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ANALYSIS OF BANKING INDUSTRY

On the Basis of

7Ps and S.W.O.T

Submitted To Submitted
By
Mr. Vijay Nagrani Vedansh
Jain (56)
Shish kant
(48)

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CONTENT
S.NO PARTICULAR Page No.
1 ACKNOWEDGEMENT 3
2 EXECUTIVE SUMMARY 4
3 INTRODUCTION
Axis Bank 5
Yes Bank 6
Kotak Mahindra Bank 7
4 COMPARISON
Product 8
Price 10
Place 10
Promotion 11
People 12
Process 12
Physical evidence 13
5 SWOT ANSLYSIS 14
AXIS Bank 19
YES Bank 21
Kotak Mahindra Bank 23
6 APPENDIX 25

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ACKNOWLEDGEMENT

“For any successful work, it owes its thanks to


many”
Hard work, knowledge, dedication & positive attitude all
are necessary to do any task successfully but one
ingredient which is also very important than others and at
times more important than others is cooperation &
guidance of experts and experienced person.

Firstly I would like to extend my heartfelt gratitude to Mr.


Vijay Nagrani, for his guidance throughout the project.
Without his support and cooperation I would have failed in
my endeavours and targets in this project Report.

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EXECUTIVE SUMMARY

The rise of retail lending in emerging economies like India has


been of recent origin. Asia Pacific’s vast population, combined
with high savings rates, explosive economic growth, and
underdeveloped retail banking services, provide the most
significant growth opportunities for banks. Banks will have to
serve the retail banking segment effectively in order to utilize the
growth opportunity.

Banking strategies are presently undergoing various


transformations, as the overall scenario has changed over the last
couple of years. Till the recent past, most of the banks had
adopted fierce cost cutting measures to sustain their
competitiveness. This strategy however has become obsolete in
the new light of immense growth opportunities for banking
industry. Most bankers are now confident about their high
performance in terms of organic growth and in realising high
returns. Nowadays, the growth strategies of banks revolve around
customer satisfaction. Improved customer relationship
management can only lead to fulfilment of long-term, as well as,
short-term objectives of the bankers. This requires, efficient and
accurate customer database management and development of

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well-trained sales force to develop and sustain long-term
profitable customer relationship.

The banking system in India is significantly different from that of


the other Asian nations, because of the country’s unique
geographic, social, and economic characteristics. Though the
sector opened up quite late in India compared to other developed
nations, like the US and the UK, the profitability of Indian banking
sector is at par with that of the developed countries and at times
even better on some parameters. For instance, return on equity
and assets of the Indian banks are on par with Asian banks, and
higher when compared to that of the US and the UK.

INTRODUCTION AXIS BANK

Axis Bank was the first of the new private banks to have begun
operations in 1994, after the Government of India allowed new
private banks to be established. The Bank was promoted jointly by
the Administrator of the specified undertaking of the Unit Trust of
India (UTI - I), Life Insurance Corporation of India (LIC) and
General Insurance Corporation of India (GIC) and other four PSU
insurance companies, i.e. National Insurance Company Ltd., The

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New India Assurance Company Ltd., The Oriental Insurance
Company Ltd. and United India Insurance Company Ltd.

The Bank today is capitalized to the extent of Rs. 359.76 crores


with the public holding (other than promoters) at 57.79%.

The Bank's Registered Office is at Ahmedabad and its Central


Office is located at Mumbai. The Bank has a very wide network of
more than 853 branches and Extension Counters (as on 30th June
2009). The Bank has a network of over 3723 ATMs (as on 30th
June 2009) providing 24 hrs a day banking convenience to its
customers. This is one of the largest ATM networks in the country.

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.

INTRODUCTION OF YES BANK

YES BANK pursues a strong Employee Value Proposition of


‘Creating & Sharing Value’, with a vision to build an organisation,
driven by Professional Entrepreneurship, where all YES Bankers

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truly partner to direct, manage and accelerate the development of
YES BANK as the Young and Dynamic Bank of “Emerging India”.

It is this untiring and relentless passion for Professional


Entrepreneurship that has resulted in YES BANK being recently
ranked as the THIRD Best Bank in India by Business world. YES
BANK also received the Continuous Innovation in HR Strategy
award at The India times Mindscape Employer Branding Awards
2007.

YES BANK recognizes that the only real source of sustainable


competitive advantage for an organization is the power of its High
Quality Human Capital. Therefore, we foster a leadership mindset
that embraces meritocracy as a vital force to reward performance
and exceptional competency. We have also institutionalized
various key strategic initiatives including:

Our Objectives

• To build a strong employer brand.


• To attain a preferred employer status in the Banking and
Financial Services industry.

To ensure that the Bank is able to attract, engage and retain high
quality human capital for its long-term success.

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INTRODUCTION KOTAK MAHINDRA BANK

Established in 1985, the Kotak Mahindra group has been one of


India's reputed financial organizations. It was previously known as
the Kotak Mahindra Finance Limited, a non-banking financial
organization.

In February 2003, Kotak Mahindra Finance Ltd, the group's


flagship company was given the license to carry on banking
business by the Reserve Bank of India (RBI). This approval created
banking history since Kotak Mahindra Finance Ltd. is the first non-
banking finance company in India to convert itself in to a bank as
Kotak Mahindra Bank Ltd. The bank has a base of 8000+
employees.

Within a small span of 6 years, the bank has spread it wings in


several sphere of finances. Presently, spread in 82 cities in India,
the bank caters to the needs of its 5.9 million customers spread
throughout the length and breadth of country and even abroad.

Kotak Mahindra Bank has over 217 branches spread across 126
locations in the country offering both traditional banking products
and investment advisory services. The Bank has the products, the
experience, the infrastructure and most importantly the
commitment to deliver pragmatic, end to- end solutions that
really work.

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The Bank offers comprehensive business solutions that include
Trade Services, Cash Management Service and Credit facilities,
keeping in mind the needs of the business community.

COMPARISON ON THE BASIS OF 7Ps

PRODUCT
AXIS BANK YES BANK KOTAK BANK

Banking and Savings Banking and Savings Banking and Savings

• Banking and • Banking and • Banking and


Accounts Accounts Accounts
• Convenience • Convenience • Convenience
Banking Banking Banking
• Credit Cards • Credit Cards • Credit Cards
• NRI Services • NRI Services • NRI Services
• Demat • Demat • Demat
• Deposits • Deposits • Deposits

Corporate and Corporate and Corporate and


Institutional Institutional Institutional

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• Corporate • Corporate • Corporate
Finance Finance Finance
• Treasury • Treasury • Treasury
• Investment • Investment • Investment
Banking Banking Banking
• Institutional • Institutional • Institutional
Equities Equities Equities

Investments and Investments and Investments and


Insurance Insurance Insurance

• Life Insurance • Life Insurance • Life Insurance


• Mutual Funds • Mutual Funds • Estate Planning
• Gold • Gold • Mutual Funds
• Share Trading • Share Trading • Gold
• • • Share Trading

Loans and Loans and Loans and


Borrowings Borrowings Borrowings

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• Car Finance
• Commercial • Car Finance • Car Finance
Loans • Commercial • Commercial
• Home Loans Loans Loans
• Personal Loans • Home Loans • Home Loans
• Loans Against • Personal Loans • Personal Loans
Property
• Loans Against • Loans Against
• Agriculture Property Property
Loan

PRICE
AXIS BANK YES BANK KOTAK BANK

The pricing decisions or the decisions related to interest and fee


or commission charged by banks are found instrumental in
motivating or influencing the target market.

The RBI and the IBA are concerned with regulations. The rate of
interest is regulated by the RBI and other charges are controlled

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by IBA.

PLACE
AXIS BANK YES BANK KOTAK BANK

Spread In 126 Cities


123 Branch
827 Branch In India
Future Target 2015 Is
3595 ATM 217 Branches
3000 ATM Across Spread Across
17 State In India
Country Over 800 ATM

PROMOTION
AXIS BANK YES BANK KOTAK BANK

Advertising: Advertising: Advertising:


Television Television Television
Radio Radio Radio

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Movies Movies
Theatres
Print Media: Print Media: Print Media:
Hoardings Newspaper Hoardings
Newspaper Magazines Newspaper
Magazines Magazines

Publicity: Publicity: Publicity:


Campus Visits Campus Visits Campus Visits
Sponsorship Sponsorship Sponsorship

Sales Sales Sales


Promotion: Promotion: Promotion:
Gifts Gifts Gifts
Personal Personal Personal Selling:
Selling: Selling:
Cross-Sale (Selling
Cross-Sale Cross-Sale (Selling
At Competitors
(Selling At At Competitors
Place)
Competitors Place)
Place) Personalized
Personalized
Service
Personalized Service
Service

PEOPLE
AXIS BANK YES BANK KOTAK BANK

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14000 Employee base 3150 Employee Base 9800 Employee Base

PROCESS
AXIS BANK YES BANK KOTAK BANK

Standardization: Bank has got standardized procedures got typical


transactions. In fact not only all the branches of a single-bank, but all
the banks have some standardization in them. This is because of the
rules they are subject to. Besides this, each of the banks has its
standard forms, documentations etc. Standardization saves a lot of
time behind individual transaction.

Customization: There are specialty counters at each branch to deal


with customers of a particular scheme. Besides this the customers
can select their deposit period among the available alternatives.

Number of steps: numbers of steps are usually specified and a


specific pattern is followed to minimize time taken.

Simplicity: Banks various functions are segregated. Separate


counters exist with clear indication. Thus a customer wanting to
deposit money goes to ‘deposits’ counter and does not mingle
elsewhere. This makes procedures not only simple but consume less
time. Besides instruction boards in national boards in national and
regional language help the customers further.

Customer involvement: ATM does not involve any bank


employees. Besides, during usual bank transactions, there is definite
customer involvement at some or the other place because of the
money matters and signature requires.

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PHYSICAL EVIDANCE
AXIS BANK YES BANK KOTAK BANK

• Internet/Web • Internet/Web • Internet/Web


Pages Pages Pages
• Paperwork • Paperwork • Paperwork
• Brochures • Brochures • Brochures
• Furnishings • Furnishings • Furnishings
• Business Cards • Business Cards • Business Cards
• Building • Building • Building
• Signage • Signage • Signage
• Financial Reports • Financial Reports • Financial
• Tangibles • Tangibles Reports
• Punch Lines • Punch Lines • Tangibles
• Employee’s • Employee’s • Punch Lines
Dress Code Dress Code • Employee’s
Dress Code

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SWOT ANALYSIS OF BANKS

STRENGTH

• Indian banks have compared favourably on growth, asset


quality and profitability with other regional banks over the
last few years. The banking index has grown at a
compounded annual rate of over 51 per cent since April 2001
as compared to a 27 per cent growth in the market index for
the same period.

• Policy makers have made some notable changes in policy


and regulation to help strengthen the sector. These changes
include strengthening prudential norms, enhancing the
payments system and integrating regulations between
commercial and co-operative banks.

• Bank lending has been a significant driver of GDP growth and


employment.

• Extensive reach: the vast networking & growing number of


branches & ATMs. Indian banking system has reached even
to the remote corners of the country.

• The government's regular policy for Indian bank since 1969


has paid rich dividends with the nationalisation of 14 major
private banks of India.

• In terms of quality of assets and capital adequacy, Indian


banks are considered to have clean, strong and transparent

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balance sheets relative to other banks in comparable
economies in its region.

• India has 88 scheduled commercial banks (SCBs) - 27 public


sector banks (that is with the Government of India holding a
stake)after merger of New Bank of India in Punjab National
Bank in 1993, 29 private banks (these do not have
government stake; they may be publicly listed and traded on
stock exchanges) and 31 foreign banks. They have a
combined network of over 53,000 branches and 17,000
ATMs. According to a report by ICRA Limited, a rating agency,
the public sector banks hold over 75 percent of total assets
of the banking industry, with the private and foreign banks
holding 18.2% and 6.5% respectively.

• Foreign banks will have the opportunity to own up to 74 per


cent of Indian private sector banks and 20 per cent of
government owned banks.

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WEAKNESS

• PSBs need to fundamentally strengthen institutional skill


levels especially in sales and marketing, service operations,
risk management and the overall organizational performance
ethic & strengthen human capital.
• Old private sector banks also have the need to
fundamentally strengthen skill levels.
• The cost of intermediation remains high and bank
penetration is limited to only a few customer segments and
geographies.
• Structural weaknesses such as a fragmented industry
structure, restrictions on capital availability and deployment,
lack of institutional support infrastructure, restrictive labour
laws, weak corporate governance and ineffective regulations
beyond Scheduled Commercial Banks (SCBs), unless industry
utilities and service bureaus.

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• Refusal to dilute stake in PSU banks: The government
has refused to dilute its stake in PSU banks below 51% thus
choking the headroom available to these banks for raining
equity capital.
• Impediments in sectoral reforms: Opposition from Left
and resultant cautious approach from the North Block in
terms of approving merger of PSU banks may hamper their
growth prospects in the medium term.

OPPORTUNITY

• The market is seeing discontinuous growth driven by new


products and services that include opportunities in credit
cards, consumer finance and wealth management on the
retail side, and in fee-based income and investment banking
on the wholesale banking side. These require new skills in
sales & marketing, credit and operations.

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• Banks will no longer enjoy windfall treasury gains that the
decade-long secular decline in interest rates provided. This
will expose the weaker banks.

• With increased interest in India, competition from foreign


banks will only intensify.
• Given the demographic shifts resulting from changes in age
profile and household income, consumers will increasingly
demand enhanced institutional capabilities and service
levels from banks.
• New private banks could reach the next level of their growth
in the Indian banking sector by continuing to innovate and
develop differentiated business models to profitably serve
segments like the rural/low income and affluent/HNI
segments; actively adopting acquisitions as a means to grow
and reaching the next level of performance in their service
platforms. Attracting, developing and retaining more
leadership capacity
• Foreign banks committed to making a play in India will need
to adopt alternative approaches to win the “race for the
customer” and build a value-creating customer franchise in
advance of regulations potentially opening up post 2009. At
the same time, they should stay in the game for potential
acquisition opportunities as and when they appear in the
near term. Maintaining a fundamentally long-term value-
creation mindset.
• reach in rural India for the private sector and foreign banks.

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• With the growth in the Indian economy expected to be strong
for quite some time-especially in its services sector-the
demand for banking services, especially retail banking,
mortgages and investment services are expected to be
strong.
• the Reserve Bank of India (RBI) has approved a proposal
from the government to amend the Banking Regulation Act
to permit banks to trade in commodities and commodity
derivatives.
• Liberalisation of ECB norms: The government also
liberalised the ECB norms to permit financial sector entities
engaged in infrastructure funding to raise ECBs. This enabled
banks and financial institutions, which were earlier not
permitted to raise such funds, explore this route for raising
cheaper funds in the overseas markets.
• Hybrid capital: In an attempt to relieve banks of their
capital crunch, the RBI has allowed them to raise perpetual
bonds and other hybrid capital securities to shore up their
capital. If the new instruments find takers, it would help PSU
banks, left with little headroom for raising equity.
Significantly, FII and NRI investment limits in these securities
have been fixed at 49%, compared to 20% foreign equity
holding allowed in PSU banks.

THREATS

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• Threat of stability of the system: failure of some weak banks
has often threatened the stability of the system.
• Rise in inflation figures which would lead to increase in
interest rates.
• Increase in the number of foreign players would pose a
threat to the PSB as well as the
private players.

SWOT ANALYSIS OF AXIS BANK

1. STRENGTH

• Extremely Competitive And Profitable Banking Franchise

• Banking Services Include Corporate Credit, Retail Banking,


Business Banking, Capital Markets, Treasury And International
Banking.

• Sound Technological Platform With Centralized Database And


Operations

• Retail Banking Savings Bank Deposits Grew To Rs. 25,822 Cr.


On 31st March 2009 From Rs. 19,982 Cr. As On 31st March
2008 Showing A Year On Year Growth Of 29%.

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• Corporate Banking: Current Account deposits grew by 24%
yoy, from Rs. 20,045 crores as at end March’08 to Rs. 24,822
crores as at end March’09.

• Support of various Promoters

• Strong technology

• Total Deposits Rs 1,17,374 crore

• Net Advances Rs 81,557 crore

• Net NPA 0.35%

• Capital Adequacy Ratio 13.69%

2. WEAKNESS
• Not having Image UTI (fraud)
• Higher cost

• Customer service

• Market Capitalization Very Low

3. OPPORTUNITY

• Large retail and corporate market


• Wide scope in rural India
• Other Activity (Non Banking Activity)
• People are become more service oriented

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4. THREAT

• Other better Saving, investment option available (like


Insurance, Mutulfund, Real-estate, Gold)

• Government Rules And Regulation

• Very high competition with Private sector (ICICI Bank, HDFC


bank) or public sector (BOB, PNB) Bank.

• Capital Market slow-down


• Rising Rates
• Future Market Trands

SWOT ANALYSIS OF YES BANK

1.STRENGTH

• High Quality, Customer Centric, Service Driven, Private


Indian Bank Catering To The “Future Industries Of India”.

• The Bank Has Adopted International Best Practices, The


Highest Standards Of Service Quality And Operational
Excellence,

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• World-Class Team, Based On Professional Recruitment
Methodologies, And Attract The Best Talent In The Industry

• Building Learning And Development Solutions That


Continuously Enhance Employee Value, High Performance
Culture.

• Credible And Transparent Performance Management Process

• Robust Rewards And Recognition Strategy

• Strong technology, Well capitalized

• Total Deposits Rs 1,61,694 million

• Net Advances Rs 124,031 million

• Net NPA 0.33%

• Capital Adequacy Ratio 16.6%

2. WEAKNESS

• Less wide network

• Not in every state

• Less promotional activity

• Unknown brand

3. OPPORTUNITY

• Very wide market

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• Other activity(insurance, stock broking, mutulfund)

• Wide scope in rural area

4. THREAT

• Very high competition Private bank market (ICICI Bank, HDFC


bank), In public sector (BOB, PNB)

• Government Policy

• Other better Saving, investment option available (like


Insurance, Mutulfund, Real-estate, Gold)

• Capital Market slow-down


• Rising Rates

SWOT ANALYSIS OF KOTAK MAHINDRA BANK

1.STRENGTHS:
• Capital markets franchise
• Professional management
• Strong technology
• Well capitalized
• Construction equipment financing business

• Comprehensive cash management system

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• Capturing supply chain businesses
• NPA is at 1.30%
• Total Deposits Rs 15,645 crore
• Net Advances Rs 16,625 crore
• Capital Adequacy Ratio 16%

2.WEAKNESS:
• Wholesale Funding Costs
• Latecomers
• Less Promotional Activities

3. OPPORTUNITIES:
• Low loan and retail penetration
• Stressed Asset Business
• Plans to invest Rs. 120 crores over three years for
infrastructure, technology and personnel

4. THREATS:
• Capital Market slow-down
• Competition
• Rising Rates
• Other better Saving, investment option available (like
Insurance, Mutulfund, Real-estate, Gold)

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• Government Rules And Regulation

APPENDIX

• Website

• Newspaper

• Magazine

• Annual Report

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