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Banking Industry: Structure and Comparison

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A PROJECT REPORT ON

“Banking Industry: Structure and Comparison”

GUIDANCE OF: Mr. Anil Suvarna

SUBMITTED BY: Rafat Khan

Semester – III, Roll no 30

Nerul Batch – 2009 - 2011

In partial fulfillment of Executive Post Graduate Program in Business Management

(Finance)

SIES College of Management Studies

Nerul, Navi-Mumbai


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TABLE OF CONTENTS

Chapter 1 – Introduction…………………………………………7

Chapter 2 – Bank Overview……………………………………...8

2.1 State Bank of India……………………………………9

2.1.1 Services………………………………………………...10

2.2 ICICI Bank…………………………………………….16

2.2.1 Services………………………………………………...17

2.3 Punjab National Bank…………………………………20

2.3.1 Services………………………………………………...21

2.4 HDFC Bank…………………………………………...22

2.4.1 Services…………………………………………….......23

2.5 Axis Bank……………………………………………..25

2.5.1 Services…………………………………………...........26

Chapter 3 – Capital Structure…………………………………...27

3.1 State Bank of India…………………………………...27

3.2 ICICI Bank…………………………………………...28

3.3 Punjab National Bank………………………………...31

3.4 HDFC Bank…………………………………………...33

3.5 Axis Bank……………………………………………..36

Chapter 4 – Financial Performance……………………………..39

4.1 Balance Sheet of State Bank of India…………………39

4.2 Profit & Loss Account of State Bank of India…….......40

4.3 Balance Sheet of ICICI Bank………………………….41

4.4 Profit & Loss Account of ICICI Bank………………....42


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TABLE OF CONTENTS

4.5 Balance Sheet of Punjab National Bank…………………43

4.6 Profit & Loss Account of Punjab National Bank ……….44

4.7 Balance Sheet of HDFC Bank……………………………45

4.8 Profit & Loss Account of HDFC Bank…………………..46

4.9 Balance Sheet of Axis Bank……………………………...47

4.10 Profit & Loss Account of Axis Bank…………………….48

Chapter 5 – Key performance indicators..........................................56

Chapter 6 – Ratio Analysis……….………........................................58

Chapter 7 – SWOT Analysis……………...………...........................65

6.1 State Bank of India………………………………………65

6.2 ICICI Bank………………………………………………66

6.3 Punjab National Bank……………………………………67

6.4 HDFC Bank………………………………………………68

6.5 Axis Bank………………………………………………....69

Chapter 8 – Corporate Social Responsibility……………………...70

7.1 State Bank of India………………………………………..70

7.2 ICICI Bank……………………………………………….75

7.3 Punjab National Bank……………………………………79

7.4 HDFC Bank………………………………………………81

7.5 Axis Bank…………………………………………………82

Chapter 9 – Challenges facing Banking industry in India………...83

WEBLIOGRAPHY…………………………………………………….88


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Acknowledgement

I owe a great many thanks to a great many people who helped and supported me

during the writing of this Project report.

My deepest thanks to my Guide Mr. Anil Suvarna for Guiding me on “Banking

Industry: Structure and Comparison” and correcting various documents of mine

with attention and care. They have taken pain to go through the project and make

necessary correction as and when needed.

I would also thank my Institution and my faculty members without whom this

project would have been a distant reality. I also extend my heartfelt thanks to my

family and well wishers.


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Declaration

I, Ms. Rafat Khan of SIES College of Management Studies hereby declare that I

have completed this project on “Banking Industry: Structure and Comparison” in

the academic year 2009 – 2011. The information submitted is true and original to

the best of my knowledge.

Signature of the student


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Executive Summary

I as a student of SIES College of Management Studies have been asked to prepare a Capstone

project as a part of my Curriculum. I have prepared my project on “Banking Industry: Structure

and Comparison”.

The way of doing every business has been changing drastically. Banking industry is not

untouchable of it. Even there is more implication of changes in the banking. The whole

definition of banking has been changed by the competition and the application of IT enabled

services. Earlier it was people who use to persuade the banks, for availing the services of banks,

but now we say that banks are persuading customers by creating need of financial services for

customers. They are doing each effort to make customers loyal and add new customers.

So, now it is the customers, who run the Banks, not the governments or any individual

organization. Banks are bound to provide the personalized products to different category of

customers.

Customers need to be segmented and classified according to the different attributes. Once we

divide them into the different segments, we can easily provide them the products which is

suitable for them, and from which he can be satisfied. If we talk about specially Investments,

there are varieties of schemes available in Investments, and we cannot sell same products to all

customers, and here the segmentation comes in light.

Once we define the segments, we need to promote the products to the different classes of

customers. As for Preferred customers, we need to pitch them personally. And for the regular

customer, we need to promote through cross – selling at banks.

This project compares the five top banking companies in terms of its assets– State Bank of India,

ICICI Bank, Punjab National Bank, HDFC Bank and Axis Bank.


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Chapter 1:

Introduction

A bank is a financial institution that provides banking and other financial services. By the term

bank is generally understood an institution that holds a banking license. Banking licenses are

granted by bank regulatory authorities and provides rights to conduct the most fundamental

banking services such as accepting deposits and making loans. There are also financial

institutions that provide certain banking services without meeting the legal definition of a bank, a

so called non-banking financial company. Banks are a subset of the financial services industry.

Figure 1: Structure of the organised banking sector in India.


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Chapter 2:

Bank Overview

The current report examines major trends in the Banking sector focusing on five top companies

in terms of its assets– State Bank of India, ICICI Bank, Punjab National Bank, HDFC Bank and

Axis Bank. Summary information for each company is presented in Figure 1.

(Rs. in crores)

State Bank

of India

ICICI

Bank

PNB HDFC

Bank

Axis Bank

Last Price 2,312.50 1,047.40 1,080.25 2,356.75 1,242.75

Market

Capitalization

146,843.52 120,636.64 34,223.63 109,642.06 51,065.78

Net Interest

Income

81,394.36 25,974.05 26,986.48 19,928.21 15,154.81

Net Profit 8,264.52 5,151.38 4,433.50 3,926.39 3,388.49

Total Assets 1,053,413.74 363,399.71 296,632.79 262,458.56 242,713.37

Figure 1 Summary company information

Throughout the report analysis has been presented based on information gathered from various

sources, including company annual reports, company website, moneycontrol website, BSE

website and NSE website. I have tried to acknowledge each source of information where

possible.

2.1 State Bank of India

State Bank of India (SBI) is the largest Indian banking and financial s

turnover and total assets) with its headquarters in Mumbai, India. It is state

traces its ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of

the Bank of Calcutta, making it the olde

Madras merged into the other two presidency banks, Bank of Calcutta and Bank of Bombay to

form Imperial Bank of India, which in turn became State Bank of India. The government of India

nationalized the Imperial Bank of India in 1955, with the Reserve Bank of India taking a 60%

stake, and renamed it the State Bank of India. In 2008, the government took over the stake held

by the Reserve Bank of India.

Figure 2 State Bank of India shareholding pattern

13%

12%

6%

4%3%

SBI

Banking Industry: Structure and C

State Bank of India (SBI) is the largest Indian banking and financial services company (by

turnover and total assets) with its headquarters in Mumbai, India. It is state-owned. The bank


the Bank of Calcutta, making it the oldest commercial bank in the Indian Subcontinent. Bank of



Imperial Bank of India in 1955, with the Reserve Bank of India taking a 60%


State Bank of India shareholding pattern

59%

3%

Promoters

FII/NRI

Financial

Institutions/Bank/Insurance

Individuals

MutualFunds/UTI

Depository receipts

Bodies Corporate


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ervices company (by

owned. The bank


st commercial bank in the Indian Subcontinent. Bank of



Imperial Bank of India in 1955, with the Reserve Bank of India taking a 60%


Institutions/Bank/Insurance


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2.1.1 Services

Personal Banking

The SBI Personal Banking service is controlled and accessible from the entire SBI branches

available throughout the country. In fact, it will be unfair to mention only about the branches.

The network can be accessible through online banking services available from the SBI.

The Personal Banking services that are offered by the State Bank of India offer certain list of

services, and facility related schemes. Some of the most popular ones are availing of personal

loans with lowest interest rates, online money transferring facility, opening up of tax saving

policies, fixed deposit schemes with higher and effective interest rates, etc. The genuineness in

service providing facility have made the State Bank of India a name to be reckoned and

respected by millions of users and customers. The services are quick, fast and genuine. The State

Bank of India personal banking services and schemes are created keeping in mind the needs and

demands of each and every individual customers. The services are available twenty four hours

online banking technique. Moreover, the toll free customer care number can be called anytime to

clear the doubts and misconceptions regarding any service. The SBI ATM service is available

throughout the country with the inclusion of wide range of outlets opened twenty four hours and

seven days a week.

Following are the list of services offered by State Bank of India:

SBI Term Deposits SBI Loan for Pensioners

SBI Recurring Deposits Loan against Mortgage Of Property

SBI Housing Loan Loan against Shares & Debentures

SBI Car Loan Rent-Plus Scheme

SBI Educational Loan Medi-Plus Scheme

SBI Personal Loan Rates of Interest


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Agricultural/Rural Banking

State Bank of India Caters to the needs of agriculturists and landless agricultural labourers

through a network of 8750 rural and semi-urban branches. Apart from the branches, there are

428 Agricultural Development Branches (ADBs) which also cater to agriculturists. SBI are the

leaders in agri finance in the country with a portfolio of Rs. 64,000 crs in agri advances covering

around 80 lac accounts.

Their branches have covered a whole gamut of agricultural activities like crop production,

horticulture, plantation crops, farm mechanization, land development and reclamation, digging of

wells, tube wells and irrigation projects, forestry, construction of cold storages and godowns,

processing of agri-products, finance to agri-input dealers, allied activities like dairy, fisheries,

poultry, sheep-goat, piggery and rearing of silk worms.

To give special focus to agriculture lending Bank has also appointed agri specialists in various

disciplines to handle projects/ guide farmers in their agri ventures. Advances are given to

borrowers for very small activities covering poorest of the poor to hitech activities involving

large fund outlays.

Now SBI is setting up Agri Commercial Branches (ACBs) which will handle high value agri

financing involving large investments. It envisages lending through corporate partnerships and

other large enterprises for commodity financing, investment credit, other high value agriculture

segments like horticulture, floriculture & food processing etc. It also focuses on Agri related

SME including setting up of Rice and Dhal mills, seed processing industry, food processing

industry, large and small scale dairy units, etc.

Traditionally, rural business is associated with agriculture and allied activities. Of late however,

the trickle down effect of economic growth, renewed focus on infrastructure development, and

employment generation in rural areas have led to huge investment by the Government in rural

India, with a view to bridge the urban and rural divide.


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Considering that agriculture would continue to be significant driver of Indian economy, with the

possibilities of rapid growth in emerging areas like contract farming, agro-processing and agro-

export zones, etc., a separate Agri Business Unit (ABU) with a distinct organizational structure

has been set up in the Bank and under noted objectives has been created in 2004:-

• Providing focused attention on the banking requirements of the agriculture segment,

• Achieving 18% target under agricultural advances as required under priority sector

norms,

• Focus on micro finance and SHG opportunities (now part of non-farm sector in Rural

Business),

• Focus on Key Corporate and Institutional relationships in agriculture, emerging

opportunities, and special initiatives, as may be necessary,

• Focus on product development and management,

• Reduce NPA levels in Agriculture,

• Make agriculture a commercial proposition.

ABU has four departments headed by Deputy General Managers:

1. Agri Business, Planning, Monitoring and Market Intelligence.

2. Corporate and Institutional Relationship.

3. Product Development and Marketing.

4. RRBs & Lead Bank Department.

SBI also have an effective Marketing and recovery team in each region with responsibilities for

marketing and building relationships with dealers of agri-products, organizing promotional

events and for loan sanction, processing, monitoring and recovery.

With a collective effort of Govt. and the people, SBI are set forth to continue growth in the rural

and agri development and become the ‘Banker to Every Indian’.


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NRI Services

SBI offers specifically designed banking services to the expatriate Indians settled in various parts

of the world in the name of SBI NRI services or SBI NRI Banking services with over 73 SBI

NRI branches in 30 countries along with representative offices and off shore banking units across

the globe.

NRI accounts, deposit schemes, loans, remittance, investments, are some of the services being

offered by the state bank of India to its NRI customers throughout the world. Being India's

largest and the most trusted bank State bank of India provides special services through SBI

Online to its NRI customers spread across the globe.

International Banking

International banking services of State Bank of India are delivered for the benefit of its Indian

customers, non-resident Indians, foreign entities and banks through a network of 131

offices/branches in 32 countries as on 31 July 2009, spread over all time zones. The network is

augmented by a cluster of Overseas and NRI branches within India and correspondent links with

over 522 banks, the world over. Bank's Joint Ventures and Subsidiaries abroad further underline

the Bank's international presence.

The services include corporate lending, loan syndications, merchant banking, handling Letters of

Credit and Guarantees, short-term financing, collection of clean and documentary credits and

remittances.

The Bank has carved a niche for itself in the Euroland with branches located in Antwerp, Paris

and Frankfurt. Indian banks and corporates are able to avail single-window Euro services from

the Bank's Frankfurt branch.


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Corporate Banking

The SBI’s powerful corporate banking formation deploys multiple channels to deliver integrated

solutions for all financial challenges faced by the corporate universe. The Corporate Banking

Group and the National Banking Group are the primary delivery channels for corporate banking

products.

The Corporate Banking Group consists of dedicated Strategic Business Units that cater

exclusively to specific client groups or specialize in particular product clusters. Foremost among

these specialized groups are the Corporate Accounts Group (CAG), focusing on the prime

corporate and institutional clients of the country’s biggest business centers. The others are the

Project Finance unit and the Leasing unit.

The National Banking Group also delivers the entire spectrum of corporate banking products to

other corporate clients, on a nationwide platform.

The SBI offers an exhaustive range of financial products and services that answers any business

or market circumstance, backed by an assublack expertise in customizing the product to meet the

most sensitive specificities of each client and each business context.

It is committed to understanding the finest nuances of your business objectives and engineering

cblackit and non-cblackit solutions to suit them. Its team of highly skilled and experienced

product specialists can help you forecast your cblackit patterns and structure complex transaction

requirements.

Commanding unsurpassed respect and legacy in the Indian financial expanse, the SBI is

committed to offering you financial solutions that extract maximum value from business and

market situations.

While the bank is strongly positioned to structure financial packages that anticipate the changing

business environment, its vast network--the world’s largest—ensures delivery channels of

unmatched reach, both in India and abroad.


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Government Business

State Bank of India's linkage with Government business is widespread. No wonder that out of

9315 branches in India, about 7000 branches are conducting Government Business. The large

network of our branches provides easy access to the common man to deposit the following

Government dues and pension payments.

• SBI e-Freight

• Centralised Pension Processing Center (CPPC)

• Government Accounts

• SBI e-TAX

• Senior Citizens Savings Scheme

• Public Provident Fund

SME

State Bank of India has been playing a vital role in the development of small scale industries

since 1956.The Bank has financed over 8 lakhs SSI units in the country. It has 55 specialised SSI

branches, 99 branches in industrial estates and more than 400 branches with SIB divisions.

The Bank finances for Small Business activities which are of special significance to a large

number of people as many of these activities can be started with relatively lower investment and

with no special skills on the part of the entrepreneurs.

Other Services

Domestic Treasury SBI Vishwa Yatra Foreign Travel Card

Broking services Foreign inward remittances

ATM services Internet Banking

E-Pay/E-Rail Micro codes

RBIEFT Safe deposit locker

2.2 ICICI Bank

ICICI Bank (formerly Industrial Credit and Investment Corporation of India) established in 1955

is a major banking and financial services organization in India. It is the second largest bank in

India and the largest private sector bank in India by market c

are listed on the stock exchanges at BSE, NSE, Kolkata and Vadodara; its ADRs are traded on

the New York Stock Exchange (NYSE).

largest international balance sheet amo

subsidiaries, branches and representatives offices in 19 countries, including an offshore unit in

Mumbai.

Figure

28%

17%

7%

6%3%

1%

ICICI




India and the largest private sector bank in India by market capitalization. ICICI Bank's shares


the New York Stock Exchange (NYSE). The Bank is expanding in overseas markets and has the

largest international balance sheet among Indian banks. ICICI Bank now has wholly owned


Figure 3 ICICI Bank shareholding pattern

38%

FIIs/NRIs/Foreign Banks/Foreign

Companies/OCBs/Foreign

Nationals/NRI Directors

Deuts che Bank Trust Co.

(Depositary For ADS Holders )

Insurance Companies

Mutual Funds

Individuals

Bodies Corporates

Banks/Financial Institutions/UTI

MF


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apitalization. ICICI Bank's shares


The Bank is expanding in overseas markets and has the

ng Indian banks. ICICI Bank now has wholly owned


FIIs/NRIs/Foreign Banks/Foreign

Companies/OCBs/Foreign

Nationals/NRI Directors

Deuts che Bank Trust Co.

(Depositary For ADS Holders )

Insurance Companies

Banks/Financial Institutions/UTI


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2.2.1 Services

Personal Banking

ICICI Bank personal banking services include customized products to suit each individual

investor and customer. The diversity of requirements makes each individual unique. ICICI Bank

addresses to personal banking needs of everyone with specially designed products and highly

efficient in-house teamwork. The wide array of ICICI personal banking solutions include:

• Personal Deposits in the form of usual and special savings accounts, fixed and recurrent

deposits, tax-saver deposits, outward remittance accounts, EEFC accounts and many

more.

• Personal Loans available for buying home, vehicles, business investments, and also

against property and securities.

• Personal Use Cards that include credit cards, ATM/ debit cards, travel, pre-paid cards,

and many more.

• Personal Investments in ICICI Bank bonds, GOI bonds, mutual funds, IPO, pure gold,

and senior citizens savings.

• Personalized Online Share Trading through demat accounts.

• Personal Insurance for students medical or overseas travel, health insurance, vehicle

(car or two-wheeler) insurance and home insurance.

Wealth Management

ICICI bank is a leader in the wealth management service with its exclusive ICICI wealth

management offerings. ICICI bank wealth management department has a dedicated team of

experts with a rich experience in finance and related areas. When you subscribe to ICICI wealth

management services, a dedicated wealth manager works closely with you in understanding your

current assets, your risk profiles and your financial objectives. The wealth managers are backed

up by a highly expert ICICI bank wealth management team. Based on a thorough study, your

wealth manager along with the ICICI wealth management team comes up with solutions and

recommendations. A professionally built portfolio is the main output of the whole exercise. Of


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course, it is an ongoing process with regular portfolio updates and reviews done by the same

ICICI wealth management experts.

NRI Banking

ICICI Bank offers specifically designed banking services to the expatriate Indians settled in

various parts of the world in the name of ICICI NRI services or ICICI NRI Banking services

along with representative offices and off shore banking units across the globe. NRI accounts,

deposit schemes, loans, remittance, investments, are some of the services being offered by the

ICICI Bank to its NRI customers throughout the world.

Corporate Banking

ICICI Bank corporate banking strategy is based on providing comprehensive and customised

financial solutions to corporate customers. The Bank offers a complete range of corporate

banking products including rupee and foreign currency debt, working capital credit, structured

financing, syndication and commercial banking products and services.

The corporate and investment banking franchise is built around a core relationship team that has

strong relationships with almost all of the country’s corporate houses. The relationship team is

product agnostic and is responsible for managing banking relationships with clients. They have

also put in place product specific teams with a view to focus on designing financial solutions for

clients. The investment banking team is responsible for working with the relationship team in

India and our international subsidiaries and branches, for structuring and execution of investment

banking mandates. The Bank have a Commercial Banking Group within the Wholesale Banking

Group for growing this business through identified branches, while working closely with the

corporate relationship teams. Their strategy for growth in commercial banking, or meeting the

regular banking requirements of companies for transactions and trade, is based on leveraging our

strong client relationships and focusing on enhancing client servicing capability at the

operational level.


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Business Banking

At ICICI Bank, there is an ideal bank account that takes care of all the customers cashflow and

banking needs. Whether the customer business is local or national, starting up or scaling up,

ICICI Bank's business services and banking facilities keep the customers on top of their business,

round the clock, all the time. For a small or medium business, timely finance is the key to

making the most of business opportunities. ICICI Bank has a host of innovative loan and

overdraft products that can make all the difference to the customers bottomline. ICICI Bank

provides with vital services to help the customers focus on their business and compete in global

markets. ICICI Bank’s trade services strengthen the customers business relationships by ensuring

reliability and speed in their business documentation and payments. ICICI Bank credit facilities

smoothen the customers cash flows. ICICI Bank's Small Enterprises Group's (SEG) Investment

Banking team is dedicated to provide the customers niche and exclusive investment banking

services.

2.3 Punjab National Bank

Punjab National Bank (PNB) is the third largest bank in India. It was registered on May 19, 1894

under the Indian Companies Act with its office in Anarkali Bazaar

the second largest state owned commercial bank in India with about 5000 branches across 764

cities. It serves over 37 million customers. The bank has been ranked 248th biggest bank in the

world by the Bankers Almanac, London. The bank's total assets for financial year 2007 were

about US$60 billion. PNB has a banking subsidiary in the UK, as well

Kong, Dubai and Kabul, and representative offices in Almaty, Dubai, Oslo, and Shanghai.

Figure 4 Punjab National Bank shareholding pattern

19%

15%

3%1%

PNB


is the third largest bank in India. It was registered on May 19, 1894

under the Indian Companies Act with its office in Anarkali Bazaar, Lahore. Today, the Bank is




about US$60 billion. PNB has a banking subsidiary in the UK, as well as branches in Hong


Punjab National Bank shareholding pattern

58%

1%4%

President of India

FIIs/NRIs/OCBs

Banks/Financial

Institutions/Insurance

Companies

Mutual Funds

Domestic Companies/Trusts

Indian Public/Resident

Individuals


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is the third largest bank in India. It was registered on May 19, 1894

Lahore. Today, the Bank is




as branches in Hong


Domestic Companies/Trusts


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2.3.1 Services

Punjab National Bank offers financial solutions and services in an array of sectors. All these

services that are offered keep pace with the changing market trends in order to fulfill the needs

and preferences of the customers. Some of the well known sectors on which the main functions

of the bank are based are:

Personal Banking

The company offers personal banking products and services comprising savings accounts,

current accounts, fixed deposits, nomination facilities, and debit cards, as well as various credit

schemes, such as housing loans, car finance, personal loans, professional loans, educational

loans, reverse mortgage loans, and various other credit schemes.

Corporate Banking

The corporate banking products and services of PNB are loans against future lease rentals, EXIM

finance products, cash management services, and gold card schemes for exporters.

Financial Services

The Bank provides agriculture finance services, industrial finance services and trade financial

services.

International banking/NRI

Punjab National Bank is extensively catering to banking needs of Non-resident Indians,

Importers & Exporters particularly relating to foreign exchange business including Imports &

Exports of Goods & Services as also Remittances etc. PNB offers various schemes / products

/services relating to international banking.

2.4 HDFC Bank

HDFC Bank Limited is a major Indian financial services company based in India, incorporated

in August 1994, after the Reserve Bank of India allowed establishing private sector banks. The

Bank was promoted by the Housing Development Finance Corporation, a p

finance company (set up in 1977) of India. HDFC Bank has 1,725 branches and over 5,000

ATMs, in 780 cities in India, and all branches of the bank are linked on an online real

As of 30 September 2008 the bank had total assets of R

2008-09, the bank has reported net profit of 2,244.9 crore (US$498.37 million), up 41% from the

previous fiscal. Total annual earnings of the bank increased by 58% reaching at 19,622.8 crore

(US$4.36 billion) in 2008-09.

Figure

17%

9%

9%

7%

HDFC




Bank was promoted by the Housing Development Finance Corporation, a p


ATMs, in 780 cities in India, and all branches of the bank are linked on an online real

As of 30 September 2008 the bank had total assets of Rs.1006.82 billion. For the fiscal year

09, the bank has reported net profit of 2,244.9 crore (US$498.37 million), up 41% from the


Figure 5 HDFC Bank shareholding pattern

30%

23%

5%

FII/OCBs/NRIs

Promoters

Depository receipts

Indian

Public/Resident

Individuals


22



Bank was promoted by the Housing Development Finance Corporation, a premier housing


ATMs, in 780 cities in India, and all branches of the bank are linked on an online real-time basis.

s.1006.82 billion. For the fiscal year

09, the bank has reported net profit of 2,244.9 crore (US$498.37 million), up 41% from the



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2.4.1 Services

HDFC Bank deals with three key business segments. - Wholesale Banking Services, Retail

Banking Services, Treasury. It has entered the banking consortia of over 50 corporates for

providing working capital finance, trade services, corporate finance and merchant banking. It is

also providing sophisticated product structures in areas of foreign exchange and derivatives,

money markets and debt trading and equity research.

Wholesale Banking Services

The Bank's target market ranges from large, blue-chip manufacturing companies in the Indian

corporate to small & mid-sized corporates and agri-based businesses. For these customers, the

Bank provides a wide range of commercial and transactional banking services, including

working capital finance, trade services, transactional services, cash management, etc. The bank is

also a leading provider of structured solutions, which combine cash management services with

vendor and distributor finance for facilitating superior supply chain management for its corporate

customers. Based on its superior product delivery / service levels and strong customer

orientation, the Bank has made significant inroads into the banking consortia of a number of

leading Indian corporates including multinationals, companies from the domestic business

houses and prime public sector companies. It is recognised as a leading provider of cash

management and transactional banking solutions to corporate customers, mutual funds, stock

exchange members and banks.

HDFC Bank

Wholesale Banking Retail Banking Treasuries


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Retail Banking Services

The HDFC Bank products are backed by world-class service and delivered to customers through

the growing branch network, as well as through alternative delivery channels like ATMs, Phone

Banking, Net Banking and Mobile Banking.

The HDFC Bank Preferred program for high net worth individuals, the HDFC Bank Plus and the

Investment Advisory Services programs have been designed keeping in mind needs of customers

who seek distinct financial solutions, information and advice on various investment avenues. The

Bank also has a wide array of retail loan products including Auto Loans, Loans against

marketable securities, Personal Loans and Loans for Two-wheelers. It is also a leading provider

of Depository Participant (DP) services for retail customers, providing customers the facility to

hold their investments in electronic form.

HDFC Bank was the first bank in India to launch an International Debit Card in association with

VISA (VISA Electron) and issues the MasterCard Maestro debit card as well. The Bank

launched its credit card business in late 2001. By March 2010, the bank had a total card base

(debit and credit cards) of over 14 million. The Bank is also one of the leading players in the

“merchant acquiring” business with over 90,000 Point-of-sale (POS) terminals for debit / credit

cards acceptance at merchant establishments. The Bank is well positioned as a leader in various

net based B2C opportunities including a wide range of internet banking services for Fixed

Deposits, Loans, Bill Payments, etc.

Treasury

Within this business, the bank has three main product areas - Foreign Exchange and Derivatives,

Local Currency Money Market & Debt Securities, and Equities. With the liberalisation of the

financial markets in India, corporates need more sophisticated risk management information,

advice and product structures. These and fine pricing on various treasury products are provided

through the bank's Treasury team. To comply with statutory reserve requirements, the bank is

required to hold 25% of its deposits in government securities. The Treasury business is

responsible for managing the returns and market risk on this investment portfolio.

2.5 Axis Bank

Axis Bank Limited, formerly UTI Bank, is a financial services firm that had begun operations in

1994. The Bank was promoted jointly by the Administrator of the Specified Undertaking of the

Unit Trust of India (UTI-I), Life Insurance Corporation of India (L

Corporation Ltd., National Insurance Company Ltd., The New India Assurance Company, The

Oriental Insurance Corporation and United India Insurance Company. The bank changed its

name to Axis Bank in April 2007 to avoid confusion with o

name. 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.

Figure

37%

9%

6%

5%

Axis




I), Life Insurance Corporation of India (LIC), General Insurance



name to Axis Bank in April 2007 to avoid confusion with other unrelated entities with similar

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.

Figure 6 AXIS Bank shareholding pattern

38%

37%

3%

2%0%

0%

Axis FII/NRIs

Promoters

Depository

receipts

Bodies Corporate

Individuals

MutualFunds/UTI

Financial

Institutions

Others

ForeignOthers


25



IC), General Insurance



ther unrelated entities with similar

The Bank has strengths in both retail and corporate banking and is committed to adopting


26

2.5.1 Services

Personal Banking

Axis Bank offers Personal Banking in accounts, loans, deposits, cards, forex, investments,

insurance, payments and other services.

Corporate Banking

The Bank's Corporate Banking franchise aims to provide a wide array of products across several

customer segments, including credit, trade finance, structured finance and syndication services

for debt and equity. Since each corporate engagement also offers opportunities on the retail side

of the business, products anchored in the Retail SBUs also form a part of the corporate marketing

effort. New customer acquisition and relationship-deepening constitute the two-pronged strategy

for growth. In order to leverage growth opportunities offered by India's infrastructure sector, a

separate infrastructure business group has been established within the corporate banking group.

NRI services

Wide gamut of services and fast application processing are tempting many NRI to open Axis

bank NRI account/Axis bank NRE account. Any Indian residing abroad and is of Indian origin is

eligible to open Axis bank NRI account/Axis bank NRE account.

Agri & Rural services

Axis Bank one of the largest private sector financer in India for Agriculture loans wiz Retail

Agri, Commodity & Corporate Agri.


27

Chapter 3:

Capital Structure

As per the RBI capital adequacy norms, Bank’s regulatory capital is classified into Tier-1 capital

and Tier-2 capital.

a) Tier-1 capital: includes paid-up equity capital, statutory reserves, other disclosed free

reserves, capital reserves and innovative perpetual debt instruments (Tier-1 bonds)

eligible for inclusion in Tier-1 capital that comply with requirement specified by RBI.

b) Tier-2 capital: includes revaluation reserves (if any), general provision and loss reserve,

investment reserve, upper Tier-2 instruments (upper Tier-2 bonds) and subordinate debt

instruments (lower Tier-2 bonds) eligible for inclusion in Tier-2 capital.

3.1 State Bank of India


28

3.2 ICICI Bank

Tier-1 bonds are non-cumulative and perpetual in nature with a call option after 10 years.

Interest on Tier-1 bonds is payable either annually or semi-annually. These Tier-1 bonds have a

step-up clause on interest payment ranging up to 100 basis points.

The upper Tier-2 bonds are cumulative and have an original maturity of 15 years with call

option after 10 years. The interest on upper Tier-2 bonds is payable either annually or semi-

annually. Some of the upper Tier-2 debt instruments have a step-up clause on interest payment

ranging up to 100 basis points.

The lower Tier-2 bonds (subordinated debt) are cumulative and have an original maturity

between 5 to 15 years. The interest on lower Tier-2 capital instruments is payable quarterly,

semi-annually or annually.

a) Details of amount of Tier-1 capital

(Rs. in billion)

Tier-1 capital elements Amount

Paid-up share capital^1 12.65

Reserves^2 501.44

Innovative Tier-1 capital instruments 28.21

Minority interest 0.41

Gross Tier-1 capital 542.71

Deductions:

Investments in instruments eligible for regulatory capital of

financial subsidiaries/associates

23.45

Securitisation exposures including credit enhancements 36.17

Deferred tax assets 21.43

Others^3 1.82

Minority interest not eligible for inclusion in Tier-1 capital 0.16

Net Tier-1 capital 459.68


29

1. Includes preference shares permitted by RBI for inclusion in Tier-1 capital.

2. Includes statutory reserves, disclosed free reserves, capital reserves and special reserves (net

of tax payable).

3. Includes goodwill and adjustments for less liquid positions.

b) Details of amount of Tier-2 capital

(Rs. in billions)


General provisions 16.65

Investment reserves 1.16

Upper Tier-2 capital instruments 141.73

Lower Tier-2 capital instruments 121.61

Gross Tier-2 capital 281.15

Deductions:

Investments in instruments eligible for regulatory capital of

financial subsidiaries/associates

23.45

Securitisation exposures including credit enhancements 36.17

Net Tier-2 capital 221.54

c) Debt capital instruments eligible for inclusion in Tier-1 and Tier-2 capital

(Rs. in billions)

Particulars Tier-1 Upper

Tier-2

Lower

Tier-2

Total amount outstanding at March 31, 2010 28.21 141.73 150.12

Of which, amounts raised during the year __ 33.80 30.27

Amount eligible to be reckoned as capital funds at

March 31, 2010

28.21 141.73 121.61


30

d) Total eligible capital

(Rs. in billions)

Particulars Amount

Tier-1 capital 459.68

Tier-2 capital 221.54

Total eligible capital 681.22


31

3.3 PNB Bank

Banks Tier 1 capital comprises of Equity Shares, Reserves and Innovative Perpetual Bonds.

Bank has issued Innovative Perpetual Bonds (Tier 1 capital) and also other bonds eligible for

inclusion in Tier 2 capital.

a) The Tier 1 capital of the bank comprises:

b) The amount of Tier 2 capital (net of deductions) is:

c) The debt capital instruments eligible for inclusion in Upper Tier 2 capital are:


32

d) The subordinated debts eligible for inclusion in Lower Tier 2 capital is:

e) Other deductions from capital, if any:

f) The total eligible capital comprises:


33

3.4 HDFC Bank

The Bank has issued debt instruments that form part of Tier I and Tier II capital. The terms and

conditions that are applicable for these instruments comply with the stipulated regulatory

requirements. The Bank has not issued any Tier I and Tier II bonds in the financial year 2009–

2010.

Tier I bonds are perpetual in nature with a call option after 10 years from the date of allotment.

Interest on Tier I bonds is payable semi-annually and is not cumulative. There is a step up clause

on interest payment of 100 basis points in conjunction with call option.

The upper Tier II bonds have an original maturity of minimum 15 years with call option after

10 years from the date of allotment. These Tier II bonds have a step-up clause on interest

payment ranging from 50 bps to 100 bps in conjunction with call option. The interest on upper

Tier II bonds is payable either annually or semi-annually.

The lower Tier II bonds have an original maturity upto 14 years. The interest on lower Tier II

capital instruments is payable either annually or semi-annually.

a) The details of Tier I capital of the Bank are given below :

(Rs. Lacs)

Particulars Amount

Paid-up share capital 457,74

Reserves 21,111,10

Innovative Tier-1 capital instruments 200,00

Gross Tier-1 capital 2176884

Deductions:

Deferred tax assets (84416)

Securitisation exposures including credit enhancements (24075)

Total Deductions (108491)

Net Tier-1 capital 2068393


34

b) The details of Tier II capital of the Bank are given below:

(Rs. lacs)


Provision for Standard assets 76029

Investment Reserve Account 2614

Upper Tier-2 capital instruments 275990

Lower Tier-2 capital instruments 324824


Deductions:

Securitisation exposures including credit enhancements 24075


c) Debt capital instruments eligible for inclusion in Upper Tier-2 are given below:

(Rs. lacs)

Particulars Amount

Total amount outstanding at March 31, 2010 275990

Of which, amounts raised during the year __


March 31, 2010

275990


35

d) Subordinated debt eligible for inclusion in Lower Tier II capital is given below :

(Rs. lacs)

Particulars Amount




March 31, 2010

324824

e) Other deductions from capital: Nil as on March 31, 2010 (Nil as on March 31, 2009).

f) The total eligible capital of the Bank outstanding as of March 31, 2010 amounts to Rs.

27,237,75 lacs (previous year: Rs. 20,440,32 lacs).


36

3.5 Axis Bank

Axis Bank has issued debt instruments that form a part of Tier-1 and Tier-2 capital. The terms

and conditions that are applicable for these instruments comply with the stipulated regulatory

requirements.

Tier-1 bonds are non-cumulative and perpetual in nature with a call option after 10 years.

Interest on Tier-1 bonds is payable either annually or semi-annually. Some of the Tier-1 bonds

have a step-up clause on interest payment ranging up to 100 bps.

The Upper Tier-2 bonds have an original maturity of 15 years with a call option after 10 years.

The interest on Upper Tier-2 bonds is payable either annually or semi-annually. Some of the

Upper Tier-2 debt instruments have a step-up clause on interest payment ranging up to 100 bps.

The Lower Tier-2 bonds have an original maturity between 5 to 10 years. The interest on lower

Tier-2 capital instruments is payable either semi-annually or annually.

Equity Capital

The Bank has authorized share capital of Rs. 500.00 crores comprising 500,000,000 equity

shares of Rs. 10/- each. As on 31 March 2010 the Bank has issued, subscribed and paid-up equity

capital of Rs. 405.17 crores, constituting 405,174,119 numbers of shares of Rs. 10/- each. The

Bank's shares are listed on the National Stock Exchange and the Bombay Stock Exchange. The

GDRs issued by the Bank are listed on the London Stock Exchange (LSE).

During the year ended 31 March 2010, the Bank raised additional equity capital in the form of

5,055,500 Global Depository Receipts (GDRs) (each GDR representing 1 underlying equity

share of Rs. 10/- each), at a price of US$ 18.90 per GDR. The Bank also undertook a Qualified

Institutional Placement (QIP) of 33,044,500 shares and a preferential allotment of 3,976,632

shares at a price of Rs. 906.70 per share. As a consequence, the paid-up share capital of the Bank

has increased by Rs. 42.08 crores and the reserves of the Bank have increased by Rs. 3,725.64

crores after charging of issue related expenses.


37

During the year, the Bank has also allotted equity shares to employees under its Employee Stock

Option Plan.

The provisions of the Companies Act, 1956 and other applicable laws and regulations govern the

rights and obligations of the equity share capital of the Bank.

Debt Capital Instruments

The Bank has raised capital through Innovative Perpetual Debt Instrument (IPDI) eligible as Tier

1 Capital and Tier 2 Capital in the form of Upper Tier 2 and Subordinated bonds (unsecured

redeemable non-convertible debentures).

a) The details of Tier I capital of the Bank are given below :

(Rs. crores)

Particulars Amount

Paid-up share capital 405.17

Reserves 15632.32

Innovative Tier-1 capital instruments 420.54


Deductions:

Deferred tax assets (611.33)

Investments in subsidiaries (57.28)

Total Deductions (668.61)



38

b) The details of Tier II capital of the Bank are given below:

(Rs. crores)


Provision for Standard assets 484

Upper Tier-2 capital instruments 1249

Lower Tier-2 capital instruments 4843


Deductions:

Investments in subsidiaries (57)


c) Debt capital instruments eligible for inclusion in Upper Tier-2 are given below:

(Rs. crores)

Particulars Amount




March 31, 2010

1249

d) Subordinated debt eligible for inclusion in Lower Tier II capital is given below:

(Rs. crores)

Particulars Amount


Of which, amounts raised during the year 2000


March 31, 2010

4843


39

Chapter 4:

Financial Performance

4.1 Balance Sheet of SBI as on 31st March 2010


40

4.2 Profit and Loss Account of SBI for the year ended 31st March 2010


41

4.3 Balance Sheet of ICICI Bank as on 31st March 2010


42

4.4 Profit and Loss Account of ICICI Bank for the year ended 31st March 2010


43

4.5 Balance Sheet of PNB as on 31st March 2010


44

4.6 Profit and Loss Account of PNB for the year ended 31st March 2010


45

4.7 Balance Sheet of HDFC Bank as on 31st March 2010


46

4.8 Profit and Loss Account of HDFC Bank for the year ended 31st March 2010


47

4.9 Balance Sheet of Axis Bank as on 31st March 2010


48

4.10 Profit and Loss Account of Axis Bank for the year ended 31st March 2010

Net Profit

Figure

The net profit of SBI Bank stood at Rs.

registered a growth of Rs. 4024.98

of Rs. 3905.36 crores and Axis Bank of Rs.

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

SBI


Figure 7 Net profit of the five Banks

The net profit of SBI Bank stood at Rs. 9166.05 crores in 2009-10 whereas ICICI Bank

4024.98 crores. HDFC Bank made a profit of Rs. 3926.4

crores and Axis Bank of Rs. 2514.53.

ICICIPNB

HDFCAXIS


49

10 whereas ICICI Bank

3926.4 crores, PNB

Operating Expense

Figure

SBI Bank’s Operating Expense stood at Rs.

of ICICI Bank’s. HDFC Bank’s operating expense is Rs.

is Rs. 5761.36 crores and Axis Bank’s is Rs.

0

5000

10000

15000

20000

25000

SBI


Figure 8 Operating expense of the five Banks

’s Operating Expense stood at Rs. 24941.01 crores as compared to Rs.

of ICICI Bank’s. HDFC Bank’s operating expense is Rs. 8045.36 crores, PNB operating expense

crores and Axis Bank’s is Rs. 5066.76 crores.

ICICIPNB

HDFCAXIS


50

crores as compared to Rs. 10221.99 crores

crores, PNB operating expense

Reserves and Surplus

Figure 9

SBI Bank’s reserves and surplus is Rs.

HDFC Bank is Rs. 24914.04 crores, PNB is Rs.

15639.27 crores.

0

10000

20000

30000

40000

50000

60000

70000

SBI


9 Reserves & Surplus of the five Banks

’s reserves and surplus is Rs. 65314.32 crores, ICICI Bank’s is Rs.

crores, PNB is Rs. 17407.62 crores and Axis Bank’s is Rs.

ICICIPNB

HDFCAXIS


51

crores, ICICI Bank’s is Rs. 50503.48 crores,

crores and Axis Bank’s is Rs.

Provisions and Contingencies

Figure 10 Provisions &

SBI Bank ranks higher in terms of provisions and contingencies with Rs.

Bank ranks second with Rs. 3004.88

1368.98 crores and least is the ICICI B

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

SBI


Provisions & Contingencies of the five Banks

ranks higher in terms of provisions and contingencies with Rs. 4532.53

3004.88 crores, PNB with Rs. 2421.49 crores, AXIS bank with Rs.

crores and least is the ICICI Bank with Rs. 1159.81 crores.

ICICIPNB

HDFCAXIS


52

4532.53 crores, HDFC

crores, AXIS bank with Rs.

Assets

Figure

The total assets of SBI Bank is Rs.

crores, PNB with Rs. 296632.79

with Rs. 180647.87 crores.

0

200000

400000

600000

800000

1000000

1200000

SBI


Figure 11 Total Assets of the five Banks

of SBI Bank is Rs. 1053413.74 crores, ICICI Bank total assets is Rs.

296632.79 crores, HDFC Bank with Rs. 277352.61 crores

ICICIPNB

HDFCAXIS


53

crores, ICICI Bank total assets is Rs. 363399.71

crores and Axis Bank

Total Advances

Figure

The total advances of SBI Bank is Rs.

ICICI Bank’s is Rs. 181205.6 crores, HDFC Bank’s is Rs.

Rs. 104343.12 crores.

0

100000

200000

300000

400000

500000

600000

700000


Figure 12 Total Advances of the five Banks

of SBI Bank is Rs. 631914.15 crores, PNB Bank’s is Rs. 186601.21

crores, HDFC Bank’s is Rs. 159982.67 crores and Axis Bank’s is

SBIICICI

PNBHDFC

AXIS


54

186601.21 crores,

crores and Axis Bank’s is

Total Deposits

Figure

The total deposit of SBI Bank is Rs. 804116.23

ICICI Bank has Rs. 202016.6 crores

Rs. 141300.22 crores.

0

100000

200000

300000

400000

500000

600000

700000

800000

900000

SBI


Figure 13 Total Deposit of the five Banks

The total deposit of SBI Bank is Rs. 804116.23 crores, PNB Bank has Rs.

crores, HDFC Bank has Rs. 208586.41 crores and Axis Bank has

ICICIPNB

HDFCAXIS


55

crores, PNB Bank has Rs. 249329.8 crores,

crores and Axis Bank has


56

Chapter 5:

Key Performance Indicators

Figure 14 No. of offices of the five Banks

Figure 15 No. of employees of the five Banks

SBI ICICI PNB HDFC AXIS

Series1 200299 35256 53417 51888 21640

0

50000

100000

150000

200000

250000

Axis Title

No. of employees

58%

8%

22%

8%

4%

No. of offices

SBI

ICICI

PNB

HDFC

AXIS


57

Figure 16 Business per employee of the five Banks

Figure 17 Profit per employee of the five Banks


Series1 4.46 12 7.31 5.98 12

0

2

4

6

8

10

12

14

Axis Title

Profit per employee

0

200

400

600

800

1000

1200

SBI ICICI

PNBHDFC

AXIS

Axis Title


Series1 636 1029 807.95 590 1111

Business per employee

Credit to deposit ratio (CD ratio):

is done through deposits. It is the proportion of loan

received. The higher the ratio, the higher the loan

be in the form of current and saving account as well as term deposits. The outcome of this ratio

reflects the ability of the bank to make optimal use of the available resources.

Figure

0.00

20.00

40.00

60.00

80.00

100.00

SBI

Credit to deposit ratio (CD

ratio)

Credit deposit ratio


Ratio Analysis

Credit to deposit ratio (CD ratio): This ratio indicates how much of the advances lent by banks

is done through deposits. It is the proportion of loan-assets created by banks from the deposits

received. The higher the ratio, the higher the loan-assets created from deposits. Deposits would

e in the form of current and saving account as well as term deposits. The outcome of this ratio

reflects the ability of the bank to make optimal use of the available resources.

Figure 18 Credit Deposit ratio of the five Banks

ICICIPNB

HDFCAXIS


Credit to deposit ratio (CD 78.58 90.04 74.34 75.17 71.87

Credit deposit ratio


58

Chapter 6:

Ratio Analysis

This ratio indicates how much of the advances lent by banks

assets created by banks from the deposits

assets created from deposits. Deposits would

e in the form of current and saving account as well as term deposits. The outcome of this ratio

71.87


59

Capital adequacy ratio (CAR): A bank's capital ratio is the ratio of qualifying capital to risk

adjusted (or weighted) assets. The RBI has set the minimum capital adequacy ratio at 9% for all

banks. A ratio below the minimum indicates that the bank is not adequately capitalized to expand

its operations. The ratio ensures that the bank do not expand their business without having

adequate capital.

CAR = Tier I capital + Tier II capital / Risk weighted assets

It must be noted that it would be difficult for an investor to calculate this ratio as banks do not

disclose the details required for calculating the denominator (risk weighted average) of this ratio

in detail. As such, banks provide their CAR from time to time.

Tier I Capital funds include paid-up equity capital, statutory and capital reserves, and perpetual

debt instruments eligible for inclusion in Tier I capital. Tier II capital is the secondary bank

capital which includes items such as undisclosed reserves, general loss reserves, subordinated

term debt, amongst others.

Figure 19 Capital adequacy ratio of the five Banks

0

5

10

15

20

25


Capital adequacy ratio

Series1

Tier I Tier II Total Tier I Tier II Total

State Bank of India 8.46 3.54 12 9.45 3.94 13.39

ICICI Bank 13.48 5.66 19.14 13.96 5.45 19.41

Punjab National Bank 8.38 4.59 12.97 9.11 5.05 14.16

HDFC Bank 12.5 3.95 16.45 13.26 4.18 17.44

AXIS Bank 10.65 4.4 15.05 11.18 4.62 15.8

Basel - I Basel - II


60

Non-performing asset (NPA) ratio: The net NPA to loans (advances) ratio is used as a measure

of the overall quality of the bank’s loan book. An NPA are those assets for which interest is

overdue for more than 90 days (or 3 months).

Net NPAs are calculated by reducing cumulative balance of provisions outstanding at a period

end from gross NPAs. Higher ratio reflects rising bad quality of loans.

NPA ratio = Net non-performing assets / Loans given

Figure 20 Net NPA ratio of the five Banks

1.72

2.12

0.53

0.310.4

0

0.5

1

1.5

2

2.5


Net NPA ratio

Series1

Return on assets (ROA): Returns on asset ratio is the net income (profits) generated by the

bank on its total assets (including fixed assets). The higher the proportion of average earnings

assets, the better would be the resulting returns on total assets. Similarly, ROE (returns

equity) indicates returns earned by the bank on its total net worth.

ROA = Net profits / Avg. total assets

Figure

0

0.5

1

1.5

2

SBI

Return on Assets


Returns on asset ratio is the net income (profits) generated by the


assets, the better would be the resulting returns on total assets. Similarly, ROE (returns

equity) indicates returns earned by the bank on its total net worth.

ROA = Net profits / Avg. total assets

Figure 21 Return on Assets of the five Banks

ICICIPNB

HDFCAXIS

Return on Assets


61

Returns on asset ratio is the net income (profits) generated by the


assets, the better would be the resulting returns on total assets. Similarly, ROE (returns on

Earning per share: The portion of a company's profit alloca

common stock. Earnings per share serve as an indicator of a company's profitability.

EPS = (Net profit after tax

Figure 22

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

SBI


The portion of a company's profit allocated to each outstanding share of


= (Net profit after tax − Preference dividend) / No. of equity shares

22 Earning per share of the five Banks

SBIICICI

PNBHDFC

AXIS

Earning per share


62

ted to each outstanding share of


shares

Return on Equity: The amount of net income returned as a percentage of shareholders equity.

Return on equity measures a corporation's profitability by revealing how much profit a company

generates with the money shareholders have invested.

Return on Equity = Net Income

Figure

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

SBI


The amount of net income returned as a percentage of shareholders equity.


generates with the money shareholders have invested.

Equity = Net Income after tax/Shareholder's Equity

Figure 23 Return on Equity of the five Banks

SBIICICI

PNBHDFC

AXIS

Return on equity


63

The amount of net income returned as a percentage of shareholders equity.


Dividend per share: The sum of declared dividends for every ordinary share issued. Dividend

per share (DPS) is the total dividends paid out over an entire divided by the number of

outstanding ordinary shares issued.

DPS = dividends paid/

Figure 24

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

SBI


The sum of declared dividends for every ordinary share issued. Dividend


outstanding ordinary shares issued.

DPS = dividends paid/number of shares in issue

24 Dividend per share of the five Banks

SBIICICI

PNBHDFC

AXIS

Dividend per share


64

The sum of declared dividends for every ordinary share issued. Dividend



65

Chapter 7:

SWOT Analysis

State Bank of India

Strengths

• Brand Name

• Market Leader

• Wide Distribution

Network

• Diversified Portfolio

• Government Owned

• Low Transition Costs

Opportunities

• Merger of associate banks

with SBI

• Additional 2000 branches

and 3000 ATMs

• Increasing trade and

business relations

• Low Transition Costs

Weakness

• Hierarchical management

structure of the bank

• Non performing assets

(NPAs)

• Modernisation

Threats

• Advent of MNC banks

• Consumer expectations

• Employee Strike

• Private banks venturing

into the rural and semi-

urban sector


66

ICICI Bank

Strenghts

• Brand Name

• Market Share

• Huge Network

• Diversified Portfolio

• Salary Account

• Working Hours

• Treasury Management

• Aggressive Marketing

Opportunities

• New IT & ITES Companies

• Dissatisfied Customers of Other

Banks

• Remittances

• Business advising for smaller

Players

Weakness

• Transaction Cost

• Focus on High end customers

• Defensive Approach in lending

• Little Presence outside India

• Poor customer Care/ service

Threats

• Advent of MNC banks

• Dissatisfied Customers

• Ever improving nationalized

banks


67

Punjab National Bank

Strengths

• Brand name

• Single window clearance

• Appraisal techniques

• specialised softwares

• no penalty for prepayment from

borrowers own service

Opportunities

• Special rate of interest during

exhibitions

• Special rate of interest can be

introduced for employees of PSU

• Product life cycle is to be

reviewed

Weakness

• High interest rates

• Only through direct sales agent

• No publicity

• People not aware of wide variety

of schemes

• Shortage of staff

• Delegation of authority not

proper

Threats

• Competition in market very high

• Rate of interest of other players

are very low

• Innovative schemes from other

players

• Processing process quite slow


68

HDFC Bank

Axis Bank

Strengths

• Right strategy for the right products.

• Superior customer service vs.

competitors.

• Great Brand Image.

• Products have required accreditation.

• High degree of customer satisfaction.

• Good place to work

• Lower response time with efficient and

effective service.

Opportunities

• Profit margins will be good.

• Could extend to overseas broadly.

• New specialist applications.

• Could seek better customer deals.

• Fast-track career development

opportunities on an industry-wide basis.

• An applied research center to create

opportunities for developing techniques

to provide added-value services.

Weakness

• Some gaps in range for certain sectors.

• Customer service staff needs training.

• Processes and systems, etc

• Management cover insufficient.

• Sectoral growth is constrained by low

unemployment levels and competition

for staff

Threats

• Legislation could impact.

• Great risk involved

• Very high competition prevailing in the

industry.

• Vulnerable to reactive attack by major

competitors.

• Lack of infrastructure in rural areas could

constrain investment.

• High volume/low cost market is intensely

competitive.


69

Axis Bank

Strengths

• Extremely competitive and

profitable banking franchise

• Sound technological platform

with centralized database and

operations

• Support of various promoters

Opportunities

• Large retail and corporate market

• Wide scope in rural India

• Other activity (non banking

activity)

• People are becoming more

service oriented

Weakness

• Not having image UTI (fraud)

• Higher cost

• Customer service

• Market capitalization very low

Threats

• Very high competition with

private sector and public sector

• Government rules and regulation

• Rising rates

• Other better saving, investment

option available


70

Chapter 8:

Corporate Social Responsibility

Due to the wide variability of business environments under which the five firms operate, I have

chosen to do a firm specific analysis of social issues.

State Bank of India

Corporate Social Responsibility has been a part of the State Bank of India since 1973 under the

name of Community Service Banking covering various social, environmental and welfare

activities.

The stated Corporate philosophy is as follows –

• The Bank is a corporate citizen, with resources at its command and benefits which it derives

from operating in the society in general. It, therefore, owes a solemn duty to the less fortunate

and underprivileged members of the same society.

• Staff members are expected to make their contribution by understanding the aspirations of the

public around them and by endeavouring to evolve measures to remove the apolitically

indisputable social and developmental lacunae.

During the financial year 2009-10, the Bank implemented 136 projects with donations

aggregating Rs.19.72 crores. Numerous welfare and social activities were implemented both in

Banking and Non- Banking areas with the basic aim of raising the quality of life in the

community, especially in and around the area of operation of the branches. Particular attention

was given to ameliorating the condition of the downtrodden and underprivileged common man.

Currently, the focus areas under Community Service Banking are

• Health

• Education

• Adoption of Girl Child


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• Women’s empowerment

• Child development

• Welfare and rehabilitation of poor and handicapped

• Assistance to poor and underprivileged

• Entrepreneur development programmes

• Vocational guidance

• Thrust for assistance to IT education in Rural/Tribal/unreached areas

• Environment Protection

• Assistance during natural calamities.

Projects during FY 2009-10

1. Community Service Banking

a. 114 projects were assisted with Rs.6.93 crores covering the areas of Health, Education,

Assistance for Handicapped, Sports, Environment and Assistance to tribals & other

underprivileged members of the society.

b. Natural Calamities: 6 Projects amounting to Rs.5.22 crores were undertaken for providing

relief and rehabilitation to victims of Natural Calamities. Of this Rs.5.15 crores was donated to

the Chief Minister’s Relief Funds of 4 States.

c. Adoption of Girl Child: Society’s preference for the boy child resulted in a large number of

instances when the girl child was deprived of familial attention, education, affection, healthcare,

in extreme cases, even food etc. This saw a high incidence of female infanticide or ill-treatment

of girl children.


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As a part of its commitment to the welfare of our society, the Bank decided to adopt Girl

Children in the age group of 6 to 14 who were orphans, destitute, physically handicapped,

belonging to poor families.

This initiative was started in 2008 with 8,338 children. There are presently 19,534 girl children

covered under the scheme. These belong to 6,658 schools spread all over the country and have

been adopted by 5,726 branches. An assistance of Rs.4.84 crores was extended during Financial

year 2009-10.

Apart from financial assistance, individual employees from the Bank/spouses of employees or

members of SBI Ladies Club adopt one or two children for care, mentoring, counselling, to try

and fulfill the role of a guide. This includes periodic visits to the schools by Staff Members / SBI

Ladies Club Members, talking to the girl child to understand her difficulties, academic or

otherwise, and offering solutions. A close liaison is also maintained with the teachers and the

academic progress of the girl child is monitored. If felt necessary, timely corrective action is

suggested.

While gradually increasing the coverage, the Bank has emphasized that individual care and

attention to the adopted children as originally envisaged, should not be diluted.

d. R&D Fund

The Bank has set up a chair named ‘Indian Observatory and IG Patel Chair’ at Asia Research

Centre of the London School of Economics jointly with the Reserve Bank of India. In addition,

the Bank has established an ‘SBI Chair for Public Leadership’ in the Indian School of Business,

Hyderabad. These 2 chairs have been assisted with donations amounting to Rs.2.73 crores during

FY 2009-10.

SBI Children’s Welfare Fund

Apart from the projects reported above, the SBI Children’s Welfare Fund, which was set up with

donations from the employees of SBI with matching contributions from the Bank to assist

underprivileged and poor children in their educational and economic development, undertook 6

projects during FY 2009-10 and distributed grants of Rs.4.58 lacs for child welfare projects.


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Green Banking Initiatives of the Bank

Global warming has become a serious issue attracting attention from all the Nations of the world

warranting urgent measures to combat the climate change, which may otherwise result in

irregular Monsoons, floods, draughts and uneven temperatures, altogether keeping the existence

of flora and fauna of the universe at stake. As the Country’s Premier Financial Conglomerate

providing financial resources and services to clients pan India, the Bank has a strategic role to

play in addressing this issue, both in terms of its obligations and in terms of its opportunities.

Being a responsible Corporate Citizen of the country, the Bank has adopted a Green Banking

Policy with an objective of contributing towards the fight against the adverse climatic changes.

The policy envisages two pronged approach to address the issue viz. i) to reduce the Bank’s own

carbon footprint and ii) to sensitise the Bank’s clients to adopt low carbon emission practices. As

part of the Bank’s initiatives to move towards low carbon operations, the Bank has initiated

several measures, which include switching over to energy efficient lighting systems, installation

of energy savers, efficient water management systems, waste disposal and tree plantation etc.

First of its kind in the entire Banking, Finance and Insurance Sector (BFIS), the Bank has

conceptualised generation of energy through renewable energy resources and therefore, resolved

to install windmills for the Bank’s captive use with a view to substitute the polluting power with

green power. A total of 10 windmills with an installed capacity of 15 MW came up in the States

of Tamilnadu, Gujarat and Maharashtra. The project has been installed and commissioned in a

record time of four months which reflects the Bank’s sincerity and urge in its efforts to protect

the environment and mankind.

Financial Inclusion

Considering the fact that a majority of 6.38 lacs habitations in India are not served by any

Commercial Bank or Regional Rural Bank, the Bank took upon itself the task of reaching out to

these unbanked villages and making available the basic banking facilities at affordable cost.

Thus, the Bank envisioned a mission of covering 1 lac unbanked villages by March 2010.


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The realization that the job demands highly innovative and technological initiative in view of the

fact that brick and mortar branches alone were not sufficient to reach out, the Bank decided to

take on multipronged approach of engaging Business Facilitators (BF), Business Correspondents

(BC) and technological innovations to cover the unbanked villages besides expanding through

new branches.

In the process, the Bank engaged 10 National level partners as BC /BFs and 8,000 BC/BFs as

regional level alliances. The alternate channel of BC/BF expanded its footprints at 25,000

Customer Service Points throughout the length and breadth of the country for serving unbanked

villages. The Bank also added 1,001 new branches during the last two years in Rural and Semi

Urban areas to contribute to this national cause.

Education Partnership with the Municipal Corporation of Greater Mumbai

The Municipal Corporation of Greater Mumbai (MCGM) has launched a project to transform

and upgrade the outcome of education in schools run by the Municipal Corporation. The Bank

has agreed to support this project as a partner for a period of 2 years as this project may evolve as

a model for replication across the country. The project has the following objectives:

• Improvement in average learning outcomes from 30-35% to 70-80%.

• Improvement in student attendance from 50-60% to 90%+.

• Reduction in drop-out rates especially at upper primary level.

• Enabling at least 30-50% of the children to speak English comfortably.

• At least 20% of secondary school children getting strong vocational training.

• At least 20% of parents being highly involved in the child’s learning.

• Creating infrastructure of the right quality in each school.


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ICICI Bank

In January 2008, the ICICI Group established the ICICI Foundation for Inclusive Growth (ICICI

Foundation). ICICI Foundation’s mission is to create and support strong independent

organisations that work towards empowering the poor to participate in and benefit from the

Indian growth process. Since its inception, ICICI Foundation has taken forward the ICICI

Group’s existing initiatives in the areas of primary health, elementary education and access to

finance and supported new initiatives in the areas of civil society and environmental

sustainability. ICICI Bank and its subsidiaries have, till year-end fiscal 2010, provided grants

aggregating Rs. 854.0 million to ICICI Foundation.


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Areas of focus

a) Primary health: Through the ICICI Centre for Child Health and Nutrition (ICICI Child

Health) in Pune, ICICI Foundation seeks to support mothers and children in the poorest

communities across India through improvements in government health systems.

In Ranchi district, Jharkhand, ICICI Child Health has worked in partnership with Krishi Gram

Vikas Kendra, Child in Need Institute and the Government of Jharkhand to reduce the number of

babies born with low birth weight. Village Health Committees (VHCs) and voluntary health

workers (Sahiyyas) were developed that work together to help improve access to health services

and the functioning of health centres, through organising medical camps, awareness campaigns

and building roads to ensure reach of mobile medical vans to remote areas. This five-year

initiative has covered 200,000 women, newborns up to one year of age and adolescents in two

blocks of Ranchi district. The VHC and Sahiyya models have been adopted by the State

Government for larger health sector reforms.

In Bihar, ICICI Child Health has worked with the Public Health Resource Network and the

National Health Systems Resource Centre to support preparation of District Health Action Plans

in all 38 districts of the state for fiscal 2011. ICICI Child Health has also conducted extensive

capacity building training right up to the block level in Bhagalpur district.

Through the City Initiative for Child Health in Mumbai, ICICI Child Health partnered with

Bombay Municipal Corporation (BMC) to improve antenatal, postnatal and neonatal care in

public health facilities in eight wards of the city and improved the quality of service accessed by

400,000 households in 48 slum communities. BMC has subsequently replicated the project

across the city’s western suburbs.

b) Elementary education: Through the ICICI Centre for Elementary Education (ICICI

Elementary Education) in Pune, ICICI Foundation seeks to support the transformation of student

learning by focusing on quality of learning at government-run pre-schools and elementary

schools across India. Among other activities, ICICI Elementary Education works to improve the


77

support available to teachers, to accurately measure performance of schools and students and

strengthen capabilities of state and district functionaries.

In partnership with the State of Chhattisgarh since it was constituted in 2002, ICICI Elementary

Education has taken on the task of developing school curriculum and textbooks, teacher training

and issues relating to the improvement of quality of school education. In the district of Baran,

Rajasthan, ICICI Elementary Education has worked with the Vidya Bhawan Education Resource

Centre and the Government of Rajasthan to strengthen and improve the quality of the

government system of elementary education. ICICI Elementary Education is strengthening the

capacity of district level institutions and providing training and in-classroom support for teachers

in 78 schools, aiming to improve the quality of education for 450,000 children.

ICICI Elementary Education has supported the development of the MA Education (Elementary)

course at the Tata Institute for Social Sciences, Mumbai, aiming to enhance knowledge and skills

that are relevant to strengthening elementary education. Since the inception of the programme,

two batches of 25 students each have been admitted.

c) Access to finance: In addition to the ICICI Group’s direct work in the area of financial

inclusion, which is described subsequently, ICICI Foundation has supported the IFMR Finance

Foundation in projects to develop models for enhancing access to financial services among low-

income communities in rural and urban areas. IFMR Finance Foundation works with partners

like Aajeevika Bureau (for migrants) and Kshetriya Gramin Financial Services (for remote rural

geographies). It has also participated in product development and training efforts for local

financial institutions covering micro money market mutual funds, livestock insurance,

emergency loans and weather insurance. It also works on strengthening risk management

capabilities of local financial institutions and has currently focused on access to debt

securitisation markets for Micro Finance Institutions (MFIs). IFMR Finance Foundation has

worked with partners to develop recommendations to strengthen the policy environment for

financial inclusion in India.


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d) Civil society: Through its support to CSO Partners in Chennai, ICICI Foundation supports

civil society organisations across India by enabling them to tap into new resources and networks

of support. CSO Partners provides human and financial resources to NGOs and creates platforms

for individuals, corporates and government to engage with NGOs.

Corporate Disaster Resource Network (CDRN): CDRN is a web-based supply chain

management system that enables relief agencies, first responders and local governments to

highlight their immediate resource needs and access response offers from potential product

suppliers, donors and volunteers. Currently, it has 300 NGOs and 5,000 corporate organisations

as members. CDRN is a joint initiative of CSO Partners, the National Disaster Management

Authority and Aidmatrix.

NGO Marketplace: NGO Marketplace is an online portal providing national networking

opportunities for the social sector in India. The intent is to facilitate collaborative work and

networking by NGOs with other civil society organisations as well as donors, social contributors,

researchers, policymakers and other stakeholders.

The ICICI Group has supported GiveIndia, an online platform to enable individuals to support

social causes and in turn garner funds for India’s social sector. GiveIndia has cumulatively risen

over Rs.800.0 million for over 200 NGOs; last year alone it raised approximately Rs.270.0

million. GiveIndia eventually aims to raise Rs. 3.00 billion annually to support NGOs across

India.

e) Environmental sustainability: ICICI Foundation has supported the Environmentally

Sustainable Finance group at the Centre for Development Finance at IFMR, in Chennai. One

example of the group’s work is the Environmental Sustainability Index, an index ranking the

environmental performances of Indian states, which policymakers are using as a diagnostic tool

for planning better environmental policies.


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Punjab National Bank

PNB regards Corporate Social Responsibility (CSR) as an investment in society and in its own

future. Its goal as a responsible corporate citizen is to create social capital. PNB leverage its core

competencies in five areas of activity.

Sustainability: An integral part of all PNB activities- in their core business and beyond- is being

responsible to its shareholders, clients, employees, society and the environment.

Corporate Volunteering: A growing number of PNB employees are committed to civic

leadership and responsibility- with the support and encouragement of the Bank.

Social Investments: PNB create opportunities for people and communities. They help them

overcome unemployment and poverty and shape their own futures. The Bank has set up

numerous training institutes and counseling centres for this purpose.

Health: PNB believe that healthy mind and healthy body in a healthy environment is essential

for overall growth of society and the nation. That is why they invest in areas that facilitate such

enhancements.

Education: PNB enable talent across all disciplines as one of the most important sources of

growth and progress. Their philosophy is to catch the young and empower them through skill

enhancement.


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PNB awarded Golden Peacock Corporate Social Award 2011

Punjab National Bank, the leading Nationalised Bank bagged the 'Golden Peacock Award for

Corporate Social Responsibility' for the year 2011 by the Awards Jury of Institute of Directors

under the Chairmanship of Justice P N Bhagwati, former Chief Justice of India and Member, UN

Human Rights Commission.

Punjab National Bank is the Second largest bank in the country with a business of over Rs 5 lakh

crore and pan India presence of more than 5000 branches. PNB believes that being profitable and

doing good work for the people and the world around us aren’t exclusive of each other; they're

an integrated goal.

PNB said in a statement, "A strong and well governed business enables us to translate positive

financial results into sustainable community and environmental efforts that benefit everyone.

This is the essence of Bank's CSR paradigm. Everyday Bank strives to be a good corporate

citizen and in the process-the most respected financial services institution."

PNB said that it has a vision of reaching the poor through technology driven, foolproof and risk

free door step banking, improving their financial awareness and education; developing and

upgrading their farming and other skills. The Bank has created social structures like Farmers'

Training Centres; Financial Literacy & Credit Counselling Centres; PNB Rural Self Employment

Traning Institutes; PNB Prerna; Hockey Academy etc. that impart training to people from

underprivileged segments aimed at their empowerment for their sustainable upliftment.


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HDFC Bank

HDFC Bank’s CSR initiatives range across the spectrum of purely operational and financial

parameters at one end to social and altruistic at the other. Together, these elements go towards

fulfilling its CSR objectives. The Bank seeks to achieve its corporate and social objectives by

focusing on the following strategic areas.

Environmental Responsibility: HDFC Bank is aware of its role of an influencer towards the

environment, which is embodied in its approach to Carbon Emission Reduction. The Bank

demonstrates this commitment to contribute positively to the environment and sustainable

development by calculating its carbon footprint and preparing a carbon management plan to

reduce it. In addition, in order to create awareness amongst employees on climate change and the

need to reduce and recycle various drives to conserve the environment including tree plantation

are organized on a regular basis.

Employee Engagement: The Bank’s employees are encouraged to volunteer time and skills

through the ‘Corporate Volunteering Program’. Bank’s employees have engaged in activities

such as academic support classes, held English speaking courses and helped in organizing special

events in order to celebrate festivals with the underprivileged. Additionally the Bank has

facilitated employee donations to charities of their choice through ‘Give India’. The bank makes

a donation matching the amounts donated by its employees on a monthly basis.

Community Initiatives: As a responsible Corporate Citizen HDFC Bank strives for community

empowerment through socio-economic development of underprivileged and marginalized

sections of society. The Bank partners with NGOs across India to support educational initiatives

and livelihood training programs. The Bank also supports projects that provide skills training to

school dropouts, youth, women and other disadvantaged groups. The Bank’s social development

programs have so far touched the lives of over 73,000 children and 700 women and youth.


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Axis Bank

As an integral part of society, the Bank is aware of its corporate social responsibilities and has

been engaged in community and social investments. For this purpose, the Bank has set up a Trust

- the Axis Bank Foundation, to channel its philanthropic initiatives. The Axis Bank Foundation

has committed itself to participate in various socially relevant endeavours with a special focus on

education for the special/underprivileged children. The Trustees of the Foundation have focused

on education for underprivileged children and these are largely supported by programme grants

in order that the projects become replicable. The Bank has decided to contribute upto one percent

of its net profit annually to the Foundation under its CSR initiative. During the year, the

Foundation partnered with twelve more NGOs, taking the partnership to a total of 42 NGOs, for

educating underprivileged children and special children all over India. The Foundation has

committed grants for projects running upto three years. Eight hundred and fifty nine education

centres, involving 12 States are covered by the Foundation programmes. 55,452 children are

covered under the programmes that include 27,899 girls and 27,553 boys. The projects supported

by the Foundation involves imparting quality education for the underprivileged child (with a

special focus on the girl child), focusing on early childhood programmes for 2-6 year olds,

focusing on projects that encourage 'Inclusive Education' for physically challenged children,

teacher training programmes that result in competencies to teach pre-primary and primary school

children and supporting vocational training centres in slum areas to imparting training to school

dropouts.

The Axis Bank Foundation will also play an important role under the Bank’s Financial Inclusion

initiative. It is proposed that literacy campaigns will be launched by the Bank in all regions

where financial inclusion is undertaken where the objective of the Bank will be to impart

financial awareness. It will also undertake various other initiatives such as healthcare, vocational

training and other community development programmes like afforestation and rain-water

harvesting in these areas.


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Chapter 9:

Challenges facing Banking industry in India

The banking industry in India is undergoing a major transformation due to changes in economic

conditions and continuous deregulation. These multiple changes happening one after other has a

ripple effect on a bank trying to graduate from completely regulated seller market to completed

deregulated customers market.


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• Deregulation: This continuous deregulation has made the Banking market extremely

competitive with greater autonomy, operational flexibility and decontrolled interest rate

and liberalized norms for foreign exchange. The deregulation of the industry coupled

with decontrol in interest rates has led to entry of a number of players in the banking

industry. At the same time reduced corporate credit off take thanks to sluggish economy

has resulted in large number of competitors batting for the same pie.

• New rules: As a result, the market place has been redefined with new rules of the game.

Banks are transforming to universal banking, adding new channels with lucrative pricing

and freebees to offer. Natural fall out of this has led to a series of innovative product

offerings catering to various customer segments, specifically retail credit.

• Efficiency: This in turn has made it necessary to look for efficiencies in the business.

Banks need to access low cost funds and simultaneously improve the efficiency. The

banks are facing pricing pressure, squeeze on spread and have to give thrust on retail

assets.

• Diffused Customer loyalty: This will definitely impact Customer preferences, as they

are bound to react to the value added offerings. Customers have become demanding and

the loyalties are diffused. There are multiple choices, the wallet share is reduced per bank

with demand on flexibility and customization. Given the relatively low switching costs;

customer retention calls for customized service and hassle free, flawless service delivery.

• Misaligned mindset: These changes are creating challenges, as employees are made to

adapt to changing conditions. There is resistance to change from employees and the

Seller market mindset is yet to be changed coupled with Fear of uncertainty and Control

orientation. Acceptance of technology is slowly creeping in but the utilization is not

maximized.


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• Competency Gap: Placing the right skill at the right place will determine success. The

competency gap needs to be addressed simultaneously otherwise there will be missed

opportunities. The focus of people will be on doing work but not providing solutions, on

escalating problems rather than solving them and on disposing customers instead of using

the opportunity to cross sell.

Strategic options with banks to cope with the challenges

Leading players in the industry have embarked on a series of strategic and tactical initiatives to

sustain leadership. The major initiatives include:

• Investing in state of the art technology as the back bone to ensure reliable service

delivery

• Leveraging the branch network and sales structure to mobilize low cost current and

savings deposits

• Making aggressive forays in the retail advances segment of home and personal loans

• Implementing organization wide initiatives involving people, process and technology to

reduce the fixed costs and cost per transaction

• Focusing on fee based income to compensate for squeezed spread, (e.g. CMS, trade

services)

• Innovating Products to capture customer ‘mind share’ to begin with and later the wallet

share

• Improving the asset quality as per Base II norms

Transformation initiatives needed for banks

Strategy

• Sales & Marketing strategy for both retail & wholesale banking

• Expanding geographies


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Brand

• Understanding the values of the brand

• Repositioning the brand to communicate the values

Organization restructuring

• Re organization of the bank in line with the strategic thrust

Re engineering of the key business processes

• Redesign of Sales processes to increase conversion ratio

• Six Sigma process improvements for branch channel, Call Center & back office

processes

• Centralization of branch operations and deferred processes to free up resources

Cost efficiency

• Reduction in Total cost of acquisition

• Reduction in transaction costs

• Reduction in fixed and overheads cost

Right sizing and matching of skills

• Manpower modeling for branch & back office at various volume scenarios

• Productivity improvement for sales & service functions

• Competency Assessments & profiling


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Creating a high performing organization

• Define new roles & responsibilities, KRA

• Assessing competencies of people across levels and match the position with the skill set

• Designing and implementing a new PMS for restructured organization

Change management & creating a new mind set

• Developing critical mass of champions and drive ‘Change’ across the organisation to

move from conventional banking to new age banking


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Webliography

http://www.bseindia.com

http://www.nseindia.com

http://www.moneycontrol.com

http://www.rbi.org.in

http://www.statebankofindia.com

http://www.icicibank.com

http://www.pnbindia.in

http://www.hdfcbank.com

http://www.axisbank.com

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