OBJECTIVE

• 1)Define Savings Bank in market context• 2)Estimate market size each of these products

in terms of Volume and Revenue.• 3)To estimate market share of India post in

savings bank• 4)To estimate the current market share of

each of the five competitors vis-à-vis Indiapost

• 5) Identify customer segments for Savings Bank along with their usage characteristics and attributes

INDIAN ECONOMY OVERVIEW

• India’s GDP has grown up between the period FY-2005 and FY-2011 and that market for many goods and services has expanded correspondingly.

• The major change has been the rapid growth in service industry which has outpaced overall GDP growth

• Among service subsectors, Financing, Insurance, Real Estate & Business Services recorded a growth rate of 9.9% in 2010-11 and has a share of 17.4% in real GDP.

Savings Rate in India, China & USA, A Comparison Form 2006 to 2011

SOURCE:IMRB REPORT DEC 12

Savings Rate in India, China & USA, A Comparison Form 2006 to 2011

• Emerging economies of India and China have a very high savings rate with respect to their GDP.

• This can be attributed to the cultures of these economies where there is a traditional emphasis to save for a prospective rainy day.

• But as per RBI Annual Report, 2010-11, rising consumerism in these countries could soon lead to a decrease in savings rate in the coming years.

TYPES OF SAVINGS

Savings is a broad term and can be done by households, private companies and public sector. The following chart shows the various types of savings.

GROSS DOMESTIC SAVINGS: SECTOR-WISE CONTRIBUTIONS

• Gross domestic savings constitutes household savings, savings by public and private sectors.

• The following chart shows India’s GDP along with savings contribution from these three components

• Household savings form a large portion (almost 25%) of GDP of India.

• In FY 2012, savings as a percentage of GDP has increased to their highest levels over the last 6 years.

• Financial assets can be in many forms viz currency, deposits, shares and debentures, claims on government (Includes small savings), life insurance and provident and pension funds.

SMALL SAVINGS: DEFINITION

• The full basket of small savings schemes come under the umbrella of NSSF (National

Small Savings Fund). The NSSF schemes are:• 1) Postal Deposits• a) Savings Account• b) Recurring Deposits• c) Time Deposits• d) Monthly Income Schemes (MIS)

• 2) Savings Certificates• a) National Small Savings Certificate VIII issue• b) NSC IX Issue• 3) Social Security Schemes• 4) PPF• 5) SCSS

NSSF as on 31st March 2011

Growth in deposit in India post

Deposits have grown at a CAGR of 6 per cent during FY06-12

SOURCE:IMRB REPORT DEC 12

In crores

Growth in deposits in Bank

Deposits have grown at a CAGR of 21.2 per cent during FY06-13; in FY13 total deposits stood at US$ 1,274.3 billion.

In Bn $Source: IBEF Report July 2014

TYPE AND NUMBER OF PLAYERS

• Each product/service within Savings Bank portfolio is unique and competes with different products/service of other players.

• The following table shows each product/service of India Post Savings Bank and its nearest competitor

Market share of bank groups by deposits

Share of private sector banks in India in total deposits have increased to 18.8 per cent in FY13 from 17.1 per cent in FY05.

Table showing total deposits in Banks, NSSF and Indiapost

• COMPARISON OF INDIA POST WITH OTHER BANKS, TOTAL NUMBER OF BRANCHES .

• In terms of number of branches to reach out to customers, India Post has a network of 154,856 post offices, essentially making it bigger than the network of bank branches in the country

• It can be observed from the table below that the total number of bank branches has gone up by approximately 8.7% between FY 2011 and FY 2012

COMPARISON OF INDIA POST WITH OTHER BANKS, CUSTOMER BASE

• It is seen that India Post has 115 million savings bank accounts where as the biggest competitor SBI has more than 150 million savings bank accounts. Overall, there are more than 624 million savings accounts ( other banks included).

PUBLIC PROVIDENT FUND (PPF)

• PPF deposits held by India Post are Rs. 31,582 Crores as of 31st March 2011 compared to Rs. 26,096 in 2010, showing a 20% increase over last year.

• PPF deposits held by other banks were Rs. 179,092 Crores as of 31st March 2011. (Source: CGA, Govt. of India, 2011).

• Share of India Post in PPF is roughly more around 18% in terms of total deposits held.

• PPF accounts with NSSF grew by 14% that with India Post registered growth of 20%.

SENIOR CITIZENS SAVINGS SCHEME

• SCSS deposits held by India Post are Rs. 30,912 crores as on 31st March, 2011 compared to Rs. 24,989 in 2010.

• SCSS deposits held under NSSF are Rs. 50,681 crores as of 31st March, 2011 compared to Rs. 30,912 in 2010.

• India Post has a share of 61% within SCSS deposits.

• Rest of the share is with authorised agency banks.

CUSTOMER SCENARIO

OCCUPATION PROFILE • The following table shows the occupation

profile of India Post Savings Account holders

Occupation profile of customers

• Customers are from different walks of life • It is indeed a challenge to cater to meet

the needs of such a wide variety of customers.

• Hence the PO official requires a flexible customer handling technique

SOURCE OF INFORMATION

• Physical visit to post offices is still seen as the major source of information about savings bank products for most people.

• The other sources of information are friends and relatives

• In addition to word of mouth publicity, we also should use other means of communication for information dissemination

Source of information

• Though visits to post offices are cited by almost half of users as the major source of information, only 11% of them agreed that “India Post Officials” are good source of information.

• The need of the hour is to improve the knowledge about the SB products and communication ability of the staff

Perceived Advantages by India Post Savings Bank Account Holders

• In general, users have a good opinion of India Post with a majority indicating that they are highly satisfied on all parameters.

• However, except for Post Office Savings Bank and Recurring Deposit.

• All other products rank very low in customer satisfaction under these two parameters, namely “Ease of Transaction” and “Customer Service at Post Office”.

• These two parameters need to be the focus area for India Post going forward; both are linked to improving the experience at Post Office.

NON-USERS: AWARENESS & PERCEPTION OF INDIA POST

• Among non-users, only 19% were not

aware of India Post Savings schemes.• A majority of them were aware of

savings bank account followed by recurring deposit.

NON-USERS: AWARENESS & PERCEPTION OF INDIA POST

• The advertising campaigns undertaken by India Post is one of the reasons contributing to increasing awareness.

Activity• Trainees to list out the factors

contributing to the high rate of awareness among non users

Methods to increase awareness

• A low cost way of increasing awareness could be strategically placed information material at all post offices. Whenever a non-user walks into a post office for any other service, they will be exposed to information on financial services from India Post. Very few non users have ever held an India Post savings account in the near past.

WILLINGNESS TO AVAIL SERVICE IN FUTURE

• Almost half of the non users interviewed expressed willingness to invest in India Post.

• The increasing awareness, coupled with willingness to invest in India Post among non users augurs well for future business

CONCLUSION & RECOMMENDATIONS

• There is tremendous scope for cross-selling financial products to existing customers. The penetration of other Savings Bank products and Life Insurance products among Savings Account holders is currently low.

Promotion

• One way to link all the products could be a unique number for all services. Most of the due diligence requirements can be waived for existing customers in this manner

• This is taken care in CBS• Postmen can also be encouraged to drop

pamphlets along with letters at houses

Promotion

• Increasing awareness among non-users should be top priority for India Post.

• Low cost options include posting prominent information materials at all post offices so that walk-in customers of other services become aware of all products and services available in India post

Promotion

• Advertising in mass media is needed to increase awareness among non users.

• Long term advertisement programme has to be planned for increasing the awareness among the urban population

• The tax free nature of India Post Savings Account interest income needs to be highlighted prominently

Other Areas Of Improvement

• Queue Management to reduce waiting time

• Improved Customer Service• Good Ambience in Post office

Road Ahead

• These days, India Post is turning their focus to servicing clients and improving their technology infrastructure, which can help better customer experience and give them a competitive edge.

• The popularity of internet and mobile banking is at an all-time high, with customer relationship management (CRM) will help to drive the next wave in India post.

Activity

Trainees to be divided in to groups and each group to plan the marketing strategy for the product assigned • PPF• MIS• TD• SCSS