A PROJECT REPORT ON SELLING OF SAVINGS ACCOUNT OF IDBI

Submitted in partial fulfillment for the award of degree of Post Graduate Diploma course in Business Management (FINANCE)

UNDER THE GUIDANCE OF NAME OF GUIDE: PROF. AMAR TIGGA

Xavier Institute of Social Service Dr. Camil Bulcke Path, Post Box - 7, Ranchi, Pin-834001, Jharkhand, India BY: SNEHLATA SARAF ROLLNO.-59

ACKNOWLEDGEMENT

SALES AND SALESMANSHIP

Sales Management is defined as the planning, direction and control of personal selling, including recruitment, selecting, equipping, assigning, routing, supervising, paying and motivating as these tasks apply to the personal sales force.

SELLING PROCESS
Identifying and locating the prospects, Separating the prospects from the suspects, approach them and make a sales presentation, handles their objections, closing the sell Also existing customers to identify further sales leads

AREA OF RESEARCH
The project given was to sell a product of your choice. Since I am from a business background, I selected pharmaceutical products as my product for sale purpose. The prospects of this product were the other wholesaler and retailers in the market.

OBJECTIVE OF THE STUDY

To understand the importance of salesmanship. To have personal experience regarding direct interaction with customers. To have knowledge about IDBI SAVINGS Account. Understanding the problems being faced in selling to customers.

PROFILE OF IDBI
The Industrial Development Bank of India (IDBI) was established on 1 July 1964 under an Act of Parliament as a wholly owned subsidiary of the Reserve Bank of India. In 16 February 1976, the ownership of IDBI was transferred to the Government of India and it was made the principal financial institution for

coordinating the activities of institutions engaged in financing, promoting and developing industry in the country. Although Government shareholding in the Bank came down below 100% following IDBIs public issue in July 1995, the former continues to be the major shareholder (current shareholding: 65.14%). IDBI provides financial assistance, both in rupee and foreign currencies, for green-field projects as also for expansion, modernization and diversification purposes. In the wake of financial sector reforms unveiled by the government since 1992, IDBI also provides indirect financial assistance by way of refinancing of loans extended by State-level financial institutions and banks and by way of rediscounting of bills of exchange arising out of sale of indigenous machinery on deferred payment terms. [ IDBI has played a pioneering role, particularly in the pre-reform era (196491),in catalyzing broad based industrial development in the country in keeping with its Government-ordained development banking charter Narasimam committee recommends that IDBI should give up its direct financing functions and concentrate only in promotional and refinancing role. But this recommendation was rejected by the government. Later RBI constituted a committee under the chairmanship of S.H.Khan to examine the concept of development financing in the changed global challenges. This committee is the first to recommend the concept of universal banking. The committee wanted the development financial institution to diversify its activity. It recommended to harmonize the role of development financing and banking activities by getting away from the conventional distinction between commercial banking and developmental banking. In September 2003, IDBI diversified its business domain further by acquiring the entire shareholding of Tata Finance Limited in Tata Home finance Ltd., signaling IDBIs foray into the retail finance sector. The fully owned housing finance subsidiary has since been renamed IDBI Home finance Limited. In view of the signal changes in the operating environment, following initiation of reforms since the early 1990s, Government of India has decided to transform IDBI into a commercial bank without eschewing its secular development finance obligations. The migration to the new business model of commercial banking, with its gateway to low-cost current, savings bank deposits, would help overcome most of the limitations of the current business model of development finance while simultaneously enabling it to diversify its client/ asset base. Towards this end, the IDB (Transfer of Undertaking and Repeal) Act 2003 was passed by Parliament in

December 2003. The Act provides for repeal of IDBI Act, corporatisation of IDBI (with majority Government holding; current share: 58.47%) and transformation into a commercial bank. The provisions of the Act have come into force from 2 July 2004 in terms of a Government Notification to this effect. The Notification facilitated formation, incorporation and registration of Industrial Development Bank of India Ltd. as a company under the Companies Act, 1956 and a deemed Banking Company under the Banking Regulation Act 1949 and helped in obtaining requisite regulatory and statutory clearances, including those from RBI. IDBI would commence banking business in accordance with the provisions of the new Act in addition to the business being transacted under IDBI Act, 1964 from 1 October 2004, the Appointed Date notified by the Central Government. IDBI Bank, with which the parent IDBI was merged, was a new generation Bank. The Pvt. Bank was the fastest growing banking company in India. The bank was pioneer in adapting to policy of first mover in tier 2 cities. The Bank has one of the highest productivity per employee in Indian banking industry. On 29 July 2004, the Board of Directors of IDBI and IDBI Bank accorded in principle approval to the merger of IDBI Bank with the Industrial Development Bank of India Ltd. to be formed incorporated under the Companies Act, 1956 pursuant to the IDB (Transfer of Undertaking and Repeal) Act, 2003 (53 of 2003), subject to the approval of shareholders and other regulatory and statutory approvals. A mutually gainful proposition with positive implications for all stakeholders and clients, the merger process is expected to be completed during the current financial year ending 31 March 2005. The immediate fall out of the merger of IDBI and IDBI Bank was the exit of employees of IDBI bank. The cultures in the two organizations have taken its toll. The IDBI Bank now is in a growing fold. With its retail banking arm expanding further after the merger of united western Bank. IDBI would continue to provide the extant products and services as part of its development finance role even after its conversion into a banking company. In addition, the new entity would also provide an array of wholesale and retail banking products, designed to suit the specific needs cash flow requirements of corporate and individuals. In particular, IDBI would leverage the strong corporate

relationships built up over the years to offer customized and total financial solutions for all corporate business needs, single-window appraisal for term loans and working capital finance, strategic advisory and hand-holding support at the implementation phase of projects, among others. IDBIs transformation into a commercial bank would provide a gateway to low-cost deposits like Current and Savings Bank Deposits. This would have a positive impact on the Banks overall cost of funds and facilitate lending at more competitive rates to its clients. The new entity would offer various retail products, leveraging upon its existing relationship with retail investors under its existing Suvidha Flexi-bond schemes. The responsibility for maintaining standards of corporate governance lies with its Board of Directors. Two Committees of the Board viz. the Executive Committee and the Audit Committee are adequately empowered to monitor implementation of good corporate governance practices and making necessary disclosures within the framework of legal provisions and banking conventions.

VISION
To be the trusted partner in progress by leveraging quality human capital and setting global standards of excellence to build the most valued financial conglomerate

CATEGORISATION AS OTHER PUBLIC SECTOR BANK

Industrial Development Bank of India Ltd. (since renamed as IDBI Bank Ltd.) was incorporated under Companies Act 1956, as a Limited Company, registered with the Registrar of Companies, Maharashtra, Mumbai vide Certificate of incorporation dated 27th September, 2004. In terms of the Articles of Association of the IDBI Bank Ltd., the Central Government being a shareholder of the company shall, at all times, maintain not less than 51% of the Issued Capital of the company. Considering the shareholding pattern, IDBI Ltd. has been categorized under a New Sub-Group "Other Public Sector Banks".

GENESIS

Set up by an Act of Parliament in 1964 as a subsidiary of the Central Bank (RBI) Ownership transferred to Govt. in 1976

IDBI Act amended to permit private ownership upto 49%. Domestic IPO in 1995 reduces Govt. stake to 72%. Post capital restructuring in 2000, Govt. stake reduced to 58.5

IDBI Repeal Act passed in December 2003 for conversion to a banking company. Govt. ownership to be not below 51% Amalgamation of IDBI Bank Ltd. With IDBI Ltd. w.e.f. April 2, 2005 Oct. 2006 amalgamated erstwhile UWB.

Complete Networking (100% Core Banking) Organization structure redesigned on Customer Segmentation basis for better customer focus and effective business delivery Name changed to IDBI Bank

DETAILS OF SAVINGS ACCOUNT OF IDBI Saving Account

I.
CORE SAVING
Womens Shakti Account Jubilee plus Account Sabka Saving Account Power Kids Account RETIREMENT PLUS ACCOUNT

Savings ac Super saving

Account

i.) SUPER SAVING- A CHARGE FREE ACCOUNT

Account Opening Amount : INR 5,000/2,500 ( Tier A and B) Access to account : International Debit cum ATM card Personalized cheque book/PAP cheque book Any branch cash transactions

 Other Bank ATM transactions. Transactional convenience : Alternate channels, Bill payments, Demand drafts and Pay orders.(10 DD FREE PER MONTH) Sweeps-In Facility : ATM & POS withdrawal limit of Rs 25,000/ii.) SHAKTI WOMENS ACCOUNT

SUPERCarved to meet the requirements of this strata AOA of Rs 5000 in tier A and Rs 2500 in tier B. 2 Zero balance kids account, 25% discount on locker* (Provided AQB of Rs 5,000 is maintained) Auto sweep out facility to FD over a balance of Rs 15000 Ten Demand drafts and Pay orders free. Five Other Bank ATM transactions free per month. ATM & POS withdrawal limit of Rs 40,000/
iii.)

If AQB is not maintained facilities will be withdrawn JUBILEE PLUS SAVING ACCOUNT FOR SENIOR CITIZENS

Accounts with Rs 5000 AOA Sponsors account Free 25% Discount on lockers available (Provided AQB of Rs 5,000 is maintained) Sweep out facility above Rs 15000 optional to FD International ATM cum debit card free

 Free I NET banking facility ATM & POS withdrawal limit of Rs 50,000/iv.) NO FRILL ACCOUNT -SABKA

IDBI Banks No Frills Account, places emphasis on the smallest of deposits Our No Frills Account is available to you without any minimum quarterly average balance requirement. The product targets the economically weaker segment of the society.
Free IDBI Bank debit card, Cheque books and many other facilities . v.) POWER KIDZ ACCOUNT-A SPECIAL ACCOUNT FOR CILDREN

An account with an AOA of Rs 1500 in urban/metro cities and Rs 750 at the rural/semi urban areas. Exclusive debit card for the account free for 1st year to be issued to the Kid on declaration from the parent/guardian on attainment of 10 years of age, to be independently operated by the kid. No cards to be issued to Kids below the age of 10 yrs. Cheque book with 10 cheque leaves free. ATM & POS facility of Rs 2,000/vi.) SWEEP-IN AND OUT SAVINGS ACCOUNT

Fixed deposits on first in and last out basis-minimum interest loss. Super Shakti Account and Jubilee plus Account can avail Sweep-in and out facility. Senior citizens can avail Sweep-in facility and link their fixed deposits at higher ROI. Multiple fixed deposits can be linked to single savings account. Interest rate on fixed deposits better than the best.
vii.) RETIREMENT PLUS ACCOUNT OBJECTIVE

 Dedicated sourcing of accounts of individuals who fall in this segment. Account holders with regular pension income will be targeted. These account holders will help us get more business and cross sell the products.
PRODUCT CONCEPT

To be targeted at retired individuals. Salary accounts can be converted to pension accounts on retirement .
Key Features:

Product Positioning:

Zero Balance Account- No AQB requirement. Free debit card for lifetime. Free 2 other bank ATM transactions per month. Free Personalized local Cheque Book. Free PAP cheque book. Free PAP utilization upto Rs. 50,000. Free Quarterly statement of account/ Pass Book. Auto Sweep out/sweep in facility above Rs. 25,000/-. A minimum FD of Rs. 10,000/- to be maintained with the bank for a period of one year. Tax Savings options viz; Tax saving FD and Mutual fund. Relationship Manager to guide about investments. Exposure to TPD products. Phone Banking available. Mobile Banking available. Internet Banking available. KYC and Documentation: Introduction from the corporate and copy of identity card (if account to be opened on retirement) / for existing pensioners proof of pension credits to be given. PAN Card (if PAN card is not available then Form 60) Photograph Address proof Correspondence & Permanent Address

The accounts can be opened single or joint account with spouse only Mode of operation in the joint account to be Former or Survivor or either or Survivor. A separate flag to be created to be marked for the submission of Life Certificate. Life Certificate should be submitted in the month of November every year. Sweep In/ Sweep Out to be allowed above Rs. 25,000/- subject to an FD receipt with the bank above Rs. 10,000/-.

CLASSIFICATION OF CUSTOMERS
1. Common class of people who want to open a savings account or are dissatisfied by the service of public sector banks. 2. Special account for woman strata. 3. Account with special benefits to senior citizens. 4. Special Kidz account 5. Account for weaker sections of society.

PROSPECTS
Customers will include people living near my residence Commercials and offices for bulk selling Students of Xiss.

APPROACH
Personal selling for all prospective customers who want to open a savings account. Door to Door visits in my area of residence. Bulk openings in offices.

WHY IDBI SAVINGS ACCOUNT

Any branch cash withdrawal and cash deposit are free at IDBI which is chargeable at other banks. The greatest benefit regarding saving account at IDBI is that there is no account maintenance charges which is Rs 750 in case of ICICI and HDFC and Rs 100 in case of SBI. There are also annual charges regarding Debit card in other banks except IDBI and HDFC. IDBI is creating a competitive edge over other banks by providing 10 demand drafts free per month which is chargeable at other banks.

NO CHARGES FOR NON MAINTENANCE OF AQB ITS AZERO BALANCE ACCOUNT NO RUSH AS IN CASE OF PUBLIC SECTOR BANKS HAVE CUSTOMER FRIENDLY ENVIRONMENT.

CONSTRAINTS
Rs 5000 account opening amount which may not be affordable for all. There might be constraints of time for customers Competition from other major bank such as ICICI, PNB, SBI etc.

Field work.
Personal selling on the basis of door to door selling was done near my residence. Also people working in offices were contacted for selling the product. Household and working women near my resident, mothers and relatives of various students were contacted. Kidz account was really difficult to open because of parents unwillingness.

Also feedback questionnaire was filled by each of the candidates to know their satisfaction level. (ANNEXURE-1) OVERALL FEEDBACK FROM CUSTOMERS The customers are satisfied by the kind of service being provided by IDBI. Most of the customers were also satisfied by the product features which are at par with most of the banks and competitive at most sense. They really appreciated the Private working culture at a public sector banks. The customers felt that account opening amount of Rs.5000 was really high. Also the KYC norms at the bank are really strict to adhere with. The people really liked the women account which has special benefits attached to it.

RECOMMENDATION
AQB OF 5000 SHOULD BE REDUCED AT PAR WITH SBI BECAUSE IT IS DIFFICULT FOR THE PEOPLE TO MAINTAIN SUCH AQB. MORE BRANCHES SHOULD BE OPENED TO MAKE IT MORE COMPETITIVE WITH PUBLIC SECTOR BANKS. ATMS SHOULD ALSO BE INSTALLED AT VARIOUS LOCATIONS TO MAKE its PRESENCE MORE FELT.