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1.1 OVERVIEW OF THE BANKING SECTOR
INTRODUCTION
Banking in Indiaoriginated in the last decades of the 18th century. The firstbanks
were The General Bank of India, which started in 1786, and Bank of Hindustan,
which started in 1770; both are now defunct.
BANKS IN INDIA
In India the banking sector is segregated as public or private sector banks,
cooperative banks and regional rural banks. Foreign banks have been given a
different head followed by upcoming foreign banks in this section.
BANKING SERVICES IN INDIA
Bouquets of services are at customers demand in todays banking
system. Different types of accounts and loans, facilitating with plastic money and
money transfer across the globe.
RESERVE BANK OF INDIA (RBI)
The Reserve Bank of India (RBI) is India's central banking institution, which
regulates, controls credit, issue licenses and functions as banker of all banks and
the government. It was established on 1 April 1935 during the British Raj in
accordance with the provisions of the Reserve Bank of India Act, 1934. Following
India's independence in 1947, the RBI was nationalized in the year 1949.
EASY BANKING
With the advancement of technology, banking sector has become more easy, fast,
accurate and also time saving. ATMs, Mobile Banking, SMS Banking and Net
Banking are only the tip of an ice-berg.
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INDIAN BANKS ASSOCIATION (IBA)
Indian Banks Association (IBA), formed on 26 September, 1946 as a
representative body of management of banking operating in India based in
Mumbai. With an initial membership representing 22 banks in India in 1946, IBA
currently represents 173 banking companies operating in India. IBA was formed
for development, coordination and strengthening of Indian banking.
Structure of Banking Sector In India
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RESERVE BANK OF INDIA
The RBI is the central banking and monetary authority in India. The RBI manages
the countrys money supply and foreign exchange and also serves as a bank for
the GOI and for the countrys commercial banks. In addition to these traditional
central-banking roles, the RBI undertakes certain developmental and promotional
activities. RBI issues guidelines, notifications, and circulars on various areas
including exposure standards, income recognition, asset classification,
provisioning for non- performing assets, investment valuation and capital
adequacy standards for commercial banks, long-term lending institute. And non-
banking finance companies. The RBI requires these institutes to furnish
information relating to their businesses to the RBI on a regular basis.
COMMERCIAL BANKS
Commercial Banks in India have traditionally focused on meeting the short-term
financial needs of the industry, trade and agriculture. At the end of Sept. 2007,
there were 291 scheduled commercial banks in the country, with a network of
67221 branches. Scheduled commercial banks are banks that are listed in the II
Scheduled to the RBI Act, 1934, & may further be classified as PSU, Private
sector banks & foreign banks. IDBI was converted into a banking company by the
name of INDUSTRIAL DEVELOPMENT BANK OF INDIA LTD. with effect
from Oct. 2007 & is a scheduled commercial bank. Scheduled Commercial bank
has a presence throughout India, with nearly 70.1% of bank branches located in
rural or Semi- urban areas of the country. A large no. of these branches belongs to
the Public Sector Banks.
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CO-OPERATIVE BANKS
Cooperative banks cater to the financing needs of agriculture; small industry and
self-employed businessmen in urban and semi urban areas of India. The State land
development banks and the primary land development banks provide long-term
credit for agriculture. In light of the liquidity and insolvency problems
experienced by some cooperative banks in fiscal 2001, the RBI undertook several
interim measures to address the issues, pending formal legislative changes,
including measures related to lending against shares, borrowings in the call
market and term deposits placed with other urban cooperative banks. The RBI is
currently responsible for supervision and regulation of urban co-operative
societies, the National Bank for agriculture and Rural Development, state co-
operative banks and district central co-operative banks. The banking Regulation
(Amendment) and Miscellaneous Provision Bill, 2003, which was introduced in
the parliament in 2003, proposed the regulation of all co-operative banks by the
RBI. The Bill has not ye been ratified by the Indian parliament and is not in force.
FOREIGN BANKS
At the end of June 2007, there were 32 foreign banks with 217 branches operating
in India, accounting for 4.6% of aggregate deposits and 7.0% of outstanding gross
banks credit of scheduled commercial banks. The Govt. of India permits foreign
banks to operate through (i) branches (ii) a wholly owned subsidiary (iii) a
subsidiary with aggregate foreign investment of up to 74% in a private bank. The
primary activity of most foreign banks in India has been in the corporate segment.
However, some of the larger foreign banks have made consumer financing a
significant part of their portfolios. These banks offer products such as automobile
finance, home loans, credit cards and household consumer finance. The GOI in
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2006 announced that wholly owned subsidiaries of foreign banks would be permitted
to incorporate wholly owned subsidiaries in India. Subsidiaries of foreign banks will
have to adhere to all banking regulations, including priority sector lending norms,
applicable to domestic banks .In March 2007, the Ministry of Commerce and
industry, GOI announced that the foreign direct investment limit in private sector
banks has been raised to 74% from the existing 49% under the automatic route
including investment by FII .The announcement also stated that the aggregate of
foreign investment in a private bank from all sources would be allowed up to a
maximum of 74% of the paid up capital of the bank .The RBI notification increasing
the limit to 74% is however still awaited.
REGIONAL RURAL BANKS
Regional Rural banks were established from 1976 to 1987 jointly by the central
Govt. , State Govt. and sponsoring public sector commercial banks with a view to
develop the rural economy. Regional rural banks provide credit to small farmers,
artisans, small entrepreneurs & agricultural laborers. There were 196 regional
rural banks at the end of Sept. 2007 with 144430 branches, accounting for 3.6%
of aggregate deposits and 3.0% of gross bank credit outstanding of scheduled
commercial banks.
URBAN CO-OPERATIVE
The term Urban Co-operative Banks (UCBs), though not formally defined, refers
to primary cooperative banks located in urban and semi-urban areas. These banks,
till 1996, were allowed to lend money only for non-agricultural purposes. This
distinction does not hold today. These banks were traditionally centred around
communities, localities work place groups. They essentially lent to small
borrowers and businesses. Today, their scope of operations has widened
considerably.
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PUBLIC SECTOR BANKS
Public Sector banks make up the largest category of banks in the Indian Banking
System. There are 27 public sector banks in India. They include the SBI & its
associate banks & 19 nationalized banks. Nationalized banks are governed by the
banking companies (Acquisition & transfer of U/T) Act, 1970 & 1980. The banks
nationalized under the banking companies (Acquisition & transfer of U/T) Act,
1970 are referred to as Corresponding new banks. PNB is a public sector bank
nationalized in 1969 and a corresponding new bank under the bank acquisition Act.
At the end of Sept. 2007, public sector banks had 46782 branches & accounted for
74.9% of the aggregate deposits & 70.5% of the outstanding Gross bank credit of the
scheduled commercial banks.
After the first phase of bank nationalization was completed in 1969, the majority of
Indian Banks were public sector banks. Some of the existing private sector banks,
which showed signs of an eventual default, were merged with state- owned banks. In
July 1993, as part of the banking reforms process and as a measure to induce
competition in the banking sector, the RBI permitted entry by the private sector into
the banking system. This resulted in the introduction of 9 private sector banks. These
banks are collectively known as the new private sector banks. There are 9 new
private sector banks operating at present.
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CLASSIFICATION OF BANKS
The Indian Banking industry consisted of 97 commercial banks, 196 regional banks, 52
Scheduled urban Co-operative banks, and 16 Scheduled state Co-operative banks.
At present, the banking system can be classified into the following categories:
PUBLIC SECTOR BANKS
Reserve Bank of India
State Bank of India and its 7 associate banks
Nationalized Banks
Regional rural Banks Sponsored by Public Sector Banks
PRIVATE SECTOR BANKS
Old Generation Private banks
New Generation Private Bank
Foreign banks in India
Scheduled Co-operative Banks
Non- Scheduled Banks
CO-OPERATIVE SECTOR BANKS
IFCI
IIBI
SIDBI
NABARD
EXIM
SCICI
DEVELOPMENT BANKS
State Co-operative Banks
Central Co-operative Banks
Primary Agriculture Credit Societies
Land development Banks
Urban co-operative Banks
State Land Development Banks
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The RBI has a centralized control over all these banks. It performs a wide range of
functions to:
Issue Bank notes
Supervise & administer exchange control and banking regulations and administer
the Govt. policy
Issue licenses to the foreign banks for operations in India
Approve the licenses of operation for the private banks
Grant licenses to new banks and new bank branches.
Globalization, financial deregulation and improvement in technology have had a profound
effect on the financial landscape in recent years. These developments have intensified
competition and resulted in financial engineering through product innovation and business
strategies. While market participants have now greater scope to diversify risk and manage itefficiently, this has also posed new risks and challenges to the financial system. Growth of
financial firms across different business lines and across national boundaries has made the
task of designing appropriate policies more challenging. Regulatory and supervisory
policies are, therefore, constantly assessed regarding their capabilities to meet the
challenges of containing systemic risk in the financial system. The main challenge for the
supervisory authorities has been to maintain financial stability without curtailing the
incentive to innovate.
Keeping in view the changing landscape in the financial sector, the Reserve Bank has been
suitably focusing its regulatory and supervisory framework to promote a stable and efficient
financial sector. The main focus of the Reserve Banks recent regulatory and supervisory
initiatives has been on prudential regulation and financial infrastructure broadly in line with
international best practices. However, while focusing on a globally competitive and the
robust banking sector, the Reserve Bank has also emphasized financial inclusion, whereby
banking services are accessed easily by the underprivileged sections of the society. The
overall approach to reforms has been sequenced and arrived at through consultative process
with all the stakeholders. Various reform measures initiated from time to time have
imparted resilience to the financial system.
The Reserve Bank had indicated on February 15, 2005 that banks in India would start
implementing Basel II with effect from March 31, 2007. Several initiatives, therefore, were
taken during the year to facilitate the smooth transition to Basel II. The Reserve Bank
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permitted banks to raise capital through new instruments to enable them to meet capital
requirements prescribed under Basel II. The Reserve Bank also issued a guidance note for
operational risk management. Taking into account the state of preparedness of the banking
system, however, it was announced in the Midterm Review of the Annual Policy for 2006-
07 on October 31, 2008 that Indian banks with presence outside India and foreign banks
operating in India would be required to migrate to Basel II framework with effect from
March 31, 2008, while all other Indian banks would be encouraged to migrate to these
norms by March 31, 2009.
With a view to providing basic banking services to common man, the Reserve Bank took
several measures to incentives banks. Improvement in customer service was another area of
focus of the Reserve Banks regulatory Policy.
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1.2 AXIS BANK
Axis Bank 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.
The Bank's Registered Office is at Ahmedabad and its Central Office is located at
Mumbai. The Bank has a very wide network of more than 1600 branches (including 169
Service Branches/CPCs as on 30th June, 2012). The Bank has a network of over 10000
ATMs (as on 30th June, 2012) providing 24 hrs a day banking convenience to its
customers. This is one of the largest ATM networks in the country.
The Bank as on 30th June, 2012 is capitalized to the extent of Rs. 414.29 crores with the
public holding (other than promoters and GDRs) at 54.24%. 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.
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1.2.1 COMPANY PROFILE
Axis Bank Ltd., the first bank to begin operations as new private banks in 1994
after the Government of India allowed new private banks to be established. Axis
Bank was jointly promoted by the Administrator of the specified undertaking of
the:
Unit Trust of India (UTI-I)
Life Insurance Corporation of India (LIC)
General Insurance Corporation Ltd.
Also with associates viz. National Insurance Company Ltd., The New India
Assurance Company, The Oriental Insurance Corporation and United Insurance
Company Ltd. Axis Bank in India today is capitalised with Rs. 414.29 Crores
with 54.24% public holding other than promoters. It has more than 1600 branch
offices and Extension Counters in the country with over 10000 Axis Bank ATM
proving to be one of the largest ATM networks in the country. Axis Bank India
commits to adopt the best industry practices internationally to achieve excellence.
Axis Bank has strengths in retail as well as corporate banking. This is the first
bank in India to offer the AT PAR Cheque facility, without any charges, to all its
Savings Bank customers in all the places across the country where it has presence.
With the AT PAR cheque facility, customers can make cheque payments to any
beneficiary at any of its existence place. The ceiling per instrument is Rs. 50,000/.
The latest offerings of the bank along with Dollar variant is the Euro and Pound
Sterling variants of the International Travel Currency Card. The Travel Currency
Card is a signature based pre-paid travel card which enables travelers global
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access to their money in local currency of the visiting country in a safe and
convenient way. 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.
BUSINESS DESCRIPTION:
The Bank's principal activities are to provide commercial banking services which
include merchant banking, direct finance, infrastructure finance, venture capital
fund, advisory, trusteeship, forex, treasury and other related financial services.
The Bank has 463 branches and 263 extension counters throughout India. During
April, 2006 the Bank opened 1 overseas branch in Singapore.
PROMOTERS:
UTI 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
GIC and its four subsidiaries contributing Rs. 1.5 crore each.
SUUTI - Shareholding 23.47%
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
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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 Government of India has appointed Shri K. N. Prithviraj as the Administrator
of the Specified undertaking of UTI, to look after and administer the schemes
under UTI - I, where Government has continuing obligations and commitments to
the investors, which it will uphold.
PRODUCTS OFFERED
Savings Account
Current Account
Business Priority
Business Wealth
Salary Account
Investment Products Gold and Silver Mohur
Mutual Funds
Life Insurance
General Insurance
Loans
Cards Titanium Rewards Card
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Prepaid Cards
MyMoney Card
Agri Business Loans
Kisan power
Power Gold
Arthia Power
Foreign Exchange
Travel Card
Outward Remittances
Inward Remittances
Axis Remit Online
Axis Remit Direct
Money Transfer Operators
Wire Transfers
Axis Direct 3-IN-1 online Trading Account
Other
Se r v ic e s
Priority
Wealth
NRI Services
Business Banking
Investment Banking
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1.2.2 COMPETITIVE STATUS
The following are best banks which are currently operating in India under the
guidelines of Reserve Bank of India (RBI) and hence are giving tough
competition to Axis Bank
Allahabad Bank In India
American Express Bank In India
Andhra Bank In India
Bank Of India
Canara Bank
Central Bank Of India
CITI Bank
Corporation Bank
HDFC Bank
HSBC Bank
ICICI Bank
IDBI
Indian Overseas Bank
Oriental Bank Of Commerce
Punjab National Bank
State Bank Of India (SBI)
Standard Chartered Bank
United Bank Of India
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Further, Banks like HDFC Bank, Kotak mahindra bank, SBI are the close
competitors of AXIS bank. Here is the detail of other banks-:
HDFC BANK
HDFC Bank is an Indian financial services company based in Mumbai,
Maharashtra that was incorporated in August 1994. HDFC Bank is the fifth or sixth
largest bank in India by assets and the second largest bank by market capitalization as
of February 24, 2012. The bank was promoted by the Housing Development Finance
Corporation, a premier housing finance company of India. HDFC Bank has 1,986branches and over 5,471 ATMs, in 996 cities in India, and all branches of the bank
are linked on an online real-time basis. For the fiscal year 2010-11, the bank has
reported net profit of 3,926.30 crore up 33.1% from the previous fiscal. Total annual
earnings of the bank increased by 20.37% reaching at 24,263.4 crore (US$4.59
billion) in 2010-11. HDFC Bank is one of the Big Four banks of India, along
with: SBI, ICICI and PNB.It was among the first companies to receive an 'in
principle' approval from the Reserve Bank of India (RBI) to set up a bank in the
private sector.
KOTAK MAHINDRA BANK
Kotak Mahindra Bank is an Indian financial service firm established in 1985. It was
previously known as Kotak Mahindra Finance Limited, a non-banking financial
company. In February 2003, Kotak Mahindra Finance Ltd, the group's flagship
company was given the license to carry on banking business by the Reserve Bank of
India (RBI). Kotak Mahindra Finance Ltd. is the first company in the Indian banking
history to convert to a bank. Today it has more than 20,000 employees and R. 10,000
crore in revenue. The Bank has its registered office at Nariman Bhavan, Nariman
Point, and Mumbai.
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COMPARISON OF AXIS WITH SBI
AXIS bankis the largest private sector bank in India and the second largestcommercial bank in India. It has branches all over India and even in smaller towns in
South India after the takeover of Bank of Madurai . The bank also has foreign
subsidiaries like AXIS bank, Canada in Canada, Britain and Russia, representative
offices in USA, China, UAE, Bangladesh, South Africa and branches in Bahrain,
Singapore.
It offers a platform for online share trading through AXIS Direct and
insurance services - AXISPrudential. NRI services include money transfer
through Money2India, which offer better foreign exchange rates for lower
amounts compared to other services.
Like most private sector banks, all bank branches in India are networked.
You can access your account from any AXIS bank branch in India. Anyone
can also deposit cash/local cheque in your account at any branch of AXIS
bank.
Also they have very convenient bank timings and are open for 12 hours from
8.00 a.m to 8 p.m from Monday to Saturday. Since AXIS bank was
established after 1991 it offers online banking where you can check the
balance in your account any time. The interface for savings accounts is much
better and user friendly compared to that for their roaming current account
However, unlike other banks like HDFC bank, their online bank statementdoes not indicate the branch at which the amount is deposited. The
information is available in the email statement sent to you the next day. You
have to contact phone banking , enter CRN and TPIN, during working hours
to get this information.
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They have discontinued the auto sweep-in facility (earlier called Quantum
Optima ) , where the amount in savings account was automatically converted
into a fixed deposit, if it exceeded Rs 15000. With the decline in interest rates
for loans, providing this facility is no longer profitable for the bank
SBI
SBI has branches and ATMs all over India , details of which are available at their
website. State Bank of Hyderabad, State Bank of Patiala, State Bank of Saurashtra,
State Bank of Bikaner and Jaipur ,State Bank of Indore, State Bank of Mysore and
State Bank of Travancore are the seven subsidary banks of SBI. As of March 2006,
SBI holding in these banks varies from 74% to 100% , but is likely to decrease in
future. SBI has one of the largest network of ATMs in the Asia Pacific region. Manybranches of State Bank of India are computerised. In places where the Reserve Bank
of India, (RBI) the central bank of India does have an office, SBI carries out many of
its functions. SBI timings vary according to location, for example the Powai,
Mumbai branch of State Bank of India is open between 10.15 am to 2pm (Monday-
Friday)
You can open a public provident fund (PPF) account at any State Bank of
India branch. PPF accounts are one of the few savings instruments which offer
a high tax free interest rate of 8% per year
If you know an agent who is registered with that particular branch of State
Bank , he will pay you back, a part of the commission he receives from the
bank. So you can get back 0.5% - 0.6% of the amount deposited immediately
by cash. Usually larger the amount, the higher the commission paid back by
the agent (it is negotiable) . The pay-in slip for PPF has 3 sections - depositors
copy, agents copy and bank copy. The agents copy has to be given to the
agent and he will give part of the commission. Earlier financial services firm
like Bluechip in Mumbai, would also give a commission of 0.25%.
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The minimum amount that can be invested in one year is Rs 500 and
maximum amount is Rs 70000. This investment has a lock in period of 15
years. No withdrawals are allow till 6 years after account opening and one
withdrawal is allowed per year there after
For cash withdrawals, you can either use a withdrawal slip or cheque. If an
account is inactive for a long time, State Bank of India does not charge anyfee for reactivation. However, they have a verification process, which may
take a long time. Payment of income tax , advance tax , sales tax can be done
at SBI branches.
State Bank of India has increase home loan interest rates by 25-75 basis
points. Also no fixed rate loans will be available for periods more than 10
years.
SBI Railway Visa Card allows booking of railway tickets online at the Indian
Railways websiteat zero transaction charges. Users of this credit card can get
back up to 10% of ticket fare as railway points. These points can be redeemed
later, like frequent flyer miles offered by airlines. State Bank of India is the
largest issuer of debit cards (Maestro) in India
State Bank customers who have to wait a long time to process a bank
transaction can register their complaint through a touch screen device for
customer feedback service at the branch. The information is recorded and
processed in the central server.
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1.2.3 SWOT ANALYSIS OF AXIS BANK
STRENGTH
Good for new investor as the fund has to be managed by specialized fund
manager.
Only product which invests in money market, debt market and equity market
at same time.
Investment needed is comparatively less than other investments.
During the stack market boom periods all AXIS bank funds have performed
fairly well thereby increasing investors expectations.
WEAKNESS
Customers do not prefer it because of risk attached to it that is market risk.
Fund manager if makes a wrong prediction then customer will bear the brunt
therefore it depends on funds managers analysis.
Sometimes the age factor affects the investment preference of the investors.
People are afraid of investing in the equity market.
OPPORTUNITIES
Creating positive image about the fund and changing the nature of the market
itself.
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Market of mutual fund is expanding as many foreign companies are coming in
this.
Great scope of new investment due to the budget announcement this year.
The objective of investing in AXIS bank is Tax-saving apart form returns
third main objective is growth.
THREATS
Now there are many other investment instruments which are more lucrative
than AXIS bank. (real estate , gold)
Unawareness among investors regarding AXIS bank. Also in India most of the
people lack of awareness about AXIS bank. They dont know anything about
what is AXIS bank, how it works. How fund managers invest peoples money
in different portfolios and provide the better returns to the customers
Lack of promotions, advertising by AXIS bank industry
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1.3 CUSTOMER SATISFACTION
Customer satisfaction is equivalent to making sure that product and service
performance meets customer expectations. It is the perception of the customer that the
outcome of a business transaction is equal to or greater than his/her expectation.
Customer satisfaction occurs when the acquisition of products and /or services
provides a minimum negative departure from expectations when compared with other
acquisitions and when the marginal utility of a transaction is equal to or greater than
preceding acquisitions.
Customer satisfaction occurs when the perception of the reward from the purchase of
goods or services by the customer meets or exceeds his/her perceived sacrifice. The
perception is a consequence of matching past purchase and consumption experience
with the current purchase.
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CUSTOMER SERVICE AND SATISFACTION
We must cultivate our garden. Voltaire
When we talk about customer service and/or satisfaction, we talk about creativity.
Creativity allows us to handle or diffuse problems at hand or later on rather in the
process of conducting the everyday business. We talk about how, or what, does the
organization have to do to gain not only the sale but also the loyalty of the customer.
We want to know the payoff of the transaction both in the short and long term. We
want to know what our customers Want? We want to know if our customers are
satisfied. Satisfaction, Of course, means that what we delivered to a customer met the
customers Approval. We want to know if customers are delighted and willing to
come
Back, and so on. Fleiss 2 and Feldman 3 present examples of that delightfulness in
their writings. Fleiss has written about Ben and Jerrys ice cream and Feldman has
discussed excellence in a cab ride. As important as delightfulness is, some of us
minimize it, or even totally disregard it. At this point, we fail. Some of the issues that
will guarantee failure in sales, satisfaction, and loyalty are:
Employees must adhere to a rigid chain of command
Employees are closely supervised
Conflictin whatever formis not allowed
Rewards are based on carrot-and-stick principles
Wrong objectives are measure.
We must understand customer expectation levels concerning quality. We must also
understand the strategy for customer service quality, and next we must understand the
measurement and feedback cycles of Customer satisfaction.
The customer is the person or unit receiving the output of a process on the system. In
fact, it is worth emphasizing that a customer can be the immediate, intermediate, or
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ultimate customer. Also, a customer may be a person or persons, or a process or
processes. Customer satisfaction, however, is when the customer is satisfied with a
product/service that meets the customers needs, wants, and expectations.
There are at least three levels of customer expectations about quality:
Level 1. Expectations are very simple and take the form of assumptions, must have,
or take it for granted. For example, I expect the airline to be able to take off, fly to my
destination, and land safely. I expect to get the correct blood for my blood transfusion
and I expect the bank to deposit my money to my account and to keep a correct tally
for me.
Level 2. Expectations are a step higher than that of level 1 and they require some
form of satisfaction through meeting the requirements and/or specifications. For
example, I expect to be treated courteously by all airline personnel. I went to the
hospital expecting to have my hernia repaired, to be in some pain after it was done, to
be out on the same day, and to receive a correct bill. And I went to the bank expecting
the bank teller to be friendly, informative, and helpful with my transactions.
Level 3. Expectations are much higher than for levels 1 and 2. Level 3 requires some
kind of delightfulness or a service that is so good that it attracts me to it. For example,
an airline gives passengers traveling coach class the same superior food service thatother airlines provide only for first-class passengers. In fact, I once took a flight
where the flight attendants actually baked cookies for us right there on the plane.
When I went to the hospital, I expected staff to treat me with respect and they
carefully explained things to me. But I was surprised when they called me at home
the next day to find out how I was doing. And at my house closing, the bank officer,
representing the bank holding my mortgage, not only treated me with respect and
answered all my questions about my new mortgage, but just before we shook hands to
close the deal, he gave me a housewarming gift.
CUSTOMER SATISFACTION SURVEYS HELP TO:
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1. Improve customer, client, or employee loyalty.
2. React quickly to changes in the market.
3. Identify and capitalize on opportunities.
4. Beat the competition.
5. Retain or gain market share.
6. Increase revenue.
7. Reduce costs.
2.1 RESEARCH OBJECTIVES
To study about AXIS as a company and a group.
To study about the products and services offered by AXIS.
To study the customer satisfaction in AXIS bank.
To provide AXIS bank the suggestion and opinions given by its customers to
improve the facilities for customers.
The next objective is to analyze from which product/services the customers are
getting more satisfaction and which product/service is not very significant from a
customers point of view.
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2.2 SCOPE OF STUDY
This project provides the knowledge about banking industry of India.
It also gives a brief knowledge about the customer behavior about the bank.
It also gives knowledge about the bank and its performance.
This study will help us to understand customers, preference and their needs
expected from the business owners.
It enhances the satisfaction level of the customers.
Helps in capturing more market and customers with better services.
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2.3 MANAGERIAL USEFULNESS OF THE STUDY
The SWOT analysis done helps to know the strengths, weaknesses, opportunities and
threats of the organization which would help in managerial work. The authentic data
collected from the survey help the managers to judge their public image. The judgments
could be easily made by the managers from the secondary data collected which clearly
shows the progress and regress of the bank with the help of graphs, diagrams and tables
etc. This project can be useful to bank to improve the satisfaction level of customers and
motivating them by fulfilling some of their suggestion. In return the bank can get
improved result.
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2.4 METHODOLOGY
2.4.1 TYPE OF RESEARCH
QUANTITATIVE RESEARCH
Quantitative research allows a firm to develop an understanding of the "big
picture" of their customers' experiences based upon a relatively small number of
interviews. This "sample" of the firm's customers must be carefully designed and
drawn if the results of the study are to be considered representative of the
customer population as a whole. In most cases, the results of quantitative studies
are based upon the responses of a relatively "large" number of interviews.
Depending upon the size of the population and the amount of segmentation
desired, "large" can be as few as 50 responses or range from several hundred to
thousands of interviews. Mail-based, telephone-based, and (more recently)
Internet-based surveys and related data collection.
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2.4.2 RESEARCH DESIGN
DESCRIPTIVE RESEARCH
Descriptive research includes Surveys and fact-finding enquiries of different
kinds. The major purpose of descriptive research is description of the state of
affairs, as it exists as the present. The main characteristic of this method is that the
researcher has no control over the variables; he can only report what has
happened or what is happening, the research cannot describe what caused a
situation. Thus, Descriptive research cannot be used to create a causal
relationship, where one variable affects another.
However, it does not answer questions about e.g.: how/when/why the
characteristics occurred, which is done under analytic research
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2.4.3 SOURCES OF DATA COLLECTION
This project consists of two parts-
The first part is a study of the banking industry, AXIS Bank using secondary data
sources. This secondary information has been sourced from the internet and from
business related magazines and newspapers.
The second part of the study has been done using an exploratory research process and
a structured questionnaire was developed for this purpose. For the collection of
primary data this was the only method used. The reason I used this method is becausea need was felt for the free influx of information about the products. Also this method
allowed the use of skills gained in class.
PRIMARY SOURCES
Primary sources are original sources from which the researcher directly
collects data that have not been previously collected, e.g., collection of data
directly by the researcher on brand awareness, brand preference, brand loyalty
and other aspects of consumer behaviour from a sample of consumers by
interviewing them. Primary data are first-hand information collected through
various methods such as observation, interviewing, mailing etc
Questionnaire - A sample questionnaire was provided to around
100 different people which was used to Derive Results and
Analyze customer needs for Insurance and ho far they have been
satisfied with the Services and Returns Provided by AXIS Bank as
well as other companies .
A sample of the questionnaire along with Results from Findings
and Analysis are given later in the Project.
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SECONDARY SOURCES
These are sources containing data that have been collected and compiled for another
purpose. The secondary sources consist of readily available compendia and already
compiled statistical statements and reports whose data may be used by researches for
their studies, e.g., census reports, annual reports and financial statements of
companies, Statistical statements, Reports of Government Departments, Commercial
Banks.
JournalsVarious Journals published by B-Schools as well as Business
houses have provided vital statistical as well as Theoretical Data which
have been very helpful.
Newspapers and Magazines Economic Times as Well as Magazines
such as Business Today have provided useful Information on Developing
Indian Insurance Sector as well as how the trend and demand of customers
has changed over a period of time .
Internet and Other Media Sources WWW has the latest data and
interviews which helped me in determining the scope pf my project as well
as make it as up to date as possible.
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2.4.4 SAMPLE DESIGN AND SAMPLE SIZE
Sampling Unit
The marketing researcher must define the target population that will be
sampled. Who is to be surveyed? The marketing researcher must define
the target population that will be sampled. In this research, sample unit
were the customers of AXIS bank as provided in the database by the
bank.
Sample size/Population Size
- How many people should be surveyed?
My sample size is 100. I have questioned Banks Customers for the
survey. Sample size of 100 was used for questionnaire out of them
maximum responded.
Time Frame
It is the period of time for which the survey or study is to be done
When the survey should be conducted?
I conducted my survey for 3 weeks from 1-3-2013 to 21-3-2013.
Sampling Method
Random Sampling
Since the information required was not of a very technicalnature and also looking at the scope of the project and the
extent of the target segment, the sampling technique employed
was Random Sampling. A random sample gives every unit of
the population a known and non-zero probability of being
selected. Since random sampling implies equal probability to
every unit in the population, it is necessary that the selection of
the sample must be free from human judgment.
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2.4.5 TOOLS OF PRIMARY DATA COLLECTION
QUESTIONNAIRE DESIGN/FORMULATION
Questionnaire: - A questionnaire is a research instrument consisting of a series of
questions and other prompts for the purpose of gathering information from
respondents. Although they are often designed for statistical analysis of the responses,
this is not always the case. Questionnaires have advantages over some other types of
surveys in that they are cheap, do not require as much effort from the questioner as
verbal or telephone surveys, and often have standardized answers that make it simpleto compile data.
A questionnaire consists of a set of questions presented to respondent for their
answers. It can be Closed Ended or Open Ended
Open Ended: - Allows respondents to answer in their own words & are difficult to
Interpret and Tabulate.
Close Ended: - Pre-specify all the possible answers & are easy to Interpret and
Tabulate.
TYPES OF QUESTION INCLUDED: -
DICHOTOMOUS QUESTIONSWhich has only two answers Yes or No?
MULTIPLE CHOICE QUESTION
Where respondent is offered more than two choices.
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IMPORTANCE SCALE
A scale that rates the importance of some attribute.
RATING SCALEA scale that rates some attribute from highly satisfied to highly unsatisfied and
very inefficient to very efficient
SAMPLING UNIT: -
Who is to be surveyed? The marketing researcher must define the target population
that will be sampled.
The sample Unit taken by me was customers of AXIS bank of different age group,
different gender and different profession.
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3.1 DATAANALYSIS AND INTERPRETATION
AGE GROUP-
AGE GROUP
A, 47%
B, 25%
C, 19%
D, 9% A
B
C
D
IMPLICATION: If we closely look at the pie-chart, we can say that the people
between the age group of 25 to 55 are the main customer of the bank, which
contributes almost 75% of the banks customers. But the old age and the young
people have been less attractive on this leading product of AXIS Bank, which is
a matter of concern. So more focus should be given to them as they are huge in
number.
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OCCUPATION
SERVICE
51%BUSINES
S
32%
STUDENT
7%
OTHERS
10%
SERVICE
BUSINESS
STUDENT
OTHERS
POTENTIAL OCCUPATION-
IMPLICATIONS: This pie chart clearly shows that service holder and the
business people are the main customer of the bank. Reason for this could be as
per interviewed was working hour and anywhere banking which suits them. 8 to
8 banking give them the freedom to do banking work after the office. Students
contribution is less as student account is not available in Delhi and 5000 as
minimum balance is not possible for them. Other section should be increased by
creating awareness about the banking products.
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ANNUAL INCOME
LESS
THAN 1
LAKH, 8%
1-2 LAKH,
22%
3-4 LAKH,
37%
MORE
THAN 4
LAKHS,
33%
LESS THAN 1
LAKH
1-2 LAKH
3-4 LAKH
MORE THAN 4
LAKHS
ANNUAL INCOME-
IMPLICATIONS: Higher income or we can say that more than 34 LAKHS
earning people are contributing 70% of the transactions. But it is advisable to
penetrate more in the lower income group not only in terms of accounts but also
in other banking products because they contribute a major part of the society.
Target should be on that every section of the society should open saving accountor other account in AXIS Bank.
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WHATDO YOU EXPECT FROM A BANK WHILE OPENING AN
ACCOUNT?
FEATURES / ATTRIBUTES
QUICK
SERVICE ,44%
PROPER
INFO, 14%
WORKING
HOUR, 28%
LESS
FORMALITIE
S, 8%
VARIETY OF
PRODUCTS,
6% QUICK SERVICE
PROPER INFO
WORKING HOUR
LESSFORMALITIES
VARIETY OFPRODUCTS
IMPLICATIONS: When a customer visits a bank the first and foremost
thing he looks, that how quickly he is served, how his problem is entertained by
the bank employee and what is the working hour of the bank. Thats why these
three things contribute the maximum of this pie chart. Less formalities and
variety of products although contributes less but it has a major impact on the
customer. So bank should follow on these things also. Service sector like
banking, preference should be given to make.
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WHICH OF THE FOLLOWING ATTRIBUTES COMPELLED YOU
MOST TO OPEN SAVING ACCOUNT IN AXIS BANK?
SAVINGS A/C ATTRIBUTES
ATM CUMDEBIT
CARD, 26%
VALUE
ADDED S.
A/C, 48%
CHEQUE
BOOK, 16%
PHONE /
INTERNET
BANKING,10%
ATM CUM DEBIT
CARD
VALUE ADDED S.
A/C
CHEQUE BOOK
PHONE /
INTERNET
BANKING
IMPLICATIONS: As we found in our finding that majority of the people
like the saving account, this chart reveals that what are the factor and their
contribution making their product really leading product of AXIS Bank.VALUE ADDED SAVING ACCOUNT is undoable a unique sub product of
AXISBank. Since it has the appeal catch maximum customer as it provides
the facility of FIXED deposit in saving account ATM cum debit card is also a
major attributes as it made the banking easy. Personalized chequebook is also a
major attraction in this section. As far as other factors are concern they are
showing less appearance in this chart.
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ACCOUNT TYPE
SAVING
54%CURRENT
18%
FIXED
15%
NRI
8%
OTHER
5%
SAVING
CURRENT
FIXED
NRI
OTHER
WHAT TYPE OF ACCOUNT DO YOU HAVE IN AXIS BANK?
IMPLICATIONS: Saving account is the leading and attractive product for
the AXISBankas it has occupied a major chunk in this chart. This number and
percentage clearly shows that this product has all the quality to give the
customer best services and ability to satisfy them. On the second and third
position current and fixed deposit has also been helpful to increase the customer
base but still their performance needs to be improved. As far as NRI and other
accounts are concerned they have less appearance. So majority of the business is
moving around few leading products. Reason could be either people are not
aware about the various products of the bank or bank has limited range of
products. So bank must ascertain that where things are going wrong and for that
what sort of necessary step could be taken.
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WHICH FACTOR AMONG THE FOLLOWING INFLUENCED YOU
MOST TO OPEN AN ACCOUNT IN AXIS BANK?
INFLUENCED FACTOR
FRIENDS /RELATIVE
44%ADVERTISE
MENT33%
BANKEMPLOYEE
12%
PROSPECTUS
11% FRIENDS /RELATIVEADVERTISEMENTBANK EMPLOYEEPROSPECTUS
IMPLICATIONS: It has been said a satisfied customer is the best medium
for an advertisement since in this chart friend / relative have played a key role in
opening the accounts of others. Which implies that banks real customers are
satisfied enough with facilities available on the products and services enjoyed by
them. On the other hand advertisement also plays a vital role in influencing the
customer. As their behavior not only please the customer but also attract the
customer. Well maintained prospectus is also a major attributes of attracting the
customer. Main focus of the bank should be no satisfaction of customer.
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COMPARISON
EXCELLEN
T
27%
GOOD
47%
AVERAGE
14%
POOR
5%
CAN'T SAY
7%
EXCELLENT
GOOD
AVERAGE
POOR
CAN'T SAY
IN COMPARISION TO OTHER BANKS HOW WOULD YOU
RATE AXIS BANK?
IMPLICATIONS: Comparison with other banks depends on its overall
performance in the eyes of the people. In this chart it is clearly showing that
74% of the people are satisfied with AXISBank. In a short span of time of its
existence in this city with strong competition from major public sector bank like
SBI and other private players bank has done well it has occupied a different
position in the peoples mind.
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RECOMMANDATION
YES
95%
NO
5%
YES
NO
WOULD YOU RECOMMEND AXIS BANK TO OTHERS?
IMPLICATIONS: As per the chart we show that 5% of the people dont
want to recommend AXIS Bankto others. Bank must find the reason of their
dissatisfaction because in this competitive world we have to achieve this target.
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Q. Are you interested in products offered by the AXIS
PRUDENTIAL ?
Yes 61%
No 22%
Will think 17%
INTERPRETATION
The good thing is that atleast the corporates were quite eager to find out
what AXIS PRU has to offer whereas the major 39 % of the corporates
were not even interested in the products as they are quite satisfied by theLIC and they are not in breaking their long relationship with them. The
private players will have to play a long battle in order to ensure that they
are serious player in the market.
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61%22%
17%
Yes
No
Will think
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Q. Are you satisfied with your present insurer?
YES 95%
No 5%
INTERPRETATION
Here is where the challenge is. Inevitably most of the players are very
satisfied with their present insurer which makes it more tough for the
private players to attract the corporates. The remaining 5 % are also not
very dissatisfied by the services but they are just open to new avenues
and are looking forward that private companies come with good offers so
that they may shift to them. Thus private players will have to be very
proactive and in this regard since LIC is the leader and AXIS PRU is
lagging behind its competitors in terms of competition.
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95% 5%5%Yes
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Q. Where would you like to insure if given chance?
LIC - 60
ICICI - 15
BAJAJ ALLIANZ - 5
HDFC - 10
SBI - 8
KOTAK MAHINDRA - 2
INTERPRETATION
Thus we see that the companies are comfortable in having
business with govt. owned companies as they feel its safe &secure to have business with them which is followed by SBI as it is
the biggest bank.
Q. What is peoples main concern while taking an insurancepolicy?
A) Security 70%
48
25
15
108
60
0
10
20
30
40
50
60
70
LIC SBI HDFC ICICI BAJAJ KOTAK
MAHINDRA
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B) Returns 10%C) Tax rebate 20%
INTERPRETATION:
People invest in insurance mainly because of security concern.
What is the level of satisfaction of customers from products
of AXIS bank?
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TAX REBATE
20%
SAVINGS
70%
SECURITY
10%
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Very High
40%
High
30%
Moderate
11%
Low
10%
Very Low
9%
INTERPRETATION:
Here we found that
40%people are very highly satisfied,
30% of people are highly satisfied,
11% are moderate,
10% of people are low satisfied,
9% are very low satisfied.
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30%
40%
15%
5%
10%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Highly
satisfied
Satisfied Moderate Unsatisfied Highly
Unsatisfied
6). Are you satisfied with the incentives associated with your policy?
Highly satisfied
Satisfied
Moderate
Unsatisfied
Highly Unsatisf ied
INTERPRETATION:
30% people are highly satisfied,
40% satisfied,
15%are moderate,
5% are unsatisfied
10%are highly unsatisfied.
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7). What other plans or flexibility you expect from
Insurance companies?
30%
20%
50%
More returns
Complementarygifts
InvestmentPattern
INTERPRETATION:
50%people are satisfied with investment pattern,
30% are satisfied with more returns and
Only 20% people expect complimentary gifts.
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LIMITATIONS OF THE RESEARCH
By working on this project I gained a lot of knowledge over the banking sector in
India. But there are a certain no. of problems which I faced while working on
this project. These problems can be illustrated as limitations of study which are as
followed:
Most of the contents collected were difficult to understand because it was
new for me to work in this field.
it was tricky and time consuming to understand the mysteries of marketing.
Response of customers could be biased.
Lack of interest shown by the respondents resulted in incomplete responses.
Poor a n d a m b i g u o u s r e s p o n s e s w e r e t h e r e b e c a u s e o f
s o m e respondents responded without clearly understanding the questions.
But this was minimized as far as possible because the interviewer assisted
the respondents.
contacting the customers was a difficult job.
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RECOMMENDATIONS
Since the customer and his needs remain in focus in banking, it would be
appropriate to have a view of the customers banking needs which include financial
security, convenience, quick service, personalized service, investment counseling,
return of investment, support by way of credit prestige, wide range of service, etc.
and to be the best on these aspects AXIS Bank has and is trying its best, and has
been successful too, but still there is some scope for improvement, which I
observed during my training in this bank.
Nowadays, customers are more service driven than product driven and are
not homogeneous in their behavioral pattern, attitude, needs and expectations.
Therefore, a through understanding of the customer is a pre requisite to offer
him satisfaction through providing services.
AXIS Bank should also focus on to have the provision to make some changes
in its core products on the basis of region, purchasing power of the people etc.
because customers want that their special case must be considered, for that
branches need to be empowered. In other word it can be said bank should alter
its existing service to satisfy the customer needs, as and when it is needed in
special cases. Bank should begin a clear understanding of the entire customer
base in particular; of those customers are the most profitable.
Pricing is in fact a very critical and sensitive issue while launching any
product or inducing more features in existing product in such a highly
competitive market of banking before the management of any bank. Because,
price driven competition is one of the significant emerging trend in bank
marketing. AXIS Bank should also be very careful while reconsidering the
price of any core and leading product by closing understanding the behaviour
up to what extent customers are in the position to tolerate it, since customers
price sensitivity is not same across product categories. As it has been seen in
the case of increase in charges of QAB of savings account that resulted in
many closures of the account. The reaction of this increment in the charges
from the customer was aggressive. So bank must price any product by keeping
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the view of region factor too-where people needs, attitude and purchasing
power must be closely understood by the management of the bank. For this,
branches also needs to be empowered to the some extent-where they can make
necessary changes in the price of some selected core products, as they have
better understanding of the behaviour of their customers than the policy
makers of the bank.
There should be effective publicity of new products of new products and
relaunching of existing one too. Monitoring and customer feedback of all the
new and old products should be one regular basis.Bank should provide
effective publicity of new product launched and educate the customer to go in
for these products by highlighting the advantages of the products. Because if
banks aim is to provide service matching the best in the banking industry so
that it can get the most effective publicity, especially through word of mouth
for this at the same it is inevitable to educate the customer about banks
product and facilities available on it.
As the products and services of the AXIS Bank are almost technology oriented
where most advanced softwares are used and most of the banking work are
executed on computer through Internet. In such situation where more
technicalities is involved in both products and services there is a need to
educate the customers so that they can easily use and avail all the facilities
available on all the product. During my training, I observed that many
customers, not to ask about Internet banking, Phone Banking even dont know
how to use ATM, which is really a area of concern. Customers do not know
the complete rules and regulations and procedures of banks and bankers
preserve them for themselves and do not take interest in educating the
customers because if you are giving a product in the hands of the customers
keeping the view to serve them better, it is equally important to aware not only
about the facilities that are available on any product but also how to use them.
Until and unless this thing is practices as a campaign, it would be difficult to
retain existing customers as it is said retaining the existing customers is less