Banking Sector

Introduction

• Definition of bank:

“A bank is a financial intermediary which accepts deposits and in turn converts the deposits

into lending”

Functions of Bank

• Accepting deposit from people and others(deposit)• Lending money to public (loan)• Transferring money from 1 place 2 another• Credit creation• Acting as a trustee• Keeping valuable in safe custody • Investment decisions and analysis• Other types of lending and transaction

Banking Sector in India

Banking structure in India

Public

Bank of Maharashtra

Central Bank of India

Private

ING Vysya

Federal Bank

Co-operative

Saraswat Co-op

TJSB

Rural

Marathwada Gramin Bank

Thane Gramin Bank

Foreign

HSBC

Citibank

Reserve Bank of India

ROLE

FORMULATE AND

IMPLEMENT

REGULATE AND

SUPERVISE

MANAGE FOREIGN EXCHANG

E

ISSUE AND

EXCHANGE

BANKER TO

CENTRAL & STATE GOVT.

Current Scenario

• The Present Status • Major contributor• The percent contributed to the economy: 2.5%• Still dominated by Government Banks• Competition• Increase in share value

Current Scenario

Banks 1997 2009

Shares of new private assets 2.6% 15.2%

Average capital adequate ratio for consumers 10.4% 13.03%

Gross NPA’s for commercial banks 15.7% 2.3%

Returns on assets of commercial bank 0.4%(1991)

1.0%

Success : A road ahead…

Top 3 Private Banks of India

• Largest private sector bank in India • Total asset of Rs. 3,674.19 billion • Network of 1,600 branches with about 5000 ATMS • 21% Increase in profit after tax to Rs 8.78 billion in

Q1 2010

SWOT

Strengths• Market share• Huge network• Salary account• Working hours• Aggressive marketing

Weaknesses• High Transaction cost• Focus only on high end

customers• Poor customer

care/service

SWOT

Opportunities• Dissatisfied customers of

other banks• Bank –insurance services• Increase in percentage of

returns• Business advising for

smaller players

Threats• Advent of MNC banks• Dissatisfied customers• Ever improving

nationalized banks

• One of the first bank to be listed on NYSE in 2001• Among the first companies to receive an 'in

principle' approval from the Reserve Bank of India (RBI).

• Times Bank Limited was merged with HDFC Bank Ltd., in 2000

• The Bank has an network of 1,725 branches spread in 771 cities across India

• The Bank also has 3,898 networked ATMs across these cities

SWOT

Strengths

• Right strategy

• Great Brand Image.

• High degree of customer

satisfaction

• Good working environment

• Lower response time with efficient

and effective service.

• Dedicated workforce

Weaknesses

• Some gaps in range for certain

sectors

• Customer service staff need

training

• Management cover insufficient

SWOT

Opportunities• Scope to expand to larger

areas

• Potential to attract more customers from overseas

Threats• Very high competition

prevailing in the industry

• Lack of infrastructure

• Began operation in 1994

• Was earlier known as UTI Bank

• Total Income as on 31/03/2009 is Rs.13,745.04

crore

• Net Profit as on 31/03/2009 is Rs 1812.93 crore

• MD and CEO is Shikha Sharma

• Head Quarter in Mumbai

SWOT

Strengths

• Support of various

promoters

• High Level of Services

• Knowledge of Indian

Market

Weaknesses

• Low market Capitalization

• Not been able to Fully

position itself correctly

• Less Popular

SWOT

Opportunities

• Growing Indian Banking

Sector

• People becoming more

service oriented

• Global Market

Threats

• Competitors

• Future Market Trends

Future of Banking Sector in India

• Mortgages to cross Rs 40 Trillion by 2020

• Wealth management will be big business with 10x

growth

• The Next Billion will be the largest segment

• The branches to grow by 2x and ATMs by 5x

• Mobile Banking to see huge growth

• New Models to serve Small and Medium Enterprise

• Investment Banking to grow by 10 folds

Challenges

• Financial Inclusion

• The HR challenge in the Public Sector

• New entrance

• Technology

Future for an MBA

• Add new professionals

• Globally competitive market

• Deploy suitable strategies

Future for an MBA

Finance• Reorganizing the financial system • Improvise their nose-dived profit graph

Marketing• Market Investment Product• Direct selling agents

HR• Sustainability of bank• Challenges in recruiting, training, and developing

Conclusion

Thank You