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Banking Operations Management

Project On Study Of Bank Branch Operations


Submitted By: Aabhash Chandra Shrivastav (R1101001) PGPBF National Institute Of Bank Management

Table of Contents
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Introduction: ................................................................................................................................... 3 About The Bank: ............................................................................................................................. 3 Bank Branch Profile: ....................................................................................................................... 3 Service Area Characteristics: .......................................................................................................... 5 Staffing, Work Analysis & Manpower Deployment: ..................................................................... 7 Business Analysis: ........................................................................................................................... 8 SWOT Analysis of the Branch:........................................................................................................ 9 Problems Faced in Managing Customers .................................................................................... 10 Overall Growth & Competitive Performance .............................................................................. 11 Conclusion ................................................................................................................................ 11

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1. Introduction:
This Project on the Study of Bank Branch Operations aimed at giving us a thorough idea about the functioning of a bank branch, its business, work and overall organization. As a requisite for the study, visits were to be made to the branch to collect data, observe the layout and interview the key respondents. Subsequently, visits were made to the Rishra Branch, of ICICI Bank in Rishra, Hooghly District in West Bengal for the same. The Brach Manager, Mrs. Struti Ganguly, gave the permission for the study and Senior Officer, Mrs. Maitryee Mazumdar, responded to the key questions. The study revealed the process behind the functioning of the branch and the key details regarding the business and overall organization of the branch operations. The following report contains a detailed analysis of the same.

2. About The Bank:


ICICI Bank is India's second-largest bank with total assets of Rs. 4,062.34 billion (US$ 91 billion) at March 31, 2011 and profit after tax Rs. 51.51 billion (US$ 1,155 million) for the year ended March 31, 2011. The Bank has a network of 2,553 branches and 7,440 ATMs in India, and has a presence in 19 countries, including India. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries in the areas of investment banking, life and non-life insurance, venture capital and asset management. The Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. The UK subsidiary has established branches in Belgium and Germany.

3. Bank Branch Profile:


Bank Name: Branch Name: Branch Type: ICICI Bank Rishra Branch Sub Urban

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Technology: Address:

Fully Computerized (CBS) 38, G.T. Road, P.O Rishra, District Hooghly, West Bengal. Pin 712248

Contact No.: Branch Manager: Date Branch Opened On: Branch Timing: Floor Area: No. Of Customers (S/B & C/A Deposit): Deposits (Amount): Advances (Amount): Average Daily Transactions (Numbers) (Credits, Debits & Transfers)

033 64607390 Mrs. Struti Ganguly 4th July, 2008 9 am to 6 pm 1800 Sq. Ft. 2100 (Approx.) Rs. 7.75 Crore (Approx.) N/A.

125-175

Services Offered o Savings Bank Deposits o Current A/c Deposits o Recurring Deposits o Transfer Of Funds (Only by cheques) o Cheque Clearing Facilities o Safe Deposit Locker o Third Party Products In Insurance & Assets Management Important Services Not Present o Credit Facilities o Utility Bill Payments (Through Branch)

As it has only been a little over three years for the branch to be operational, it is functioning only as a deposits accepting branch. The branch is not yet self sufficient, in
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terms of deposits, to be able to provide loans. Any loan proposals to the branch are forwarded to the banks branches in Howrah and Kolkata. That is the branch is working for the liability side of the Balance Sheet of the bank and any asset generating opportunities are forwarded to the other offices. Branch Floor Plan
Safety Lockers Sales Officers Cubicles

First Floor

Cash Vault

Store Room

Ground Floor

Branch Managers Cabin

Cash Counters

Service Counters Customers Waiting Area

Entrance

4. Service Area Characteristics:


The Rishra Branch of ICICI Bank is situated at a prime location on the Grand Trunk Road just besides a Bus Stop and a Ferry Ghat. The ease of commute to the location and the continuous footfall augment the prime nature of the location. Moreover, the presence of the General Post Office and branches of State Bank Of India, Central Bank and United Bank of India in close proximity exemplify the importance of the location for the service area. The branchs effective service area can be said to include mainly Rishra but it also comprises of adjacent parts of the neighbouring Konnagar on one side and Serampore on the other, all three being small sub-urban, station towns in Hooghly district in West Bengal. The branchs location being on the Grand Trunk Road, which connects and runs across the three towns, make it that more a favourable location, as far as commuting to the place is considered. The Hooghly region has been an industrial belt in the past, mainly famous for its Jute Industry, but most of them are now non-operational. Still, the town of Rishra has many operational factories, such as
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Wellington Jute Mills Hastings Jute Mills Jayashree Textiles (Aditya Birla Nuvo Group) Aditya Birla Insulators (Aditya Birla Nuvo Group) Phosphate Company Limited Hindusthan National Glass (HNG) Limited PMC Rubber Chemicals Limited Bhushan Steel Limited Nalco Chemicals Berger Paints Limited

And most of these companies require vendors for some of their ancillary works. Besides, many of these factories being established four or five decades earlier are mostly labour intensive. Thus, the branchs service area comprises of both large corporate customers and small retail customers working in those organisations. There are no fund generating Government Organisations in the service area. However, the Rishra Municipality is considered to be a cash rich entity. Also, the town has a number of government and trust funded schools along with many private schools which, to some extent, add to the business opportunities for a bank branch. Moreover, a large population residing in the area work or are self-employed in the city of Kolkata, around 25Kms away, augmenting the number of retail customers in the area. Again, there are also a certain number of households who have an earning member living in the Gulf Countries sending inward remittances through bank accounts. Hence, it can be seen that the service area for the branch has huge opportunities for providing banking services. But for a new bank branch to establish itself as a major player in the area can be a tough task, due to the level of competition present. The following banks have a branch(es) in the area, State Bank Of India (2)

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United Bank Of India Central Bank Of India (2) Allahabad Bank UCO Bank Axis Bank Syndicate Bank HDFC Bank Vijaya Bank Bank Of India

* The number in the parentheses indicates the no. of branches in the service area, if more than one.

5. Staffing, Work Analysis & Manpower Deployment:


A total of 15 employees work in the branch, the break-up of the no. of employees as per their designation is as follows, Designation
Branch Manager Senior Officer Officers Sales Officer Sub Staff Security Guard TOTAL

Number of Employees
1 2 4 4 3 1 15

The branch does not have specified departments for various activities, as it is mainly concerned with retail banking. There are 7 counters in total out of which only 4 are active, Cash Counters: Service Counters: 2 2

All the counters and operators are equipped to perform any banking service such as deposits, withdrawal, transfers, passbook printing, etc. But for security purpose, cash
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facilities are provided only from the two cash counters and other services are provided through the service counters. The Service Counters, in effect, are performing the following functions, Fund transfers (Through cheques only) Passbook Update Printing New A/c Opening (S/B, C/A) A/c Enquiries Service Requests o Activating New Services o Updating A/c Details, etc. Third Party Product Enquiries & Sales

Again, one of the cash counters is reserved for Privilege Banking and Senior Citizens, but functions as an ordinary cash counter in absence of such customers. Privilege Banking is a facility provided by the bank to High Net Worth Individual (HNI) customers having high amounts of deposits in the branch. All, these counters are manned by employees in the Officer grade. One of the Senior Officers is the Accountant and the other takes up a supervisory role in the branch. The Sales Officers (SO) have delegated areas of work, regarding promoting and sales of Third Part Products like Insurance and Wealth Management Services and opening of Deposit A/cs. The branch is only involved in selling products of its sister concerns like ICICI Prudential Life Insurance, ICICI Lombard General Insurance and ICICI Wealth Management. The following explains the work delegation of the SOs, Promoting Deposit A/c s (S/B, C/A) 2 Sales Officers Promoting Third Party Insurance Product (ICICI Prudential Life Insurance & ICICI Lombard General Insurance) 1 Sales Officer Promoting Third Party Wealth Management Service (ICICI Wealth) 1 Sales Officer

The sub staff is involved in providing basic facilities to the staff and one of the sub staff is concerned with providing door-step banking facilities to select customers. The branch does not have any back office operations. All such activities are carried out in the banks Regional Processing Centre (RPC). Any such work is forwarded to the RPC on a daily basis.

6. Business Analysis:

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Evident, from the study of branchs operations and business, is that the strategy of the branch is to concentrate on the High End customers. The branch currently handles some large deposit accounts belonging to the owners of small scale setups and other traders along with numerous retail accounts belonging to households. It has been able to get the Salary A/cs of the non-labour staff of PMC Rubber Chemicals Pvt. Limited, a more than Rs. 10 Crore turnover company, but not the factorys accounts. The branch currently does not have any of the big corporate accounts with it. As said by the Senior Officer, Mrs. Maitryee Mazumdar, the branch is vying for the Quality customers, not for the quantity of customers That is, the branch is looking for avenues to get the corporate accounts to ensure a large deposits base. But it seems a steep task to win such customers as most of them have been banking with their respective banks since the last 10-15 years or have recently changed their bankers. Some of the big organisations employing more than 1500 employees each, and their respective bankers are as follows, Hindusthan National Glass (HNG) Limited: Jayashree Textiles Limited (Aditya Birla Nuvo Group): Aditya Birla Insulators (Aditya Birla Nuvo Group): Bhushan Steel: Axis Bank HDFC Bank HDFC Bank Allahabad Bank

Of the above, Jayashree Textiles Limited is the biggest organisation and HDFC Bank and Standard Chartered Bank have recently captured the salary A/Cs of the non-labour employees, while Central Bank, operating a branch from within the factory premises, is handling the salary A/cs of the labour employees. As the branch was reluctant to provide any quantitative information about the business details, any quantitative analysis is not possible.

7. SWOT Analysis of the Branch:


After conducting the study, the branch can be said to have the following, Strengths: The ICICI Brand name and new-age banking facilities provided by the bank makes the branch favourable, in the customers viewpoint, for retail banking. The Branch location which is both prominent and easy to commute to makes it that more convenient for the customers. ATM Network in the region specially the service area which includes two ICICI Bank ATMs at different, convenient spots.

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ICICI Bank conducts various training programmes for its employees that makes them that more competent and efficient to deal with the customers and provide favourable services. That is, the employees of the branch also augment the Strengths of the branch. The welcoming ambience also adds to the image of the branch.

Weakness: As suggested by the Senior Officer, Mrs. Maitryee Mazumdar, the mindset of the people in the area to bank with only the Public Sector Banks forms a weakness for the branch. The general retail customer in the service area is more comfortable in transacting with the PSBs rather than the Private Banks The branch was a late entrant in the service area, and most of the customers were captured by the existing bank branches.

Opportunities: The branch sees the presence of big corporates in the service area as the opportunity to grow in terms of size of deposits. The branch is aiming to get both the corporates A/cs and Salary A/cs of the employees to do the same.

Threats: The stern competition in the service area, especially for the big corporate customers is a major threat for the branch and can hinder its growth prospects. The branchs inability to provide credit can also hamper its growth process as the small & micro industry proprietors in the service area will prefer a branch that does provide such facilities.

8. Problems Faced in Managing Customers:


The branch on an average daily basis facilitates 125-175 transactions and as suggested by the Senior Officer, Mrs. Maitryee Mazumdar, the branch is sufficiently staffed to manage the workload. The branch follows a Single Channel Multi Phase system where the customers can sit and wait for a counters to be vacant. The sitting area for the customers has sufficient no. of chairs for the customers. As the branch is reasonably new and has a low customer count the customer arrival rate is very low at about 20-25 per hour in peak hours and 10-12 per hour in off-peak hours. The service rate, as observed, varied from 2-4 minutes depending upon the nature of the transaction on the cash counters and
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more than 5-7 minutes in case of service counters (except for passbook printing).Hence, no such problems are faced in managing the workload in branch transactions. However, partly due to the competition and the growing demand for service by the customers, the branch needs to facilitate door step banking to some of its large deposit customers even though they do not fulfil the criteria for Privilege Banking (which includes such facilities). Hence, one of the sub staff has been designated to perform such functions only.

9. Overall Growth & Competitive Performance


As the branch did not provide any quantitative data relating to the business any comment on the growth and overall performance of the bank is not possible. However, as responded by the Senior Officer, the branch achieved its attributed targets in one and only marginally missed in two of the three fiscal years, it has been operating. Also, the growth in terms of deposits has been satisfactory. Moreover, owing to the stern competition for providing retail banking in the service area and the late entrance of the branch along with limited facilities being provided as of now the performance of the branch can only be said to be satisfactory. For example, HDFC Bank and Standard Chartered Bank (which does not have a branch in the service area) have been able to reap in Salary A/cs of Jayashree Textiles Limited and Aditya Birla Insulators recently and have set up an ATM each in the factory premises. Thus, comparatively the branchs performance has scope to progress further.

10.Conclusion:
The study of the bank branchs operations revealed certain important details about the functioning of a bank branch and its operations. The Rishra Branch of ICICI Bank being a late entrant in the service area faces stiff competition in both retail and wholesale banking. The branch currently aims to reap in the big corporate A/cs and Salary A/cs of the respective employees of those organisations to grow in terms of deposits. The branch is only working for the liability side of the bank, i.e., accepting only deposits and any loan proposals are forwarded to the bank offices in nearby Howrah and Kolkata. Moreover, for the same reason the no. of transactions in the branch are limited and the staff being sufficient to support the operations does not face any major problems in handling the customers and the workload.

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