread allows these
institutions to generate more income.

Conversely, during times of economic recession, banks may need to incentivize consumer
spending by lowering interest rates on loans. This compresses their profit margins.

Offering higher interest rates on savings accounts may incentivize consumers to hold more
money in these accounts. This, in turn, may reduce consumer participation in the capital markets.

Transaction fees make up a substantial amount of revenue for commercial banks. These fees
include usually recurring charges on credit cards and fees for transfers or other financial services.
Since commercial banks essentially have a monopoly on this market, they are able to charge
premium prices without seeing excessive erosion in demand.

2) Credit Unions and Cooperatives

Another of the retail bank types are credit unions (or similar cooperative institutions). They offer
services similar to commercial banks, but usually on a smaller scale. Credit unions are not-for-
profit institutions, where its depositors are its shareholders. As a result, credit unions face smaller
pressures to generate profits. This means that they typically charge lower interest rates on loans
and offer higher rates on deposit accounts. Transaction fees are also relatively low because credit
unions do not perceive them as revenue drivers. They are viewed more frequently as services that
can be offered at cost.
Nonetheless, there are some disadvantages to credit unions. Due to being much smaller
institutions, credit unions lack a big brick-and-mortar presence. This is likely to dissuade
consumers that prefer banking services being delivered in-person. Credit unions also employ less
advanced technology than banks, making their online banking services less secure. Credit unions
also have fewer employees and are open for shorter hours than commercial banks.

What is the role of the three types of retail banks?

From an economic standpoint, all three types of retail banks exist to:

 Provide more liquidity by influencing the money supply in an economy. This is usually done
by adjusting interest rates and periodically reviewing creditworthiness protocols
 Reduce the probability of default on loans by pooling together the risks of lending money.
These institutions are also in better positions to cope with defaults due to federally-mandated
reserve ratios. The ratio ensures that banks always have a minimum amount of cash on hand
that is a percentage of total consumer deposits
 Lower the cost of borrowing by offering competitive interest rates. Economies that follow
the Keynesian monetary policy increase profits during economic booms by increasing
interest rates on loans and build cash reserves. Then, during a recession, banks are expected
to lower interest rates in order to spur consumer spending and stimulate economic growth.
 3.5 SWOT ANALYSIS OF RETAIL BANKING

STRENGTH WEAKNESS

OPPORTUNITIES THREATS
STRENGTH:

1) Emerging as new growth driver:

For several years banks viewed consumer loan with skepticism. Commercial loan denominated
the loan portfolio as they generated high net yield with low credit risk. Consumer loan on the
other hand involved smaller amount, large staff to handle account and high default rates.

2) Improve standard of living:

Due to major economic reforms in Indian Economy there has been increase in per capita income
which has led to change in lifestyle and growing urbanization have made the Indian population
rise from oblivion and resurge in modern era on this front role of retail banking arises.

3) Provides diversified asset portfolios:

Retail banking includes comprehensive range of financial products and services i.e. deposit
product, auto loan, car loan, home loan, loan against equity shares, mortgage loan, payment of
bills, debit card, credit card etc.

4) CRM Tool:
The individual customer is deity of bank in retail banking segment. All product and services are
designed to satisfy need and wants of it customer. As customer in retail banking belong to
different economic, educational, cultural, and social background there demand is also varied.

5) Innovative product development:

The scope of development in financial services is unlimited. In retail banking ball is in the court
of bankers where they approach the customers, finds out there financial needs and problem,
design the product and services, market them and finally sells them to satisfy its customers.

6) Economies of scale:
Retail banking enables banks to utilize existing capacities and reaching wider population of
customer. Banks can get the benefits of information and transaction. In process of extending
variety of services, banks are acquiring enormous amount of customer information.
WEAKNESS:

1) Avoids corporate sector:

Retail banking avoids corporate sector totally which is backbone of Indian Economy. Main
reason put forth for this is decline in corporate borrowing. However bank can take certain step to
manage there corporate clients such as lower arte credit, higher amount of loan etc.

2) Marketing (internal and external):

Retail banking requires strong marketing strategies to be adopted by banks both internally and
externally. Under retail banking segment, top level management needs employees to introduce
product properly to its employees because if the employees are not aware regarding the product
they are offering that product will fail however effective the product is also bank require to spend
lot on its marketing of product to general public.

3) Changes in technology:
Future of retail banking lies in the hand of IT. Various IT solutions used by banks such as E-
banking, phone banking, ATM leverage the retail banking product and services offered by banks.
But this has weekend the segment somehow. If banks are no able to adopt latest technologies it
may pull back the growth of bank.

4) Reduces the profitability:

It is claimed that retail banking increases overall profitability of the bank but in reality this is not
the case because managing wide range of product and services require high quality technology,
large number of staff and all this requires high capital investment which reduces bank
profitability.
OPPORTUNITIES:

1. Scope for innovation:

Under retail banking as banks try to provide all those products and services which are desired by
its customer. This segment has more scope for innovation banks can keep on modifying its
product as per market demand which helps them from not being out dated.

2. Rise in per capita income:

The rise on and Indian middle class is an important contributory factor in this segment. The
percentage of middle to high-income Indian household is expected to continue rising. The
younger population not only wields increasing purchasing power, but as far as acquiring personal
debt is concerned, they are perhaps more comfortable than previous generations.

3. Economic growth:
Retail banking has immense opportunities in growing economy like India. In BRIC report, India
is stated as an economic superpower. According to A.T. Kearney, a global management-
consulting firm, recently indentified India as the ‘second most attractive retail destination’ of 30
emergent markets. Hence retail banking has high opportunities in India.
THREATS:

1) Large disbursement of firm:

The boom in the field of retail banking and the intense composition among to increase the
customer base has resulted in large disbursement of customer loan, loan on credit card, auto loan,
educational loans etc. on easy terms without much scrutiny this has brought with an increase in
the number of cases of default in loan repayment thus increasing the bank’s NPAs.

2) Issue of customer’s dignity:

Banks have been adopting carrot and stick policy by renegotiating loan terms where the default
is genuine and handling over recovery to third party where default is willful. Most of the time,
the third parties or external agents are not trained to handle the loan repayment process. Hence,
they restore to strong arm tactics with defaulting customers.

3) Issue of customer privacy:

Customer privacy is also affected in another way wherein customer service representative of
bank rings up customer at any times at their places of work, informing them about new products
and services. This may cause inconvenience to busy customers. It is also obligation on part of the
banks not to share the private information from the records of the customers with outside
agencies.

4) IT:
The growth of IT has brought a number of frauds perpetrated with the help of technologies and
which come under the domain of cyber crimes. Banks are victims of unscrupulous who have in
many instances hacked banks website and stolen credit card number, password and other
confidential information relating to customers.
 3.6 PRESENT SCENARIO

There has been considerable growth in the retail banking sector in India, which makes up for
about 1/5th of the overall bank credit. Typically, the retail banking industry encompasses the
services such as credit card, housing loan, education loan, auto loan etc.

Retail banking has brought drastic makeover in overall bank scenario in India. The exceptional
improvement in the banking system in India is a result of strong initiative taken up by both
government and private companies. A recent market research report named “Indian retail
banking sector analysis (2006)” published by RNCOS provides an exclusive tour to entire retail
banking industry of India. As per the report, “Mainstream banking and retail banking have
become one and the same thing for past several years now. Approximately, 22% of the total
outstanding advances were derived from the retail portfolios of the banks in India till March
2004”.

The ratio of retail credit to net credit at the global level is around 5%. In India, it is interesting to
note that this ratio is over 10% as on March 31, 2002.

With the economic reform set in motion, the country is already rated as a major hub for
economic development. Change in per capita income, changes in lifestyle and growing
urbanization have made the Indian population rise from oblivion and resurge in modern era.
 3.7 ROLE OF ‘IT’ IN RETAIL BANKING

The growth in retail banking has been facilities by the growth in banking technology and
automation in banking process that enables in extension of reach and nationalization of cost.
ATM has emerged as an alternative channel which has facilitated low cost transaction. It also has
the advantage of reducing the branch traffic and enable bank with small network to offset
traditional disadvantage by increasing their reach and spread.

Indian retail banks have been extensively using information and communication technologies for
their operations like central counting, customer information management, transaction-processing
and importantly, for numerous customers facing solutions. Beside there are supporting or
ancillary solutions such as security and compliance in addition to the “middleware” that banks
use to link their customer facing applications to their core systems. The major business focus of
the IT savvy retail banks is in providing products and services to the customer through a
diversified base of channels- bank branches, ATMs, e-banking, e-branch, mobile banking, SMS-
banking etc. In India, the business growth is driving technology spending in the retail banking
segment. Indian retail banks are looking forward to move beyond their branch-centric
distribution model.

Extending ATMs network, advancing online and phone banking, and rationalizing branch
infrastructure are all on the cards.
 Benefits of E-banking:

To the Customer:

 Anywhere Banking no matter wherever the customer is in the world. Balance enquiry, request
for services, issuing instructions etc., from anywhere in the world is possible.
 Anytime Banking – Managing funds in real time and most importantly, 24 hours a day, 7days a
week.
 Convenience acts as a tremendous psychological benefit all the time.
 Brings down “Cost of Banking” to the customer over a period a period of time.
 Cash withdrawal from any branch / ATM
 On-line purchase of goods and services including online payment for the same.

To the Bank:

 Innovative, scheme, addresses competition and present the bank as technology driven in the
banking sector market
 Reduces customer visits to the branch and thereby human intervention
 Inter-branch reconciliation is immediate thereby reducing chances of fraud and misappropriation
 On-line banking is an effective medium of promotion of various schemes of the bank, a
marketing tool indeed.
 Integrated customer data paves way for individualised and customised services.

Impact of IT on the Service Quality:

The most visible impact of technology is reflected in the way the banks respond strategically for
making its effective use for efficient service delivery. This impact on service quality can be
summed up as below:

 With automation, service no longer remains a marketing edge with the large banks only. Small
and relatively new banks with limited network of branches become better placed to compete with
the established banks, by integrating IT in their operations.
 The technology has commoditising some of the financial services. Therefore the banks cannot
take a lifetime relationship with the customers as granted and they have to work continuously to
foster this relationship and retain customer loyalty.
 The technology on one hand serves as a powerful tool for customer servicing, on the other hand,
it itself results in depersonalising of the banking services. This has an adverse effect on
relationship banking. A decade of computerization can probably never substitute a simple or a
warm handshake.
 In order to reduce service delivery cost, banks need to automate routine customer inquiries
through self-service channels. To do this they need to invest in call centers, kiosks, ATM’s and
Internet Banking today require IT infrastructure integrated with their business strategy to be
customer centric.

Impact of IT on Banking System:

The banking system is slowly shifting from the Traditional Banking towards relationship
banking. Traditionally the relationship between the bank and its customers has been on a one-to-
one level via the branch network. This was put into operation with clearing and decision making
responsibilities concentrated at the individual branch level. The head office had responsibility for
the overall clearing network, the size of the branch network and the training of staff in the branch
network. The bank monitored the organisation’s performance and set the decision making
parameters, but the information available to both branch staff and their customers was limited to
one geographical location.
Traditional Banking Sector

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 to the
customer. They provide traditional banking services, but additionally offer much greater access
to information on their account status and on the bank’s many other services. To do this banks
have to create account information layers, which can be accessed both by the bank staff as well
as by the customers themselves.

The use of interactive electronic links via the Internet could go a ling way in providing the
customers with greater level of information about both their own financial situation and about the
services offered by the bank.
The New Relationship Oriented Bank

Customers are bi-directional with telephonic, branch and banking. Telephonic or branch can
contact the customer regarding the information or vice-versa. Shared information can reach to
the customers through telephone, branch or electronic banking.

Shared information are the transferred to clearing system and head office risk monitoring.
 Impact of IT on Privacy and Confidentiality of Data:

Data being stored in the computer is now being displayed when required on through internet
banking mobile banking, ATM’s etc. all this has given rise to the issues of privacy and
confidentially of data are:

 The data processing capabilities of the computer, particularly the rapid throughput, integration,
and retrieval capabilities, give rise to doubts in the minds of individuals as to whether the privacy
of the individuals is being eroded.
 So long as the individual data items are available only to those directly concerned, everything
seems to be in proper place, but the incidence of data being cross referenced to create detailed
individual dossiers gives rise to privacy problems.
 Customers feel threatened about the inadequacy of privacy being maintained by the banks with
regard to their transactions and link at computerised systems with suspicion.

Aside from any constitutional aspect, many nations deem privacy to be a subject of human right
and consider it to be the responsibility of those who concerned with computer data processing for
ensuring that the computer use does not revolve to the stage where different data about people
can be collected, integrated and retrieved quickly. Another important responsibility is to ensure
the data is used only for the purpose intended.
 3.8 RECENT DEVELOPMENTS IN BANKING SECTOR

1) Internet:
Internet is a networking of computers. In this marketing message can be transferred and received
worldwide. The data can be sent and received in any part of the world. In no time, internet
facility can do many a job for us. It includes the following:
 This net can work as electronic mailing system.
 It can have access to the distant database, which may be a newspaper of foreign country.
 We can exchange our ideas through Internet. We can make contact with anyone who is a linked with
internet.
 On internet, we can exchange letters, figures/diagrams and music recording.

Internet is a fast developing net and is of utmost important for public sector undertaking,
Education Institutions, Research Organization etc.

2) Society for Worldwide Inter-bank Financial Telecommunications (SWIFT):

SWIFT, as a co-operative society was formed in May 1973 with 239 participating banks from 15
countries with its headquarters at Brussels. It started functioning in May 1977. RBI and 27 other
public sector banks as well as 8 foreign banks in India have obtained the membership of the
SWIFT. SWIFT provides have rapid, secure, reliable and cost effective mode of transmitting the
financial messages worldwide. At present more than 3000 banks are the members of the network.
To cater to the growth in messages, SWIFT was upgrade in the 80s and this version is called
SWIFT-II. Banks in India are hooked to SWIFT-II system.
SWIFT is a method of the sophisticated message transmission of international repute. This is
highly cost effective, reliable and safe means of fund transfer.
 This network also facilitates the transfer of messages relating to fixed deposit, interest
payment, debit-credit statements, foreign exchange etc.
 This service is available throughout the year, 24 hours a day
 This system ensure against any loss of mutilation against transmission.
 It serves almost all financial institution and selected range of other users.
 3) Automated Teller Machine (ATM):

ATM is an electronic machine, which is operated by the customer himself to make deposits,
withdrawals and other financial transactions. ATM is a step in improvement in customer service.
ATM facility is available to the customer 24 hours a day. The customer is issued an ATM card.
This is a plastic card, which bears the customer’s name. This card is magnetically coded and can
be read by this machine. Each cardholder is provided with a secret personal identification
number (PIN). When the customer wants to use the card, he has to insert his plastic card in the
slot of the machine. After the card is a recognized by the machine, the customer enters his
personal identification number. After establishing the authentication of the customers, the ATM
follows the customer to enter the amount to be withdrawn by him. After processing that
transaction and finding sufficient balances in his account, the output slot of ATM give the
required cash to him. When the transaction is completed, the ATM ejects the customer’s card.

4) Cash Dispensers:
Cash withdrawal is the basic service rendered by the bank branches. The cash payment is made
by the cashier or teller of the cash dispenses is an alternate to time saving. The operations by this
machine are cheaper than manual operations and this machine is cheaper and fast than that of
ATM. The customer is provided with a plastic card, which is magnetically coated. After
completing the formalities, the machine allows the machine the transactions for required amount.

5) Electronic Clearing Service:

In 1994, RBI appointed a committee to review the mechanization in the banks and also to review
the electronic clearing service. The committee recommended in its report that electronic clearing
service-credit clearing facility should be made available to all corporate bodies/Government
institutions for making repetitive low value payment like dividend, interest, refund, salary,
pension or commission, it was also recommended by the committee Electronic Clearing Service-
Debit clearing may be introduced for pre-authorized debits for payments of utility bills,
insurance premium and instalments to leasing and financing companies. RBI has been necessary
step to introduce these schemes, initially in Chennai, Mumbai, Calcutta and New Delhi.
 6) Bank net:
Bank net is a first national level network in India, which was commissioned in February 1991. It
is communication network established by RBI on the basis of recommendation of the committee
appointed by it under the chairmanship of the executive director T.N.A. Lyre. Bank net has two
phases: Bank net-I and Bank net- II.
Areas of Operation and Application of Bank net:
 The message of banking transaction can be transferred in the form of codes from the city to
the other.
 Quick settlement of transactions and advices.
 Improvement in customer service-withdrawal of funds is possible from any member branch.
 Easy transfer of data and other statements to RBI.
 Useful in foreign exchange dealings.
 Access to SWIFT through Bank net is easily possible.

7) Chip Card:
The customer of the bank is provided with a special type of credit card which bears customer’s
name, code etc. The credit amount of the customer account is written on the card with magnetic
methods. The computer can read these magnetic spots. When the customer uses this card, the
credit amount written on the card starts decreasing. After use of number of times, at one stage,
the balance becomes nil on the card. At that juncture, the card is of no use. The customer has to
deposit cash in his account for re-use of the card. Again the credit amount is written on the card
by magnetic means.

8) Phone Banking:
Customers can now dial up the bank’s designed telephone number and he by dialling his ID
number will be able to get connectivity to bank’s designated computer. The software provided in
the machine interactive with the computer asking him to dial the code number of service required
by him and suitably answers him. By using Automatic voice recorder (AVR) for simple queries
and transactions and manned phone terminals for complicated queries and transactions, the
customer can actually do entire non-cash relating banking on telephone: Anywhere, Anytime.
 9) Tele-banking:
Tele banking is another innovation, which provided the facility of 24 hour banking to the
customer. Tele-banking is based on the voice processing facility available on bank computers.
The caller usually a customer calls the bank anytime and can enquire balance in his account or
other transaction history. In this system, the computers at bank are connected to a telephone link
with the help of a modem. Voice processing facility provided in the software. This software
identifies the voice of caller and provides him suitable reply. Some banks also use telephonic
answering machine but this is limited to some brief functions. This is only telephone answering
system and now Tele-banking. Tele banking is becoming popular since queries at ATM’s are
now becoming too long.

10) Internet Banking:

Internet banking enables a customer to do banking transactions through the bank’s website on the
Internet. It is a system of accessing accounts and general information on bank products and
services through a computer while sitting in its office or home. This is also called virtual
banking. It is more or less bringing the bank to your computer. In traditional banking one has to
approach the branch in person, to withdraw cash or deposit a cheque or request a statement of
accounts etc. but internet banking has changed the way of banking. Now one can operate all
these type of transactions on his computer through website of bank. All such transactions are
encrypted; using sophisticated multilayered security architecture, including firewalls and filters.
One can be rest assured that one’s transactions are secure and confidential.

11) Mobile Banking:

Mobile banking facility is an extension of internet banking. The bank is in association with the
cellular service providers offers this service. For this service, mobile phone should either be SMS
or WAP enabled. These facilities are available even to those customers with only credit card
accounts with the bank
 12) Any where Banking:
With expansion of technology, it is now possible to obtain financial details from the bank from
remote locations. Basic transaction can be effected from faraway places. Automated Teller
Machines are playing an important role in providing remote services to the customers.
Withdrawals from other stations have been possible due to inter-station connectivity of ATM’s.
The Rangarajan committee had also suggested the installation of ATM at non-branch locations,
airports, hotels, Railway stations, Office Computers, Remote Banking is being further extended
to the customer’s office and home.

13) Voice Mail:

Talking of answering systems, there are several banks mainly foreign banks now offering very
advanced touch tone telephone answering service which route the customer call directly to the
department concerned and allow the customer to leave a message for the concerned desk or
department, if the person is not available.
 3.9 RETAIL BANKING vs. CORPORATE BANKING

BASIS RETAIL BANKING CORPORATE BANKING

Number of clients Large number of clients Small number of clients as compare

to retail banking.
Cost Low processing cost High processing cost

Relationship Medium level of relations High level of relations

Transactions lower value transactions Higher level value transactions

Both types of banking play an important role for the smooth functioning in an economy. Both
offers services related to the segment oriented. They design service keep in mind the need of the
clients.
 3.10 CHALLENGES FACED BY INDIAN RETAIL BANKS

A major challenge for retail banks in India is the retention of customers. In this competitive
environment the customer retention is very difficult. Profitability of retail banks is highly
affected by customer retention. According to a research by Reich held and Sesser in the Harvard
Business Review, 5% increase in customer retention can increase profitability by 35% in banking
business, 50% in insurance and brokerage, and 125% in the consumer credit card market. Thus,
banks need to focus on customer retention. They are expected to take utmost care to retain the
ongoing trust of the public. Banks are required to adopt innovative strategies to meet customers’
needs and requirements in terms of service and products. The efficiency of operations would
provide the competitive edge for success in retail banking in coming years.

In future rising indebtedness could turn out to be a cause for concern. In developed countries the
household debt in proportion to disposable income is much higher. India’s condition is not
comparable to that of the developed countries. There will be high uncertainty in such a scenario.
There will be huge risk and high uncertainty if there is a disproportion between debt/loan and
disposable income. The Reserve Bank has been well aware of this problem. For example, as
Revathy has pointed out, the Reserve Bank has, as a temporary measure, put in place risk
containment measures and increased the risk weight from 100 per cent to 125 per cent in the case
of consumer credit including personal loans and credit cards (Midterm Review of Annual Policy,
(2004-05).Another important issue in retail banking is risks in money laundering and KYC
(Know Your Customer) issues. Banks should take utmost care to retain the trust of the public in
them. Banks have to consider and verify all the documents seriously which are accepted by them
for approving the loans. As the amount of transactions involved is lower, the risk of money
laundering is less in retail banking. There is also possibility of waiver of KYC procedures by
banks in order to retain customers in this competitive environment. The core activities in the
bank like hardware and software maintenance, ATM setup and operation including cash refilling
etc are usually outsourced by banks. So the issue of outsourcing has become very important in
recent past in Indian retail banking. Information technology poses both opportunities and
challenges. Many customers prefer the personal touch of their bank even though the bank has
ATM and Internet Banking services
 3.11 PRIORITIES OF THE NEW MILLENNIUM

Each bank needs to develop a clear strategy to deal with this transforming landscape. To succeed
in this rapidly changing landscape, banks need to have a clear sense of the posture they wish to
adopt – whether to shape the industry, rapidly follow the leaders, or manage defensively, putting
off change. They need to create agility and optionality, to adapt to rapid change and future
uncertainty. Yet, whatever the chosen strategy, success will come from successfully executing
the right balance across the following six priorities.

The following six priorities for retail banks to win in 2020:

 Developing a customer-centric business model.

 Optimizing distribution.
 Simplifying business and operating models.
 Obtaining an information advantage.
 Enabling innovation and the capabilities required to foster it.
 Proactively managing risk, regulations and capital.
 4. DATA ANALYSIS

1. Gender of respondent
o Male
o Female

PARTICULARS TOTAL PERCENTAGE

MALE 44 44/80*100 = 55%
FEMALE 36 36/80*100 = 45%

GENDER

45%

55% male
female

Comments:
Out of 80 respondents 55% are males while 45% are females.
 2. Marital status
o Unmarried
o Married

PARTICULARS TOTAL PERCENTAGE

UNMARRIED 66 66/80*100 = 83%
MARRIED 14 14/80* = 18%

MARITAL STATUS

18%

unmarried
married
83%

Comments:
Out of the total respondents 82% are married and rest are unmarried.
 3. Educational qualification
o Under-graduate
o Graduate
o Post-graduate

PARTICULARS TOTAL PERCENTAGE

UNDER-GRADUATE 46 46/80*100 = 57%
GRADUATE 23 23/80*100 = 29%
POST-GRADUATE 11 11/80*100 = 14%

EDUCATIONAL QUALIFICATION

14%

under graduate
29%
57%
graduate
post graduate

Comments:
Out of the 80 respondents 57% are undergraduate, 29% are graduate and remaining are post
graduate.
 4. Do you have a bank account?
o Yes
o No

PARTICULARS TOTAL PERCENTAGE

YES 73 77/80*100 = 91%
NO 7 7/80*100 = 9%

BANK ACCOUNT

9%

yes
no
91%

Comments:
Out of the 80 respondents 91% have a bank account while rest doesn’t have.
 5. In which bank you maintain an account with?
o Axis bank
o ICICI bank
o HDFC bank
o Others

PARTICULARS TOTAL PERCENTAGE

AXIS BANK 15 15/80*100 = 19%
ICICI BANK 10 10/80*100 = 13%
HDFC BANK 18 18/80*100 = 23%
OTHERS 35 35/80*100 = 45%

BANKS

19%
45% axis bank
13%
icici bank
hdfc bank
23%
others

Comments:
Out of the total respondents 19% have a bank account in axis bank, 13% for ICICI bank, 23% for
HDFC bank and while rest 45% have several different accounts.
 6. What type of account you maintain with the bank?
o Saving account
o Current account
o Salary account
o DEMAT account

PARTICULARS TOTAL PERCENTAGE

SAVINGS ACCOUNT 75 75/80*100 = 81%
CURRENT ACCOUNT 6 6/80*100 = 7%
SALARY ACCOUNT 7 7/80*100 = 8%
DEMAT ACCOUNT 4 4/80*100 = 4%

TYPE OF ACCOUNT

7% 4%
8%
savings account
current account
salary account
81%
demat account

Comments:
Out of the total respondents, maximum have a savings account i.e. 81%, 7% have current
account, 8% have salary account and the remaining 4% have DEMAT account.
 7. How often you go to banks for transactions?
o Daily
o Weekly
o Monthly
o Never

PARTCULARS TOTAL PERCENTAGE

DAILY 7 7/80*100 = 9%
WEEKLY 19 19/80*100 = 24%
MONTHLY 37 37/80*100 = 46%
NEVER 17 17/80*100 = 21%

TRANSACTIONS

21% 9%
24% daily
weekly
monthly
46%
never

Comments:
Out of the total number of respondents, 9%, 24%, 46% and 21% go to banks for transactions
daily, weekly, monthly and never respectively
 8. Reason for maintaining an account with a particular bank?
o Trust/ reliability
o Friendly behavior by staff
o Quick and fast service
o Location

PARTICULARS TOTAL PERCENTAGE

TRUST/RELIABILITY 14 14/80*100 = 33%
FRIENDLY BEHAVIOUR 6 6/80*100 = 8%
BY STAFF
QUICK AND FAST 34 34/80*100 = 43%
SERVICE
LOCATION 14 14/80*100 = 18%

REASON

18%
33%
trust/reliability
friendly behaviour by staff

42% 8% quick and fast service

location

Comments:
Out of 80 respondents, 32% of them believe that their bank is trustworthy or reliable, 7% of them
thinks that staff are friendly in nature, 43% gets quick and fast service whereas remaining 18%
have banks in nearby location.
 9. Did you face any difficulty while opening an account with a particular bank?
o Yes
o No

PARTICULARS TOTAL PERCENTAGE

YES 69 69/80*100 = 86%
NO 11 11/80*100 = 14%

DIFFICULTY

14%

yes
no
86%

Comments:
Out of the total respondents, 86% does not faced any kind of difficulty while opening an account
with the particular bank while remaining 14% somewhere faced difficulty.
 10. Will you change your bank if better services are provided?
o Yes
o No
o Not sure

PARTICULAARS TOTAL PERCENTAGE

YES 32 32/80*100 = 20%
NO 17 17/80*100 = 11%
NOT SURE 31 31/80*100 = 69%

BETTER SERVICES PROVIDED

20%

11% yes
no
69%
not sure

Comments:
Out of the total respondents, 20% will change their bank if better services are provided, 11% will
continue with the same bank while remaining 69% are not sure in changing the bank.
 11. Are ATMs of your respective banks easily available?
o Yes
o No

PARTICULARS TOTAL PERCENTAGE

YES 64 64/80*100 = 80%
NO 16 16/80*100 = 20%

AVAILIBILITY OF ATMs

20%

yes
no
80%

Comments:

Out of the total respondents, ATMs are easily available for 80% while remaining 20% have to go
far for ATM transactions.
 12. Are you aware about the concept of retail banking?
o Yes
o No

PARTICULARS TOTAL PERCENTAGE

YES 60 60/80*100 = 75%
NO 20 20/80*100 = 25%

RETAIL BANKING

25%

yes

75% no

Comments:
Out of the total respondents, 75% are aware about the concept of retail banking while remaining
25% are not aware of the same.
 13. Are you aware about the retail products of banks?
o Yes
o No
o Partially

PARTICULARS TOTAL PERCENTAGE

YES 43 69/80*100 = 54%
NO 18 11/80*100 = 24%
PARTIALLY 19 69/80*100 = 23%

RETAIL PRODUCTS

23%

yes
54%
24% no
partially

Comments:
Out of the 80 respondents, 54% of them are aware about the retail products of banks, 24%
doesn’t know about it while remaining 22% partially knows about it.
 14. Do you use credit card? (If yes, then which bank?)
o Axis bank
o ICICI Bank
o HDFC Bank
o Others
o `No, I don’t use credit cards

PARTICULARS TOTAL PERCENTAGE

AXIS BANK 9 9/80*100 = 54%
ICICI BANK 5 5/80*100 = 24%
HDFC BANK 12 12/80*100 = 15%
OTHERS 3 3/80*100 = 23%
NO, I DON’T USE CREDIT 51 51/80*100 = 23%
CARDS

CREDIT CARD

6%
11%
axis bank
15% ICICI Bank
64% HDFC Bank
others
4% no, I don’t use credit card

Comments:

Out of 80 respondents, 11% use credit cards of axis bank, 6% use credit cards of ICICI Bank,
15% use credit card of HDFC bank, 4% use credit card of other bank while remaining 64%
don’t use credit cards.
 15. Does your bank provide additional discounts on the credit card you use?
o Mostly yes
o Rarely
o No discount

PARTICULARS TOTAL PERCENTAGE

MOSTLY YES 31 31/80*100 = 39%
RARELY 25 25/80*100 = 31%
NO DISCOUNT 24 24/80*100 = 30%

ADDITIONAL DISCOUNTS

30%
39%
mostly yes
rarely

31% no discount

Comments:

Out of 80 respondents, 39% of them gets an additional discount mostly on the credit card they
use, 31% rarely gets an discount and remaining 30% gets no discount.
 16. Do you use Debit Card? (If yes, then which bank?)
o Axis Bank
o ICICI Bank
o HDFC Bank
o Others
o No, I don’t use debit card

PARTICULARS TOTAL PERCENTAGE

AXIS BANK 11 11/80*100 = 14%
ICICI BANK 10 10/80*100 = 13%
HDFC BANK 16 16/80*100 = 20%
OTHERS 33 33/80*100 = 41%
NO, I DON’T USE DEBIT 10 10/80*100 = 12%
CARDS

DEBIT CARD

12% 14% axis bank

13%
icici bank

41% hdfc bank

20%
others
no, I don’t use debit card

Comments:

Out of the total respondents, 14% use debit cards of axis bank, 13% use debit card of ICICI
Bank, 20% use debit card of HDFC Bank, 41% use debit card of other banks and remaining 12%
don’t use debit card.
 17. Which bank you think provides better loan facility?
o Axis Bank
o ICICI Bank
o HDFC Bank
o Others

PARTICULARS TOTAL PERCENTAGE

AXIS BANK 15 9/80*100 = 10%
ICICI BANK 16 5/80*100 = 10%
HDFC BANK 30 12/80*100 = 19%
OTHERS 19 3/80*100 = 61%

LOAN FACILITY

10%
10%
axis bank
19% icici bank
61%
hdfc bank
others

Comments:

Out of the total respondents, axis bank and ICICI bank stands equal in providing loan facility, for
19% HDFC bank provides better loan facility and remaining 61% prefer other banks’ loan
facility.
 18. Does your bank provide online facility?
o Yes
o No

PARTICULARS TOTAL PERCENTAGE

YES 79 79/80*100 = 99%
NO 1 1/80*100 = 1%

ONLINE FACILITY
1%

yes
no
99%

Comments:

Out of the total respondents, loan facility is provided by 99% bank account holder while just 1%
is not having the online facility.
 19. Do you have a safe deposit locker in your respective bank?
o Yes
o No

PARTICULARS TOTAL PERCENTAGE

YES 38 38/80*100 = 48%
NO 42 42/80*100 = 53%

SAFE DEPOSIT LOCKER

48%
53%
yes
no

Comments:

Out of the total respondents, 47% use the facility of safe deposit locker, rest 53% does not use
safe deposit locker.
 20. How long your bank does takes to deliver you the new retail products which you have
ordered?
o 1 week
o Less than a week
o More than a week

PARTICULARS TOTAL PERCENTAGE

1 WEEK 31 31/80*100 = 39%
LESS THAN A WEEK 35 35/80*100 = 44%
MORE THAN A WEEK 14 14/80*100 = 18

DELIVERY OF NEW RETAIL PRODUCTS

44% 39%
1 week
more than a week
less than a week
17%

Comments:

In total number of respondents, 39% receives the new retail product in 1 week, 17% receives in
more than a week while rest 44% receives in less than a week.
 21. How long does your bank take to resolve your complaints?
o 1 week
o Less than a week
o More than a week

PARTICULARS TOTAL PERCENTAGE

1 WEEK 46 31/80*100 = 25%
LESS THAN A WEEK 35 35/80*100 = 58%
MORE THAN A WEEK 14 14/80*100 = 18%

COMPLAINTS RESOLVING

18% 25%

1 week
less than a week

58% more than a week

Comments:

Out of the total number of respondents, complaints are resolved in 1 week for 25%, for 58%
complaints are resolved in less than a week and for remaining 18% its takes more than a week.
 22. How would you rank your respective banks in providing the retail products? (out of 10)
o 1-3 (low)
o 4-6 (average)
o 7-10 (high)

PARTICULARS TOTAL PERCENTAGE

1-3 (LOW) 3 3/80*100 = 4%
4-6 (AVERAGE) 44 44/80*100 = 55%
7-10 (HIGH) 33 33/80*100 = 41%

RANKING

4%
41%
1-3 (low)
55% 4-6 (average)
7-10 (high)

Comments:
Out of the total respondents, 4% will rank their respective bank between 1-3 i.e. low, 55% will
rank average and remaining 41% will give a high rank to their respective banks.
 23. Out of 10, on what scale will you suggest others to avail the retail products of your
respective bank?
o 1-3 (low)
o 4-6 (average)
o 7-10 (high)

PARTICULARS TOTAL PERCENTAGE

1-3 (LOW) 5 5/80*100 = 6%
4-6 (AVERAGE) 52 52/80*100 = 65%
7-10 (HIGH) 23 23/80*100 = 29%

SUGGESTION TO OTHERS

6%
29%

1-3 (low)
4-6 (average)
65% 7-10 (high)

Comments:
Out of the total respondents, on the scale of 10, 6% would suggest in the range of 1-3 i.e. lowest,
65% would suggest on the range of 4-6 i.e. average and remaining 29% will suggest on the range
of 7-10 i.e. highest.
 5. INTERPRETATION OF DATA

The survey was done by asking questions to 80 customers of various banks regarding their
knowledge about the concept of retail banking and its product also which bank provides better
facility. The results shown in the preceding graphs can be interpreted as follows:
 It is observed that there are maximum numbers of respondents who have an bank
account. By this, analyzing of data became easy.
 In comparison with AXIS Bank, ICICI Bank, HDFC Bank it is been observed that
there are more percentage of people having bank account in other banks
irrespective of these three banks.
 Most of the respondents have savings accounts with their respective banks. As
savings account is linked with daily transactions. One can maintain a CASA
Account which means Current and Savings account if they run a business.
 As per the research people using DEMAT Account is low in percentage i.e. 4%.
DEMAT Account refers to a deposit made at an Indian financial institution that
can be used for investing in shares of stocks and other financial assets.
 It is observed that many of the respondents go to bank for transactions monthly.
Due to online facility provided by each bank, having a physical appearance is
bank has been reduced until it is some sort of documentation or paper work whee
signature is required.
 Some of them never go to a bank. It can have two reasons:
 They don’t have a bank account.
 Online facility has become easy for each transaction.
 Respondents have maintained the account with their respective bank id because of
the quick and fast service by the bank. More the fast service is, more the customer
rely on a particular bank.
 Most of them have trust on a particular bank maybe they have their account for a
longer period of time. There can be a direct relationship between trust and quick
and fast service mans high the quick and fast service more chances of increase in
trust factor of a customer.
 Most of the banks have provided easy facility while opening an account with a
respective bank. Account in banks can easily be opened with zero balance and
opening an account online has saved many people time.
 Out of the total respondent very few are there who faced a problem while opening
an account. Maybe they are not aware of how to open a account or the banker
would have send the customers every now then to get more documents,
 Talking about changing bank many of them aren’t sure whether they will change
the bank or no. It is on the customer whether he/she wants to change bank or not.
Relying on the single bank for longer period adds points to the trust factor of
customers.
 Less than a half would change the bank if better services are provided. Maybe
they are expecting more from bank regarding income, interest etc.
 Each bank has set up the ATMs in various locations which have helped customer
to transact the money. Most of the ATMs are easily available in their location.
 Most of the respondents are aware about the concept of retail banking. It refers to
consumer banking; it is the typical mass-market banking in which individual
customers use local branches of larger commercial banks.
 In the graph given above it is observed that maximum number of respondents is
aware about the retail products of banks. It includes cards, loans, account, safe
deposit locker etc. each of the above bank provides all these retail products.
 On asking the respondents, maximum of them don’t use credit cards. On
comparing from the above 3 banks most of the respondents use credit card of
HDFC Bank.
 Most of the banks provide an additional discount on the credit card. The
difference of percentage among the answers of mostly yes, no discount, rarely is
less. Most of the credit cards provides additional discount, cash backs etc.
 On asking respondents, maximum number of respondents use debit card of other
banks than these three banks. On comparing AXIS bank, ICICI bank, HDFC bank
the percentage is more of HDFC bank. With a less difference in percentage, AXIS
Bank lags the second position.
 HDFC Banks provides better loan facility as per the respondents. But the
percentage is more for other banks.
 As said before, all the banks provide an online facility to its customers which
indeed save their time, travelling expenses etc.
 With a difference of 4%, most of them don’t use deposit locker in their respective
bank.
 As per the survey, most of the respondents receive the new retail products they
have ordered in less than a week. This can be a plus point to the trust of the
customer towards their respective bank.
 It is being analyzed that banks takes less than a week to resolve complaints of the
customers regarding the service or any other issues. It can also be considered as
the plus point to the trust of the customers.
 Respondents have ranked the retail products of the bank as “average” which is in
the range of 4-6. With a less difference, some of the respondents have ranked the
retail products of their respective bank as “high” which is in the range of 7-10.
 While suggesting other to use the retail products of a respective bank, respondents
have ranked it as an “average” which is in the range of 4-6. Very less number of
respondents has ranked “high” in terms of suggesting others.
 6. CONCLUSION

It is being concluded from the above analysis and interpretation of data, HDFC Banks clocks
better results in comparing with AXIS Bank and ICICI Bank.

The banking industry is perceived to be going through difficult times due to low credit off-take
in face of high interest rates and inflation. However, this perception could be incorrect given the
extremely robust performance of HDFC Bank and ICICI Bank. The message from Axis’
performance is less clear since it is undergoing a transformation under the current CEO.

Regarding the use of credit card and debit card, more preference has been given to HDFC Bank
rather than AXIS Bank or ICICI Bank.
Retail banking is clear in most of the people mind by which analyzing and interpreting data
became easy.
Considering the retail products, it is obvious that the percentage of the retail products provided
by HDFC Bank is more rather than AXIS Bank or ICICI Bank.
Private sector lender HDFC Bank has been rated 27th safest bank in the world, according to
latest Bank Safety Ranking by 'The Banker', a Financial Times publication.

The HDFC bank has been ranked 27th globally among 250 banks and stood at number 6 in Asia
Pacific region, a statement said.

The ranking is based on capital, asset quality, profitability, how the bank funds itself, and the risk
environment for each bank’s home country. As per the report, Axis Bank has been ranked at 71, ICICI
Bank at 85.
 7. SUGGESTIONS AND RECOMMENDATIONS

1) To AXIS Bank:
 The bank should provide more facilities to the credit card and debit holder
mostly who are regularly using. Facilities can be cash backs, offers, and
additional discounts.
 Mostly service class persons prefer AXIS Bank in the comparison of business
and students and other class persons thus it needs to promote its product and
services that are offered mainly for the business class people and students.
Because these two class forms major users of the banking services.
 Axis Bank is normally not using properly for the currents account so its
popularity ratio is quite down. This bank normally using for the long term
planning like saving and FD.
 This bank is not investing more into the marketing sector so I will suggest that
some of the part of income it investing in the advertising and marketing
sector.
 Into the comparison of other bank its performance is quite good but not an
effective so this may be doing the rates were down with some other facilities.

2) To ICICI Bank:
 Due to intense competition in the banking sector, the ICICI Bank should adopt
better strategies to attract more customers.
 ICICI Bank should select the location for its branch in such a way that the
parking problems should be solved, as more than half respondents do not visit
a bank instead they use online facility.
 ICICI Bank should come up with various supporting policies to increase the
awareness level among the consumers about the new online services.
 ICICI Bank should ask for their customer feedback to know whether the
customers are really satisfied and dissatisfied with the service and product of
 the bank. If they are dissatisfied, then the reasons for dissatisfaction should be
found out and should be corrected in future.
 ICICI Bank should try to increase the brand image through performances and
services then only the customers will be satisfied.
 Majority of the people find banking important in their life, so the ICICI Bank
should employ the strategies to convert the want into need which will enrich
their business.
 APPENDICES
Gender of respondent:
 Male
 Female

Marital status:
 Unmarried
 Married

Educational qualification

 Under-graduate
 Graduate
 Post-graduate

1) Do you have any bank account?

 Yes
 No

2) In which bank you maintain an account?
 Axis bank
 Icici bank
 Hdfc bank
 Others

3) What type of account you maintain with the bank ?

 Savings account
 Current account
 Salary account
 DEMAT account
4) How often you go to banks for transactions?

 Daily
 Weekly
 Monthly
 Never

5) Reason for maintaining an account with a particular bank?

 Trust/ reliability
 Friendly behavior by staff
 Quick and fast service
 Location

6) Did you face any difficulty while opening an account with a particular bank?

 Yes
 No

7)Will you change your bank if better services are provided?

 Yes
 No
 Not sure

8) Are ATMs of your respective banks easily available?

 Yes
 No
9) Are you aware about the concept of retail banking?

 Yes
 No

10) Are you aware about the retail products of banks?

 Yes
 No
 Partially

11) Do you use credit card? (If yes, then which bank?)

 Axis bank
 ICICI Bank
 HDFC Bank
 Others
 No, I don’t use credit cards

12) Does your bank provide additional discounts on the credit card you use?

 Mostly yes
 Rarely
 No discount

13) Do you use Debit Card? (If yes, then which bank?)

 Axis Bank
 ICICI Bank
 HDFC Bank
 Others
 No, I don’t use debit card
14) Which bank you think provides a better loan facility?

 Axis bank
 ICICI bank
 HDFC bank
 Others

15) Does your bank provide online facility?

 Yes
 No

16) Do you have a safe deposit locker in your respective bank?

 Yes
 No

17) How long your bank does takes to deliver you the new retail products which you have
ordered?
 1 week
 Less than a week
 More than a week

18) How long does your bank take to resolve your complaints?
 1 week
 Less than a week
 More than a week

19) How would you rank your respective banks in providing the retail products? (out of 10)
 1-3 (low)
 4-6 (average)
 7-10 (high)
20) Out of 10, on what scale will you suggest others to avail the retail products of your
respective bank?

 1-3 (low)
 4-6 (average)
 7-10 (high)

BIBLIOGRPHY
WEB:
https://www.financialexpress.com/industry/banking-finance/hdfc-bank-ranked-27th-safest-bank-
globally-by-the-banker/158151/
https://www.slideshare.net/shifali123/axis-bank-project
https://www.slideshare.net/prateekgahlot/a-study-on-customer-satisfaction-in-icici-bank
https://www.thebalance.com/what-is-retail-banking-3305885
https://www.researchgate.net/publication/321360090_Retail_banking_challenges_and_latest_tre
nds_in_India-
https://www.investopedia.com/articles/general/071213/retail-banking-vs-commercial-
banking.asp
https://www.mbaknol.com/business-finance/role-of-information-technology-it-in-the-banking-
sector/
https://www.axisbank.com/retail/cards/prepaid-cards

NEWSPAPER:
Times of India
Hindustan Times
Economic Times