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1 | Journal of Management and Science - JMS ISSN 2250-1819 (Online) / ISSN 2249-1260 (Printed)

EMPIRICAL STUDY ON FACTORS INFLUENCING CONSUMER CHOICE OF LIFE PRODUCTS A.Asmarubiya Begam and 2S.M.Mohamed Nasardeen 1 Ph.D Scholar University of Madras. 2 Associate Professor, P.G.Dept of commerce, Quaide Milleth College for Men. INTRODUCTION: The insurance plays a major role in the life of the humanity. Slowly people started to realize the necessity of the insurance and these needs are unending as long as life exists. In fact insurance is not restricted for any category neither of the society nor in term of cast, ages or life styles. Also many people have a notion that Insurance is very good form of an investment, which is not right. The life insurance industry has become increasingly competitive in recent years. Consumer behavior and satisfaction from life insurance products depends upon various attributes like search, experience and credence factors. Life Insurance is a professional service which is characterized by high involvement of the consumers, due to the importance of tailoring specified need, the variability of the products available, the complexity involved in the policies and processes and ultimately the need to involve the consumer in every aspect of the transaction. All these characteristic features cause customers to seek long term relationships with their insurance agents, their service providers, in order to reduce risks and uncertainties. Potential consumer are driven to buy life insurance policy for one or more of three major reasons i.e., security of money invested, saving for one or more specific purposes and the availability of tax benefits. This study brought various factors influencing consumer choice of life insurance products with the following objectives: 1. To study the history of life insurance in India. 2. To observe current scenario of the Life Insurance Industry in India. 3. To evaluate the factors influencing consumer choice of Life Insurance products. METHODOLOGY: This study is based on primary data. As many as 150 respondents were interviewed and questionnaire was drafted to find out important aspects of Life Insurance products. A sample size of 122 respondents were answered duly the questionnaire. LIMITATIONS OF THE STUDY: The data for the purpose of the study is collected from respondents in Chennai only. DEMOGRAPHIC PROFILE OF THE RESPONDENTS:The success of the Life Insurance Companies in formulating effective marketing strategies requires maintaining an up-to-date profile of the consumers in the form of customer based data. Accordingly, the following table presents a demographic profile of the insurance consumers (policy holders) who have participated in this study. TABLE-1 DEMOGRAPHIC PROFILE OF THE RESPONDENT Sl.No. Particulars No.of Respondents Percentage (%) 1.1-AGE-Profile 1 21-30 years 32 26 2 31-45 years 60 49 3 45 years and above 30 25 Total 122 100 1 1.2-Educational qualifications Up to VIII Std. 28 23
1

2 | Journal of Management and Science - JMS ISSN 2250-1819 (Online) / ISSN 2249-1260 (Printed)

2 3 4

SSLC Higher Secondary level Degree level Total 1.3 Gender Male Female Total 1.4 Occupation

30 32 32 122 72 50 122

25 26 26 100 59 41 100

1 2

1 2 3 4

Employed 42 34 Business 28 23 Professionals 40 33 Agriculture 12 10 Total 122 100 1.5 Annual house hold Income 1 Less than Rs.2,50,000 51 42 2 Rs.2,50,000 to Rs.4,50,000 39 32 3 More than Rs.4,50,000 32 26 Total 122 100 1. It is inferred from the table 1.1 that majority (49%) of the respondents belongs to the age group of 31 to 45 years followed by 26 percent and 25 percent of the respondents are in the age group of 21 to 30 years and 45 years and above respectively. This is due to the emerging awareness among the customers belonging to the age group of 31-45 years regarding their life and of their family members too. 2. Table 1.2 shows Gender of the respondents, when analyzing the table majority (59%) of the respondents were Men, 41 percent of the respondents were Women. The reason behind this strategy is the dependence of the family members including women are based on the head of the family who are mostly men. 3. When analyzing the table 1.3, 26 percent of the respondents were studied up to Higher secondary level, 26 percent of the respondents are studied up to Degree level followed by 25 percent of the respondents and 23 percent of the respondents have studied up to SSLC and up to VIII level respectively. 52% of the respondents both Graduates and those who have completed their Higher Secondary Education were comparatively aware of the life assurance products rather than the other respondents. 4. The table 1.4 shows the occupation of the respondents. When analyzing the table, 34 percent of the respondents were employed, 23 percent of the respondents are businessmen, 33 percent of the respondents are professionals and rests of them (10%) are agriculturists. Based on the occupational level, respondents were able to choose the suitable life insurance products. 5. Table 1.5 shows, the Annual house hold income of the respondents. When analyzing the table, 42 percent of the respondents fall in the income group of up to Rs.2,50,000,

3 | Journal of Management and Science - JMS ISSN 2250-1819 (Online) / ISSN 2249-1260 (Printed)

32 percent of the respondents fall in the income group of Rs.2,50,000 to Rs.4,50,000 and 26 percent of the respondents fall in the category of above Rs.4,50,000. It is noteworthy that the income level of the family of the respondents influences the choice of insurance products. FACTORS INFLUENCING CONSUMER CHOICE OF LIFE PRODUCTS: A set of twenty variables considered to be important while choosing a particular insurance product over others. Such variables are analyzed in the following table: Table 1.6 Factors influencing Consumer Choice of Life Products Sl.No Factors No. of respondents Percentage 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17 18 19. 20. (a)Product Factors: Awareness of the Product Product Features Public/ Private ownership (B) Promotional Factors: Advertisement Agent recommendation Suggestions from Friends/ Relatives. Brand Name (c) Consumer Expectations: Safety of the Scheme Hassle free / Convenience Delivery Schedule Tax Benefits (d) Service Quality Factors: Service Behavior Technology adopted Transparency (e) Risk Return Factors: Performance Guarantee Regular income Assured Return Maturity Amount to be received Premium Amount to be paid Extra Bonus Coverage Total 8 10 6 5 6 6 7 8 4 5 7 9 4 5 6 3 4 8 5 6 122 7 8 5 4 5 5 6 7 3 4 6 7 3 4 5 2 3 7 4 5 100

Table 1.6 shows the factors influencing consumer choice of Life Insurance products, it is inferred that majority of the respondents (8%) are influenced by the factor of product features. Testing of Hypothesis: Ho = There is no significant relationship between the influencing factors and consumer choice of life insurance products. For analyzing this hypothesis, K sign test has been applied.

4 | Journal of Management and Science - JMS ISSN 2250-1819 (Online) / ISSN 2249-1260 (Printed)

Table-1.7 K Sign test Value S K - test 4.73 13

Level of Significance 5%

Since S > K the null hypothesis is accepted. i.e. there is no significant relationship between the influencing factors and consumer choice of life insurance products. ANALYSIS OF AGE OF THE RESPONDENTS AND FACTORS INFLUENCING CONSUMER CHOICE OF LIFE PRODUCTS: The sample respondents Age level and Factors influencing consumer choice of Life Insurance products have been compared for testing the Significance of relationship. In order to test the relationship of two variables viz., age level and factors influencing consumer choice of Life Insurance products, Null Hypothesis has been set up and chi- square test has been applied. Null Hypothesis (Ho): There is no significant relationship between the age of the consumers with their preference to life insurance products. Table 1.8 Paired Sample test From the above table the calculated value (60.42) is more than the Table value Value t - test 60.42 d.f 6 Level of Significance 5%

(2.447) at 5% level of significance. So the null hypothesis is rejected i.e. there is a significant relationship between the age of the consumers with their preference to life insurance products. ANALYSIS OF ANNUAL HOUSE HOLD INCOME AND FACTORS INFLUENCINFG CONSUMER CHOICE OF LIFE PRODUCTS: The significance in the relationship between Income level and Factors influencing consumer choice of Life products has been tested with the following hypothesis. Null Hypothesis (Ho): There is no significant relationship between incomes of the consumer with their choice of life insurance products. Table- 1.8 Paired Sample test Value d.f Level of Significance t - test 16.77 6 5% From the above table the calculated value (16.77) is more than the Table value (2.447) at 5% level of significance. So the null hypothesis is rejected i.e. there is a significant relationship between incomes of the consumer with their choice of life insurance products. MAJOR FINDINGS OF THE STUDY: The results of this study are as follows: 1. Most of the respondents (49%) fall in the age group of 31 to 45 years. 2. Majority of the respondents (26%) have studied up to Degree level. 3. Majority of the respondents (59%) were Male. 4. Majority of the respondents (34%) were employed. 5. The study reveals that there is no significant relationship between the influencing factors and consumer choice of life insurance products. 6. It was found that there is a significant relationship between the age of the consumers with their preference to life insurance products. 7. It was also found that there is a significant relationship between incomes of the consumer with their choice of life insurance products.

5 | Journal of Management and Science - JMS ISSN 2250-1819 (Online) / ISSN 2249-1260 (Printed)

SUGGESTIONS 1. Companies should ensure that their advertisements are comprehended appropriately by their customers as well as their agents. Companies must ensure that their agents or company personnel visit the customer at the latters convenience. 2. One-to-one relationship strategy by the insurance companies can be adopted for their better performance and also it will improve the customer loyalty to the bottom line of the business. 3. Insurance organizations can expand their wing by extending programmes of micro insurance. Like e-banking services, insurance companies can also make their e-insurance services effective. 4. Pension plans of Insurance Companies were not considered as long-term fixed instruments. Hence, insurance companies were discouraged to come out with such type of plans which affects the pensioners. As per IRDA norms, the insurance companies should come forward to provide minimum guarantee for pension plans. 5. Companies must train their staff and agents to handle customer queries and customer complaints effectively. The agents and company personnel should be transparent in their dealing with their customers. 6. Finally, the insurance companies should offer policies for all segment of customer as the amount of premium to be paid is different for various policies. CONCLUSION Today, only one business, which affects all walks of life, is insurance business. Thats why insurance industry occupies a very important place among financial services operative in the world. Owing to growing complexity of life, trade and commerce, individual as well as business firms are turning to manage various risks. Therefore a proper knowledge of what insurance is and what purpose does it serve to individual or an organization is therefore necessary. Companies must ensure that their marketing mix suits all segments of people and should be formulated based on the preference of customers. It is suggested to all companies to study product factors, promotional factors, customer expectation factors, service quality factors and risk return factors. *****

6 | Journal of Management and Science - JMS ISSN 2250-1819 (Online) / ISSN 2249-1260 (Printed)

INNOVATIVE HR PRACTICES IN BANKING AND INSURANCE SECTOR-EHUMAN RESOURCE MANAGEMENT N. ABHILASHA I M.A. HRM, S.D.N.B. Vaishnav College, Chrompet, Chennai 44. Introduction: Technology is the redundant word that is in air in each and every walk of life. Gone are the days where each and every activity needed a person to pressure himself to get it done. Even shopping of a less mighty accessory has become quite easy without any strenuous effort with the development in technology. Banking and Insurance Sector which was once dependent wholly on human handling of activities has also become a follower of technological advancements from the year 2000. HR plays a very preliminary and important role in all fields. This paper deals with the impact of technological advancement [E - HRM] to HR activities in banking and insurance sector and how and why innovations were brought to HR activities. EHRM: E-HRM is the core of Weaver ecology, which means people is the center of information process. This module enables the user to get all information related to one employee when he search the name of that employee, including information concerning documents, customers, assets, products, projects and tasks. E-HRM also offers customized portal for every individual user. Users, under certain security level, are able to visit the documents, process daily work and participate in related projects. E-HRM is the basis of business collaboration. Besides offering traditional HRM functions, E-HRM gives all your employees access to your information systems via Internet. The role-based approach of E-HRM enables all employees, partners, resellers and customers to be involved in your business processes electronically. People can now work hassle-free, both within and outside the office environment. The ecology solution E-HRM is fully integrated with the other ecology modules. Now the employee can easily track products, customers, documents, external and internal requests that are linked to his name. In simple terms, Electronic human resource management, or E-HRM, is the use of technology to automate human resource activities and functions. Common E-HRM solutions include webbased self-service tools that allow employees to change their mailing address online, use the web to complete forms needed to hire a new employee or submit the documentation for annual performance reviews and salary increases electronically. Goal E-HRM is seen as offering the potential to improve services to HR department clients (both employees and management), improve efficiency and cost effectiveness within the HR department, and allow HR to become a strategic partner in achieving organizational goals. E-HRM allows you to: Manage systems and information Use yellow pages Generate reports and statistics Manage and delegate online Plan resources Get a clear overview of planning and statistics Manage workflow, absence and expenses Keep track of fringe benefit schemes

7 | Journal of Management and Science - JMS ISSN 2250-1819 (Online) / ISSN 2249-1260 (Printed)

Keep track of applicants Perform mail merges Manage your assets Track individual financial transactions Link to payroll THE E - HRM BUSINESS SOLUTION EXCELS IN: modularity the solution can be accessed and used in a web browser security of data, protected levels of access to individual modules, records documents and their component parts parametric and customizability access to archived records and documents user-friendly interface connectivity with the client's existing information system (payroll accounting, ERP, attendance registration, document systems) multi-language support ADVANTAGES OF THE E - HRM BUSINESS SOLUTION: gradual implementation adaptability to any client collection of information as the basis for strategic decision-making integral support for the management of human resources and all other basic and support processes within the company prompt insight into reporting and analysis a more dynamic workflow in the business process, productivity and employee satisfaction a decisive step towards a paperless office lower business costs COMPETITIVE PRESSURE TO REDUCE COSTS External competitive pressure forces companies to minimize their costs, and this is a main external driver of E - HRM. Functions such as HR are prime targets for expense reductions, because they are "cost centers" that spend money and don't earn money. E-HRM can help an organization automate HR processes so that HR can get the same amount of work done with fewer people. This allows the department to reduce its staff, which reduces the overall cost to the organization. COMPETITIVE PRESSURE TO MAXIMIZE EFFICIENCY In tandem with external pressure to reduce cost is the pressure to maximize efficiency, and this is another external driver of E - HRM. While cost reduction efforts focus on the HR department itself, efficiency efforts focus on the HR-related activities of people outside the HR department. E-HRM can help improve the efficiency of HR tasks and activities that employees and managers are required to perform on a regular basis by putting them online. For example, web-based, self-service tools allow employees to complete processes without having to rely on HR to process tall stacks of paperwork. This is not only more efficient for HR but also for HR's primary "customers", who spend less time on HR administrative work and more time focused on the business.

8 | Journal of Management and Science - JMS ISSN 2250-1819 (Online) / ISSN 2249-1260 (Printed)

TREND TOWARDS OUTSOURCING Rather than spending the time trying to reduce HR costs and increase HR efficiency, many companies decide to outsource all or part of the HR function to a third party. Outsourcing often provides the same or more HR services for less money than it cost a company to deliver those services in house. Outsourcing is driving a move to E - HRM, because E - HRM tools are a fundamental requirement of any outsourcing arrangement. These tools enable the outsourcer to maximize efficiency and are a communication vehicle between the outsourcer and the company's employees. SHIFT IN JOBS TO SERVICE PROVIDERS The shift of workers, particularly in the U.S., from manufacturing and goods-producing jobs to service providing jobs, is driving the adoption of leading edge E - HRM tools focused on analytics and metrics. Today, leading companies are discovering that they can gain much more by increasing the HR effectiveness than by increasing HR efficiency. For example, if we reduce cost by making the hiring process efficient but we consistently hire the wrong people; the gain in efficiency is insignificant compared to what we could gain by hiring the right people. E-HRM tools allow companies to measure the effectiveness and impact of HR programs, and to make decisions that maximize the effectiveness of human resources in the organization. Conclusion: E-HRM is an innovation in terms of HRM. In the first place because of the opportunities it creates to put employee-management relationships in the hands of the employees and line managers. In the second place because information technology creates possibilities to design HRM tools and instruments that would not be possible without this information technology. EHRM also helps in minimizing cost and maximizing efficiency. Information are readily available and accessible with proper authorization. Banking and Insurance sector utilizes EHRM to the fullest satisfaction of its employees which makes it welcome to the field. Thus, EHRM has gained popularity and is widely used in almost all fields.

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9 | Journal of Management and Science - JMS ISSN 2250-1819 (Online) / ISSN 2249-1260 (Printed)

GOLD IN BANKING SECTOR IN INDIA S.Aiswarya Madras Christian College Introduction Gold counters the effect of inflation and currency fluctuations and also has performed as an electronically secure asset during recession. During difficult times gold has not only retained its value but has performed much better than most of the other asset class. In time of inflation, portfolios containing gold are considered healthy and less volatile than the other portfolios which do not contain gold. From the beginning banks have played a major role in transactions which involved gold. India is the worlds largest consumer of gold in tonnage terms. It is estimated that about 800 tonnes of gold was consumed in India in the year 2007. According to World Gold Council, in 2007, India accounted for 22.9 per cent of global gold jewellery demand and 53.8 per cent of all net retail investment (coins and bars). Gold demand has grown at an average annual rate of 10% since the repeal of the Gold Control Act in 1990, which had forbidden the holding of gold in bar form. Objective of the Study The objective of this paper is to focus on the different options available in banking sector in investment of gold and an analysis of the recent form of gold. Research Methodology The research paper contains secondary data. Secondary data is collected from various website and journals. Analysis and Discussion Gold Coins Gold was traded by local traders in India. After which a stage evolved were post offices and a few banks in India was authorized to sell gold. Even today Reserve Bank of India has permitted few banks to import gold. The gold coins or bars sold by banks are generally higher than the rate prevailing in the market. So people prefer to buy gold coins from the neighboring trader of gold. The banks claim the purity as the reason for the higher price for the gold sold by them. The gold which is sold by banks is generally preferred by corporate for gifting purposes. GOLD DEPOSIT SCHEME The government announced a new initiative in its 1999 budget to tap the hoard of private gold in India by permitting commercial banks to take gold deposits of bars, coins or jewellery against payment of interest. In the year 1999 few banks launched a Gold Deposit Scheme (GDS) where by they will issue interest bearing certificates against gold collected from the customers. The main aim of this scheme was to draw out a part of countrys vast gold holding in private hands and thus reducing Indias dependence on import of gold. Since the scheme did not have a good response it was withdrawn and re-launched in the year 2009. The scheme offers an opportunity to investors to deposit their surplus gold, in any form, with the bank and earn interest on the same. All Resident Indians (singly or jointly), Hindu Undivided Families, Trust, Companies are eligible to make Gold Deposit, the minimum quantity of which is pegged at 500 grams (1/2 kg) though there is no upper limit for deposit.

10 | Journal of Management and Science - JMS ISSN 2250-1819 (Online) / ISSN 2249-1260 (Printed)

Under the scheme deposit is accepted for a maturity period of 3 Years, 4 Years and 5 years with a lock in period of one year. The interest is calculated in gold currency and paid in equivalent rupees. The option for interest payment is either non-cumulative every year or cumulative on maturity is available to the depositor. The customer has to submit application form and complete the required Know Your Customer formalities such as identification proof, address proof and inventory form. The gold so deposited with the bank i.e. Gold bars, Coins, Jewellery etc. will be accepted in scrap form only. After preliminary testing it will be sent to government of India mint, Mumbai where it will be melted, assayed, minted and converted into bars. The bank will issue the Gold Deposit Certificate for pure gold contents based on mint report. All expenses in connection with assaying of gold shall be borne by the bank and will not be passed on to the customer. The depositor has the option to get maturity payment either in gold or in equivalent cash as on the date of maturity or payment. The Premature payment is permitted after a lock-in period of 1 year with a penalty on applicable interest rate. The nomination facility is available in single names in individual capacity. The Gold Deposit Certificates are transferable by endorsement and delivery. The Rupee loan can also be raised there against from any branch of State Bank of India up to 75% of notional value of gold. The deposit can be renewed any time after maturity provided the renewal is for a future period for the term and interest rate as available on the date of maturity. SBI has accumulated 7.79 tonnes of the precious metal so far, the latest addition being Tirumala Tirupati Devasthanam's deposit of 1,175 kg. TTDs gold forms the bulk of the deposits the bank has raised from temples. An estimated 20,000 tonnes of gold is in India, much of it lying in lockers in banks and homes. The endowments department of the state government has approved deposit of gold with SBI by temples. The scheme is also attractive from tax perspective as the interest earned as well as tax on any capital gains arising from rise in price of gold after maturity is exempt from tax. Gold so deposited has also been exempted from wealth tax. The major disadvantage of this scheme is that it has ignored the small investors. EXCHANGE TRADED FUND The next stage of gold in banking sector is the introduction of gold Exchange Traded Fund (ETF). ETF began in the year 2007, when Benchmark Asset Management Company, launched Gold on the National Stock Exchange (NSE) of India. Subsequently, UTI Mutual Fund listed gold ETF on the National Stock Exchange of India. Every unit of UTI Gold Exchange Traded Fund approximately represents one gram of pure gold. Units allotted under the scheme are credited to investors demat accounts. Several other financial institutions including State Bank of India followed it. Gold ETF are mutual fund units that are traded on the exchange just like a listed share of a company. These are instruments that can be traded like shares and are backed by physical gold holdings. However, investors require a trading and demat account with National Stock Exchange member or a bank to deal with gold ETF. Some of the mutual fund houses too have gold ETF are Benchmark Mutual Fund, UTI Mutual Fund, Kotak Mutual Fund, Reliance Mutual Fund and SBI Mutual Fund. Investors can either invest in these mutual funds during New Fund Offer (NFO) periods when the scheme is launched or buy gold ETF units from NSE. Investing during the NFO period would attract entry load, which differs from one mutual fund to the other, and have a minimum investment amount.

11 | Journal of Management and Science - JMS ISSN 2250-1819 (Online) / ISSN 2249-1260 (Printed)

SBI GETS SBI Funds, a leading fund house of the country, launched SBI Gold Exchange Traded Scheme (SBI GETS) in the Indian market. The investment objective of the fund is to seek and provide returns that closely correspond to returns provided by price of gold through investment in physical gold. According to an official release, the scheme will invest 90%-100% in gold and gold bullion with medium to high risk profile and 0-10% in debt and money market instruments, with low risk profile. The minimum application amount will be Rs. 5,000 and in multiples of Rs. 1 thereafter. During the NFO period, the scheme will charge entry load of 2.50% for application size up to Rs. 25 lakhs, 1.50% for application size of Rs. 25 lakhs to Rs. 50 lakhs and 1% for application amount of Rs. 50 lakh to Rs. 1 crore. However, for application amount above Rs. 1 crore, there will be no entry load. The company will not charge any kind of exit load. ADVANTAGES OF GOLD EFT Investors need not carry gold physically, yet attain the benefits of price appreciation. It also helps to overcome the risk of purity of gold. Investors have to spend on wastage and making charges if they invest in physical gold, this can be overcome by gold ETF. Investors can invest as low as the amount equivalent to one gram of gold in gold EFT on a monthly basis whereas buying physical gold each month for a smaller amount may not be possible. Even in terms of liquidity aspect, gold EFT has an advantage over the physical gold. Investor can sell gold EFT either partly or in full at any time after 3 days from the date of purchase. Incase of sale of physical gold it may involve few burden such as finding a purchaser for the gold or wastage charges. It is also accepted as collateral for loans. ELECTRONIC GOLD E-Gold (Electronic Gold) is a product launched by the National Spot Exchange Limited (NSEL) for the first time in the history of Indian commodities market. The product enables investors to invest their funds into gold in smaller denomination starting from one gram and hold it in demat form. It provides an unique opportunity to buy, accumulate, hold and liquidate E-Gold as well as to convert the same into physical form. This facility of converting gold into physical from is available in select centers of NSEL. The E-Gold bought by the investor will be settled on trading day plus two days. If the investor buys E-Gold today, it will be credited in investors demat account two days from the date of purchase. Similarly, if the investor intends to sell today, it will be debited in investors demat account two days from the date of sale. Investors are required to have demat account with any of the Depository Participants (DPs) linked with NSEL in order to transact in E-Gold. There was an impression created among the members of public by some agencies or persons those transactions involving E-gold, purportedly an electronic currency is freely permitted in India and that E -gold has the status of a foreign currency. Reserve Bank of India has clarified the information that E-gold is not a currency of any sovereign state and has also mentioned that use of E-gold in any transaction is violation of current regulations in force in India. ADVANTAGES OF E-GOLD

12 | Journal of Management and Science - JMS ISSN 2250-1819 (Online) / ISSN 2249-1260 (Printed)

E-Gold provides a convince transaction to the investor compared to the difficulties involved to transact physical gold. The investor can transact during the long trading hours of NSEL, which is from 10:00 am till 11:30 pm. E-Gold provides the investor, with the adequate liquidity as investor can sell any number of units, at anytime during the trading hours of the exchange. E-Gold eliminates the risk of theft as the gold transacted by the investor is stored in demat form. Investors have to spend on wastage and making charges and also the storage cost if they invest in physical gold, this can be overcome by E-Gold. The cost which is to be incurred by the investor is the custody cost which is about 0.60 per unit per month. In case of E-gold, the problem of quality concern does not arise because the gold is in its purest form. In contrast, in E-Gold investors will be paid the market value for the pure Gold accumulated in their demat account on the date of sale. Incase of conversion of the demat gold into physical form investor is assured of the purity, as per the Securities and Exchange Board of India (SEBI) regulations, the purity of underlying gold should be 0.995 fineness and above. The disadvantage while re-materialization is that the option is available in select centers only. Apart from this the investor has to incur re-materialization charges and Value Add Tax at the time of taking delivery of physical gold. COMPARISON OF GOLD COINS, DEPOSIT SCHEME, EXCHANGE TRADED FUND AND E-GOLD Parameters Gold coins Gold deposit Gold exchange E-Gold scheme traded fund Pricing Differs from From bank to Linked to Net Linked to actual bank to bank bank interest Asset Value Gold Price rate differs on gold deposited Form of Physical Certificate Demat Demat holding Transaction As per the As per the 9:15 am to 10:00 am to timings timing of banks timing of 3:30 pm 11:30 pm banks Risk of High Low Cannot exist Cannot exist impurity Security Responsibility Not Responsibility Responsibility of of investor Applicable of custodians exchange of mutual fund Resale Banks do not Transfer is Transparent - Transparent At buy back the possible but At secondary secondary market coins should be market prices prices intimated to the bank Convenience Very low Low High High of buying, storage and

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selling Conclusion There are various options available to the investor with regard to investment in gold. The banking sector has emerged with different strategies and plans to attract the investors of gold. The recent trend is the gold ETF which is been launched by many mutual funds of various banks. This investment option has attracted most of the investors since it is simple and easy to access. This option also provides much benefit to the investors. The other recent option available to a person who wants invest in gold is the electronic gold which operates separately from the banking sector. The investors have to choose the option which is feasible to their needs and the one which is most beneficial. Thus the banking sector is adapting to the changes in the market and providing the customers various investment opportunities. REFERENCES 1. Ciner, C. (2001), on the long run relationship between gold and silver: A note, Global Finance Journal, 12, 299-303. 2. Capie, F.Mills, T.C. and Wood, G. (2005) Gold as a hedge against the dollar, Journal of International Financial Markets, Institutions and Money, 15, 343352. 3. Reserve Bank of India (2002) press release e-Gold Violative of Indian Rules: RBI 21, October 2002. 4. Business standard (2011) SBI to promote gold deposits 12, February 2011. 5. The Hindu Business line (2011) Investment in gold ETF gives more return 20, June 2011. 6. State Bank of India http://www.sbi.co.in accessed January 2012. 7. National Spot Exchange Limited http://www.nationalspotexchange.com accessed January 2012. *****

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RETAIL BANKING: A STUDY OF CUSTOMER SATISFACTION ON CORPORATION BANKS VILLUPURAM DISTRICT DESIGN AND EXECUTION OF THE STUDY J.Alex Perira and A.Vickram Assistant Professor. Dept of Commerce, Loyola College. INTRODUCTION Indian banks may be missing out on substantial profit opportunities in retail banking because of lack attention to the needs of the customer. According toMr. Middleton, European head of the financial sector strategy at KPMG consulting, India is on the threshold of a financial service revolution and the winners will be those who are the masters of knowledge management and those who can win the customers heart and mind. According to him, customers crave for a relationship with their bank, i.e. they want to be known and valued. A research conducted by KPMG consulting shows that two thirds of the customer destroy shareholder value, i.e., there are a large number of customers who do not generate any revenue for the bank. The whole problem is that banks; do not know their profitable customers form the unprofitable ones and by being indifferent to all the customers they tend to lose the profitable customers to the competition Says Mr. Meddleton. The future winners will have a strong focus on customer service and will also exploit technology that enable them to reach customers on optimal terms. It is helpful to think about meeting customer requirements by considering a business function as an overall process. Each process should fulfill customers requirement until ultimately the external customer is satisfied. Thus, banks should strive to satisfy its customers, retain them their value and should excel in customer service. They should try to determine the defect levels of their customers experience and try to rectify, them, with large scale expansion of bank branches in the post nationalization era. STATEMENT OF THE PROBLEM: Customer satisfaction in the combination of services rendered by the bank and environment substance causes a person to truthfully say that he/she is totally with the service. Today, all banks basically offer the same types of services and facilities and so the customer banking business has standardized. The only important factor that distinguishes one banks service from another is the Customer service rendered by the bank which influences the customers choice of the bank. Banking is a fiercely competitive business today. Almost all big banks offer the same service. Only by offering good service, a bank can gain advantage over competitive banks. A customer can be defined as a user or a potential user of bank services. A customer would obviously include an Account holder out of casual business transactions with banks. Identification of customer should be followed by identification of customer needs by tailoring bank service to what customer wants, rather than making him accept whatever banks can provide.

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Good delivery of service is very important otherwise it may be disastrous as a perfect delivery of a badly conceived service. The fire elements of good delivery could be said to be speed, timeliness, accuracy, courtesy and concern. IMPORTANCE OF THE STUDY Customer satisfaction is a dominant factor in the success of an enterprise. In the service industry where intangible products are to be marketed, the importance of customer has, therefore, necessarily and consistently to be the focal point in all decision making relating to the policies, programmers and practices of an organization. While there is a growing need to improve customer service, there is no corresponding motivation in all those who are required to deliver the service. Customer services of banks should take in to account the following four important, interdependent factors which influence customer service. Demands on and expectation from banks. Quality and job knowledge of bank personnel. Attitude and motivation of bank employee, and Bank up systems and procedures. Systems and procedures are vehicles for delivery of customer satisfying services. Speedy, timely and courteous service to customer is the essence of banking business. This aspect has been emphasized by the reserve bank in several of the circulars addressed to banks covering the recommendations made by the working group on customers service in banks in its report submitted to the government of India and the finding of reviews made periodically by small group constituted by Government to oversee and monitor the implementation of recommendations. A. Postal identification cards or identity cards or passports may be considered sufficient for establishing the identity of persons desiring to open deposit account without cheque facilities B. Banks should minimize delay in disposal of loan application. C. Customer should be provided with booklets giving details of the services and facilities available at banks. D. Complaints should be studied and corrective action initiated. To serve in this competitive field, the bank should satisfy the customers considering the importance of customer satisfaction; the need for research in this field is felt to explore the various aspects affecting customer satisfaction. OBJECTIVE OF THE STUDY: The general objective of the study is to know the customer satisfaction on corporation Banks, VilluppuramTaluk. The following are the more specific objectives; 1. Banking services 2. Time Limits 3. Loan facility 4. Safety and Security 5. Motivation 6. Details of deposit SAMPLE SIZE The researcher collected data from the customers of Corporation Bank by administering a questionnaire. Twenty five customers were selected from each of the two selected, corporation

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branches totaling to 50 customers. In selecting the customers, nature of the account, loan schemes were considered. Even though it was not possible to contact and assess all the customers in the branches, the sampling method was taken as a measure to understand the customers satisfaction. The sampling customers from each corporation branches were selected at random without using any stratification procedure outside the preview of banking hours. Data was collected for a period of two weeks through questionnaire given to the customers. HYPOTHESIS: The researcher has formulated the following hypotheses, There is a relationship between satisfaction of the customers regarding banking services and method of withdrawal. There is a relationship between income, gender, rate of interest, and loan facility availed. LIMITATIONS: 1. Time and cost were the major limitation of the study 2. Since it is an opinion survey about the customer satisfaction towards corporation Bank, the opinion expressed by the customers may differ from to time. THE PROFIL OF THE CORPORATION BANK The corporation Bank was established in the year 1906. It is an organization based on the traditional Indian values of service to the community. Corporation Bank is regarded as one of the well run banks in the community of Public Sector Banks in the country. The Bank has a unique history of 100 years of successful banking and has stood the test of time by growing steadily, offering vast, varied and versatile services with a personal touch. Today, its good customer service has earned the bank a place of pride in the banking community. The key factor of the Banks success is its relatively young, dynamic and efficient manpower. Excellence in performance and uniqueness in customer service form the central core of the Banks organizational culture and which is reflected in the Banks performance in all areas of its operations all through the years. The Bank is a Public Sector Unit with 57.17% of share capital held by the Government of India. The Bank came out with its Initial Public Offer (IPO) in October 1997. The Banks Net worth Stood at Rs. 3,374.89 crore as on 31.03.2006. Corporation Bank is the first public Sector Bank to publish the results under US GAAP. The bank has been publishing the results under the US GAAP since 1998 99. The net profit of the bank and its subsidiaries under US GAAP for the year 2004 2005 stood at Rs. 435.89 crore against consolidated net profit of Rs. 350.69 crore registered under Indian GAAP method.

In pursuit of niche banking with technology as the competitive edge, the bank has drawn up an IT plan to provide better service to its customers. All the branches of the Bank have been computerized and consequently, 100% of the Banks business is computerized now. As on 30th September 2006, the aggregate business of the Bank stood at Rs. 66,022 crore comprising Rs. 38, 017 crore Deposits and Rs. 28, 004 Crore Advance. With its strategic business focus and innovation the Bank is striving for better performance in the coming years. Its

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total business is set to cross Rs. 70,000 crore in March 2007. The Bank has an ambitious plan to raise its total business level to Rs. 1, 00,000crore by March 2009. Working Capital The working capital limits would be considered only after the project nearing completion and after ensuring full tie up of the term loan requirements of the borrower. These limits would be either in the form of fixed loans or running accounts and / or bill financing facility. The finance extended under this category would be for meeting the funds requirements for day to day operations of the units i.e., to meet recurring expenses such as acquisition of raw material, the various expenses connected with products, conversion of raw materials into finished products, marketing and administrative expenses, etc., In tune with Reserve Bank of India guidelines on Loan system for delivery of bank Credit for working capital purpose to larger borrowers, the same would be extended in the form of fixed loan (working capital Demand loan) and cash credit (running amount) in the ratio 60: 40 in respect of borrowers enjoying aggregate working capital limits of Rs.10 crore and above from the Banking system. The working capital demand loan facility shall be for a minimum fixed term of 7 days subject to roll over at the option of the borrower concerned. Eligible Working capital Limits would be assessed by adopting various methods such as Projected Turnover Method, Permissible Bank Finance Method, Cash Budget Method and Net Owned Funds Method, depending upon the type of borrower, the aggregate working capital facility enjoyed from the banking system, the scale of operation, nature of activity/enterprise and the duration/length of the production cycle etc., The working capital limits would require such security and personal / third party guarantees as applicable to general lending norms of the bank and risk perception in respect of individual borrower account. Customer Service in Corporation Bank A customer is the one who comes having some work to do with the bank. It is not necessary that he must be an account holder or a directive of bank service. Some of the services of corporation Bank are as follows: Savings account, Current account, Fixed deposit, NRI account, Housing Finance, Educational Finance Scheme, Personal Loan scheme, Loan against NSC / KVP, Miscellaneous Services, Issue of DD/MM/TT, Locker facility, Gift Cheques, Internet Banking, Core Banking and ATM. Number of branch in Villupuram Taluk Three branch. Corporation Bank, Villupuram. Corporation Bank, Anniyur. Corporation Bank, Ketar. DATA ANALYSIS AND INTERPRETATION Tables are prepared from the data collected in order to arrive at meaningful interpretation. This analysis and interpretation is based on the questionnaire distributed to 75 and out of seventy five, sixty responded. For in completed answers 10 were discarded. Distribution of Respondents by their Gender S.No Gender No. of Respondents Percentage 1. 38 76.0 Male

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2.

Female Total

12 50

24.0 100

S.No 1. 2. 3. 4.

From the above table it is clear that 76% of the respondents are male and the remaining 24% of the respondents are female. Distribution of Respondents by their Age Age No. of Respondents Percentage Below 25 years 12 24.0 22 44.0 26 35 Years 10 20.0 36 46 years 6 12.0 More than 45 Years Total 50 100

It is clear that from the above table that majority of the respondents 44% are belonging to the age category of 26 35 years, 24% of the respondents are belonging to the category of below 25 years, 20% of the respondents are belonging to the age category of 36 45 years and the remaining 12% of the respondents belonging to the age category of more than 45 years. Distribution of Respondents by their Occupation S.No Occupation No. of Respondents Percentage 1. Student 6 12.0 2. 11 22.0 Professional 3. 9 18.0 Business 4. 24 48.0 Others Total 50 100 From the above table it is clear that 48% of the respondents belong to the category of Others, 22% of the respondents are professional, 18% of the respondents are belonging to the Business and the remaining 12% of the respondents are students. Distribution of Respondents by their Income S.No Income No. of Respondents Percentage 1. Below 5000 14 28.0 2. 5001 10,000 15 30.0 3. 10001 20000 10 20.0 4. More than 20000 12 24.0 Total 50 100 It is clear from the above table that 30% of the respondents receive monthly salary between Rs. 5001 10000, 28% of the respondents receive below 5000, 24% of the respondents receive Rs. 20000 and above and the remaining 20% of the respondents receive 10001 20000. Distribution of Respondents by their No. of Earning Members in the Family S.No Number of Earning No. of Respondents Percentage Members 1. One 6 12.0 2. 16 32.0 Two 3. 13 26.0 Three 4. 15 30.0 Above Four

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Total 50 100 It is clear from the above table that 32% of the respondents have only two earning member in their family, 30% of the respondent have above four earning members, 26% of the respondents have three, and 12% of the respondents have one earning member in their family. FINDINGS 1. 76% of the respondents are male and the remaining 24% of the respondents are female. 2. Majority of the respondents (44%) belong to the age category of 26 35 years, 24% of the respondents belong to the category of below 25 years, 20% of the respondents belong to the age category of 36 45 years and the remaining 12% of the respondents belong to the age category of more than 45 years. 3. 48% of the respondents belong to Others category others, 22% of the respondents are Professional, 18% of the respondents belong to the Business and the remaining 12% of the respondents are students. 4. 31% of the respondents receive the monthly salary of Rs. 5001-10000, 23% of the respondents receive below 5000, 24% of the respondents receive Rs. 20000 & above and the remaining 20% of the respondents receive below between Rs. 10001 20000. 5. 32% of the respondents have two earning members in their family, 30% of the respondents have above four earning members in their family and the remaining 26% of the respondents have three earning members in their family. 6. 84% of the total respondents operate savings account and the remaining 10% of the respondents operate current account. 7. 56% of the respondents use ATM for withdrawal, 44% of the respondents use Cheque for the same purpose. 8. 62% respondents save below 30 percent, 34% respondents save 31 40 percent. 9. 8% of the respondents are neutral, 68% of the respondents agree with, the remaining 24% of the respondents strongly agree with banking services. 10. 8% of the respondents strongly disagree, 68% of the respondents agree and the remaining 24% of the respondents strongly agree the working hours of the bank. 11. 8% of the respondents strongly disagree, 18% of the respondents are neutral, 14% of the respondents agree and the remaining 60% of the respondents strongly agree with the computerization of banking services. 12. 8% of the respondents strongly disagree, 8% of the respondents disagree, 24% of the respondents are neutral, 52% of the respondents agree and the remaining 8% of the respondents strongly agree the grievances handling. 13. 60% of the respondents strongly disagree, 14% of the respondents disagree, 54% of the respondents are neutral, 18% of the respondents agree and the remaining 8% of the respondents strongly agree to open an account in urgency. SUGGESTIONS The services rendered by Corporation Bank are highly commended by the respondents. But some respondents have unhesitatingly highlighted areas for improvement during the time of data collection. 1. The taxes levied by the Corporation Bank towards cash withdrawal by ATM are severely criticized by the customers. So the bank can suggest to the financial minister to withdraw such tax collection or the maximum amount can be extended up to Rs. 50000.

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2. The opinions of the customers of the Corporation Bank regarding locker facilities are also unmixed blessing. The customers felt that the charges collected by the banker towards locker rent are very high. So the bank can reduce the locker rent. 3. Among the 50 respondents, 12 respondents felt that the loan for education is not encourageble. The corporation Bank should take necessary steps to make the loan reachable to the people those for applying loan. The corporation Bank should give preference to the loan for higher education. CONCLUSION It is heartening to note that Corporation Banks are doing good service and the customers are happy about the various services rendered by this bank in Villupuram Taluk. There is a good bond between banking services and the customers which is reflected in the analysis. The significant value is less than probability value (.000<0.05), and so it is inferred that there is a relationship between satisfaction of customer regarding banking services and method of withdrawal. Similarly it is inferred that the significant value is greater than *****

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CRM IN INSURANCE: SOME PRIORITIES R.ALLWIN NIRMAL SINGH M.PHIL., SCHOLAR in COMMERCE, ST.XAVIERS COLLEGE (AUTONOMOUS), PALAYAMKOTTAI-627002. INTRODUCTION CRM IN INSURANCE CRM Invades the Insurance Sector with Amazing Results.The current scenario in the insurance industry is a complex and competitive environment tinged with little stability. The major hassle the industry faces is obtaining clients. This is due to the fact that the big fish in the insurance industry dominate the sector. It has become increasingly difficult for this particular sector to gain profits while curtailing costs. Acquisitions, mergers, have all contributed to the difficulty insurance agents and other professionals from this industry face. CRM helps insurance companies to ensure that the customer is understood better.Right now insurers can achieve excellent policy administration; good billing systems etc but fall short on the customer front. However this alone is insufficient to survive on. Insurers have now realized that CRM is essential if they want to deliver high quality services since it satisfies current customers and gains new ones. This is because policies get sold only if relationships are built. CRM solves these problems with its user-friendly, web-based CRM tools that increase sales opportunities. PRESENT SCENARIO To maintain competitive edge and viability, insurance companies are focusing intently on delivering superior customer service. A comprehensive customer relationship management (CRM) strategy addresses three imperatives: Sum providing a unified enterprise customer view; Sum retaining customers with great services; and Sum controlling costs as the insurance company in question expands. These three imperatives form a unique interplay that maximizes sales while reducing operational coststhe equation for improved revenue growth and profitability. Retain Customers With Great Service Most insurance companies understand the virtues of a single, complete, real-time enterprise view of individual customers, and they have made great progress towards providing this view at customer touch-points throughout the enterprise. But it's critical to note that this view should not be regarded as an end in and of itself rather, it is a rich foundation to be used as a basis for a deeper, more advanced level of customer understanding. By making customer analysis and behavior prediction data immediately accessible at the desktop, sales efforts are optimized and customer loyalty is strengthened, as individual customers feel that their needs are understood and met in a way that is fast and convenient. Predicting customer behavior for improved sales efforts is a three-step process: Sum Profiling: Insurance companies first build a profile of information about customers who have previously exhibited a targeted behavior. Profiling requires rich customer data, including enterprise-wide transactional and behavioral data such. An example of profiling might be building a profile for customers who bought new homeowners' insurance policies in the past two years. The goal is to determine characteristics to look for in future buyers. Sum Modeling: By using data mining on the profile information, analytics can uncover the most relevant characteristics of the customer segment being analyzed. For example, the most

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significant attributes of customers who bought homeowners' insurance are gleaned from the profile via the data mining application. Such characteristics comprise the model of customers most likely to purchase homeowners' insurance in the future. Sum Scoring: Insurance companies use predictive analytics to score existing customers by comparing them to the model. Those most closely matching the characteristics included in the insurance services. Control Costs While You Expand Business expansion presents many positive opportunities to insurance companies, including increased assets and broader geographic reach to new customers. The company must offer the same level of superior service that its customers have come to expect while minimizing operational costs. The first key is to enable your agents, representatives and brokers to identify and spend the right amount on each opportunity. A high-value, low-risk customer, who carries policies over a long period and makes relatively low claims, is an ideal subject for marketing and sales efforts targeted at extending his or her portfolio. Agents and brokers need real-time access to this business intelligence, so they will know where to concentrate their efforts in the limited amount of time they have the customer's attention. The second key is to use the most costeffective channels without sacrificing a high level of customer service. Using customer analysis and behavior prediction, call center representatives, agents and brokers can target marketing and sales efforts through different channels depending on the target audience in question. The third key is automation of the more mundane insurance business processes. By automating mundane processes and removing the paper trail, call center agents, representatives and brokers are freed up to focus on the more strategic activitieslike servicing customers. With the increase in number of players in the market and consumer becoming more and more aware of the different products insurers have realized the importance of CRM .LIC has been the sole Player in the market before the appearance of private players CRM concept was not given so much importance. Customer was not educated regarding the benefits of insurance .But with the entry of the private players in the market the competition forced LIC and other new entrant to become customer centric. The impact of their entry has been felt in four areas namely: 1. Knowledge dissemination 2. Product Development 3. Product Promotion 4. Service Standards 1.Knowledge dissemination With the advent of Liberalization an area that has undergone dramatic transformation is product knowledge. Prior to liberalization buying of insurance product was done through an agent known to the insured or referred to him/her by a friend, relative or colleague. With no option at disposal one has to repose full trust in the agent and accepted on the face value all the information dished out. It was at the time of any calamity that one realized the implication of the various clauses and blamed the PSU insurers, rather than the agent for misleading them. 2.Product Development Another important differentiation is the variety of alternatives being offered to the customer by the private sector. For the customer used to the plain Vanilla type of product on offer by the public sector the availability of different options to package a solution to his needs was like icing on the cake from the private sectors. Introduction of unit linked products was well received in the market and the booming stock market provided further push.

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3.Product promotion One of the perceptible changes with the entry of the private players was the series of aggressive advertisement .Since most of the Indians are conservative in their outlook and are generally averse to risk, the private player projected themselves as the customer centric company willing to provide customized package and service in order to capture a share of customers wallet. With LIC using TRUST and RELIABILTY (Jeevan ke Saath Bhi Jeevan Ke Baad Bhi) as their advertisement tool, private sector companies like ICICI Prudential projected the Sindoor a sacred and auspicious symbol for the family to drive the message of offering protection at all stages of the Life.Max new York life tried appealing to patriotic sense and emotions in their advertisement showing goddess Durga and three teenagers with saffron, white and green painted across their face. This was done to create a niche in the minds of the potential clients. Some of the other time tested and popular strategies adopted by the private sector were acknowledging by sending greetings on the special occasion, data mining and cross selling to sponsoring mega event. Though experience has shown that each interaction at an event may not result in a sale but it helps in two ways, firstly it helps company to feel the pulse of the customer and channel their energies toward meeting customer expectation and secondly this strategy has resulted in greater return on marketing investment coupled with reduced marketing cost, lesser cost of communication for reaching out to a larger targeted audience and higher response rate. 4.Service Standards One of the key factor which after liberalization marked a huge improvement is the service standards in the sense of introduction of the smart, computer savvy and competent professional to distribute the product and introduction of web portal as well as facility to pay premium by way of instruction to bank or alternatively to any branch of the service provider. Platform for ideal CRM in insurance: 1. Segmentation One area where insurers are looking at facilitating ideal CRM is the customer segmentation.They should divide the target population into segments and provide customized product to them. This would enable the players to adopt right CRM solutions which would be expected to last for reasonably long time with constant review of these to keep up with the changes. 2. Insurance Orientation of Customer Insurance players should be interested in identifying the insurance orientation of the prospect. Insurer should aim at increasing this by explaining the all possible coverage that can be obtained for his or her various needs and also providing him discounts. This would not only ensure improvement in business but also go a long way in promoting the cause of insurance. 3. Long term Association with customer This type of relationship should be build up by a rock solid commitment towards providing good service throughout the contract period. 4. Need based selling The insurer should be capable of firstly identifying the need of the client and be in such a position that he can suggest a suitable product which best suits his needs. This would help in building a long term relationship and also to increase the customer loyalty. Insurance CRM Gains Since most insurance companies are not adequately equipped to help their agents deal with customer centered problems CRM insurance enables insurance organizations to survive in a tough economic climate by using the data the insurance company has on the existing customers

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and then use it to increase the level of profitability. It manages to enhance your customer relationships based on customer's unique requirements. A wealth of customer data is available but insurance companies do not have it readily assessable nor is it coherent. CRM insurance software creates a holistic view of the customer which helps eliminate customer irritation experienced due to this, when they need to identify themselves repeatedly. Insurance CRM assists Customer Service Representatives when they are not able to properly access customer data. Having ample customer information on hand enables a CSR to be more confident of dealing with the client.It removes the chance of errors. CRM enables customers themselves to do research on products, have answers to their questions etc. In addition to this policyholders or beneficiaries can check their claim status, change their account information, submit complaints etc. Insurers find that CRM is assisting them in their marketing efforts as well through a comprehensive understanding of the client base. CRM aids the insurance companies by ensuring that campaigns are more affective. Conclusion: Insurance Companies should not be carried by the apparent high sounding appeal the CRM solutions make but rather pay caution while implementing them. CRM in insurance industry in India is at a very nascent stage so a proper CRM platform has to be laid only after properly understanding the customers needs and desires. Even though most of the private insurance companies are using CEM the public sector companies are in CRM stage itself. The reason for this is that amount of data is very less and the quality of data is very high as compared to public sector companies, so they are able to implement the CEM concept easily. It is the biggest challenge in front of PSUs to purify the data that has been evolved through different systems over the years and also handling such a big volume, to enable efficient implementation of the CRM solutions. For the success of any CRM initiative, proper conviction of top level management is must. Moreover the Indian market for Insurance is not matured enough. Some of the higher technologies can not be implemented here. The system is not so well developed that it can adopt itself to the changing CRM concepts. Indian Insurance companies may require more funds which could be possible only when the market is further liberalized. We could see these developments in the coming few years when the market is developed and matured. *****

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WOMEN CUSTOMERS PERCEPTION OF E BANKING SERVICES BY BANKS WITH SPECIAL REFERENCE TO WEST CHENNAI ANIS AKTHAR SULATHANA BANU.A ( Research Scholar, Manonmaniam Sundaranar University ) Asst. Prof. Dept of Business Administration, Jaya college of Arts and Science, Thiruninravur. INRODUCTION: E Banking is the term used for new age banking system. E Banking is also called on-line banking and it is an outgrowth of pc banking. E banking uses the internet as the delivery channel by which to conduct banking activity, for example, for transferring funds, pay bills viewing, checking saving account balances, paying mortgages and purchasing financial instruments and certificates of deposit. It is difficult to infer whether the internet tool has been applied for convenience of bankers or for the customers convenience. But ultimately it contributes in increasing efficiency of the banking operations as well providing more conveniences to customers even interacting with the bankers, customers transact from one corner of the country to another corner. This paper seek to help the banks to know their customers perception regarding their e banking services and thus makes these services more efficient. The paper, after a brief introduction, reviews the literature, fixes the objectives and methodology, then discusses the findings and finally provides the concluding observation. OBJECTIVES: To study and analyze the perception of women customers regarding e banking services. To suggest some remedial measures to improve e banking services. REARCH METHODOLOGY: The present study is concerned with the banking industry in general and in particular those banks that are providing services in West Chennai through e channels, i.e., e banks. The study focuses on the customers of e banks. The Sample size of the bank customers is 50. These customers holding saving or current account in the e banks and using e channels in West Chennai ( Avadi, Ambattur etc.,) . The data is collected through pre tested and well structured questionnaire circulated in West Chennai. Weighted Average Scores (WAS) are calculated from the five point likert scale. The weights are 2- most reasonable / strongly agree / most important ; 1 reasonable / agree / important; 0 undecided status; -1 unreasonable / disagree / unimportant ; and -2 to most reasonable / strongly disagree / most unimportant.Weights are given to ranks of the different statements. The highest weight is given to the first rank and the lowest weight to the lowest weight to the lowest rank. RESULTS AND DISCUSSION: As we know, recent banks transformation is taking place with IT and all this affect the customers perception regarding e banking services. In the present paper, an attempt has been made to know the perception of e bank channels. It can be concluded that factors like age, income, family size, education level and occupation level affect the customers thinking. Out of 50 respondents, 42% are those having income between one to two lakh, 20% are those having more than two lakh income. Similarly, it is concluded that 64% of the respondents are highly educated with Master Degree and 6% with doctorate Degree. The table also shows the occupation level of the respondents: 24% respondents are under service class, 4% are businessmen, 46% are professionals and 8% are industrialists.

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Overall we can say that high education, serviceman and businessmen use e delivery channels more and are aware of the concept of e banking. Industrialist and agriculturist and 38% of the respondents having below one lakh and only high school are also using these e channels to some extent. From Table-2, it can be concluded that weighted average score of all the factors except for the one factor namely (i.e) low hidden cost for services is more than 1. The respondents feel all these factors are important in selecting their e channel. Among five convenient location of ATM and security to use are the main factors affecting their e channel selection decision. Table-2 Factors Influencing the selection of E-channels Factors Most Imp. UnUnMost WAS Imp. Decided Imp Un-Imp. Convenient accessibility of e-channels 25 18 5 2 1.28 Convenient location of ATMs 34 12 4 1.60 Easy availability of e-channels 16 24 10 1.12 Low hidden cost for services 14 18 12 4 2 0.76 Number of facilities provide by e-channels 10 20 16 1 3 1.26 Security/less risk to use 34 14 1 1 1.52 Table 3 analyses the frequency of physical visit of the customers to banks even when they are using e channels. We can see that a majority of 64% of the respondents visit bank occasionally once for accessing e channels. Table-3 Frequency of Customers monthly physical visit the bank in addition to E-channels Number of Bank visit Number of Responses Occasionally once 32 (64%) 2 to 5 times 15 (30%) 6 to 10 times 2 (4%) 11 to 15 times 1 (2%) More than 15 times a month Table 4 analyses that those who visit the banks physically even while accession e channels, do so for mega size deposits and withdrawals, or otherwise to get loans and advances. Some of them visit banks for making complaints and to get new information. Table-4 Purpose of customers physical visit in the Banks in addition to accessing E-channels Purpose R-1 R-2 R-3 R-4 R-5 R-6 R-7 Total Over scores Rank Mega size deposit 20 8 3 2 2 4 11 226 1 Mega size withdrawals 3 16 11 3 8 8 1 225 2 Making complaints 4 4 7 6 17 11 1 186 5 For getting loans/Advances 5 9 11 13 6 2 4 222 3 To access lockers 7 4 6 13 8 8 4 199 4 To get new information 6 7 5 4 8 14 6 183 6 Any other 6 3 8 10 3 4 16 173 7

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Table 5 analyses the motivational factors encouraging the customer to prefer a particular e channel against others. Here the strongest factor is cost effective and second provides efficient services followed by accurate information and time saving is the factors which attract them to choose a particular e channel. Most of the respondents preferred e channel which is cost effective. Table-5 Motivational Factors Encouraging Customers to prefer a particular E-channel Motivational Factors SA A UD DA SDA WAS Cost-effective 26 17 6 1 1.36 Convenient accessibility 17 28 4 1 1.22 Provide accurate Information 25 20 4 1 1.28 Provide efficient services 25 20 2 2 1 1.32 Provide security for threats to lose information 24 20 1 1 4 1.16 Time-saving 23 21 2 3 1 1.24 Table-6 Awareness about HiddenCost of e-channels Status Yes No Respondents 18 (40%) 32 (60%)

Table-6 shows the awareness level of the respondents abouthidden cost of the e-channel. It is examined that 36% are aware of the hidden cost, but 64% are ignorant due to inadequate information provided by the bank. Table 7 whether services of e channels are reasonable and which e channel is most cost effective. A majority of the respondents are in favour of ATM. ATMs are cost effective and majority are in favour of debit card which also provide services at a reasonable cost. Table - 7 Responses regarding the hidden charges of e-channels Most reasonable UnUn Most reasonable decided reasonable Unreasonable 29 11 6 3 1 6 22 14 5 3 10 27 7 5 1 12 14 18 2 4 10 12 16 8 4 4 10 25 7 4 7 9 23 3 8

E-channels ATM Credit card Debit card Internet-Banking Mobile Banking Smart card Tele Banking

WAS 1.28 0.46 0.80 0.56 0.32 0.06 0.08

Table 8 analyses that out of 50 respondents, most of then preferred ATM compared to other channels. ATMs got first rank in preference of e channels, followed by debit card, credit card and On line banking, but smart card and tele banking are least preferred among the respondents. The basic reason for the popularity of e channel is they are convenient and easy to access

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E-Channels ATM Credit card Debit card Mobile Banking Online Banking Smart card Tele-Banking

Table-8 Response regarding preferences for E-Channels R-1 R-2 R-3 R-4 R-5 R-6 R-7 36 3 5 3 2 2 7 13 17 4 9 1 3 16 7 7 10 3 5 1 5 8 11 11 10 3 1 4 10 7 10 6 11 1 4 2 12 4 7 16 1 5 1 6 4 22 14

Total scores 319 224 239 175 207 123 122

Overall Ranks 1 3 2 5 4 6 7

Table 9 analyses the most effective solutions preferred by the respondents is demo fares and information at the counter preferred, followed by conduct more training program. Therefore we can conclude that the banks that make demo at the counter and any other information should make more and more customers aware of the e banking services. Table-9 Responses Regarding suggestions to make the customers Aware of E-channels Suggestions R-1 R-2 R-3 R-4 R-5 Total Over scores Rank Conduct more training programs for bank 10 7 15 9 9 150 3 customers Demo-fares regarding e-channels 21 8 8 6 7 180 1 Information/demo at the counter 8 14 12 10 7 158 2 Personal contact programs 10 11 8 7 14 146 4 More advertisements 10 10 9 3 18 141 5 SUGGESTIONS: On the basis of the findings of the study, this paper offer some suggestions to make e channel service more effective, which will further accelerate the process of transformation in banks. Convenient Accessibility of E Channel. Transparency. Social Rapport of E Channel. Awareness Regarding E delivery channels. CONCLUSION: From the above study it is evident that the customers of e banks are highly satisfied from e- banking services. The customer prefer e channels with time and cost utility which provide efficient services. The customers are not fully aware of the operational part of each channel and their transformational facilities. Hence bank have to increase the level of trust between bank website and customers and bank should keep track of ever changing banking industry and the latest updates of internet technology to envisage future competition. *****

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TECHNOLOGY ADVANCEMENTS AND OPPORTUNITIES IN MOBILE BANKING IN INDIA Anitha Vergin S. Research Scholar, Madurai Kamaraj University, Madurai. Introduction: Gone are the days when people in India needed to wait for years together to get a land line connection. Thanks to the Mobile Phone revolution that has dramatically transformed the nation, right from the urban rich to the rural poor. According to a recent survey, an estimated 8 million rural Indian who do not even have access to banks, own mobile phones. This is a result of high innovation, intense competition within the telecommunication sector which in turn has resulted in India being the largest mobile phone market in the world. Mobile banking started as a novelty, something only techies and first adopters felt comfortable using. But as smartphones have skyrocketed in popularity over the past few years, mobile banking adoption has increased along with it. Initially, many banks' mobile offerings consisted of their online banking model ported to an iPhone or Android device. As mobile has grown into a maturing channel, however, banks and their vendor partners have produced richer mobile offerings that take advantage of its unique capabilities. And the rise of the tablet gives financial institutions another unique interface through which to interact with consumers. Mobile Banking: Mobile banking (also known as M-Banking, mbanking, SMS Banking) is a term used for performing balance checks, account transactions, payments, credit applications and other banking transactions through a mobile device such as a mobile phone or Personal Digital Assistant (PDA). The earliest mobile banking services were offered over SMS. With the introduction of the first primitive smart phones with WAP (Wireless Application Protocol) support enabling the use of the mobile web, banks started to offer mobile banking on this platform to their customers. Mobile banking has until recently most often been performed via SMS or the Mobile Web. Apple's initial success with iPhone and the rapid growth of phones based on Google's Android (operating system) have led to increasing use of special client programs, called apps, downloaded to the mobile device. Objective: Evolution of Mobile Banking in India. Technologies Behind Mobile Banking. Future of Mobile Banking. Advantages of Mobile Banking. Challenges in Mobile Banking. India's Mobile Phone Market: Over the last few years Mobile and Wireless market has been one of the fastest growing markets in the world and it continues to grow consistently at a rapid pace. Indian Mobile Phone Market has an estimated 700 million subscribers and a growing 17 million each month represents a facet of India's modernizing economy. According to the Indian Council for Research on International Economic Relations (ICRIER), rural tele-density has soared to 12.72 percent from 0.4 percent and urban tele-density to 72.47 percent from 5.8 percent in the past decade. Evolution of Mobile Banking in India:

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Internet Banking helped give the customer's anytime access to their banks. Customer's could check out their account details, get their bank statements, perform transactions like transferring money to other accounts and pay their bills sitting in the comfort of their homes and offices. However the biggest limitation of Internet banking is the requirement of a PC with an Internet connection, not a big obstacle if we look at the US and the European countries, but definitely a big barrier if we consider most of the developing countries of Asia like China and India. Mobile banking addresses this fundamental limitation of Internet Banking, as it reduces the customer requirement to just a mobile phone. The main reason that Mobile Banking scores over Internet Banking is that it enables Anywhere Anytime Banking'. Customers don't need access to a computer terminal to access their bank accounts, now the can do so on-the-go while waiting for the bus to work, traveling or when they are waiting for their orders to come through in a restaurant. The mobile banking trend that started with just text messaging during its early days has grown dramatically into a full fledged banking model. With the evolution of smart phones, mobile banking has taken a new avatar. Smart Phones coupled with service providers, who provide high speed internet through technologies like EDGE, 3G is also a major boon to the Mobile Banking community. Applications customized for different smart phones are readily available, which could be downloaded and installed in a smart phone free of cost. This enables end to end banking with all the features like fund transfer, bill pay, checking balances and much more. Technologies Behind Mobile Banking: Presently mobile banking is being deployed using mobile applications developed using the below platforms: IVR (Interactive Voice Response) SMS (Short Messaging Service) WAP (Wireless Access Protocol) Mobile Application Clients IVR Interactive Voice Response: IVR or Interactive Voice Response service operates through pre-specified numbers (Customer Care numbers) that banks advertise to their customers. Customer's make a call at the IVR number and are usually greeted by a stored electronic message followed by a menu of different options. Customers can choose options by pressing the corresponding number in their keypads, and are then read out the corresponding information, mostly using a text to speech program. Mobile banking based on IVR has some major limitations that they can be used only for Enquiry based services. Also, IVR is more expensive as compared to other channels as it involves making a voice call which is generally more expensive than sending an SMS or making data transfer (as in WAP or Standalone clients). SMS Short Messaging Service: SMS uses the popular text-messaging standard to enable mobile application based banking. The way this works is that the customer requests for information by sending an SMS containing a service command to a pre-specified number. The bank responds with a reply SMS containing the specific information. For example, customers of the HDFC Bank in India can get their account balance details by sending the keyword HDFCBAL' and receive their balance information again by SMS. However there have been few instances where even transaction-based services have been made available to customer using SMS. For instance, customers of the Centurion Bank of Punjab can make fund transfer by

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sending the SMS TRN (A/c No) (PIN No) (Amount)'. One of the major reasons that transaction based services have not taken of on SMS is because of concerns about security. WAP Wireless Access Protocol: WAP uses a concept similar to that used in Internet banking. Banks maintain WAP sites which customer's access using a WAP compatible browser on their mobile phones. WAP sites offer the familiar form based interface and can also implement security quite effectively. Mobile Application Clients: Mobile Applications are the latest advancements in Mobile Banking. They are more suitable to implement complex banking transactions like trading, Fund Transfer in a secure manner. With the help of latest mobile high speed internet technologies like EDGE, 3G, these clients applications are capable of complete banking, virtually from anywhere in the world. Future of Mobile Banking: Based on Research from World business Institute, Australia, following are the key functional trends possible in world of Mobile Banking With the advent of technology and increasing use of smart phone and tablet based devices, the use of Mobile Banking functionality would enable customer connect across entire customer life cycle much comprehensively than before. With this scenario, current mobile banking objectives of say building relationships, reducing cost, achieving new revenue stream will transform to enable new objectives targeting higher level goals such as building brand of the banking organization. Emerging technology and functionality would enable to create new ways of lead generation, prospecting as well as developing deep customer relationship and mobile banking world would achieve superior customer experience with bi-directional communications. Communication enrichment: Video Interaction with agents, advisors. With the video calling functionality already up and running in most smart phones, this will be the next direction where banks will be heading to. Cheque Deposit: This feature already available with certain banks in the US, where a photo of the cheque from and rear need to be taken using the mobile phone and uploaded to the Mobile Banking Application and the cheque gets deposited in the corresponding account. Referrals and Offerings: Banks could refer over mobile banking for specific industries / across all industries based on the interest of the customer. Personalization of the Corporate Banking Sector: Personalized experiences for various roles and responsibilities with the right authentication. Advance Services like using Mobile Phones to pay bills in Shops and Restaurants. Challenges in Mobile Banking: There are a large number of different mobile phone devices and it is a big challenge for banks to offer mobile banking solution on any type of device Security of financial transactions, being executed from some remote location and transmission of financial information over the air, are the most complicated challenges that need to be addressed jointly by mobile application developers, wireless network service providers and the banks' IT departments. Another challenge is to scale-up the mobile banking infrastructure to handle exponential growth of the customer base.

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Due to the nature of the connectivity between bank and its customers, it would be impractical to expect customers to regularly visit banks or connect to a web site for regular upgrade of their mobile banking application. It will be expected that the mobile application itself check the upgrades and updates and download necessary patches. Personalization such as preferred language, date time format etc of the applications for the customers could be a major challenge. Conclusion:Mobile banking is poised to become the big killer mobile application arena. According to the Gartner Group, mobile banking services will have to support a minimum of 50 different device profiles in the near future which highlights the fact that in a developing country like India, mobile banking is going to be the next biggest thing that banks would be concentrating on. Bank's need to take a hard and deep look into the mobile usage patterns among their target customers and enable their mobile services on a technology with reaches out to the majority of their customers. Nevertheless, it is going to be a boon for the consumers with hassle free banking right at the tip of their fingers, provided it is secure enough. *****

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GLOBAL MELTDOWN AND INDIAN FINANCIAL MARKETS - LESSONS FROM THE PAST & POINTERS TO THE FUTURE Prof. Anli Suresh Madras Christian College India Introduction The financial market in India at present more advanced than many other sectors as it organized as early as the 19th century with the securities exchanges in Mumbai, Ahmedabad and Kolkata. In the early 1960s, the number of securities exchanges in India became eight - including Mumbai, Ahmedabad and Kolkata. Apart from these three exchanges, there was the Madras, Kanpur, Delhi, Bangalore and Pune exchanges as well. Today there are 23 regional securities exchanges in India. However, the stock markets in India remained stagnant due to stringent controls on the market economy that allowed only a handful of monopolies to dominate their respective sectors. The corporate sector not allowed into many industry segments, which were dominated by the state controlled public sector resulting in stagnation of the economy right up to the early 1990s. Thereafter when the Indian economy began liberalizing and the controls began to ease out, the securities markets witnessed a flurry of IPOs that launched. This resulted in many new companies across different industry segments to come up with newer products and services. The launch of the NSE (National Stock Exchange) and the OTCEI (Over the Counter Exchange of India) in the mid 1990s helped in regulating a smooth and transparent form of securities trading. The regulatory body for the Indian capital markets was the SEBI (Securities and Exchange Board of India). The capital markets in India experienced turbulence after which the SEBI came into prominence. The market loopholes bridged by taking drastic measures. India Financial Market helps in promoting the savings of the economy - helping to adopt an effective channel to transmit various financial policies. The Securities and Exchange Board of India (SEBI) the regulatory authority for Indian securities market established in 1992 to protect investors and improve the microstructure of capital markets. In the same year, Controller of Capital Issues (CCI) abolished, removing its administrative controls over the pricing of new equity issues. In less than a decade later, the Indian financial markets acknowledged the use of technology (National Stock Exchange started online trading in 2000), increasing the trading volumes by many folds and leading to the emergence of new financial instruments. With this, market activity experienced a sharp surge; rapid progress made in further strengthening, and streamlining risk management, market regulation, and supervision. The Indian financial sector is well developed, competitive, efficient and integrated to face all shocks. In the India financial market, there are various types of financial products whose prices are determined by the numerous buyers and sellers in the market. The other determinant factor of the prices of the financial products is the market forces of demand and supply. The various other types of Indian markets help in the functioning of the wide India financial sector. Indian financial market has witnessed a paradigm shift at par with the advanced markets of the world in the last 10 years or so. Business process, functionality, monitoring / regulating mechanisms, hardware, software etc., all revamped to compete with the global leaders. During the recent crisis, central banks in both advanced as well as EMEs resorted to various unconventional policy measures to instill confidence and stabilize the markets. India could not insulate itself from the adverse developments in the international financial markets, despite having a banking and financial system that had little to do with investments in structured financial instruments carved out of

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subprime mortgages, whose failure had set off the chain of events culminating in a global crisis. In this milieu, this study made to assess the implications from the global meltdown and performance of the Indian financial markets. Review of Literature In the IMF June 2011 Market Update of the Global Financial Stability Report, a rise in the financial risks was reported due to (i) downside risks to the multi-speed recovery baseline; (ii) concern about debt sustainability in Europes periphery; and (iii) search for yield pushing investors into riskier assets. The flattening of yield curves in both AEs as well as Asian Emerging Market Economies (EMEs), particularly since end-March 2011 suggest moderation in economic growth, albeit differentially, during 2011-12. "Global uncertainties as well as domestic developments impacted Indian financial markets. The Indian markets, however, remained largely orderly, despite the challenges posed by persistent inflation and high current account deficit," RBI said in its report 'Macroeconomic and Monetary Developments in 201011' (http://articles.economictimes.indiatimes.com.02/05/2011, 08.26pm IST). In the backdrop of a global meltdown of stock markets, which also rocked Dalal Street, and a ratings downgrade of US, Finance Minister Pranab Mukherjee said despite such crises, the Indian economy remained strong (http://post.jagran.com. 07 Aug 2011, 10:56 AM). On an average, credit spreads widened during 2011-12 as balance sheet risks came to fore. Sovereign Credit Default Swap (CDS) spreads rose sharply in the Euro Area following the accentuation of the Greek debt crisis. And the indications that the crisis may spread from periphery to some core Euro zone countries Rating downgrades or downward revision of outlook in case of the US, Japan, Spain and Italy impacted financial market confidence that were reflected in widening spreads. Amplification of refinancing risks in Greece and Portugal and the sharp four notch downward revision by Moodys of Portugals credit rating to junk status with a negative outlook in early July reconfirmed the Euro zone fragilities. Recapitalization of the banking system in the fragile Euro zone countries is the most important element of an enduring Euro zone solution. The stress tests conducted by the European Banking Authority (EBA) have not succeeded in restoring confidence amongst investors and creditors. The EU needs to deal with capital shortfalls for banks that fail stress tests, but market access is limited for weaker sovereigns like Greece, Portugal and Ireland. On the other hand, with hardly any fiscal space and the potential moral hazard risk from bailouts, the solution is not easy. Euro zone risks may lead to global financial market volatility (http://rbi.org.in). Statement of the problem While interest rates are firming up in the Indian economy, global financial markets witnessed rising financial risks and softening interest rates in 2011-12. Libors for 1- month to 1-year tenors edged down marginally even from the low prevailing rates. G-sec yields across maturity spectrum eased by 30-50 bps in 5-10 year segment for the US, the UK and Germany. Falling interest rates co-existed with (1) policy rate hikes by some AE central banks, most notably by the ECB in April and again in July, (2) rising sovereign and credit spreads and (3) inflation in the AEs with escalating energy and food prices that have spilled over to rising producer price and headline inflation. It remains seen whether; the movements in interest rates reflect temporary overreaction or based on expectations of future global growth. The study attempts to find out the implications from the global meltdown and performance of Indian financial markets amidst turbulences.

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Objective of the study The main objective of the Study is to assess the implications from the global meltdown and identify some of the future challenges for the Indian financial markets. The study also highlights how Indian financial market is performing amidst the various hurdles in the current scenario. Methodology &Data Source The research methodology used is descriptive and based on secondary sources of data from the pertinent data gathered from the publications of RBI, NSE India, and SEBI and from the websites of BSE India, NSE India, RBI, and SEBI. The study based on the hypothesis that the appropriate regulatory framework in place along with specific prudential measures taken from time to time played an important role in preventing instability in the Indian financial markets during and after the global meltdown. Analysis & Discussion Indian financial markets remain orderly and range bound: Even as domestic and global factors resulted in two-way movements in the Indian financial markets, asset price movements remained broadly range-bound and orderly. This was despite the challenges posed by persistent inflation, tight liquidity conditions and uncertainty in the international markets because of Greek sovereign debt crisis and slowdown in AEs. The call rate declined in the beginning of 2011-12 on the backdrop of surplus liquidity, but firmed up thereafter, in step with policy rate hikes since May 2011. The interest rates on commercial paper (CP) and Certificates of Deposit (CDs) moved in tandem with the overnight money market rates. The yield curve for Government securities (Gsec) shifted upwards during the first two months of the quarter in line with the policy rate hike, but moderately shifted downwards in June 2011. Table 1: Stock Price Movement and PE Ratios in EMEs (Year-on-Year Variations) Items Stock Price Variations (Per Cent) P/E- Ratios EndEndEndEndEndEndMar2010@ Mar2011@ Jun2011* Mar2010 Mar2011 Jun2011 1 2 3 4 5 6 7 Indonesia(Jakarta 93.7 32.5 5.7 16.6 16.9 17.9 Composite) Brazil (Bovespa) 71.9 -2.5 -9.0 16.2 10.9 9.8 Thailand (SET 82.6 32.9 -0.6 12.4 13.3 13.3 Composite) India (BSE Sensex) 80.5 10.9 -3.1 17.7 17.6 17.1 South Korea (KOSPI) 40.3 24.4 -0.3 12.2 13.8 13.9 China (Shanghai 31.0 -5.8 -5.7 23.0 16.3 15.4 Composite) Taiwan (Taiwan 52.0 9.6 -0.4 19.1 15.7 15.5 Index) Russia (RTS) 128.0 30.0 -6.7 9.0 8.4 7.6 Malaysia (KLCI) 51.3 17.0 2.2 18.9 17.0 16.8 Singapore (Straits 69.9 7.6 0.5 13.4 10.3 10.5 Times) @: Year-on-year variation. *: Variation Over End-March 2011. Source: Bloomberg.

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Stock prices fell during 2011-12, albeit at a lesser pace than that of other BRIC nations, influenced by domestic and global concerns. There was, however, some rally towards the end of the quarter due to FII inflows. The P-E ratio of Indian equities was higher than of other BRIC nations (Table.1). On a quarter-on-quarter basis, prices in the housing market firmed up during Q4 in majority of cities tracked by the Reserve Bank after showing signs of moderation during Q3 of 2010-11. Money market rates firm up on tight liquidity and rate hikes but do not exhibit signs of stress: Short-term rates moved up further, but there were no signs of stress in money markets. The interest rate movement tracked the 75 bps repo rate hike during the quarter and the tight liquidity conditions. Monetary transmission strengthened further during 2011-12. The call rate, which had declined in April 2011 on the back of easing of liquidity conditions, firmed up thereafter, in response to the increase in the repo rate in May and June 2011, (Table.2). The rates in the collateralized segments (i.e., CBLO and market repo) moved in tandem with the call rate, but generally remained below it. Transaction volumes in the CBLO and market repo segments were higher during the Q1 of 2011-12 than in the preceding quarter (Table.3).
Table.2: Domestic Financial Markets at a Glance Money Market Bond Market Call Rate* (%) Forex Market Exchang e Rate@@ (Rs/US$) Stock Market Indices CNX BSE Nifty# Sensex#

Commercial COD Corp. G-Sec 10Marke CBLO Rate Paper WADR WAEIR Bonds year t Repo (%) (%) (%) Yield yield@ Rate (%) AAA 5(NonYr bond RBI) (%) (%) 1 2 3 4 5 6 7 8 9 10 Mar-10 3.51 3.32 3.15 6.29 6.07 7.94 8.61 45.50 5178 Mar-11 7.15 6.56 6.46 10.40 9.96 8.00 9.23 44.99 5538 Apr-11 6.58 5.55 5.63 8.62 8.66 8.05 9.25 44.37 5839 May-11 7.15 7.05 6.94 9.49 9.30 8.31 9.48 44.90 5492 Jun-11 7.38 7.30 7.06 10.15^ 9.61 8.28 9.63 44.85 5473 *: Average of daily weighted call money borrowing rates. #: Average of daily closing indices. @: Average of daily FIMMDA closing rates. @@: Average of daily RBI reference rate. ^: As at mid-June 2011. WADR: Weighted Average Discount Rate. WAEIR: Weighted Average Effective Interest Rate. Source: RBI Table.3: Average Daily Volumes in Domestic Financial Markets (Rs. crore) Money Market Bond Market LAF

11 17303 18457 19450 18325 18229

Call Market CBLO Com. COD * G-Sec@ Corp. Money Repo Paper* Bond 1 2 3 4 5 6 7 8 9 Mar-10 37,640 8,812 19,150 60,006 75,506 3,41,054 6,621 1,598 Mar-11 -80,963 11,278 15,134 43,201 80,305 4,24,740 8,144 1,314 Apr-11 -18,809 13,383 14,448 56,160 1,24,991 4,47,354 6,928 1,053 May-11 -54,643 10,973 15,897 40,925 1,21,221 4,33,287 7,356 691 Jun-11 -74,125 11,562 16,650 41,313 1,23,400^ 4,23,767 12,844 1,168 *: Outstanding position. @: Average daily outright trading volume in Central Government dated securities. #: Volumes in BSE and NSE^: As at mid-June2011. **UptoJune24, 2011. Note: In col. 2, (-) ve sign indicates injection of liquidity while (+) ve sign indicates absorption of liquidity. Source : RBI

Forex Market Inter-bank (US$ mn) 10 16,082 22,211 25,793 24,167 19,099**

Stock Market#

11 9,191 7,276 8,277 6,668 6,404

During the quarter, banks and primary dealers were the major groups of borrowers in the collateralized segments whereas mutual funds (MFs) contributed nearly three-fourth of the total lending in CBLO, and more than half in market repo segment. The collateralized segment of the

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overnight money market remained dominant, accounting for more than 80 per cent of the total volume during Q1 of 2011-12. With from strong growth in retail deposit mobilisation, banks offered a relatively lower rate of interest on CDs during 2011-12 so far (up to June 17) compared with the previous quarter. The CD issuance declined in Q1 of 2011-12. In contrast, the CP issuance increased. The leasing and finance and manufacturing companies were the major issuers of CPs. Primary yields on Treasury Bills (TBs) firmed up during Q1 of 2011-12 in line with the spike in short-term interest rates (Table.4). The rise in yields reflected a sharp increase in Government short-term borrowing, through issuances of TBs over and above the amount as per the indicative calendar announced in March 2011 as also through issuances of Cash Management Bills (CMBs) to meet the unanticipated sharp cash flow mismatches, particularly, in the wake of large tax refunds.
Table 4: Treasury Bills in the Primary Market Year/ Month Notified Amount Average Implicit Yield at Minimum Cut-off Price (%) (Rs. crore) 91-day 182-day 364-day 1 2 3 4 5 2009-10 3,80,000 3.57 3.97 4.38 2010-11 3,03,000 6.18 6.48 6.56 Apr-11 30,000 7.32 7.60 7.65 May-11 44,000 8.05 8.24 8.25 Jun-11 53,000 8.21 8.19 8.32 Jul-11* 20,000 8.16 8.27 8.27 *: Up to July 15, 2011. Source: RBI

In the context of inflationary pressures and tight liquidity conditions, the primary market yields moved up. The weighted average yield in primary auctions firmed up during Q1 of 2011-12 (Table.5). The investor sentiment, however, largely sustained. The bid-cover ratio stood in the range of 1.39-3.20 during Q1 of 2011-12 as against 1.39-3.87 during the corresponding quarter of the previous year. In view of the flattening yield curve, more long dated securities issued and accordingly, the weighted average maturity of the dated securities issued during Q1 of 2011-12 increased. During 2011-12 so far (up to July 15, 2011), 13 States raised Rs.31, 773 crore on a gross basis as compared with Rs.28, 210 crore raised during the corresponding period of 201011. The spreads of 5-year corporate bonds over comparable G-secs decreased during May 2011, reflecting the impact of unanticipated increase in Government short-term borrowing. The spreads increased in June mainly reflecting the hardening of corporate bond yields.
Table.5: Issuances of Central and State Government Dated Securities Item 2009-10 2010-11 1 2 3 Central Government Gross amount raised (` crore) 4,51,000 4,37,000 Devolvement on Primary Dealers (Rs. crore) 7,219 5,773 Bid-cover ratio (range) 1.44-4.32 1.39-3.88 Weighted average maturity (years) 11.16 11.62 Weighted average yield (per cent) 7.23 7.92 State Governments Gross amount raised (Rs. crore) 1,31,122 1,04,039 Cut-off yield range (per cent) 7.04-8.58 8.05-8.58 Weighted average yield (per cent) 8.11 8.39 *: Up to July 15, 2011. Source: RBI 2011-12* 4 1,59,000 1,506 1.39-3.20 12.35 8.38 31,773 8.36-8.69 8.57

Monetary transmission strengthens with rates hardening in the credit market: Monetary policy transmission to credit market strengthened further during Q1 of 2011- 12 as banks

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increased their deposit and lending rates in response to the increase in the policy rate by the Reserve Bank (Table.6). During Q1 of 2011-12, deposit rates of banks increased in the range of 10-300 basis points (bps) across all maturities. Twenty-three major banks accounting for around 65 per cent of the total bank deposits raised their deposit rates in the range of 25-175 bps. The rise in deposit rates was relatively sharper for maturities up to 1 year for all categories of banks. As savings account deposits constitute around a quarter of total deposits, the 50 bps hike in the savings deposit rate also increased the cost of funds for the banks. During the quarter, all scheduled commercial banks increased their Base Rates in the range of 25-225 bps, of which 47 major banks with a credit share of around 98 per cent raised their Base Rates by 50-125 bps.
Table.6: Deposit and Lending Rates of Banks (Per cent) Sep-10 Dec-10 Mar-11 Jun-11 2 3 4 5 Domestic Deposit Rate (1-3 years tenor) (i) Public Sector Banks 6.75-7.75 7.00-8.50 8.00-9.75 8.25-9.75 (ii) Private Sector Banks 6.50-8.25 7.25-9.00 7.75-10.10 8.00-10.50 (iii) Foreign Banks 3.00-8.00 3.50-8.50 3.50-9.10 3.50-10.00 Base Rate (i) Public Sector Banks 7.50-8.25 7.60-9.00 8.25-9.50 9.25-10.00 (ii) Private Sector Banks 7.00-8.75 7.00-9.00 8.25-10.00 8.50-10.50 (iii) Foreign Banks 5.50-9.00 5.50-9.00 6.25-9.50 6.25-9.50 Median Lending Rate* (i) Public Sector Banks 7.75-13.50 8.75-13.50 8.88-14.00 (ii) Private Sector Banks 8.00-15.00 8.25-14.50 9.00-14.50 (iii) Foreign Banks 7.25-13.00 8.00-14.50 7.70-14.05 *: Median range of interest rates at which at least 60 per cent of business has been contracted. -: Not available. Note: Bank group-wise variations in deposit interest rates worked out from the table would differ from those reported in the text as the latter are based on bank-wise and tenor-wise variations in deposit interest rates. Source: RBI 1

Equity markets remained sluggish and less volatile: Volatility in equity markets declined substantially in the post-crisis period. This declining trend continued into Q1 of 2011-12. Although, in relative terms, the performance of the Indian equity markets was better than that of other BRIC nations during Q1, the two key indices, Sensex and Nifty, declined by about 3 per cent (Table.7). Rising crude oil prices, persistently high inflation, successive policy rate hikes by the Reserve Bank, domestic political developments and the worsening Greek sovereign debt crisis affected market sentiment negatively. Net investment by FIIs in equity and debt segments was US$ 1.0 billion during Q1 of 2011-12, of which flows to equity market amounted to US$ 0.8 billion. Equity markets, however, rallied towards end-June with a revival in FII investments. Stock price returns affected by stock return volatility, and the extent of impact depends crucially on the permanence of shocks to the variance in returns. An analysis of the returns from the broad based S&P CNX Nifty index against the backdrop of the financial crisis and monetary policy action demarcates the time varying volatility persistence in the returns data. The variability in returns, controlling for all other past factors, shows a sharp decline from the crisis period and appears to be moderating. Turnover in the equity derivatives segment constituting almost 90 per cent of the overall investments, witnessed some moderation during Q1 of 2011-12. Volatility in Nifty index options as measured by the India Volatility Index (VIX) was lower in Q1 of 201112 than Q4 of 2010-11.

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Indicator

1 BSE Sensex/NSE Nifty (i) End-period 19445.22 18845.87 5833.75 5647.40 (ii) Average 18605.18 18617.73 5583.54 5585.97 Coefficient of Variation 6.32 3.28 6.40 3.31 @ Price-Earnings Ratio 21.25 19.94 22.14 20.82 Price-Book Value Ratio 3.70 3.48 3.70 3.50 86.80 74.90 85.10 73.20 Market Capitalisation to GDP Ratio (per cent)@ @: As at end-period. Source: Bombay Stock Exchange Ltd. (BSE) and National Stock Exchange of India Ltd. (NSE). The resource mobilisation in the primary segment of the domestic capital market through public issues was lower during Q1 of 2011-12 than the corresponding quarter of the previous year (Table.8). Poor performance of the IPOs after their listing affected investor and promoter sentiments. Resource mobilisation by mutual funds during April-June 2011 was higher than that during the corresponding period of the previous year, although there were net outflows during May-June 2011, particularly in debt mutual funds. The increase in dividend distribution tax for non-retail investors in liquid/debt mutual funds effective from June 1, 2011 and the cap of 10 per cent of net worth placed on banks investment in liquid/debt funds which will be made effective over a six-month period beginning July 5, 2011, could have affected flows into debt mutual funds. Table.8: Resource Mobilisation from Capital Market (Rs. crore) Category 2010-11(Apr-Mar) 2010-11(Apr-Jun) 2011-12(Apr-Jun) 1 2 3 4 Prospectus and Rights Issues* 37,620 7,737 7,000 1. Private Sector (a+b) 24,831 7,737 2,422 (i) Financial 4,335 2,550 901 (ii) Non-financial 20,496 5,187 1,521 2. Public Sector 12,790 0 4,578 Euro Issues 9,441 4,844 1,237 Mutual Fund Mobilisation(net)@ -49,406 3,547 73,039 1. Private Sector -19,215 14,109 64,425 2. Public Sector# -30,191 -10,562 8,614 *: Excluding offer for sale. @: Net of redemptions. #: Including UTI Mutual fund. Source: Mutual Fund data are sourced from SEBI and exclude funds mobilised under Fund of Funds Schemes.

Table.7: Key Stock Market Indicators BSE Sensex NSE Nifty 2010-11 Apr-Jun2011-12 2010-11 Apr-Jun2011-12 2 3 4 5

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Housing prices and transaction volumes rise in Q4 of 2010-11: Property prices increased during 2010-11, despite firming up of mortgage rates. The Reserve Banks Quarterly House Price Index (HPI) based on data in respect of seven cities collected from the Department of Registration and Stamps (DRS) of the respective State Governments show that house prices in five of the seven major cities were higher on a quarter over- quarter basis in Q4 of 2010-11. However, were flat in Ahmedabad and had continued to fall in Chennai. The data on volume of transactions show that after stalling in Q3, transactions increased during Q4 of 2010-11. On a year-on-year basis, there has been an increase in housing prices in Q4 in six cities (i.e., barring Chennai). Housing transactions, however, fell in five of the seven cities (i.e., barring Delhi and Mumbai). Exchange rate remains flexible with less volatility: During 2011-12 so far (up to July 20, 2011), the rupee appreciated marginally against all major currencies barring the Japanese Yen, reflecting in part the dollars movement in the international currency markets due to uncertainty of growth prospects in the US. The average daily turnover in the interbank segment of the foreign exchange market was higher while it was lower in the merchant segment than that in the preceding quarter. The 1-month, 3-month as well as 6-month forward premia declined significantly during the quarter, reflecting an increased supply by exporters in the forward market. The Reserve Bank did not intervene in the forex market during 2011-12 so far. The average daily turnover in the exchange traded currency derivatives grew by 1.7 per cent when compared with the negative growth of 2.8 per cent in the previous quarter. Options recorded a higher growth rate than futures. In the OTC currency derivatives, the swap segment continued to dominate. The average daily turnover in the OTC market grew by around 14.8 per cent during Q1 of 2011-12 as compared with a negative growth of 3.7 per cent during the previous quarter. Test of Hypothesis: The hypothesis appropriate regulatory framework in place along with specific prudential measures taken from time to time played an important role in preventing instability in the Indian financial markets during and after the global meltdown is proved in this study because, of much better macroeconomic policies and regulatory frameworks in Indian financial market than in the past. Indian financial market that entered the meltdown with more policy space and less binding financing constraints were able to react more aggressively with fiscal and monetary policy. Concluding Observations In some respects, Indian finance has made major progress. Policy makers over the last 20 years made important progress with revolutionary reforms of the equity market (including sophisticated thinking on institution building for SEBI, NSE and NSDL), the limited entry of private banks, and the limited liberalisation of the capital account. However, these three areas of greater success have not been adequate in obtaining financial system that is commensurate with India's needs, for intermediating $390 billion of savings and investment a year for an increasingly complex and internationalized economy. The subdued current market volatility is no guidance for future. Financial market volatility can return if macro conditions worsen. Indian financial markets continue to influence by the global as well as domestic factors. Money market rates continue to condition by monetary policy actions. If prolonged inflation feeds into inflationary expectations, it would affect all segments of the markets, particularly the G-sec markets. A widening of the fiscal deficit leading to a higher than budgeted market borrowings could also exert upward pressure on G-sec yields. A slowdown in economic growth could affect corporate performance, which, in turn, would weigh on equity markets. Market volatility could resurface if macro conditions deteriorate. Since 2003, Indian financial markets have been

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receiving global attention, especially from sound investors, due to the improving macroeconomic fundamentals. The presence of a great pool of skilled labour and the rapid integration with the world economy increased Indias global competitiveness. No wonder, the global ratings agencies Moodys and Fitch have awarded India with investment grade ratings, indicating comparatively lower sovereign risks. However, P-E ratio of Indian equities was higher than of other BRIC nations because of strong fundamentals and regulatory framework in the Indian financial markets. References 1. http://articles.economictimes.indiatimes.com.02/05/2011, 08.26pm IST 2. http://post.jagran.com. 07 Aug 2011, 10:56 AM IST 3. http://rbi.org.in *****

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BANKING ON HR CAPITAL: VALUE ADDITION VIA BALANCE SCORECARD R. Marie Anne Research Scholar, LIBA, Chennai. ______________________________________________________________________________ The Indian banking industry in the present times engage greater importance to the Human Resource Management function as it is the non-financial people assets, that brings value addition to business. Taking a diversion from the traditional roles of HR which followed a follow the rules, command and control pattern, banks today places importance in being a strategic partner to business. Due to the emergence of LPG (Liberalization, Privatization, and Globalization), IT Architecture, internet and e-commerce, most of the banks today have transformed from brick and mortar banking to branchless banking. With organizational dynamics shifting towards an increasing market-and-customercentric approach, the role of the human resource function as a strategic partner is very critical when it comes to the strategic alignment of the HR activities with the business. Strategic HR, the new avatar, is a realization that HR can play a more important and proactive role in the emerging flexible new organization paradigm. The HR function is well interconnected with the strategic goals and objectives of an organization, such that HR can enhance the organizations ethos, and foster a participative culture. Strategic HR, thus, recognizes HRs partnership role in the organizations strategizing process. In this enhanced capacity, HR is required to balance the roles of a change agent, an administrative expert, a strategic partner, and an employee championand add value on all these counts (John Winchester, 2001). Human Capital The Challenge The whole challenge lies in managing the human capital resource of the organization effectively and efficiently. Human capital is the stock of competencies, knowledge and personality attributes embodied in the ability to perform labour so as to produce economic value. It is the attributes gained by a worker through education and experience. This most important resource is the most difficult to manage as no two persons are similar. Every person has different qualities, attitude, motives, personality traits, skills, knowledge etc. which has an effect on the performance. Researches conducted by Industrial and organizational psychologists have found that effectiveness of a person to carry out a job depends not only single or isolated factors but on set of many different factors. Such set of factors that help the possessor to be effective in a particular job is termed as competency for that particular job. Competencies include the collection of success factors necessary for achieving important results in a specific job or work role in a particular organization. Success factors are combinations of knowledge, skills, and attributes (more historically called KSAs) that are described in terms of specific behaviors, and are demonstrated by superior performers in those jobs or work roles. Attributes include: personal characteristics, traits, motives, values or ways of thinking that impact an individuals behavior. The key to gaining a competitive edge is the ability of the workforce of an organization to maximize the advantages of state-of-the-art technology, superior products, and steady technological tools are only as useful as its employers ability to employ them; they are perceived in terms of how effectively the benefits are communicated (McLagan, 1989).

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The ability to define core competencies and skills, the technology to be used, as well as the corporate culture vis--vis HR are needed to support an organizations strategy. Once these objectives are identified, the company can map the road ahead for HR to play an instrumental role in the overall organizational strategy. What is critical, however, is the managements realization that HR can no longer be a reactive, backstage function, whose sole aim is to respond to a given business situation. On the contrary, HR is today in a position to define business scenarios, plan for the manner in which they would be handled, and derive the maximum value for the organization and its employees. The Balance Scorecard Balanced scorecard is a management system that measures and manages an organizations progress toward strategic objectives. Balanced scorecard incorporates four perspectives: financial indicators, customer, internal business, and learning/innovation. The balanced scorecard is a management system (not only a measurement system) that enables organizations to clarify their vision and strategy and translate them into action. It gives managers a comprehensive view of the performance of a business. It provides feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results. The Balanced Scorecard has been promoted as a tool to help organizations monitor the implementation of organizational strategy. Balanced Scorecard is a performance management tool: although it helps focus managers' attention on strategic issues and the management of the implementation of strategy, it is important to remember that Balanced Scorecard itself has no role in the formation of strategy. Balanced Scorecard can comfortably co-exist with strategic planning systems and other tools. Unlike traditional performance measurement systems, which have financial controls at their core, the Balanced Scorecard begins with an organizations vision and strategy (at the center of the diagram). This is accomplished by determining objectives and measures in each of the Scorecards four interrelated perspectives (see diagram). A popular model for working with balanced scorecard is to describe, for each perspective: 1. the long-term goals of the organization. 2. What success factors have been established to achieve these goals? 3. What activities should be carried out to achieve goals? 4. What indicators should be measured to monitor development? The Balance Scorecard in Banking Strategic HRM Initiatives Even if bank has huge capital, attractive credit and deposit offers and many potential customers who might be fascinated in these offers, the bank may be unsuccessful just because their employees do a poor job. Management of personnel in financial institutions is an inseparable part of any business management system. The success of the HR department lies in effectively evaluating the key performance indicators. This can be well established using the balance scorecard. Vision, Mission & Values The core challenge of the balance scorecard lies in communicating the vision, mission and values throughout the organization. Banks today use certain cultural artifacts to depict the organizations vision, mission and values to its employees. Posters, signboards, badges, neck ties, circulars etc depict the cultural artifacts in any organization. For example cups and t-shirts carrying the inscription of targets is given to employees to create the spirit of working towards a common goal. The broad vision is communicated in simple terms that can easily be remembered

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by the employees. The organizations holistic interest to develop and facilitate both business and individual growth is best conveyed by a good vision statement. Efforts are also taken to make the vision work through collective ambition such that all products, process improvements and HR initiatives are directed towards the banks achieve its objectives. Financial Perspective Most banks measure its financial growth by dividing their markets into metro, urban, semi urban and rural based on the required breakeven for optimum business. The growth is measured by considering four parameters namely income, deposit, advances, control and efficiency. Cost to income is taken as a parameter. Monthly averages are taken for performance evaluation in deposits and advances. In the case of business performance, achievements beyond targets are rewarded. Control and efficiency is based on areas like Sales Initiatives, Rectification of Audit Comments, Customer Service, Compliance, Employee involvement & Employee relation, Maintenance of premises/Signboard and Cash & Bank Balance. A most prominent measure taken to improve business is conducting internal campaigns for different products with incentives. For e.g. POS campaign, SIP campaign with individual and branch incentives, Best ATM campaign, Gold loan campaigns, Trip to foreign countries are some attractive measures to motivate employees to perform more productively and efficiently and hence bring measurable revenue to the organization. Customer Perspective Customer relationship management in banks today takes care of two perspectives namely the operational and the analytical. The operational perspective involves the interactions between the customer and the bank that happens normally. Whereas the analytical part, involves studying the nature of relationship of the customer with the bank, more precisely analyzing investment patterns and thereafter mapping the purchase patterns, his/her needs and requirements and providing tailor made products based on customer feedback and requirement e.g. special products for NRI customers due to rise in interest rates. Sending birthday wishes and anniversaries is a more common way of showing the customer that the bank values them. Such huge customer databases are managed by softwares such as PIVOTAL, SAP, SIEBEL, AMDOCS, SALES FORCE. Royal Bank of Canada, Union Bank, Federal Bank, ICICI, KVB, HDFC, Yes Bank are some banks that have a strong Customer relationship management system. Employee Learning and Growth Perspective Employee learning and growth which is the most important of all perspectives can be managed well by a sound knowledge management system in banks. Sharing and exchange of information throughout the organization is very important. Bankers have access to confidential information of the bank itself and customers. This is sensitive information that should not go to third parties. For this a reason it is important that bank employees are familiar with ethics policy of the bank otherwise offended customers may go to competitors which means loss of money. Intranets facilitate this aspect by helping employees know the current happenings inside and outside the bank. Announcements, notices, employee information, branch information, market view, daily news inside and outside organization, System support, Rates of interest, birthday of employees etc are common information shared through the intranet. Weekly internal publications, CD containing manual of policies, schemes and other publications since the inception of the bank, etc facilitate employees to know well about their organization and the recent changes they need to adapt to e.g. cheque validity to be 3 months from April 1st 2012.

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Rewarding employees at the right moment facilitates more learning and growth. Getting older employees to adapt to technology is another challenge. Basic needs like viewing leave balances, allowances and other personal details, applying for transfer request, applying for loans etc. using technology and internet creates a necessity for older employees to know the technology thus helping them update their knowledge. Interaction with the top management on a frequent basis will also help employees express their views and feel respected. Socializing with employees family is another way of creating the spirit of learning and recognizing of talents. Publications that give an opportunity to employees families for self expression, literary creations, paintings and achievements facilitates strong family bonding with the organization. Developing ASK Attitude, Skills, Knowledge and ABC Awareness, Belongingness, Commitment is the mantra for effective knowledge management and hence effective employee learning and growth. Internal Business Process Perspective Business should take a customer centric approach rather than product centric approach to attain internal business process effectiveness. The BCG matrix given by Boston Consulting Group facilitates this effective change. Organizational development initiatives like organizational restructuring, influencing the organizational culture, the core values and ethos of the organization etc that facilitate improvement in performance in a scientific manner through action research approach. An organization culture that fosters innovation is the need of the hour. Identifying new ways of effectively meeting customer needs is essential to take the business to greater heights. Even the smallest idea should to recognized. A collaborative approach will surely facilitate proactive ways of responding to change. Thus, to sum it up, it needs saying that effective strategic HR policy in the banks results in revenue increase since satisfied employees directly contact with customers. It is well known that satisfied employees have the most satisfied customer. The balance scorecard serves as an effective tool to achieve just this. *****

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A STUDY ON HRM PRACTICES - GOVERNMENT INSURANCE COMPANIES AT CHENNAI S.Arockiasamy and 2Victor Louis Anthuvan 1 Research Scholar in LIBA and 2Faculty of LIBA Introduction: As part of the LPG (Liberalization, Privatization, Globalization) India deregulated the Insurance sector by allowing private Insurance companies with a maximum of 26% foreign holding. This has unleashed aggressive competition in the market place. Contemporary companies must seek ways to become more efficient, productive, flexible and innovative, under constant pressure to improve results. The traditional ways of gaining competitive advantage have to be supplemented with organizational capability i.e. the firm ability to manage people (Ulrich and Lake 1990).Organizational capability relates to hiring and retaining competent employees and developing competencies through effective human resource management practices is essential to sustainable competitive advantage(Kundu and Vora 2004). High Performance work practices provide a number of important sources of enhanced organizational performance (Pfeffer and Veiga 1999). HR Systems have important ,practical impacts on the survival and financial performance of firms, and on the productivity and quality of work life of the people in them Objectives of the Study: The main objective of the study was to assess the human resource management practices being to implement in the Government run insurance companies operating in Chennai. To achieve the main objectives, the following sub-objectives were framed: 1. To assess practices regarding human resources planning and recruitment 2. To assess the practices regarding training in insurance companies 3. To assess the practices of performance appraisal in insurance companies 4. To assess the compensation and benefits related practices in insurance companies 5. To assess and compare the HR practices being implemented in the Private and Government companies 6. To assess the differences of perception of male and female employees regarding HR practices being practiced in insurance companies Research Methodology The study was based on the primary data collected through a questionnaire which contained 10 background questions(Table 1) and 18 statements about human resource management practices(Table 2). The respondents were asked to rate the statements on a five point rating scale. The questionnaire was administered to 100 respondents of four insurance companies(Life Insurance Corporation of India, Oriental Insurance Corporation of India, The New India Assurance Company Ltd, United India Insurance Company Ltd) in 12 branches( Three from each company) out of which 78 (78%)questionnaires were returned and only 71 were found to be in order. Out of 71 respondents 55 were males and 16 females. Statistical tools like actual counts, percentages and means were used to assess the frequency and extent of variables related to general and background information. Correlations were used to assess the relationships of human resource management practices used in Government run Insurance companies. Standard deviations were used to understand the variations in data collected through responses. ANOVA was used to assess the significant differences regarding HR practices between the four companies
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Results 1.The primary data were analyzed to assess HR practices being analyzed by Government run insurance companies.Table 3 explains the characteristics of the sample 2.Stude revealed correlation between various HR practices 3. Training and development Factor mean score of 3.1 reveals that it is on a much lesser scale compared private players(3.5) 4.Performance Appraisal Factor mean score of 2.8 illustrates that it is in no way compared to private players(3.4) 5.Recruitment,Selection and Socialization of employees Factor mean score of 2.5 compared to 3.4 of private players illustrates the scope for improvement 5.Contemporary HR Practices Mean Factor score is 2.2 against 3.0 of private players Findings 1. The primary data were analyzed to assess HR practices being analyzed by Government run insurance companies. Table 3 explains the characteristics of the sample 2. Study reveals that there is a good correlation between various HR practices 3. Planning, Recruitment & Selection as a HRM initiative is practiced. Factor mean score of 2.5 reveals that it is on a much lesser scale compared private players (3.4) 4. Training and development to improve the skills and competencies of the employees is being practiced.Factor mean score of 3.1 indicates that it is on a lesser scale compared private sector (3.4) 5. Though Performance Appraisal is done, it lacks credibility since the target setting and the appraisal are not being done objectively. Factor mean score of 2.8 illustrates that it is in no way comparable with private players (3.4) 6. The study reveals that the compensation and benefits are much lesser compared to private sector 7. The study reveals that there is lack of focus and initiative in introducing Contemporary HR Practices. Mean Factor score is 2.2 against 3.0 of private players 8.The study indicates that there is very little difference with regard to the perception of HR Practices by male and female employees Suggestion/Conclusion: Government run Insurance companies need to be alive to the market realities and quickly adapt contemporary HR practices in terms of Recruitment and Selection ,Training and Development, Performance appraisal, Compensation and Benefits and QWL failing which the market share will continue to slide and the organizations would go in the way many Public Sector Companies have gone.
1 2 3 4 5 TABLE 1: DESCRIPTION VARIABLES The organization conducts job analysis regularly The organizations conducts human resource planning on a regular basis The organization has a well defined recruitment policy The organization attracts service oriented employees towards the organization The organization selects individuals on the basis of service attitude and competence

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6 7 8 9 10 11 12 13 14 15 16 17 18 The organization has a well planned training and development programs for service employees The organization provides service orientation to leaders from top management Performance appraisal is done regularly Client management ad support is given due weight in performance appraisal The organization has a system of pay linked to performance The organization pays competitive salaries to the employees The benefits offered to the employees are in line with other organizations All employees have equal say in the organization The organization has flexible work hours for special groups like women and physically challenged employees The organization provide sufficient opportunities for career advancement to employees The organization conducts attitude survey regularly The organization is open to adoption of new HR practices The organization encourages constructive criticisms TABLE 2: Gender Male Female Total LIC 20 7 27 TABLE 3: Variables 1 Gender DISTRIBUTION OF SAMPLE UIIC OIC NIAC 14 4 18 11 4 15 8 3 11

Total 53 18 71

CHARACTERISTICS OF THE SAMPLE Categories Male Female Total Married Unmarried Total Life General LIC UIIC NIAC OIC Exist Does not exist

Number 53 18 71 65 6 71 27 44 3 3 3 3 12 23

Marital status

Type of insurance company

Number of Branches

5 6

HRM Dept Work experience

*****

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RISK MANAGEMENT IN INDIAN BANKS Arti Chandani and 2K. B. Chandrasekaran Research Scholar, Madras University, Chennai. 2 Associate Professor, D. B. Jain College, Chennai.
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Introduction Risk is concerned with the uncertainty which lies in the future. Risk is an evitable part of life where we face risk right from the morning till the end of the day. Risk may vary from being trivial to the significant having disastrous effect on the person. Risk might be called as an adverse deviation from a desired outcome that is expected. Banks which were working in a protected environment of late were not facing risk. Since the entry of foreign and multinational banks has forayed in India, the whole market has changed for the banks. The banks are also facing stiff competition from other competitors just like any other product or service. In this changed scenario, the banks are exposed to the different types of risk. The onus of the success of banks lies as to how good the bank is in managing the risk. Types of Risk 1. Credit Risk: - When the bank is unable to recover the loan amount, which has been disbursed, it is known as the credit risk. It may also happen that some of the customers may choose to repay the loan, easier to their scheduled payment date/time. This situation prevents banks to earn interest on the loan as the loan is closed before the maturity date/time. 2. Interest Rate Risk: - This type of risk emanates from the wide fluctuations in the interest rates. If the interest rate moves in the adverse direction, it may affect the profitability of the banks. The impact of interest rate risk is on the net interest margin, which will have to shrink, in order to stay in the market. 3. Liquidity Risk: - If the bank is not able to entertain its commitment, when they are due, the bank is considered to be facing liquidity risks. The bank may face this type of risk due to non-recovery of loans, net outflow of cash due to withdrawals, full usage of the sanctioned limits. Risk Management Process Risk management can therefore be considered the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities. Process of Risk Management Risk Management in Indian Banks Different banks have been involved in evolving a policy to mange the risk, which they face. In the liberalized era, the banks are making efforts not only to understand, measure the impact of risk, but also as to how the risks should be managed so that it does not hamper the profitability of the banks. Using quantitative techniques in risk modeling, RBI issued the first set of guidelines to banks on Risk Management on October 20, 1999. An Example: Union Bank of India Risk is inherent part of Banks business. Over a period of year, Union Bank of India (UBI) has taken various initiatives for strengthening risk management practices. Bank has an integrated

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approach for management of risk and in tune with this, formulated policy documents taking into account the business requirements / best international practices or as per the guidelines of the national supervisor. Loan Policy. Credit Monitoring Policy. Real Estate Policy Credit Risk Management Policy Collateral Risk Management Policy Recovery Policy Treasury Policy Ways to Manage Risk All the banks in one way or other are involved in the effective management of the risk. The following deals with the management of the different types of risk: Managing Credit Risk: - The banks clearly define the risk appetite they are looking for it. It will help them in defining the target market. Once this exercise is over, the details analysis of the clients is required to be done. Further more the banks should lay down the policy which will dictate the credit evaluation and appraisal system, and risk evaluation system. Credit administration, loan documentation and guidelines on the management of loans should be communicated to the concerned people in the organization. The senior management of the bank as well as the board of the banks should establish and set the limit for the credit risk and constitute a Credit Risk Management committee which will be responsible for the implementation of the credit risk policy and strategy in the bank. Managing Interest Rate Risk: -The banks management should take necessary steps to monitor and control interest rate risk. It should also ensure that the banks are equipped with the appropriate resource to evaluate and control interest rate risk. Banks should hold capital commensurate with the level of interest rate risk they undertake. Banks should also have a system of internal control for the interest rate risk management process. Managing Liquidity Risk: - The bank should have a proper management of daily management of cash so that the shortage of cash can be dealt with on daily basis, to reduce the impact. The banks should also periodically review their loans and monitor the repayment schedule. It will help in categorizing the loans into the loans which will not pose difficulty and loan which may pose difficulty. Conclusion Banks, who are the lenders and receivers of money, face tremendous amount of risk. The significance of risk management is very high in banks as they lend money to different people, if the same has been given to a wrong person/company, the bank faces risk. The banks face different types of risk viz. credit risk which emanates from lending, interest rate risk which emanates from volatility in the interest rates and so on. The banks have made the policies to take care of these risks and are better equipped to handle the various risks posed by their operation as well as by the environment. The example of Union bank of India clearly highlights the importance of risk management and the adaptation of relevant techniques to manage the different types of risks. *****

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A STUDY ON THE ROLE OF FINANCIAL LITERACY AND CREDIT COUNSELLING CENTERS. T.Joseph and 2Arun Balakrishnan 1 Associate Professor and 2Research Scholar Dept of Commerce, Loyola College (Autonomous), Chennai- 600 034. INTRODUCTION By the 1960s, the Indian banking industry has become an important tool to facilitate the development of the Indian economy. At the same time it has also emerged as a large employer. Recently, the Indian banking sector has witnessed the introduction of several new private sector banks, which have grown quickly in the past few years. India has also seen the entry of many foreign banks since the commencement of financial reforms. This rapid expansion is attributable to a policy, which required banks to open branches in the unbanked areas, which in turn paved the way for opening these financial literacy and credit counseling centers. The establishment of FLCCs is an important milestone in furthering financial inclusion. As I have emphasized time and again, opening a no frill account is by itself not financial inclusion. That is just the beginning. Financial inclusion is a much broader term which can be construed as the process of ensuring fair, timely and adequate access to financial services, namely, saving, credit, payment and remittance facilities and insurance services at an affordable cost in a fair and transparent manner by the mainstream institutional players. Educating people and making them financially literate thus becomes integral to achieving financial inclusion, which is why centres such as these are needed. One of the strides that the banks took was to swim against the tide and offer services and proper counseling. They were convinced that there was a hard need for such types of services. Financial Literacy is to help the unreached sector realize the importance of financial services in improving the standard of their living and where and how the services can be availed, i.e. to basically create a need and synergize the demand thus created with the supply of financial services by the formal institutions. FINANCIAL EDUCATION Financial education can broadly be defined as the capacity to have familiarity with and understanding of the financial market products, especially rewards and risks in order to make informed choices. Viewed from this standpoint, financial education primarily relates to personal financial education to enable individuals to take effective actions to improve overall wellbeing and avoid distress in financial matters. The financial markets offer a variety of both simple and complex financial products. It is difficult for the common person to grasp the downside risks associated with financial product as especially if he or she is confronted by a blitz of clever advertising. Making wrong choices while choosing financial products becomes one of buying in haste and repenting at leisure. The focus of any discussion on financial education is thus primarily on the individual, who usually has limited resources and skills to appreciate the complexities of financial dealings with financial intermediaries on matters relating to personal finances on a day to day basis. Lack of literacy in general and financial areas in particular, are the main hurdles in expanding the coverage of financial services to the poorer segments of the society. Notwithstanding the initiatives taken so far, given the large magnitude of the problem, concerted efforts need to be made in the direction. Banks should, therefore, come forward to set up literacy centers and guide their clients about the features, benefits and risk of various financial products.
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With no well established banking relationships, the unbanked poor are pushed towards expensive alternatives. These centers can educate the people about proper financial products and services which in turn will boost financial inclusion. This process of education could benefit the bank as the centers while interacting with customers would be in a much better position to understand their specific requirements, which could then be a critical input in appropriate product design. Financial education is also an integral component of customer protection. Despite concerted efforts, the current levels of transparency coupled with the difficulty of consumers in identifying and understanding the fine print from the large volume of information, lead to an information asymmetry between the financial intermediary and the customer. For example, customers are often penalized for minor violations in repayments, although they have limited redressal mechanisms to rectify deficiencies in service by banks. In context, financial education can greatly help the consumers. CREDIT COUNSELLING Credit counseling can be defined as counseling that explores the possibility of repaying debts outside bankruptcy and educates the debtor about credit, budgeting, and financial management. It serves three purposes. First, it examines the ways to solve current financial problems. Second, by educating about the costs of misusing a credit, it improves financial management. Third, it encourages the distressed people to access the formal financial system. According to an investment survey conducted in 2003, nearly a fourth of the households in rural areas increased sharply from 23 in 1991 to 27 in 2003, the corresponding figures for urban areas during the same period were 19 and 18, respected. As per the NSSO survey 2033, out of 89.35 million farmer household, 48.6% were reported to be indebted. Farmers indebtedness was highest in Andhra Pradesh followed by Tamil Nadu and Punjab. The average outstanding loan per farmer household was highest in Punjab, followed by Kerala, Haryana, Andhra Pradesh and Tamil Nadu. The report on the situational assessment of farmers estimated that 64.4 percent farmer households are indebted in Kerala as against the national average of 48.6 percent. The major reasons for arrears in repayment reported include high cost of cultivation, fall in prices of agricultural produce and crop failures. Opening of credit counselling centers such as these can certainly benefit the people. Earlier there were reports of farmers committing suicides in some parts of the country due to their financial liabilities. Through the provision of timely and professional advice, common people can be helped to manage their debt, improve money management skills and gain access to the structured financial system. Counselling can help solve current financial problems, create awareness about the costs of misusing a credit can improve financial management and help develop realistic spending plans. Debt counseling /credit counseling can be both preventive and curative. In case of preventive counselling, the canters could provide awareness regarding cost of credit, availability of backward and forward linkages; where warranted, etc. the clients could be encouraged to avail of credit on the basis of their repaying capacity. Preventive counseling can be made through media, workshops and seminars. In the case of curative counseling, the clients may approach the counseling centers to work out individual debt management plans for resolving their unmanageable debt portfolio. Here, the centers could work out effective debt restructuring plans that could include repayment not debt to informal sources, if necessary, in consultation with the bank branch. OBJECTIVES OF FLCCs

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The broad objectives of the FLCCs are to provide free financial literacy/ education and credit counselling. a. To provide financial counseling services through face to face interaction as well as through other available media like email, fax, mobiles, etc, as per convenience of the interested persons, including education on responsible borrowing, proactive and early savings, and offering debt counseling to individuals who are indebted to formal and informal financial sectors. b. To educate the people in rural and urban areas with regards to various financial products and services available from the formal financial sector. c. To make the people aware of the advantages of being connected with the formal financial sector. d. To formulate debt restructuring plans for borrowers in distress and recommend the same to formal financial institutions, including cooperatives, for an individual e. To take up any such activity that promotes financial literacy, awareness of the banking services, financial planning and amelioration of debt-related distress of an individual. ISSUES AND CHALLENGES Since promoting awareness is the primary objectives, the FLCCs should give due emphasis to customers rights under fair practices code and act as watch dogs. Our institutions must provide high quality public services to all citizens with transparency and accountability. To achieve this there are several challenges and issues that come to my mind. More banks are needed so that they can lend to the customers but largely to the self employed rather than the salaried. The first issue is that of treating the customers fairly. Transparent pricing, terms and conditions of financial products including interest charges, premia, fees and user friendly products made available in a form which is intelligible to borrowers would go a long way in reducing the need for having financial education centers in the first place. There is a need to sensitize the bank staff to engineer an attitudinal shift with empathy for the poor, strengthen and streamline systems to improve the efficiency of our distribution and delivery mechanisms. The second issue for banks is to expand the range and reach of counseling and advisory services to vulnerable sections. For this a large number of such centers would be required. Obviously there are many districts which still do not have such centers and we need to strive towards setting up more centers. Thirdly, banks need to facilitate the empowerment of credit counseling centers for them to be effective liaising and negotiating on the behalf of their customers. It must be understood that FLCCs are to facilitate responsible behaviour among financial institutions serving customers at the base of pyramid as part of their focus on equity and efficiency. The fourth issue is that of enlisting committed and well trained personnel top man these centers. As quality of service is an important aspect, it is desirable to have appropriately benchmarked quality standards for credit counselors and counseling agencies. A related issue is that whether there should be accreditation of credit counselors? If so, who should do it, industry associations or individual banks? These could be considered in due course. The fifth issue that faces agencies is that of following a segmented approach vis--vis a broad-based generalized one. It is clear that banks may have to adopt a segmented approach specific to different categories of borrowers and different credit segments. Similarly, in respect of urban and rural areas, different approaches would be required. For instances, the centres in rural and semi urban areas could concentrate on financial literacy and counselling for farming

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communities and those engaged in allied activities. The centers in metro/ urban areas could focus on individuals with over dues in credit cards, personal loans, housing loans, etc., thus the challenge is to tailor differential literacy and counseling mechanisms depending upon the need. Sixth, an important issue from the financial literacy perspectives is that of content design and appropriate delivery medium and mechanism suitable to the particular target group. Lastly, as lack of awareness is a major stumbling block in such initiatives, it is necessary to give wide publicity to the concept of credit counseling and the availability of such services. Effectively utilizing the various mass communication channels and leveraging information technology would assume importance in this context. CONCLUSION By Financial inclusion in India the financial system has grown rapidly in the last feqw years. Therefore the FLCCs bring a relief to the common person. The bank, based on the experience gained, may like to consider opening more such centers in other districts of the state in due course as the benefits of such initiatives flow back to the bank. We need to collectively strive to deepen and broaden to ensure that no individual, community or participate in, and benefit from the development process. *****

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WILL CORPORATE ENTRY INTO BANKING SECTOR SPREAD SMILES OR CRIES TO THE INDIAN FINANCIAL SYSTEM B.AshokBhojan Student, KCT Business School Abstract It is evident from several parameters like, annual credit growth, profitability, and trend in gross non-performing assets (NPAs), the Indian banks have made a good progress in the recent past. There is no doubt that domestic banks continued to manage growth with resilience during 2010-11 with ample reserves of capital and liquidity, improved performance in profitability and asset quality. With high growth potential of the Indian economy and favorable demographics, banks have immense opportunities to further expand their business both with traditional and innovative products. Further, it is equally true that it is challenging for banks to raise additional capital and liquidity to support higher growth. This would require banks to use innovative and attractive market based funding channels, especially when capital continues to remain expensive and the Government support may be constrained by fiscal considerations. To focus on inclusive growth, banks are expected to renew efforts to broaden the scope of financial inclusion and use viable business models to achieve their targets. One such effort is the entry of industrial houses in banking sector. Finance Ministry has lately come up with a proposal to allow the entry of top corporates of the country to enter the banking industry in India, in a move to liberalize the countrys banking sector which has vast untapped potential. Conflicts of interest, concentration of economic power, likely political affiliations and potential for regulatory capture, are though the major concerns, regulators in most developed countries do not specifically restrict businesses from setting up banks. The RBI has laid out options for the minimum capital required and the extent of promoter shareholding. This paper makes a descriptive analysis from all angles on as regards the capital mobilization and entry of corporate as a move of stimulation of economy, its impact on the Indian financial System and also have not failed to consider the unsavory past experience in India and abroad, that any such move will aggravate the already skewed concentration of wealth and political influence, besides creating an uneven playing-field with existing players. The paper has also incorporated the possible safeguards to address the downside risks of industrial houses in banking. Introduction The last two decades have seen many positive developments in the Indian banking sector. The policy makers which comprise Reserve Bank of India (RBI), Ministry of Finance and related government and financial sector regulatory entities, have made several notable efforts to improve the regulation and growth in the sector.The IT revolution had a great impact in the Indian banking system. The use of computers had led to introduction of online banking in India. The use of the modern innovation and computerization of the banking sector of India has increased manifold after the economic liberalization of 1991 as the country's banking sector has been exposed to the world's market. Apart from the above mentioned innovations the banks have been selling the third party products like Mutual Funds, insurances to its clients.The introductions of ATM centers have made the transaction system ease.

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Lesson from the crisis It was the abrupt breakdown following the collapse of Lehman Brothers in midSeptember 2008 that caused financial markets in advanced economies to go into seizure.The epicentre of the crisis lay in the advanced economies, but it soon spread in two directions. First, in the advanced economies, it spread from the financial sector to the real sector severely hurting consumption, investment, export and import. Second, it spread geographically from the advanced economies to the emerging market economies and soon engulfed almost the entire world through trade, finance and confidence channels. In short, financial stability that we had grown to take for granted got impaired. Indian approach of financial stability in crisis Even in the amidst of such a cataclysmic crisis, our financial sector remained safe and sound, and our financial markets continued to function normally. Sure, we have been hurt by the crisis, but much less than most others.This made to believe that there are some stringent regulations in Indias financial stability. Indias Approach In contrast to the minimalist formula of single objective, single instrument, the conduct of monetary policy by the Reserve Bank has been guided by multiple objectives and multiple instruments. In general, our three main objectives have been price stability, growth and financial stability, with priority among the objectives shifting from time to time depending on the macroeconomic circumstances. We established a Board for Financial Supervision for focussed regulation and supervision of banks and other financial institutions under the Reserve Banks jurisdiction. It may be relevant to highlight some of the specific features of our system that have contributed to financial stability: Banks were required to hold a minimum percentage of their liabilities in risk free government securities under the statutory liquidity ratio (SLR) system. This stipulation ensures that banks are buffered by liquidity in times of stress. We managed the capital account actively. In the face of large capital inflows during 2006-08, we sterilised the resultant excess liquidity through calibrated hikes in the cash reserve ratio (CRR) and issue of market stabilisation scheme (MSS) securities.When the flows reversed during the last quarter of 2008, we reversed the measures too. We cut the CRR and bought back the MSS securities to inject liquidity into the banking system. However the recent downgrade of the Indian Banking System by Moodys from stable to negative should make the Reserve Bank of India to rethink some of its existing policies.The downgrade is justified or not will only be known over time. The inability of the banking sector to raise sufficient capital to support credit growth now is a cause of concern. The cost of banking intermediation in India is higher and bank penetration is far lower than in other markets. Indias banking industry must strengthen itself significantly if it has to support the modern and vibrant economy which India aspires to be. While the onus for this change lies mainly with bank managements, an enabling policy and regulatory framework will also be critical to their success. Paradigm Shift This paper discusses about the entry of corporate into the Indian Banking System, its licensing regulations, pros and cons and suggestions for improvement. Entry of Corporate into the Banking System

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The Reserve Bank (RBI), on August 29, 2011, came out with draft guidelines for issuing new banking licenses in the private sector. It was mooted by the Finance Ministry which has come up with a proposal to allow the entry of top corporate of the country to enter the banking industry in India as it was earlier discussed in the UNION BUDGET speech 2010-2011. The Finance Minister made the following announcement in his budget speech for 2010-11 with regard to licensing of new banks: The Indian banking system has emerged unscathed from the crisis. We need to ensure that the banking system grows in size and sophistication to meet the needs of a modern economy. Besides, there is a need to extend the geographic coverage of banks and improve access to banking services. In this context, I am happy to inform the Honorable Members that the RBI is considering giving some additional banking licenses to private sector players. Non-Banking Financial Companies could also be considered, if they meet the RBIs eligibility criteria. Reasons for Corporate Entry To expand the geographical coverage of banks and access to banking services. To liberalise the countrys banking sector which has vast untapped potential. Financial inclusion To increase the efficiency and competition To liberalise the countrys Banking Sector Post nationalization, branch expansion of public sector banks got a boost. The share of rural and semi urban branches in the total branch network improved from 63 per cent in 1969 to 78 per cent in 1985. All SCBs were advised by the RBI to allocate 25 per cent facilitators to expand banking services, banks have been asked to cover 72,800 villages with a population above 2,000 by March 2012 through the branch mode. The draft guidelines mandate that new banks open 25 per cent of their branches in unbanked areas. However, industrial houses keen to enter banking should be asked to commit at least half their branches in rural and semi-urban areas till the goal of reasonable financial inclusion is met. If industrial houses indeed have the capability to innovate business models, it should not be difficult for them to develop banking models for rural conditions Branch Expansion India has not issued a new bank licence since 2004, and the government wants more banks in order to increase access to banking services in a country where more than half of the households are outside the formal banking system. Currently, the Indian Banking Sector is primarily dominated by 26 state owned banks that control about 75% of the assets and rest is shared by privately owned banks like HDFC, ICICI and other foreign banks. Financial Inclusion Financial inclusion formed an important plank of the inclusive growth theme of the Eleventh Five Year Plan. There has been renewed interest in branch expansion. The challenge of financial inclusion is formidable, as there are around six lakh villages and only 85,393 branches of commercial banks. The grant of licenses to industrial houses should involve a commitment on financial inclusion. To Increase the Efficiency and Competition The introductions of new private banks in the mid-1990s and liberal entry norms for foreign banks have already served the cause of promoting competition. Earlier Experience

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India's industrial houses have in the past run banks, or worked in close association with banks. In 1951, when India embarked on the process of planned development, there were 566 private commercial banks, many of which had their origins in industrial houses. These banks, however, concentrated their operations in urban areas and largely catered to the upper sections of the society. In addition, the business models of many private banks were not sustainable, resulting in bank failures. On an average, 40 banks failed in India each year between 1947 and 1955. Liquidation and amalgamation of the private banks to protect the depositors' interest brought down their numbers. By 1967, the number of banks had declined to 91 with 6,982 branches. Further, to align banking activities with planned development and promote inclusive banking, some of the bigger private banks were nationalized in two phases in 1969 and 1980. Thus, the number of private banks has significantly reduced over time. As on March 2011, there are 14 old private banks operating in the country. Licensing guidelines for Corporate Entry In pursuance of the budget announcement, the Reserve Bank put out a Discussion Paper on its website in August 2010 inviting feedback and comments. The Discussion Paper marshaled international practices, Indian experience, as well as the extant ownership and governance (O&G) guidelines. The Discussion Paper covered a swathe of issues. Important among them are the following: 1. Eligibility criteria for applicants including importantly whether corporate be made eligible, and if so under what safeguards? 2. Should Non-Banking Financial Companies be allowed to convert themselves into banks or promote new banks? 3. What should be the appropriate entry level capital to attract serious players committed to financial inclusion? 4. What should be the level of promoters shareholdings at the initial formative stage of the bank and what should be the level of promoters holding in the long run to ensure diversified ownership? What should be the time frame for dilution? 5. With the objective of creating strong domestic banks, what should be the level of foreign shareholding in the initial stages and within what time frame the extant FDI rules should become applicable? The present draft guidelines on Licensing of New Banks in the Private Sector have been framed taking into account the experience gained from the functioning of the banks licensed under the guidelines of 1993 and 2001 and the feedback and suggestions received in response to the Discussion Paper. Guidelines Eligible promoters: Entities / groups in the private sector, owned and controlled by residents, with diversified ownership, sound credentials and integrity and having successful track record of at least 10 years will be eligible to promote banks. Entities / groups having significant (10 per cent or more) income or assets or both from real estate construction and / or broking activities individually or taken together in the last three years will not be eligible. 1. Corporate structure: New banks will be set up only through a wholly owned NonOperative Holding Company (NOHC) to be registered with the Reserve Bank as a nonbanking finance company (NBFC) which will hold the bank as well as all the other financial companies in the promoter group.

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2. Minimum capital requirement: Minimum capital requirement will be Rs. 500 crore. Subject to this, actual capital to be brought in will depend on the business plan of the promoters. NOHC shall hold minimum 40 per cent of the paid-up capital of the bank for a period of five years from the date of licensing of the bank. Shareholding by NOHC in excess of 40 per cent shall be brought down to 20 per cent within 10 years and to 15 per cent within 12 years from the date of licensing of the bank. 3. Foreign shareholding: The aggregate non-resident shareholding in the new bank shall not exceed 49 per cent for the first 5 years after which it will be as per the extant policy. 4. Corporate governance: At least 50 per cent of the directors of the NOHC should be independent directors. The corporate structure should be such that it does not impede effective supervision of the bank and the NOHC on a consolidated basis by the Reserve Bank. 5. Business model: Should be realistic and viable and should address how the bank proposes to achieve financial inclusion. 6. Other conditions: The exposure of bank to any entity in the promoter group shall not exceed 10 per cent and the aggregate exposure to all the entities in the group shall not exceed 20 per cent of the paid-up capital and reserves of the bank. The bank shall get its shares listed on the stock exchanges within two years of licensing. The bank shall open at least 25 per cent of its branches in unbanked rural centres (population up to 9,999 as per 2001 census) Existing NBFCs, if considered eligible, may be permitted to either promote a new bank or convert themselves into banks. 7. In respect of promoter groups having 40 per cent or more assets / income from nonfinancial business, certain additional requirements have been stipulated. Corporates Eyeing for the Banking License Tata Group, Anil DhirubhaiAmbani Group, MukeshAmbani's Reliance Industries and Indiabulls Shriram Group which runs the largest truck financing company, Religare Enterprises and Edelweiss that run financial services companies. The Bajaj group and the Mahindra group LIC Housing Finance, Aditya Birla Group etc. NBFCs and Few others Pros of the Corporates Entry The central bank has proposed that new banks be set up under a wholly-owned holding company, which would be registered as a non-bank finance company with the RBI under which the bank as well as all the other financial companies in the group would be registered. Industry associations, NBFCs and MFIs have been in favor of corporate into banking. Along with CII, other trade and industry bodies like Ficci and Assocham have strongly supported the case for the entry of industrial houses in banking sector.

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Track record of the industrial and business houses in the financial sector is available from other regulators and authorities to ensure that only those with sufficiently long and sound track record promote banks. Professional skills and expertise in the groups financial companies would add value to the bank.Corporates can bring in the capital , business experience and managerial Competence Since licenses are given to only full-fledged bank, adequate minimum capital requirement ensure that the banks operate on a strong capital base. Such banks would be able to play a more meaningful role in financial inclusion, as they are able to invest resources in technology and partnerships for financial inclusion. Allowing Foreign Banks would enable foreign capital to be used in the promotion of domestic banks This would allow for foreign technical collaboration in setting up domestic banks. The board of directors of banks may be held accountable under new rules as they have a fiduciary duty to protect the depositors and ensure that risk is constantly monitored. Cons of the corporates Entry Entry of corporate into the banking space could open up opportunities for "self-dealing" and use of bank money for own needs. Promoters may not be seriously committed to financial inclusion as they are likely to be focused on more profitable large ticket size commercial banking In the absence of any serious promoter, the bank may lack the vision and direction a new bank may require. In the absence of a serious promoter, there would be difficulty in fixing accountability and responsibility for the affairs of the bank. If a corporate has an interest in a bank as a promoter or a shareholder, but has no position on the board, then there is no prohibition on the bank lending to the corporate. This opens up opportunities for self-dealing. Even if regulations are tough, it may be difficult to prevent misuse unless the business house itself emphasizes on high standards of corporate governance. Some Banks were not in favour of the proposal due to the unsavory past experience in India and abroad and that large capital buffer that would be available to the banks sponsored by industrial/business houses would create an uneven playing field with the existing banks The RBI also said those who argue against entry of industrial houses to promote banks said any such move will aggravate the already skewed concentration of wealth and political influence, besides creating an uneven playing-field with existing players There are certain differences prevailing between Finance ministry and RBI over the amount of foreign ownership allowed and time frame for dilution of promoters equity Suggestions Financial inclusion and access of banking services is the need of the hour.It is vital for improving our countrys growth. Corporate entry will sure enhance the competition but, at the same time stringent regulations should ensure that self-dealings will not take place There should be strict prohibition of any inter-company transactions between the Bank and the real estate arm

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Tight regulatory framework for the entry of Indian corporate houses can act as a catalyst for further expansion of banking in mid-sized cities and rural India, apart from bringing in the much-needed funds to the sector, which can help spur industrial growth and infrastructure development. As far as foreign banks are concerned, there are alarming concerns regarding their presence in India through the branch route, because the current rules do not provide sufficient ring fencing in the event of bankruptcy. Conclusion We should feel confident about the resilience of our financial regulatory system, which has been tested in the recent crisis and seize the opportunity to expand when most other markets are shrinking. Our central bank steered us well through the financial crisis. Let us wait and see what impact the corporate bank licensing can create in our financial system in the forthcoming days. Reference 1. Bhasin T M (2001), E-Commerce in Indian Banking, IBA Bulletin, Vol. XXIII,Nos. 4 and 5, pp. 18-33. 2. Bhattacharya K (1997), The Need for Optimizing the Banking Industry Structure, The Journal of the Indian Institute of Bankers, Vol. XIV, No. 3, pp. 24-25. 3. Das A (1999), Profitability of Public Sector Banks: A Decomposition Model, RBI Occasional Papers, Vol. 20, No. 1, pp. 12-16. 4. Kaveri V S (2001), Loan Default and Profitability of Banks, IBA Bulletin, Vol. XXIII, No. 1, pp. 7-11. 5. Murty P V R (1996), Cost and Profitability of PSBs, Mohit Publications, New Delhi. 6. Passah P M (2002), Banking and Financial Sector Reforms in India: Rationale, Progress, Efficacy and Future Agenda, in Banking and Financial Sector Reforms in India, 7. Sabnani P (2000), Universal Banking, IBA Bulletin, Vol. XXII, No. 7, pp. 4-7.

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BEST PRACTICES IN MARKETING OF INSURANCE & BANKING SECTOR B. Nithya, Lakshmi S.V and Sagar Singh K. MES College of Arts, Commerce & Science, Bangalore Introduction to Banking Services Bank is an important organ of the modern trade and commerce. Banking is one of the key drivers of the economy as it provides the liquidity needed by every individual for every aspect of financial need in the present living conditions. Banking in India is mainly governed by the Banking Regulations Act, 1949 and reserve Bank of India Act, 1934. The Reserve Bank of India and the Government of India exercise control over banks from the opening of bank to their winding up by virtue of the powers conferred under these statues. All the regulatory provisions are not uniformly applicable to all banks. The applicability of the provisions of these Acts to a bank depends on its constitution; that is, whether it is a statutory corporation, a banking company or a co-operative society. The service product is an offering of commercial intent having features of both intangible and tangible, seeking to satisfy the new wants and demands of the consumer. Indian banking sector has undergone major changes and reforms during economic reforms. Though it was a part of overall economic reforms, it has changed the very functioning of Indian banks. This reform has not only influenced the productivity and efficiency of many of the Indian Banks, but has left everlasting footprints on the working of the banking sector in India. SERVICES RENDERED BY BANKING SECTOR The range of services offered differs from bank to bank, depending mainly on the size and type of banks, but the acceptance of deposits from the public and provisions of credit form the mainstay of the banking business. The services offered by the banks may be classified into: 1. Deposits Scheme Tailored for Various Types of Deposits The banker accepts from the public engaged in various kinds of economic activity, belonging to different segments of the society and different financial position; and also the nature of banking facilities sought by the customers also varies accordingly. The reason why banks have introduced different types of deposit accounts with different facilities is these different classes of customers in the bank. 2. Deposits linked with other benefits Banks have also started the services of providing benefit linked accounts like Insurance linked Saving A/c, Housing Deposits Schemes, Salary Reserve Scheme, etc. to serve customers who are interested in double benefits 3. Services Provided for Depositors Banks act as payment agents by conducting checking or current accounts for customers, paying check drawn by customers on the bank, and collecting checks deposited to customers' current accounts. Banks also enable customer payments via other payment methods such as Automated Clearing House (ACH), Wire transfers or telegraphic transfer, EFTPOS, and automated teller machine (ATM) 4. Loan Schemes Tailored for Various types of Borrowers Banks provide a variety of loans that would meet the requirements of the customers. They provide Short term credit facilities like Call loan, Cash credit, Overdraft, Letter of Credit, etc. Banks have a variety of loan schemes to cater to every category of customers like Education loan to Students, Home loans for those customers want to buy/ build their homes, Vehicle loans for customers who desire to but vehicles.

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5. Ancillary Services Services rendered by banks not only for their customers but also to the general public are called Miscellaneous or ancillary services. The important ancillary services rendered by banks are Safe custody of valuables and securities, Credit & Debit Cards, Foreign Exchange, Merchant Banking, Underwriting, Issue of Guarantees, etc. PROMOTION MIX The process of making people & customers more and more aware of the services and benefits provides is dealt in this mix. In real sense, Bank marketing is nothing but Marketing of Faith & Reliability of the people. The banks today can use a lot of new technology to communicate to their customers. Promotion mix includes the following activities: Word-Of- Mouth: This is the cheapest and most effective move of promotion. This places an important role in eliminating the negative comments and improving the services. Word of mouth also helps in getting feedbacks, which would simplify the task of improvement on the part of the service provider, the Banker. Banks can sort this as it is not at all a burden as it involves very less money in it. They can have a command over their business in their area by just sticking on to providing better quality service and a bit of encouragement to the customers who take part in this activity. Advertising The best tool of promotional activities is advertising and it is one of the paid forms of communication. Banking organisations use this component of the promotion mix with motto of informing, sensing and persuading the customers. While advertising it is essential to be aware of key decision making areas so that instrumentally helps banks at micro and macro levels. Public relations and publicity: Promotional activities like community relations, event management, media blitz, corporate identity programmes have relevance and should be used effectively by marketers. This would for sure help the banks in getting more promotion to a great extend. Telemarketing The telemarketing is a process of promoting the business with the help of sophisticated communication network. Telemarketing is found instrumental in advertising the banking services and the banking organisations can use this tool of the promotion mix both for advertising and selling. This minimizes the dependence of banking organisations on sales people and just a counter or center as listed in the call numbers may service multidimensional services. Telemarketing is likely to play an incremental role in marketing the banking services. The leading foreign banks and even some of the private sector commercial banks have been found promoting telemarketing and they have been getting positive results for their efforts. Communication strategy: The service marketer should attempt to reflect a consistent & attractive personality in all manifestations of the organisations that reach the public. The banks should stress on their uniqueness rather than all the common things. This will help in creating a unique positioning. Budgeting decisions: Banks should carefully formulate the budget for advertisement. The bank professionals, senior executives and even the policy planners are found to be involved in the process. The

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business of a bank determines the scale of the advertisement budget. In addition, the intensity of competition also plays a decisive role since in the majority of cases; we find an increase in the budget due to a change in the competitors strategy. Selecting a suitable vehicle: Amidst various devices of advertising, the banks should carefully select the best device that is suitable for them. Print media is one such device that would be more effective and economical for a banking service. Creative Thinking Creative thinking means making an advertisement program such that it is distinct from the competitive organisations. It should be more active in influencing the impulse of the customers and successful in informing and sensing the customers. This requires an in-depth knowledge of the receiving capacity of the target market for which the advertisements are designed. This responsibility is borne by advertising professionals in most of the cases. Characters and themes: At apex level it is also important that while advertising the senior executives watch the process minutely and select events, characters having a regional orientation. The popular characters and sensational moments are likely to be impact generating. The theme for appeals and messages also needs due attention. Of course, they have a legitimate right of advertising but it is not meant that like the goods manufacturing organisations, the service generating organisations also start making invasion on culture. It is necessary to regulate a bias to gender, profession, region or so. SAVINGS ACCOUNT PORTABILITY After the mobile number portability, the Indian government has come up with the Savings A/c Portability concept. At first glance, it may be challenging for the man in the street to come to terms with the concept of a portable savings account number - after all, the level of confidentiality necessary to protect one's savings far exceeds that required for a telephone, which is designed to be shared. The RBI has issued general guidelines on KYC (Know Your Client) and AML (Anti Money Laundering), which require each bank to frame KYC/AML policy and procedures and record documentation requirements. Any meaningful change to the CBS system is likely to stretch resources, not only financial but also in terms of man power and technology. At the same time, the extent of the cost-benefit ratio is by no means certain. Indian banks have had limited success in penetrating remote areas, and large parts of the population continue to have scant access to basic banking facilities. Nonetheless, the RBI is seeking to stimulate the expansion of bank branch networks into remote areas by waiving licensing requirements. It is more prudent to use these scarce resources to expand basic banking facilities in remote areas. In October last year, the Reserve Bank relaxed controls on interest rates on savings account deposits, which prompted some private sector lenders to increase rates to as much as 7%. On the face of it, encouraging investors to switch savings account with the same number portability and pursuing the most attractive interest rate offers little obvious benefit to the banking sector as a whole, especially when enhanced returns are already widely available via term deposits. Clearly, the cost-benefit ratio and its implementation are not yet fully understood by the banks. So when it comes, the debate can be expected to be lively. Conclusion:

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The present day banking scenareo is characterized by fierce competition. The Indian Banking Sector is dominated by survivors strong in the form of nationalized banks, Indian MNC Banks, Foreign banks and banks in joint sector. The Regional & Co-operative banks are also offering tuff competition to larger banks therefore, all the banks have to strive hard to capture the customers and service market. All the banks are found to be concentrating on 7 Ps of marketing to serve in such cut throat competition. The further will see many more innovations on part of banking industries to further sharpen their efforts and ultimately all these will benefit the customers. *****

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BANCASSURANCE : THE CONVERGENCE BETWEEN BANKING AND INSURANCE Najmi Shabbir Research scholar & lecturer on contractual basis in Shia P.G.College, Luck now Department of Applied Economics, Faculty of Commerce, Luck now University. Introduction The banking & Insurance Industry have changed rapidly in the changing & Challenging environment throughout the globe. In the Competitive & open environment each & everyone wants to do better than others. And they know that if they are not able to provide better services, they wont survive in industry. Now the time has come to choose & adopt appropriate distribution channel. Banc assurance is seen by many to be significant or even the primary channel. Despite a billion of population. India still has a low-insurance percentage of 1.95 and it is in the 51st position in world. Despite of the fact that India boosts a saving rate around 25%, less than 5% is spending on insurance. To streamline the saving in to insurance .Banc assurance is the best channel to tackle four challenges facing the insurance industry. 1. Product Innovation 2. Distribution. 3. Customer Service 4. Investment. OPPORTOUNITIES OF BANKS Bank have opportunities to sell Insurance together with some banking products. For example :- Banks generally insist on life Insurance for mortgage borrowers. Credit cards & personal loans create opportunities for Banks to sell protection Insurance and the knowledge a bank has of its customers finance create opportunities to sell other products.Bancassurance has become significant. Banks are now a major distribution channel for Insurance, and insurance, sale, a significant source of profit for banks. Banks can often sell insurance at better prices (i.e. higher premium ) than many other channels & they have low costs as they use the Infrastructure ( branches & Systems) that they use for Banking. INDIAN SCENARIO: Banking is fully governed by RBI (Reserve Bank of India)& -Insurance Sector is by IRDA (Insurance Regulatory & Development authority)Bancassurance being the combination of two sector comes under the purview of both the regulators. GUIDELINES GIVEN BY RBI: Each of the regulators has given certain guidelines for banks getting into insurance sector. 1. Any commercial Bank will be allowed to undertake insurance business as the agent of insurance companies & this will be on fee basis with no-risk participation. 2. The second guideline given by RBI is that the joint venture will be allowed for financial strong banks wishing to undertake insurance business with risk. GUIDELINES GIVEN BY IRDA : I. Chief Insurance Executive : Each bank that sells insurance must have a chief insurance executive to handle all the insurance matters & activities.

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2.

3. 4

Mandatory Training : All the people involved in selling the insurance should under-go mandatory training at an institute determined (authorized) by IRDA & pass the examination conducted by the authority. Corporate Agents: Commercial banks, including co-operative banks & RRBS may become co-operate agents for one insurance company. Banks cannot become Insurance brokers.

IMPORTANT BANCASSURANCE TIE-UP IN INDIA: There are .certain tie-up between the Insurance company & banks for the purpose of Banc assurance. I. LIC : The insurance company LIC of India has tie-up with the following banks for Banc assurance. They are: A. B. C. D. E. F. G. H. Corporation Bank Indian Overseas Bank Centurion Bank Sahara District Central Co-operative Bank Janta Urban Co-operative Bank. Yeotmal Mahila Sahakari Bank Vijaya Bank Oriental Rank of Commerce

2. SBI Life-insurance Co: The SBI life Insurance Co Ltd is starting &. running its insurance business with the help of S.B.I. 3. Bajaj Allianz general Insurance Co. Ltd :In the field of general Insurance the Bajaj Allianz General Insurance Co. Ltd, has tie-up with Karur Vysya Bank & Lord Krishna Bank. 4. Birla Sun life Insurance Co. Ltd. : The Birla Sun Life Insurance Co. has a tie-up with the following bank for the insurance purpose: (a) Bank of Rajasthan (b) Andhra Bank (c) Bank of Muscat (d) Development Credit Bank (c) Dutch Rank

SWOT ANALYSIS OF BANCASSURANCE IN INDIA : In order to implement the bancassurance model in our country a lot of' steps we have to taken. (A) (B) (C) (D) Top professionals will have to be hired. We have to study the Indians nature regarding insurance. Study about lower middle as well as upper class of society & how much they are eager to adopt insurance. Favorable & easy policies for the people.

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High capital investment in infrastructure development particulars in Information Technology & Telecommunication is required. (F) Creation of research & development cell is very important & adaptive task. (G) We have to study about the SWOP analysis of world in the field of bancassurance & we can take this study as a base. ADVANTAGES OF BANCASSURANCE : Bancassurance is a tool, which is beneficial to bank, customer & Insurance at a time. There are certain benefits of banc assurance which are given. . (1) From the banks point of view: (A)By selling the insurance product by their own channel the banks can increase their income. (B) Banks have face-to-face contract with their customers. They can directly ask them to take a Policy. And the banks need not to go anywhere for customers. (C)The Bankers have extensive experience in the marketing. They can easily attract customers & non-customers because the customer & non-customers also bank on banks. (D) Banks are using different value added services like E-banking, tele banking, direct mail & so on, they can also use all the above mentioned facilities for Bancassurance purpose with customers & non-customers. (II) From the Insurer Point of view: (A) The Insurance Company can increase their business through the banking distribution channels because the banks have so many customers. (B) By cutting cost Insurers can serve better to customers in terms lower premium rate and better risk coverage through product diversification. (III) From the customer's point of view: Product innovation and distribution activities are directed towards the satisfaction of needs of the customer. Bancasssurance model assists customers in terms of reduction price, diversified product quality in time and at their doorstep service by banks. BANK REFERRAL : There is also another method called "Bank Referral". Here the banks do not issue the policies, they only give the database to the insurance companies. The companies issue the policies and pay the commission to them. That is called referral basis. EMERGING MARKET: India's rural market has huge potential that is still untapped by the insurance companies. Setting up their own networks entails such a huge cost, that no company would be interested in doing so. Banassurance again comes as an answer. It helps the insurance companies to tap the market at a much lower cost. As for the customer the competitive nature of the Indian market ensures that the reduction in costs would result in benefits in terms of lower premium rates being passed on to him. BANCASSURANCE BY CENTRAL BANK: Central Bank of India has undertaken selling and distribution of Life Insurance products and General Insurance products through its branches. The Bank has tied-up with two most trusted insurers Life-insurance corporation of

(E)

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India & The New India Assurance Co.Ltd. The arrangement is to undertake insurance business as corporate agent of both the insurance Companies on fee basis without any risk participation. Insurance Regulatory & Development Authority (IRDA) has issued to bank composite corporate agency license, which is valid up to 24.03.2009 Bank has trained a good number of its officers who have been authorized by IRDA to act as specified persons for selling insurance products. The most popular products of Life Insurance Corporation of India and The New, India Assurance Co. are as under : LIC has a policy for every age, a scheme for every family, a plan for every need. Be it risk cover provision for child's education, marriage, health care or pension. LIC has 40 plans to suit every need. Product of New India Assurance Co. Ltd. (General Insurance ) Burglary Insurance 1. Engineering Insurance 2. Marine Insurance 3. Motor Insurance 4. Rural Insurance.

CONCLUSION But the proper implementation of' banc assurance is still facing so many hurdles because of poor manpower management, lack of call centers, no personal contact with customers, inadequate incentives to agents and unfullfilment of other essential requirements. In the field of banc assurance banks will bring a customer database , leverage their name, recognition & reputation of both local and regional levels. If they are using personal contact with customers and non-customers then only they can success in the field of bancassurance.. Finally we can say that the bancassurance would mostly depend on how well insurers and bankers understanding is with each other and how they are capturing the opportunity and how better service they are providing to their, customers. *****

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BENEFITS OF CUSTOMER RELATIONSHIP MANAGEMENT (CRM) IN BANKING SECTOR D. Sumathi and 2Bhuvanesswari. M.U.S, 1&2 Lecturer, Department of Commerce, Dr.MGR Janaki College of Arts and Science for Women, Chennai-28. Introduction Despite the fact that in most banks profits sometimes fail, they rarely pay attention to or adopt any customer strategy. It has long been the fallacy that banks need not pay much attention to customer focus just because they had customers. Some banks even if they possess good customer relationships are unable to cross sell as they have not figured out who to target with what product/service. What happens is that customers are often approached for the wrong products. However the new millennium has resulted in banks and financial agencies rethinking their strategies and goals. They have come to understand the significance of hanging onto the customer and keeping him happy. The rules that once governed the banking industry have changed. They have realized that adopting a customer centric strategy is essential and needs to be compulsorily undertaken. The vast majority of banks now realize they need a customer strategy and are opting for CRM (Customer Relationship Management). Importance of CRM Customer relationship management is a broad approach for creating, maintaining and expanding customer relationships. CRM is the business strategy that aims to understand, anticipate, manage and personalize the needs of an organization's current and potential customers. At the heart of a perfect strategy is the creation of mutual value for all parties involved in the business process. It is about creating a sustainable competitive advantage by being the best at understanding, communicating, and delivering and developing existing customer relationships in addition to creating and keeping new customers. So the concept of product life cycle is giving way to the concept of customer life cycle focusing on the development of products and services that anticipate the future need of the existing customers and creating additional services that extend existing customer relationships beyond transactions. What Does CRM Offer Banks? Customer Information Assimilation and Storage Analyzing Profitability Aiding Marketing Efforts Gaining New Customers Relationship Management Assisting Customer retention Cross-Selling Benefits of CRM Banking: Banking CRM understands the needs of the customer and integrates it with people, technology, resources and business processes. It focuses on the existing data available in the organization and uses it to improve its relationship with customers. Banking CRM uses information and analytical tools to secure customer focus. Thus it is completely essential that banks implement CRM in order to secure this.
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Overall Profitability in adopting CRM CRM enables banks to give employee's better training that helps them face customers easily. It achieves better infrastructure and ultimately contributes to better overall performance. The byproducts of CRM banking solutions are: customer acquisition, retention and profitability. Banks that don't implement CRM will undoubtedly find themselves with lesser profitability coupled with a sharp decline in the number of customers. Pleased Customers It is vital to make a customer experience as if he / she is the only one - this will go a long way in gratifying and retaining them. Bankers need a return on investment and it has been proved that increase in customer satisfaction more than contributes a fair share to ROI(Return on Investment). The main value of CRM banking lies in satisfaction and increased retention of customers. Centralized Information CRM banking solutions manage to clearly integrate people, processes and technology. CRM banking provides banks with a holistic view of all bank transactions and customer information as well and stores it in a single data warehouse where it can be studied later. CRM Banking Boosts Small Banks Banking CRM software meets the needs of banks of all sizes in terms of attaining the required accuracy and understanding of customers. Merely assuming that banks that are considerably smaller in size have a better customer approach and are able to covenant with their customers in a better method is wrong. They are just as much in need of CRM aid as the others. Small banks on account of a limited amount of capital have had to realize that a large contribution to profits is directly the result of good customer service. CRM makes sure that the bank delivers exactly what the customer expects. Customer Segregation CRM enables a bank to see which customers are costing them and which are bringing benefits. CRM provides them with the necessary analytical tools that will help them focus on the significance of segregating these two and doing what is required to avail of the maximum returns. After this segregation is done CRM easily enables banks to enhance their communication and cross-selling to their customers effectively and efficiently. How to acquire the Most Out of CRM Banking Systems: The main problem the CRM industry now faces is cautious, hesitant bankers who rarely opt for CRM execution. This is because banks feel that the transition to being customer centric involves a lot of problems and costly. They are of the opinion that returns hardly ever equal the expected profits and that the entire implementation is unnecessary and time consuming. In addition to this the number of failed CRM implementations has also

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resulted in invoking a feeling of reluctance in banks, making them hesitate. This needs to be obliterated in order to succeed. It is imperative that business policies and processes are put early in place in order that the best can be got out of the CRM business solution. Doing this at a later stage will result in unpleasant complications. Training of customer-facing staff is being given more importance now. This not only equips them to better deal with the customer but CRM learning also empowers the employee with sufficient knowledge to carry out his job confidently and to the best of his capability. The assimilation and storage of bank customer data is a tedious task. Since this sector mostly involves numerical data this is highly essential and needs to be undertaken. It involves a lot of added work and minute attention to detail. There are loads and loads of data that need to be evaluated. Minute attention to detail is essential so that discrepancies and errors don't take place. With technology getting more complicated banks need to attend to minute details to ensure success. It is important to test the CRM system before implementation. Aside from minimizing errors this will go a long way in alleviating problems and difficulties. The new trends in CRM have seen banks adopting methods like phased CRM implementation - adopting incremental approaches and getting ample rewards. It is not sufficient to merely install CRM software. For CRM to be truly successful and effective it is imperative that there is a well established strategy, planned strategy that makes proper use of people and business processes in order to secure the maximum CRM ROI(Return on Investment). When adopting CRM it is essential that banks realize that incremental adoption is essential with a firm commitment to learn at every stage. A well developed CRM strategy catering to phased implementation should be established and implemented. The gains are enormous. Banking CRM software endeavors to improve customer profitability and manages to keep banks way ahead of the others by helping banks to study customer activity and satisfy customer needs through the help of CRM banking solutions. It is definite that the future will see CRM being adopted by banks as a part of their everyday business. CRM Strategy and Goals adopted in Global Banks Some global banking institutions adopted CRM systems, their CRM strategy and their goals. Global Banks CRM Strategy Goal Bank of America Provide service representatives with 360Improve customer experience, degree view of customer relationship for retention corporate and retail banking Segment customer base into six different Attain cross-sell revenues, groups based on demographics and maximum lifetime value banking behavior Deploy CRM system across branch Improve customer experience, network, integrating with central office, cross-sell link multiple customer databases Integrate call center, branch, and central Improve customer experience,

FleetBoston

BNP Paribas Societe Generale

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office; link 80 banking applications to support consistent message support unified view of customers Conclusion Every one working in the organization must have a very clear goal in mind; the whole organization must be working as a single unit. At every level CRM definition must be very clear, here definition does not mean by few written words, but its sole. Why we are sitting in the market? Who are our customers? Why to make contact with them? How to make contact? How to make it long? How to make customer satisfied? How these satisfied customers make to come again and again? These and other questions must be very must clear in every one working in the bank. Obtaining, maintaining and basically utilizing a customer database in an effort to maximize or improve customer relationships will go a long way in increasing overall productivity. So, to retain the customers it is essential to have really service oriented people to be in the marketing line and with good communicative skills that would exactly convey the necessities of the customers to the producers and also benefit the marketers by way of attracting more valuable customers. Thus, it should be in a position to benefit both the parties involved in the process. "If the buyer is not satisfied, then how sales could be promoted and how could the wheel of marketing be set in to motion?" Henceforth, "the motto of marketing should not only aim at loyalty of the customers but also their convenience." References: 1. http://www.crminfoline.com/crm-articles/crm-business-services.htm 2. www.articlesbase.com Finance Banking 3. http://www.isrj.net/ *****

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CONSUMER PERCEPTION ON ENTRY OF FDI INTO RETAILING BANKING BUSINESS K.BALA KRISHNA and 2Y.RAVI TEJA 1 Assistant professor and 2student, Aditya institute of P.G studies, Kakinada, East Godavari district, Andhra Pradesh. Typical mass-market banking in which individual customers use local branches of larger commercial banks. Services offered include savings and checking accounts, mortgages, personal loans, debit/credit cards and certificates of deposit (CDs)Retail banking aims to be the one-stop shop for as many financial services as possible on behalf of retail clients. Some retail banks have even made a push into investment services such as wealth management, brokerage accounts, private banking and retirement planning. While some of these ancillary services are outsourced to third parties (often for regulatory reasons), they often intertwine with core retail banking accounts like checking and savings to allow for easier transfers and maintenance. OBJECTIVES: To study about the importance of FDI in retail sector To study about the reasons for the oppositions from kiranas To study about the reasons for the government to encourage the retail FDIs NEED FOR THE STUDY : There is a huge discussion of the public regarding the entry of FDI into india. Even the government is trying to convince the public regarding the entry. This paper is an attempt made by us to study the importance of FDI into india METHODOLOGY OF STUDY: we have collected the primary data from our interactions with the small retailers and also the young students from various colleges. We have also collected the secondary data from net and other sources. Introduction: India being a signatory to World Trade Organisations General Agreement on Trade in Services, which include wholesale and retailing services, had to open up the retail trade sector to foreign investment. There were initial reservations towards opening up of retail sector arising from fear of job losses, procurement from international market, competition and loss of entrepreneurial opportunities. However, the government in a series of moves has opened up the retail sector slowly to Foreign Direct Investment (FDI). In 1997, FDI in cash and carry (wholesale) with 100 percent ownership was allowed under the Government approval route. It was brought under the automatic route in 2006. 51 percent investment in a single brand retail outlet was also permitted in 2006. FDI in Multi-Brand retailing is prohibited in India. FDI Policy in India: FDI as defined in Dictionary of Economics (Graham Bannock et.al) is investment in a foreign country through the acquisition of a local company or the establishment there of an operation on a new (Greenfield) site. To put in simple words, FDI refers to capital inflows from abroad that is invested in or to enhance the production capacity of the economy. Foreign Investment in India is governed by the FDI policy announced by the Government of India and the provision of the Foreign Exchange Management Act (FEMA) 1999. The Reserve Bank of India (RBI) in this regard had issued a notification, which contains the Foreign Exchange Management (Transfer or issue of security by a person resident outside India) Regulations, 2000. This notification has been amended from time to time. The Ministry of Commerce and Industry, Government of India is the nodal agency for motoring and reviewing the FDI policy on continued basis and changes in sectoral policy/ sectoral equity cap. The FDI policy is notified through Press Notes by the Secretariat for Industrial Assistance (SIA),
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Department of Industrial Policy and Promotion (DIPP). The foreign investors are free to invest in India, except few sectors/activities, where prior approval from the RBI or Foreign Investment Promotion Board (FIPB) would be required. Entry Options For Foreign Players prior to FDI Policy Although prior to Jan 24, 2006, FDI was not authorized in retailing, most general players ha\d been operating in the country. Some of entrance routes used by them have been discussed in sum as below:1. Franchise Agreements: It is an easiest track to come in the Indian market. In franchising and commission agents services, FDI (unless otherwise prohibited) is allowed with the approval of the Reserve Bank of India (RBI) under the Foreign Exchange Management Act. This is a most usual mode for entrance of quick food bondage opposite a world. Apart from quick food bondage identical to Pizza Hut, players such as Lacoste, Mango, 2. Cash And Carry Wholesale Trading: 100% FDI is allowed in wholesale trading which involves building of a large distribution infrastructure to assist local manufacturers. The wholesaler deals only with smaller retailers and not Consumers. Metro AG of Germany was the first significant global player to enter India through this route. 3. Strategic Licensing Agreements: Some foreign brands give exclusive licences and distribution rights to Indian companies. Through these rights, Indian companies can either sell it through their own stores, or enter into shop-in-shop arrangements or distribute the brands to franchisees. Mango, the Spanish apparel brand has entered India through this route with an agreement with Piramyd, Mumbai, SPAR entered into a similar agreement with Radhakrishna Foodlands Pvt. Ltd 4. Manufacturing and Wholly Owned Subsidiaries.: The foreign brands such as Nike, Reebok, Adidas, etc. that have wholly-owned subsidiaries in manufacturing are treated as Indian companies and are, therefore, allowed to do retail. These companies have been authorized to sell products to Indian consumers by franchising, internal distributors, existent Indian retailers, own outlets, etc. For instance, Nike entered through an exclusive licensing agreement with Sierra Enterprises but now has a wholly owned subsidiary, Nike India Private Limited. FDI in Single Brand Retail The Government has not categorically defined the meaning of Single Brand anywhere neither in any of its circulars nor any notifications. In single-brand retail, FDI up to 51 per cent is allowed, subject to Foreign Investment Promotion Board (FIPB) approval and subject to the conditions mentioned in Press Note that (a) only single brand products would be sold (i.e., retail of goods of multi-brand even if produced by the same manufacturer would not be allowed), (b) products should be sold under the same brand internationally, (c) single-brand product retail would only cover products which are branded during manufacturing and (d) any addition to product categories to be sold under single-brand would require fresh approval from the government. While the phrase single brand has not been defined, it implies that foreign companies would be allowed to sell goods sold internationally under a single brand, viz., Reebok, Nokia, Adidas. Retailing of goods of multiple brands, even if such products were produced by the same manufacturer, would not be allowed. FDI in Multi Brand Retail : The government has also not defined the term Multi Brand. FDI in Multi Brand retail implies that a retail store with a foreign investment can sell multiple brands under one roof.

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In July 2010, Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce circulated a discussion paper on allowing FDI in multi-brand retail. The paper doesnt suggest any upper limit on FDI in multi-brand retail. If implemented, it would open the doors for global retail giants to enter and establish their footprints on the retail landscape of India. Opening up FDI in multi-brand retail will mean that global retailers including Wal-Mart, Carrefour and Tesco can open stores offering a range of household items and grocery directly to consumers in the same way as the ubiquitous kirana store. Concerns for the Government for only Partially Allowing FDI in Retail Sector: A number of concerns were expressed with regard to partial opening of the retail sector for FDI. The Honble Department Related Parliamentary Standing Committee on Commerce, in its 90th Report, on Foreign and Domestic Investment in Retail Sector, laid in the Lok Sabha and the Rajya Sabha on 8 June, 2009, had made an in-depth study on the subject and identified a number of issues related to FDI in the retail sector. These included: It would lead to unfair competition and ultimately result in large-scale exit of domestic retailers, especially the small family managed outlets, leading to large scale displacement of persons employed in the retail sector. Further, as the manufacturing sector has not been growing fast enough, the persons displaced from the retail sector would not be absorbed there. Another concern is that the Indian retail sector, particularly organized retail, is still underdeveloped and in a nascent stage and that, therefore, it is important that the domestic retail sector is allowed to grow and consolidate first, before opening this sector to foreign investors. Antagonists of FDI in retail sector oppose the same on various grounds, like, that the entry of large global retailers such as Wal-Mart would kill local shops and millions of jobs, since the unorganized retail sector employs an enormous percentage of Indian population after the agriculture sector; secondly that the global retailers would conspire and exercise monopolistic power to raise prices and monopolistic (big buying) power to reduce the prices received by the suppliers; thirdly, it would lead to asymmetrical growth in cities, causing discontent and social tension elsewhere. Hence, both the consumers and the suppliers would lose, while the profit margins of such retail chains would go up. ANALYSIS OF THE STUDY Reason for the government to allow FDI into India S.No Statement Number of respondents Economic growth 02 1. Increase employment 06 2. Revaluation of rupee 03 3. All of the above 89 4. Total 100 Inference: Governments want to control the inflation and maintain the monetary stability. They also want to increase the rupee value by increase the demand for the rupees .the main reason is to gain the foreign exchange. Reason for stiff opposition S.No 1. 2. Statement Danger to local kiranas Dependency of india on Number of respondents 56 44

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foreign retailers Total

100

Inference : the evolution of the foreign retailers is a great blow to the Indian kiranas and other domestic retailers . it is sure that many people will loose the livelihood and they will be on the roads. The Indian dependency of foreign retailers will surely increase. Growth of foreign retailing may be due to S.No Statement Number of respondents 1. 2. Foreign fascination of customers Purchases are status driven Total 46 54 100

Inference: some of the Indian customers are sure to undergo foreign fascination. They would feel as a status symbol by purchasing the products in foreign retailers Prices of commodities S.No 1. 2. 3. Statement Increase presently Decrease presently Increase in future Total Number of respondents 04 77 19 100

Inference: The price of commodities is sure to decrease initially. The increase in the growth of foreign retailers will lead to the closure of kiranas. Then there is a possibility of monopoly of foreign retailers. Thus this would increase the prices which can never be decreased. Chance of foreign retailers to form monopoly S.No Statement Number of respondents 1. 2. Yes no Total 79 21 100

Inference: Most of the respondents are sure to form a monopoly. FINDINGS OF THE STUDY : Entry of FDI increases the employment Government has to protect the domestic units also against the foreign retailers There is a possibility of the formation of monopoly in the foreign retailers . The decrease in the prices of the goods may be only for short period and government has to think of the long run results of FDI It is sure that growth of retailing is possible through the entry of foreign retailers Conclusion :country has to revaluate the money.this can be possible through entry of fdi into retail sector . but the entry has to be regulated in such a way that the domestic units are protected from foreign retailers . *****

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INSURANCE PRODUCT PENETRATION IN RURAL AREAS Anitha Mary S & Deepika Rajan St. Josephs College of Commerce, Bangalore Introduction Insurance occupies an important place in the complex modern world since risk, which can be insured, has increased enormously in every walk of life. The insurance sector acts as a mobiliser of savings and a financial intermediary and is also a promoter of investment activities. It can play a significant role in the economic development of a country while economic development itself can facilitate the growth of the insurance sector. This paper focuses on the penetration of the insurance business in rural areas. The penetration of the insurance business has remained limited mostly to the urban centres historically. 70% of India live in rural areas but have no access; or have negligible access to insurance. Due to wide geographical disparity and high distribution costs that include traveling to remote corners of the country, building awareness among the rural masses, motivating them to insure their lives and assets are all undoubtedly a great constraint for exploration of insurance products in rural areas. Another dimension to low penetration is that rural people were poor and had no purchasing power to buy insurance products which is second or third priority comparing to their other life needs. It has often been said that the heart of India beats in the villages. With 2/3rds of the population living there and the agriculture sector contributing over 20% of the GDP, this sector constitutes a vibrant mass that can effectively be targeted in terms of insurance requirement. Ironically, the rural people are not very knowledgeable about the different products offered, and in some cases are not even aware of the government support available by way of subsidy in premium to protect their lives/health/crops from insurable risks. There is a great need to impress upon the rural masses. Focus of this paper is to explore the real reasons and challenges behind the low penetration of insurance products in rural areas. Objectives of the study: To study the key challenges behind low penetration of insurance business in rural areas Methodology: Data Tools This study is conducted with the help of both primary as well as secondary data. Primary data - Collection of information through personal interviews from people. Secondary data: Published and Unpublished work like journals, books and websites were referred to. Research Type: The present paper is based on observation and conceptual in nature. Limitations: Primary data is based on limited number of people. Paper doesnt have any sampling technique to select different group of people on parameters like income (low income group, middle class, above middle), eduction (illiterate, high school, and degree), areas (town, village), etc. Scope: Major scope of the study is focused on insurance product reach in rural areas and also the challenges and innovative approaches taken by insurers. Contemporary Product reach at Rural Level

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The following are the insurance products that have minimal reach to the rural people, especially focused on farmers. Micro- insurance: Micro-insurance refers to protection of assets and lives against insurable risks of target populations Its a composite package of standard insurance product to economically weaker sections in rural and urban areas. The proposed standard products are offered in the market by the insurers to meet the rural and social sector needs. This is proposed to give long term benefits to the policyholders and to ensure the poorer sections have access to products which provide enough risk cover. Study shows that poor awareness exist about micro insurance products. Life Insurance: From the study, we found that life insurance products are given low priority as the people are expecting returns from life insurance products. Instead of considering life insurance products primarily for unprecedental situations such as accident, chronic illness the consumer seems to be expecting returns. This is one of the key reasons why life insurance products are not reached in rural areas. Health insurance: In 2006, the Ministry of Health and Family Welfare published a framework for developing Health Insurance programs in rural areas, under the umbrella of the National Rural Health Mission (NRHM). Health insurance helps to remove financing barriers and improve access to healthcare, for financial protection and to improve quality of healthcare. Today, the health insurance providers face lot of challenges in reaching the rural population due to various factors such as lack of healthcare facility, belief in non-medical means, improper agent service and the problem of affordability. Even though government has initiated these programs and lot of money is spent, corruption and poor awareness made these products to not to reach the low income group. Crop insurance: Crop Insurance Scheme was introduced by General Insurance Corporation of India (GIC) in 1979. Crop insurance protect the cultivators against financial loss on account of anticipated croploss arising out of practically all natural factors beyond the control of human beings such as natural fire, weather, floods, pests, diseases etc. A number of crop insurance products are available to farmers in different geographical areas and for different purposes. These include seasonal & annual crops (Wheat Insurance, Poppy Insurance, and Varsha Bima etc) & plantation crops (Coffee Insurance, Rubber Insurance). Study shows that less people are aware of these schemes. People believe that instead of paying premium for insurance products, if they reinvest in farming business, they would benefit better. Income guarantee insurance: Insurance to provide protection to the farmers against fluctuations in market price of the crop concerned in addition to deficiency in yield. But, this type of cover is more complex and is not likely to be preferred by the farmers in the presence of Minimum Support Price regime. Study

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shows that very few people are aware of this insurance. Even after awareness, poor sources of information and direction make these schemes complex for them to understand and use. Weather insurance: It is designed to provide insurance protection against losses in crop yield resulting from incidence of adverse conditions of weather parameters like rainfall, temperature, frost, humidity etc. It is based on the fact that weather conditions affect crop yield even when a cultivator has taken all the care to ensure good harvest. Poor awareness and lack of guidance made these products unreachable for farmers. Livestock insurance: Livestock is an important sector of national economy, especially for the rural areas. The Livestock Insurance Scheme has been formulated with the twin objective of providing protection mechanism to the farmers and cattle rearers against any eventual loss of their animals due to death and to demonstrate the benefit of the insurance of livestock to the people and popularize it with the ultimate goal of attaining qualitative improvement in livestock and their products. From study we found that, people are not aware of this product completely.

Asset Insurance: It helps to cover a wide range including residential buildings, farm and nonfarm equipments and vehicles. For poor households, insurance for a hut, irrigation pump, a handloom or a bullock cart could have considerable economic significance. From study, we found that people are taking these loans from cooperative societies for higher interest. Major Challenges For ages, insurance, particularly in the personal lines, has remained out of the choice of individuals for affordability factor. But there is an urgency for insuring everyone across their many unforeseen risks in order to ensure security and sustainability at multiple levels, namely individual, family, community, commercial (to ensure credit flow, to meet legal liability etc.), at society and country level. Following are the specific reasons for low demand for insurance inspite of intense need: Product Challenges Marketing and distribution challenges Consumer awareness Underwriting Challenges Infrastructure Fraud Management Product challenges: Currently there is not much differentiation of products for urban and rural markets. The products have been designed in common for every one. This needs to be relooked. The product designers have to understand the needs of the target population and design accordingly, and for that they need to understand the psyche of the people living in the rural areas.

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The pricing should be done keeping in mind the buying power of the community, higher premium for the customers would result in failure of the product. The terms and conditions of the policy should be simple to understand. Marketing and distribution challenges: India is a large country with wide geographical disparity. Reaching the target clients can be a major challenge. Similarly, the premium being very small, the collection and distribution expenses end up being larger than the premium itself. Training of intermediaries is critically important as there is always scope for mis-selling. For eg: Critical illness policy may be sold as normal health policy. Bundling of insurance products with other products can also be explored and will give critical mass and reach. Consumer awareness: Creating awareness on intangible financial services like life insurance is a challenging task. There is also the challenge of educating the vast majority of population on insurance that has to be addressed in rural areas. Steps should be taken to inculcate in them the habit of buying insurance and not treat it as an investment. Though various measures are taken to reach rural people, still they are not aware of certain beneficiary insurance products available to them; insurance companies need to take policy services to the doorsteps of the rural folk to create awareness amongst them.Low literacy rate, misguiding products or channels of distribution (multi level marketing where people have lost money) have created negative feeling towards such products. Underwriters challenges: Underwriting basically refers to the process of evaluating a proposal that comes for Insurance. Based on the evaluation done a decision is to be taken as to the acceptance of proposal or otherwise. If it is to be accepted, at what price and on what terms and Conditions and coverages are to be determined. This process ends with the issue of policy documents. Because of the wide geographical disparities and distance from the branches, there could be a time lag between the actual premium collection and receipt of premium at the back office. Infrastructure: Due to the very nature of low premium products, it may not be physically viable for insurance companies to have their own offices to cater to this population in rural India. As such alternative distribution mechanism, which has long term perspective and well set regulated systems and procedures in place to manage premium collection and servicing is required. Fraud management: Mis-selling products and in the absence of a structured collection mechanism, of premium collection is another challenge faced by insurance company. Innovative approaches to reach rural areas To increase penetration of insurance in rural areas, Insurance companies must bring out some innovative approaches in order to help the poor get protection and mitigate personal and professional risk.

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Partnering in Sustainable Livelihoods for Rural Youth: At present the customers are not very knowledgeable about the different products offered, and in some cases are not even aware of the government support available by way of subsidy in premium to protect their lives/health/ crops from insurable risks. To overcome this challenge, the rural BPL youths are trained as insurance agents. It also reduces the High costs of rural distribution on account of travelling. Trained youth working in their own native areas helps in creating awareness/educating and motivating rural customers to buy insuranceThe IRDA has stipulated a minimum education qualification for every insurance agent which may be 10th pass in a rural area life or non-life insurance agent and in the case of a composite agent who sells both life insurance and general insurance products, he is required to undergo 75 hours of training and then clear the exam conducted by the Insurance Institute of India for obtaining a valid license. Creating a mutually beneficial situation, where the insurers overcomes the barrier of distribution and consumer awareness, and the BPL youth gets job opportunities. This leads to an effective penetration of insurance products in rural areas. Consumer Awareness Awareness is more a broader concept than education. Education may not necessarily create the required awareness. Rural dwellers need to be taught that the changing life styles require every individual to provide a supporting security solution to their families & to themselves. Therefore the insurers need to create awareness in the rural masses regarding insurance. Majority of rural population tends to rely on the advice of their chieftains. The insurers identifying a cluster of units and its headmen; and imparts the necessary insurance education through them in the form of street dramas, videos and sponsoring documentaries in televisions etc. This will help in raising the awareness levels of insurance. Consumer awareness ensures an effective market discipline as consumers take an informed decision. A majority of the new generation insurance companies are in the process of expanding their operations to the nook and corner; and creating awareness should form part of their overall marketing strategy rather than selling insurance products perforce. Empowering intermediaries: Insurers market various insurance covers either directly or through various distribution channelsindividual agents, corporate agents (Including Bancassurance) and Brokers. The marketer in the distribution network is in direct interface with the prospect and the customer. Life insurance products are sold through individual agents and many of them have this as their only career occupation. General insurance products are sold through individual agents, corporate agents and brokers. Distribution channels such as agents are licensed by the IRDA. IRDA regulations on licensing of agents/brokers lay down the code of conduct for individual agents, corporate agents and brokers.

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Companies make tie-ups with retailers, post offices & some of the largest NGOs like SEWA, BASIX, Dhan Foundation etc to reach out to the villages. In one of the cases it was noted that many remote places did not have the services of veterinary doctors and if this service has to be provided, the cost of obtaining the livestock insurance would shoot up. To overcome this gap in service providers, which seriously compromises the ability to offer livestock insurance in rural areas, BASIX worked with Royal Sundaram to enable the certification of livestock insured through its field staff who are adequately trained to assess the economics of cattle rearing and the insurable status of cattle. This arrangement greatly simplified the ease of insuring animals & great care had been exercised by BASIX staff. Developing a sound actuarial basis for a proper assessment of the risks and pricing them accordingly would make agriculture insurance products viable for the insurers; and at the same time affordable for the farmers. Innovation in product design: The insurance product for the rural insurance space may come in the form of a packaged product having an insurance cover for health, personal, accident and for some of the assets of the rural customers.Micro-insurance products, apart from covering only risks, should also provide an opportunity for providing long term savings (endowment). Customised product development is necessary to suit the varying requirements of the local populace.The processes / procedures are to be streamlined and simplified, to facilitate easier access for the rural poor. Information should be made available in vernacular for easy understanding of the terms on offer.

Push from IRDA Initiatives to reach the rural masses: IRDA has provided certain regulatory norms in order to reach out to the rural masses. They guide the insurance companies not to merely take it as a business opportunity but as a part of their social responsibility. The efforts should be made to achieve the standards in the true spirit and not merely as a target to be fulfilled. The regulations focus on the direction, design and delivery of the products: Rural businesses of insurance companies should account for 7 per cent of their total gross written premium after the first eight years of starting the operations. In case of new entrants, this cap is relaxed to 2 per cent-7 per cent. Usually Composite insurances are not favoured (i.e., life and non-life insurances by the same company) & It also limits the agency tie-up to one life and one non-life insurer. But, in recognition of the uniqueness of micro insurance, these regulations enable life and non-life companies to tie-up for offering a combined policy in rural areas. Insurers are allowed to issue policies with a maximum cover of Rs. 50,000 for general and life insurance. The norms are eased for entry of agents relating to training and pre-recruitment examination & remuneration to agents has also been leveled across the term of the policy. Another striking feature of the regulation is the provision of extending coverage to the family as a unit as against the system of insurance coverage to individual lives. The

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insurer has to take IRDAs prior approval for launching microinsurance products through the file and use mode. The maximum cover will be Rs. 30,000 per annum for a dwelling and contents or livestock or tools or implements or other named assets or crop insurance against all perils. For individual and group health insurance, the maximum cover is Rs. 30,000 per annum per individual. For personal accident policies the maximum Rs. 50,000 per annum and is open to 5-70 age group.

Suggestions and Recommendations In summary, to overcome the ignorance of rural people regarding insurance and its various beneficiary products, the insurers have to take relevant measures, like innovation in designing products and making the people realize the need for insurance, although it is not easy as it sounds. The traditional outlook of rural consumers towards insurance has not yet changed, therefore Insurance companies should take certain measures to educate the people about the necessity of insurance and bring them to the lime light. Pricing is another crucial issue that makes or mars measures to penetrate rural markets. Since majority of rural people possess limited purchasing power insurers should introduce innovative products at varied price points with well-differentiated offerings. Insurance companies should focus on various problems related to distribution channels and also provide proper infrastructure facilities, in order to make it easily accessible to rural customers. Importantly, effort should be made to convey the message in a language and in a form that the downtrodden understand easily. An essential component of marketing is publicity for the product, and it should be done in such a manner that it is easily understood and appealing to the general public. The aim should not only be at promoting the product but also providing proper information about the product. This would lead to the buyer making an informed decision, to a great extent. It should also be kept in mind that the publicity effort should target different segments of the population; and wherever required, there should be different forms of conveying the message in a comprehensible fashion. A well-trained and a plain-speaking intermediary have the ability to be the best brand ambassador for any player. An innovative way of creating awareness of insurance products to rural people could be by sending SMS (messages) with regard to the new products available in the market for their needs and also by making phone calls. Conclusion Rural marketing has gained prominence in the last decade. Marketers have started giving importance to the neglected rural markets because of the saturated urban markets and improved incomes and spending power of the rural consumers. The market research and analysis have to be done carefully in order, that there is a proper match between identification of the need of the prospect and the designing of the product. *****

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ROLE OF TECHNOLOGY IN INSURANCE AND BANKING SECTORS Dev Anand .D and 2K. Ganesan Research Scholar, University Of Madras. 2 HOD, Dept. Of Business Administration, Annai Veilankannis College, Saidapet.
1 1

Introduction Insurance and banking sectors are doing financial dealings with people. Both insurance and banking companies are motivating the people to save money for future. Both sectos provide different types of future plan regarding savings of money. Today is competitive world, many insurance and banking companies and under struggle to catch the top position. Insurance Company Insurance means savings for future with risk coverage. Insurance company means guardian for people money savings and provides protection from risks. According to D. H. Magee Insurance is a plan by which large number of people associate themselves and transfer to the shoulders of all risks attached to individuals.Insurance is arrangement for facing common risks and for different types of functions people have to face different types of risks in their lives from accidents floods, fires, tsunami, earthquakes, wars, burglaries etc., So the insurance company can help to reduce the above risks. Insurance is a social device whereby uncertain risks of individuals may be combined in a group and thus made more certain small periodic contributions by the individuals providing a fund out of which those who suffer losses may be reimbursed. In short insurance is a contract whereby the insured promises to pay a uniform rate of premium at fixed intervals of time against which the insurer agrees to pay a fixed amount on the happening of the event which may be unexpected or on the date of maturity whichever is earlier. Banking Sectors Banking is a building where the people deposit their money and they can with draw their money when they need. According to Sec. 4 of the Banking regulation Act 1949 Banking means the accepting for the purpose of lending or investments or deposits of money from the public repayable on demand or otherwise and withdrawable by cheque, drafts, order or otherwise. Banking sectors accept money from the public and return it when they need. They provide protection for money and jewellery of people and provide some interest for their deposits of money. Insurance and Banking Both Insurance and banking sectors provide some financial assistance to the public. Insurance and banking sectors make some functions like providing protection, certainty, prevention of

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losses, encouragement in savings, social security, providing loans increase the efficiency of the society. Technological Challenges and Opportunities Both Insurance and Banking sectors have to face many difficulties to stand their business in this competitive world. All banking and insurance companies are eager to catch the top position in the business. For this purpose all these concerns introduce different types of policies and deposit schemes. For example 5 years back, LIC of India and other insurance companies introduced Money plus Policy. The concept of policy was if policy holder deposited Rs. 10,000 for 3 years he/she would be paid Rs. 39,00,000. As soon as the information was received, people deposited their money into this policy very eagerly. Lack of place, LIC of India was not able to keep the money in its office. It took one godown for rent then only they kept their money. But this type of policy is totally failed. So many people are suffering from this policy. Following years LIC is unable to achieve its target. So the people should not be confuse. Small amount contributions scheme can reach the public very easily like small savings. For example monthly Rs.100, Rs.200, Rs.300 for 5 years. The return will be low but number of customers who can join this scheme will be more. In case of banking companies nil balance deposit scheme can be introduced for school and college students and we can create the awareness for savings then they can maintain the banking transactions regularly. Banking sectors arrange loan facilities to middle class people and rich people only. It leads to rich become rich and poor become poor. If poor people approach the bank to get loan they ask fixed assets security like land or house. How the poor people provide the fixed assets security.. Now a day they are unable to make both ends meet. So banking sectors should relax the hard and fast rules to get loans. Education loan scheme was introduced by Government of India and advised all banking sectors to provide education loan for poor students without interest. 3 Years back, I approached Ambattur Canara Bank for my daughter who was studying I B.E. Manager of that bank ordered me strictly to provide fixed assets security. I dont have any fixed assets. How can I produce the fixed assets security Government now and then announce the free interest education loan but that bank refused to provide loans for my daughter I arranged loan from my father for higher interest in my village. Now people are earning more money as compared with last decade but more than 50% of people do not involve in insurance and banking transactions due to lack of awareness. Insurance and banking sectors should create awareness regarding the need for insurance policies and investment in banking among the people regarding savings for future. Banking companies are paying more attention to maintain current account holders they dont consider savings account holders. All banking companies should pay attention to maintain all customers. Customers are more precious for all concern. Insurance companies fail to do good service for customers. Their main object is collection of first premium i.e new business. They are not doing proper service to subsequent premiums, because all insurance companies are fixing

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the target for first premium only. At the time of claim the insurance companies do not help to get claim for policy holders. People are thinking insurance is a contingent product, it is utilized only in the event of an accident. Insurance has a negative connotation in the mind of the buyer. It is a future delivery and benefit realized only the death of policy holders. Some agents collect the money and cheat their clients. Insurance companies comprise three parties viz customers, agent and company. These three parties should make good relationship. Here agents act mediators between insurance company and customers. They should make good relationship. For this purpose agents service is very essential. Agents are talking very nicely when they are getting new business, afterwards they do not meet the customers. In banking companies, the employees are not behaving with courtesy, they act as kind of the concern. FINDINGS Insurance and banking companies do not provide proper services for customers Malpractices are done by some of the Insurance companies Very long term plans of insurance create the dissatisfaction of the business. People are interesting in case of short period of plan Lack of awareness among students and coolie employees, they do not open account for savings Lack of communication leads to misunderstanding between corporate sector and customers Lack of after sale service lead to reduce the business target

Recommendations Banking and Insurance Company should create awareness among people After sale service should be introduced Short period deposit scheme can be introduced To know the problems of customers, Customer care cell can be introduced. Communication should be made in proper way Customers should be protected Nil balance deposit scheme can be introduced for students. Conclusion Both insurance and banking business concern depend upon the people. So both concerns should make good contact with people. They should do good services for people. The problems of people should be analyses and should take actions immediately by the insurance and banking company. *****

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TO IDENTIFY AND EVALUATE THE BEST PRACTICES IN 7 PS OF SERVICES MARKETING IN INSURANCE SECTOR M.Devaki Assistant Professor in Commerce Department, J.H.A. Agarsen College, Chennai. Introduction: Marketing Concept may be taken as Developing a strategy to get the product in front of customers, so they have the opportunity to buy it determining scientifically what products or services to make and how best to market them to be taken as a way of thinking or a management philosophy about an organizations total marketing activities. When this philosophy is adopted, it not only affects marketing activities including planning of action, control, objectives, follow-through etc., finance and other activities which are geared towards satisfying customers needs and wants. Marketing Concept has the following basic features: a. Adoption of a market or customer orientation. b. A coordinated set of activities that allow the organization to achieve the goals. c. Result-oriented marketing. Marketing strategy for every kind of product is adopted. The Marketing Mix of Insurance: The basic task of a marketer is to deliver to the customer satisfaction. So that first thing offering a Product at a reasonable Price, at a suitable Place and apt Promotional measures. These 4 Ps could bring satisfaction and these 4 Ps are called Marketing Mix. Insurance is a service industry. Marketing of services becoming more and more important, in service marketing three more Ps have been added. These are People, Process and Physical Evidence. The service marketing mix is also known as an extended marketing mix is an integral part of a service blueprint design. The service marketing mix consists of 7 Ps as compared to the 4Ps of a product marketing mix. Simply said the service marketing mix assumes the service as a product itself. All of these factors are necessary for optimum service delivery. There are three kinds of services are defined by three points. a. The activities that are intangible in nature like transportation. b. Benefits purely derived from services like Insurance and Medical services c. The services obtained along with the buying of a product like after sales service Thus services are separately identifiable, intangible activities which provide want satisfactions when marketed to consumers or industrial users and which are not necessarily tied to the sale of product or another service. Product: The product in service marketing mix is intangible in nature. A product is basically something that a producer offers to a consumer. It is an aggregate of utilities, values, expectations and perceptions, a complex cluster of value satisfactions. One buys satisfaction and states of mind rather than simply goods and services. In case of insurance, the tangibles are practically non-existent. The product in case of insurance is only a promise for the customer and according to the technical experts in the insurers office product sold is what the policy means. But these differences come to light only at the time of claim is made. These differences mainly arise because of a. Inadequate knowledge among the public about the technicalities of insurance b. Inadequate or incorrect explanations by the agent Developing a Product:

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For developing a service product, following steps are involved a. Benefit Concept -Determine what the customer values as benefit b. Service Concept Determine which of these benefits could be offered c. Decide on, the precise service offer, which includes form and levels of the benefits to be offered. d. Delivery system -Decide on arrangements for delivery of the service Pricing: Pricing in case of services is rather more difficult than in case of products. Generally service pricing involves taking into consideration labor, material cost and overhead costs. In Insurance sector, costs include the cost of running of office, plus the claims incurred in the business of price of insurance product the premium is based on cost plus margins. In insurance there is limited scope to use price as a strategic weapon. In life insurance premium rates are decided by the actuary, on considerations that depend on the experience of the insurer in the past and his assessment of the trends in future. These rates should be approved by IRDA. In general insurance, the decisions of the tariff committee are binding on all insurers. Discretion is available in the case of business for which there is no tariff. In this case a company may quote a premium lower than another. But it is only possible if it improves its performance on two main areas. a. Claim ratio, which depends on the market segment in which it transacts business and standards of underwriting. b. Expenses of administration. Actually price is the result of demand and supply. But the product of insurance is not price elastic. Place: Place refers to the arrangements by which the product after manufacturing is moved till it reaches the customer. There are various intermediaries in every business like wholesalers, retailers, etc. in the service business, agents and brokers are intermediaries in the transaction. Insurance business is sold through agents as intermediaries. In India the regulations provides that an insurance agent can represent only on life and one non-life insurer. An agent has to obtain a license from the IRDA. Brokers also act as insurance intermediaries, but they are different form agents in the sense that they are independent businessmen either working alone or in partnership. Brokers may be found in the non-life insurance business helping customers whose insurance requirements are complex. They handle big risks and need superior financial and analytical skills. Intermediaries play a very significant role when the claim has to be settled. Promotional measures: The business enterprise should inform the customers about its product and persuade them to buy. Advertising, personal selling, and other sales promotional programs are the various promotional activities. All these activities increase the volume of sales by expanding as well as retaining the market share for the product. It is the communication with the market to influence attitudes and receptively to eliminate misconceptions and thus to more sales. The IRDA has issued guidelines about advertisements by insurers and the agents or brokers in newspapers, magazines. The main requirements are a. The advertisement program has to be overseen by an officer responsible for compliance with the regulation. b. A copy of every advertisement should be filed with the IRDA. c. Advertisements should disclose the full particulars of the insurer, as well as the form number and type of coverage of the policy referred to. d. Display the registration / license numbers on their websites.

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e. No third party, other than insurer or authorized intermediary can distribute information or recommended purchase of specific insurance products. f. Advertisements should not be unfair or misleading. People: People are the most critical resource in any organization, without people no other resource can perform. The insurance services are judiciary in nature. Thus creditability or trustworthiness, in the perception of the customer, is crucial. Success Factors for Insurance: a. Change in the attitude of the population: There is need for a change in the attitude of the people towards insurance. Insurance is taken just as a tool for tax saving. Insurance can be taken as shield around their families and business for any unknown calamity and also it will be the good investment opportunity. b. Open and Transparent Environment: Insurance as the sector requires players who are financially strong and are willing to wait for returns. Their confidence can only be boosted only if there are open and transparent policy guidelines. c. Well Established Distribution Network: Bancassurance is becoming more and more popular. Public sector banks like SBI have huge network because of their long existence. Therefore they can be successful. d. Trained Professionals: Initially only insurance agents were considered to be the best salesmen for insurance products. But now with privatization and globalization more and more professionalism is required in sales efforts. e. Rational Approach to the Investment Criteria: IRDA has guidelines for the investment pattern of the insurance companies to meet its social obligations. But the players feel this compulsion to be unjust and it affects their return on investments. The more the people insured, better the revenue, better the security and ultimately better the morale and productivity. f. Stringent Accounting Practice to Prevent Failures: Insurer has the hard earned money of the masses. Failure of any of the insurer for any reason can have disastrous effects. To prevent such possibility, a stringent accounting practice is imperative. g. Level Playing Field for all Insurers: Government should provide balanced environment to all the insurers players, so that everybody has equal opportunities LIC is focusing both on mass marketing and segmentation strategy. Main focus of promotion activities is on tax benefit and returns form insurance. LIC is focusing on CRM. Process: Service process is the way in which a service is delivered to the end customer. It is a critical component in the service blueprint, wherein before establishing the service, the company defines exactly what should be the process of the service product reaching the end customer. Physical Evidence: The last element in the service marketing mix is a very important element. Services are intangible in nature. However to create a better customer experience tangible elements are also delivered with the service.

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Conclusion: Service marketing is that elusive concept which stays incomplete without a through understanding of 7 Ps. These from the critical success factors for any service as evaluated by a possible customer. The service marketing is the combination of marketing activities that an organization engages in so as to best meet the needs of its targeted market. The insurance business deals in selling services and therefore due weightage in the formation of service marketing mix for the insurance business is needed. *****

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A STUDY ON EFFECTIVENESS OF E-ADVERTISING WITH REFERENCE TO CHENNAI CITY R.DEVI and 2D. VENKATARAMANARAJU 1 Ph.D Research Scholar and 2Associate Professor in Commerce, Department of Commerce, Pachaiyappas College, Chennai-30. INTRODUCTION Advertising According to American Marketing Association, Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods or services by an identified sponsor. It involves the use of such media as magazine, newspaper, space, radio, motion pictures, outdoor media, cards, catalogues, direct mail, directories and references, store signs, programs and menus, novelties and circulars. Internet Internet media has seen the maximum growth in last few years. This is despite the fact that reach of internet in India is still less than 30%. With booming economy and increase in the number of internet service providers (ISP) across India, it is anticipated that this medium would multiply in future. In terms of contribution to GDP, in the top 10 economies of Asia, India occupies the last position. Commercial use of the Internet With a growing number of users spending an increasing amount of time on the internet, advertisers are showing greater interest in this medium. The fastest growing part of the internet, the World Wide Web is being used for commercial purposes, by companies due to following reasons: Low cost of making information available Possibility of reaching a global audience E-Advertising E-Advertising is a popular device employed in the modern marketing system. With the expansion of large scale production, the growth of competition amongst the producer to capture markets and the invention of substitutes for almost all kinds of products. In the modern world, not only commercial and industrial undertakings but also all kinds of institutions find eadvertising as a suitable means of publicity. Hence, e-advertising has assumed more importance and it is very difficult to estimate its magnitude. OBJECTIVES OF THE STUDY To identify the level of satisfaction of users of the Internet. To have an idea of whether E-Advertising is effective. To identify requirements of the users of the Internet. To know the range of cost that the customers prefer. To know the quality of the overall service of the Internet. Scope and Importance of the Study The importance is concerned with identifying facilities available to the users of Internet and the satisfaction level of the users.
1

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Identification of individual needs and feedback on the existing facilities provided on the Internet. The result arrived out of this study would help to get an idea to improve the performance of Internet. It is the systematic analysis of effectiveness of E-Advertising. The main purpose of studying effectiveness of E-Advertising is to secure information necessary for making required changes in the type of providing services. Research Methodology Methodology The purpose of the methodology section is to describe the research procedure. This includes overall research design, the sampling procedure, data collection method, and field and analysis procedures. Primary Data Primary data are those which are collected for the first time, and thus happen to be original. The Data collected from the respondents is through questionnaire, the data collection is directly related to the topic being studied. Secondary Data Secondary data are those, which have been collected by someone else for some other purpose. In other words, secondary data refers to the data compiled from already available data. They are websites, Business magazines, reports prepared by the scholars, company records, etc. Limitations 1. Consumer research can be conducted along with a limited group of people. Hence, a research conducted on these limited people cannot be applied to the public in the same way. 2. Consumer research require a lot of time. 3. The research is only for Chennai city so the result may vary if the sample size increased. 4. The study is made for the area of Chennai and sample size is only 50 with this we cannot predict the entire market. DATA ANALYSIS & INTERPRETATION Interpretation refers to the task of drawing inference from the collected facts after analytical study. The data, after collection has to be processed and analysed in accordance with the outline laid down for the purpose at the time of developing the research plan. Process implies editing, coding, classification and tabulation of the collected data, so that they are amenable to analysis. In the process of analysis, relationships or difference supporting or conflicting with original or new hypothesis, should be subjected to statistical test of significance to determine with what validity data can be said to indicate any conclusion. TABLE NO.1 EFFECTIVE METHOD OF ADVERTISING S. No Particulars No of Respondents Percentage

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1 2 3 4

Interpersonal Traditional Mass Electronic Total

9 8 22 11 50

18% 16% 44% 22% 100%

Interpretation It is interpreted that 18% of the persons feels that interpersonal advertising is effective, 16% feels that traditional advertising is effective, 44% feels that mass advertising is effective, and 22% feels that e-advertising is effective. TABLE NO.2 FACTORS FOR DEVELOPMENT OF E-ADVERTISING 1st 2nd 3rd 4th

Particulars

Average

Overall Rank 2 3 1 4

Easy Operation Cheaper Price Frequent Updates Feedback

13 5 22 10

21 13 10 6

8 22 9 12

8 10 9 22

2.78 2.26 2.9 2.08

Interpretation It is interpreted that, frequent updates with an average of 2.9 gets 1st rank, easy operation with an average of 2.78 gets 2nd rank, cheaper price with an average of 2.26 gets 3rd rank and feedback with an average of 2.08 gets 4th rank as the important factors for the development of Eadvertising. TABLE NO.3 PRODUCTS SEARCHED IN INTERNET

Particulars

1st

2nd

3rd

4th

Average

Overall Rank

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Softwares Tickets FMCGs Services

23 8 5 14

15 17 3 15

6 16 13 15

6 9 29 6

3.1 2.4 1.68 2.74

1 3 4 2

Interpretation It is interpreted that, Soft wares with an average of 3.1 gets 1st rank, tickets with an average of 2.4 gets 2nd rank, FMCGs with an average of 1.68 gets 3rd rank, and services with an average of 2.74 gets 4th rank as the important products searched in Internet TABLE NO.4 E-ADVERTISING CONVEYS MESSAGE EFFECTIVELY S.No Particulars No of Respondents Percentage

1 2 3 4 5

Highly disagree Disagree Neither Agree Nor Disagree Agree Highly Agree Total

0 1 4 30 15 50

0 2% 8% 60% 30% 100%

Interpretation It is interpreted that 2% of the respondents disagrees, 8% neither agree nor disagrees, 60% agrees, 30% highly agrees for the statement that E-advertising conveys message effectively. TABLE No.5 E-ADVERTISING PROMOTES SALES S.No Particulars No of Respondents Percentage

1 2 3 4 5

Highly disagree Disagree Neither Agree Nor Disagree Agree Highly Agree

1 2 8 29 10

2% 4% 16% 58% 20%

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Total Interpretation

50

100%

It is interpreted that 2% of the respondents highly disagrees, 4% disagrees, 16% neither agree nor disagrees, 58% agrees, 20% highly agrees for the statement that E-advertising promotes sales. TABLE NO.6 E-ADVERTISING HELPS TO OVERCOME COMPETITION S.No Particulars No of Respondents Percentage

1 2 3 4 5

Highly disagree Disagree Neither Agree Nor Disagree Agree Highly Agree Total

0 6 20 18 6 50

0% 12% 40% 36% 12% 100%

Interpretation It is interpreted that 12% of the respondents disagrees, 40% neither agree nor disagrees, 36% agrees, 12% highly agrees for the statement that E-advertising helps to overcome competition. TABLE NO.7 E-ADVERTISING IS EFFECTIVE THAN TRADITIONAL ADVERTISING S.No Particulars No of Respondents Percentage

1 2 3 4 5

Highly disagree Disagree Neither Agree Nor Disagree Agree Highly Agree Total

0 6 8 25 11 50

0% 12% 16% 50% 22% 100%

Interpretation

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It is interpreted that 12% of the respondents disagrees, 16% neither agree nor disagrees, 50% agrees, 22% highly agrees for the statement that E-advertising is effective than traditional advertising. TABLE NO.8 OVERALL SATISFACTION OF E-ADVERTISING S. No Particulars No of Respondents Percentage

1 2

Yes No Total

48 2 50

96% 4% 100%

Interpretation It is interpreted that 98% of the respondents has been satisfied with only 2% of the respondents has been not satisfied with E-advertising. E-advertising and

FINDINGS The study reveals that majority of the respondents feels that mass advertising is effective, and 22% feels that e-advertising is effective. Frequent updates with an average of 2.9% gets 1st rank, easy operation with an average of 2.78% gets 2nd rank, cheaper price with an average of 2.26% gets 3rd rank and feedback with an average of 2.08% gets 4th rank as the important factors for the development of Eadvertising, The respondents have ranked No.1 Softwares products as the important searched in Internet. 10% of the respondents neither agrees nor disagrees, 54% agree, 36% highly agrees for the statement that e-advertising is necessary. Many respondents highly agrees for the statement that e-advertising promotes sales. It is found from the analysis that 48% of the respondents agrees for the statement that eadvertising helps to overcome competition. It is notes from the analysis that 98% of the respondents have been satisfied with eadvertising. SUGGESTIONS Awareness about the e-advertising shall be improved among the people. Creative methods shall be used to make the people visit to the sites frequently. Advertising sites shall have to retain the users in their site. Contents in the site shall be updated frequently i.e., addition of latest information. The advertising websites shall be easily accessible and navigable to the users.

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Special effects such as sound and video clips shall be very effective for making the site appealing to the users.

CONCLUSION We can say that e-advertising is more effective than traditional method of advertising as it has a lot of merits like easy operation, low expensive, time saving, frequent update of advertisement informations, etc. It is also clear that creativity, as a strategy can be the key to successful advertising. Technology strategy can also be used as one form of creative thinking process. Technology can be used to gather information about the customers using the technological gadgets like Internet portal and telephones. Even the animations used for advertisements are also technologically creative. To conclude, it can be said that for a good advertising strategy, a focused, diversified and global attitude is a must. REFERENCES 1. Donald, R, Cooper Pamela and Schindler, S., Marketing Research MC Graw Hill Co, New Delhi. 2. Gupta, S.P., Statistical Methods, Sultan Chand & Sons, New Delhi, 2005.. 3. Kothari, C.R., Research Methodology, New Age International Publishers, New Delhi, 2005. 4. Philip Kotler, Marketing Management- Analysis, Planning, Implementation and Control 6th Edition, Printice Hall of India. 5. Rajan Nair, N., Marketing, Sultan Chand and Sons, New Delhi, 1986. *****

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THE 4AS FRAMEWORK AND CUSTOMER FOCUS IN SBI Dhanya J S and Linda Susan Mathew Department of Business Administration, College of Engineering, Trivandrum.

1. INTRODUCTION THE HISTORY OF BANKING IN INDIA Banking Regulation Act, 1949 (Sec. 5(c)), has defined the banking company as, Banking Company means any company which transacts business of banking in India. According to Section 5B, banking means the accepting of deposit of money from the public for the purpose of leading or investment, which are repayable on demand or otherwise and are withdrawable by cheque, draft, and order or otherwise. Without a sound and effective banking system in India it cannot have a healthy Economy. The banking system of India should not only be hassle free but it should be able to meet new challenges posed by the technology and any other external and internal factors. For the past three decades India's banking system has several outstanding achievements to its credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of the country. This is one of the main reasons of India's growth process. The government's regular policy for Indian bank since 1969 has paid rich dividends with the nationalization of 14 major private banks of India. Not long ago, an account holder had to wait for hours at the bank counters for getting a draft or for withdrawing his own money. Today, he has a choice. Gone are days when the most efficient bank transferred money from one branch to other in two days. Now it is simple as instant messaging or dial a pizza. Money has become the order of the day. The first bank in India, though conservative, was established in 1786. From 1786 till Today, the journey of Indian Banking System can be segregated into three distinct Phases. They are as mentioned below: Early phase from 1786 to 1969 of Indian Banks Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms. New phase of Indian Banking System with the advent of Indian Financial &Banking Sector Reforms after 1991. The nationalization of banks in India took place in 1969 by Mrs. India Gandhi the then prime minister. It nationalized 14 banks then. These banks were mostly owned by businessmen and even managed by them.

2. REVIEW OF LITERATURE For the past three decades India's banking system has several outstanding achievements to its credit. The most striking is its extensive reach. (Altunbas, Y. and Chakravarthy, S.P. 2001) It is no longer confined to only metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of the country. This is one of the main reasons of

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India's growth process. The government's regular policy for Indian bank since 1969 has paid rich dividends with the nationalization of 14 major private banks of India.( Arun Shourie (2003). Not long ago, an account holder had to wait for hours at the bank counters for getting a draft or for withdrawing his own money. Today, he has a choice. Gone are days when the most efficient bank transferred money from one branch to other in two days. Now it is simple as instant messaging or dial a pizza. Money has become the order of the day. The first bank in India, though conservative, was established in 1786. From 1786 till Today, the journey of Indian Banking System can be segregated into three distinct Phases. (A.V. Aruna Kumari, 2002) The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These three banks were amalgamated in 1920 and Imperial Bank of India was established which started as private shareholders banks, mostly Europeans shareholders. In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935. (Banking & Finance (2002). During the first phase the growth was very slow and banks also experienced periodic failures between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline the functioning and activities of commercial banks, the Government of India came up with The Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the Central Banking Authority. During those days public has lesser confidence in the banks. As an aftermath deposit mobilization was slow. Abreast of it the savings bank facility provided by the Postal department was comparatively safer. Moreover, funds were largely given to traders. (Banker (2003) Government took major steps in this Indian Banking Sector Reform after independence. In 1955, it nationalized Imperial Bank of India with extensive banking facilities on a large scale specially in rural and semi-urban areas. It formed State Bank of India to act as the principal agent of RBI and to handle banking transactions of the Union and State Governments all over the country. Seven banks forming subsidiary of State Bank of India was nationalized in 1960 on 19th July, 1969, major process of nationalization was carried out. (Banking & Finance, (2002). It was the effort of the then Prime Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country was nationalized. Second phase of nationalization Indian Banking Sector Reform was carried out in 1980 with seven more banks. This step brought 80% of the banking segment in India under Government ownership. 3.SBI THE PROFILE Before the steps of nationalization of Indian banks, only State Bank of India (SBI) was nationalized. It took place in July 1955 under the SBI Act of 1955. Nationalization of Seven State Banks of India (formed subsidiary) took place on 19thJuly; 1960.The State Bank of India is India's largest commercial bank and is ranked one of the top five banks worldwide. It serves 90 million customers through a network of 9,000branches and it offers -- either directly or through subsidiaries -- a wide range of banking services. The State Bank of India, the countrys oldest Bank and a premier in terms of balance sheet size, number of branches, market capitalization and profits is today going through a momentous phase of Change and Transformation the two

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hundred year old Public sector behemoth is today stirring out of its Public Sector legacy and moving with an agility to give the Private and Foreign Banks a run for their money. The bank is entering into many new businesses with strategic tie ups Pension Funds, General Insurance, Custodial Services, Private Equity, Mobile Banking, Point of Sale Merchant Acquisition, Advisory Services, structured products etc each one of these initiatives having a huge potential for growth. The Bank is forging ahead with cutting edge technology and innovative new banking models, to expand its Rural Banking base, looking at the vast untapped potential in the hinterland and proposes to cover 100,000 villages in the next two years. It is also focusing at the top end of the market, on whole sale banking capabilities to provide Indias growing mid / large Corporate with a complete array of products and services. It is consolidating its global treasury operations and entering into structured products and derivative instruments. Today, the Bank is the largest provider of infrastructure debt and the largest arranger of external commercial borrowings in the country. It is the only Indian bank to feature in the Fortune 500 list. The Bank is changing outdated front and back end processes to modern customer friendly processes to help improve the total customer experience. With about 8500 of its own 10000 branches and another 5100 branches of its Associate Banks already networked, today it offers the largest banking network to the Indian customer. The Bank is also in the process of providing complete payment solution to its clientele with its over 21000 ATMs, and other electronic channels such as Internet banking, debit cards, mobile banking, etc. With four national level Apex Training Colleges and 54 learning Centre spread all over the country the Bank is continuously engaged in skill enhancement of its employees. Some of the training programs are attended by bankers from banks in other countries. Throughout all this change, the Bank is also attempting to change old mindsets, attitudes and take all employees together on this exciting road to Transformation. In a recently concluded mass internal communication programme termed Parivartan the Bank rolled out over 3300 two day workshops across the country and covered over 130,000 employees in a period of 100 days using about 400 Trainers, to drive home the message of Change and inclusiveness. The workshops fired the imagination of the employees with some other banks in India as well as other Public Sector Organizations seeking to emulate the programme. SBIS COMPETITORS In India the banks are being segregated in different groups. Each group has their own benefits and limitations in operating in India. Each has their own dedicated target market. Few of them only work in rural sector while others in both rural as well as urban. Many even are only catering in cities. Some are of Indian origin and some are foreign players. The RBI has shown certain interest to involve more of foreign banks than the existing one recently. This step has paved a way for few more foreign banks to start business in India. Major Banks in India are ABN-AMRO Bank, Abu Dhabi Commercial Bank, American Express Bank, Andhra Bank, Allahabad Bank, Bank of Baroda, Bank of India, Bank of Maharastra, Bank of Punjab, Bank of Rajasthan, Bank of Ceylon, BNP Paribas Bank, Canara Bank, Catholic Syrian Bank, Central Bank of India, Indian Overseas Bank, IndusInd Bank, ING Vysya Bank, Karnataka Bank, KarurVysya Bank, Laxmi Vilas Bank, Oriental Bank of Commerce, Punjab

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National Bank, Punjab & Sind Bank, Scotia Bank, South Indian Bank, Standard Chartered Bank, State Bank of India (SBI), Centurion Bank, Citi Bank, City Union Bank, Corporation Bank, Dena Bank, Deutsche Bank, Development Credit Bank, Dhanalakshmi Bank, Federal Bank, HDFC Bank, HSBC ICICI Bank, IDBI Bank, Indian Bank, State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Indore, State Bank of Mysore, State Bank of Travancore, Syndicate Bank, UCO Bank, Union Bank of India, United Bank of India, UTI Bank and Vijaya Bank. RESEARCH OBJECTIVES 1. To study about effectiveness of the functioning of SBI with respect to the 4 As Framework. 2. To study about the products and services offered by SBI. 3. To understand the customer centric operations of SBI and determine the customer perception of SBI bank. RESEARCH METHODOLOGY DATA COLLECTION TECHNIQUES This project consists of two parts. The first part is a study of the banking industry, SBI using secondary data sources. This secondary information has been sourced from the internet, journals, Business magazines, books and newspapers. RESEARCH DESIGN The second part of the study has been done using a Descriptive Research Design with the help of a structured questionnaire specially developed for this purpose. Statisticals tools like the Bar chart, Pie chart, Likerts Scale and Chi Square has been used for the purpose of Analysis and Interpretation. SAMPLE DESIGN The population considered for the purpose of the survey was people residing in Sreekariyam, Trivandrum. 6.4 SAMPLING TECHNIQUE USED Since the information required was not of a very technical nature and also looking at the scope of the project and the extent of the target segment, the sampling technique employed was Convenience Sampling. The researchers administered the questionnaires. 5.5 SAMPLE SIZE The sample size to 100 respondents. 7.1 STRENGTHS Brand name: SBI Bank has earned a reputation in the market over the period of time(Being the oldest bank in India tracing history back to 1806) Market Leader: SBI is ranked at 380 in 2008 Fortune Global 500 list, and ranked 219 in 2008 Forbes Global 2000. With an asset base of $126 billion and its reach, it is a regional banking behemoth. Wide Distribution Network: Excellent penetration in the country with more than 10000 core branches and more than 5100 branches of associate banks (subsidiaries).

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Diversified Portfolio: SBI Bank has all the products under its belt, which help it to extend the relationship with existing customers Bank has umbrella of products to offer their customers, if once customer has relationship with the bank. Some Products, which SBI Bank is offering are: Retail Banking Business Banking Merchant Establishment Services (EDC Machine) Personal loans & Car loans Insurance Housing Loans. Government Owned: Government owns 60% stake in SBI. This gives SBI an edge over private banks in terms of customer security. Low Transition Costs-SBI offers very low transition costs which attracts small customers. Continued effort to increase low cost deposit would ensure improvement in NIMs and hence earnings. 7.2 WEAKNESSES: The existing hierarchical management structure of the bank, although strength in some respects, is a barrier to change. Though SBI cards are the 2nd largest player in the credit card industry, it has the highest nonperforming assets (NPAs) in the industry, which stand out to be at 16.28 % (Dec 2007). Modernisation: SBI lags with respect to private players in terms of modernization of its processes, infrastructure, centralisation, etc. SBI is currently operating at a lowest CAR(8%). Insufficient capital may restrict the growth prospects of the bank going forward. Delay in technology up gradation could result in loss of market shares. Management indicated a likely pension shortfall on account of AS-15 to be close to Rs50bn. Contribution of retail credit to total bank credit stood at 26%. Significant thrust on growing retail book poses higher credit risk to the bank. 7.3 OPPORTUNITIES: Merger of associate banks with SBI: Merger of all the associate banks (like SBH, SBM, etc) into SBI will create a mega bank which streamlines operations and unlocks value. Planning to add 2000 branches and 3000 ATMs in 2008-2009. This will further increase its reach. Increasing trade and business relations and a large number of expatriate populations offers a great opportunity to expand on foreign soil. Global expansion: SBI already has expanded globally and start its operations internationally in 32 countries like Australia, Bangladesh, etc.... and has more plans of expansion in other global markets. Growing retail & SMEs thrust would lead to higher business growth. Micro Finance: there is a lot of growth opportunity in the area of micro finance. Strong economic growth would generate higher demand for funds pursuant to Higher Corporate demand for credit on account of capacity expansion. 7.4 THREATS:

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Advent of MNC banks: Large numbers of MNC banks are mushrooming in the Indian market due to the friendly policies adopted by the government. This can increase the level of competition and prove a potential threat for the market share of SBI bank. Consumer expectations have increased many folds in last few years and the bank has not been responsive enough to meet them on time. Private banks have started venturing into the rural and semi-urban sector, which used to be the bastion of the State Bank and other PSU banks Employee Strike: There was an employee strike in the year 2006 which disrupted SBIs activities. This can be repeated in the future. Stiff competition, especially in the retail segment, could impact retail growth of SBI and Hence slowdown in earnings growth. Slow down in domestic economy would pose a concern over credit off-take Thereby Impacting earnings growth. The changing interest rates and the changing policies of RBI. 4. BUSINESS MODELS AND SBI PORTERS FIVE FORCES THEORY: 1. Threat of competitors Numerous players in the market. 2. Threat of new entrants: there have been many new entrants in banking sector like yes bank 3. Threat of substitutes: investors as a substitute can always invest into the capital markets instead of depositing in their capital in the bank. 4. Buying power of suppliers: changing policies and guidelines of RBI, interest rates, CRR and SLR maintained by the banks as per RBI norms. 5. Buying power of customers: changing scenarios, increasing and decreasing disposable incomes, other attractive options available to customers. 9.2 BCG THEORY: CASH COW There is a lot of growth potential for the banking industry because of increasing disposable income of customers, increasing working class, more volatility in other markets also increasing importance of savings and in this banking industry SBI has shown a growth rate of 13% with a 21 % increase in PAT standing to 62.1 cr in the FY 2008-09. Hence it can be concluded that SBI stands at cash cow in BCG matrix. FINDINGS 1. It was found from the study that bank believes in quality service rather than service. 2. The officials employed are very much enthusiastic about their job. 3. The officials try to make best relation with the customers. 4. There is separate counter for NRI services. 5. The registers and files are maintained on a daily basis. 6. The registers are maintained in a well organized manner. 7. The marketing strategy of the bank is very attractive. 8. The bank always tries to attract customers with innovative offers. quantity of

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9. SBI investment deposit ratio is on the declining trend 10. SBI has shown better utilization of cash portfolio. RECOMMENDATIONS Since the customer and his needs remain in focus in banking, it would be appropriate to have a view of the customers banking needs which include financial security, convenience, quick service, personalized service, investment counseling, return of investment, support by way of credit prestige, wide range of service, etc. and to be the best on these aspects SBI has and is trying its best, and has been successful too, but still there is some scope for improvement. CUSTOMIZED SERVICE Nowadays, customers are more service driven than product driven and are not homogeneous in their behavioral pattern, attitude, needs and expectations. Therefore, a thorough understanding of the customer is a pre requisite to offer him satisfaction through providing services. SBI should also focus on to have the provision to make some changes in its core products on the basis of region, purchasing power of the people etc. because customers want that their special case must be considered, for that branches need to be empowered. In other word it can be said bank should alter its existing service to satisfy the customer needs, as and when it is needed in special cases. Bank should begin a clear understanding of the entire customer base in particular, of those customers are the most profitable. SINCERE PRICING OF THE CORE PRODUCT Pricing is in fact a very critical and sensitive issue while launching any product or inducing more features in existing product in such a highly competitive market of banking before the management of any bank. Because, price driven competition is one of the significant emerging trend in bank marketing. SBI should also be very careful while reconsidering the price of any core and leading product by closing understanding the behaviour up to what extent customers are in the position to tolerate it, since customers price sensitivity is not same across product categories. Price of any product is kept same across the country but for the some places is always not correct, like Trivandrum where delta increase in the price of any product matters for the customers. As it has been seen in the case of increase in charges of QAB of savings account that resulted in many closures of the account. The reaction of this increment in the charges from the customer was aggressive. So bank must price any product by keeping the view of region factor too-where people needs, attitude and purchasing power must be closely understood by the management of the bank. For this, branches also needs to be empowered to the some extentwhere they can make necessary changes in the price of some selected core products, as they have better understanding of the behaviour of their customers than the policy makers of the bank. There should be effective publicity of new products of new products and relaunching of existing one too. Monitoring and customer feedback of all the new and old products should be one regular basis. CUSTOMER AWARENESS Bank should provide effective publicity of new product launched and educate the customer to go in for these products by highlighting the advantages of the products. Because if banks aim is to provide service matching the best in the banking industry so that it can get the most effective publicity, especially through word of mouth for this at the same it is inevitable to educate the

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customer about banks product and facilities available on it. As the products and services of the SBI are almost technology oriented where most advanced softwares are used and most of the banking work are executed on computer through Internet. In such situation where more technicalities is involved in both products and services there is a need to educate the customers so that they can easily use and avail all the facilities available on all the product. During our study, we observed that many customers, not to ask about Internet banking, Phone Banking even dont know how to use ATM, which is really a area of concern. Customers do not know the complete rules and regulations and procedures of banks and bankers preserve them for themselves and do not take interest in educating the customers because if you are giving a product in the hands of the customers keeping the view to serve them better, it is equally important to aware not only about the facilities that are available on any product but also how to use them. Until and unless this thing is practices as a campaign, it would be difficult to retain existing customers as it is said retaining the existing customers is less expensive than creating new one. For this bank need to educate the customer from the grass root of banking. 12. CONCLUSION With you all the way- is the core principle on which Banking at SBI is structured. Though products have been added and modified in the past but the motto has not changed which is to grow and develop relationship with top end client age and generate returns for the bank. Banking at SBI has been a great success lately thanks to their expertise in financial advisory, skilled team of Relationship Managers and being proactive in approach right from the beginning. The analysis of the research shows that around two-third of their client age are banking with them from more than two years which is commendable in terms of client retention. Also for nearly all of their clients SBI banking is the only solution provider. From a high net worth individual aspect the banking is truly a brilliant experience to be recognized and treated as a priority customer. The rise of E-banking is redefining business relationships and the most successful banks will be those that can truly strengthen their relationship with their customers. Without any doubt, the international scope of E-banking provides new growth perspectives and Internet business is a catalyst for new technologies and new business processes. Relationship Managers need to be more proactive in approach and concentration should be on enlarging the customer base of HNI clients and also stress should be given on client retention techniques. To sum up SBI is going great guns with its Banking division but this business model is still at its growing stage of life cycle in India and there is still a lot more to be achieved by everyone involved with this. 13. Bibliography 1. Altunbas, Y. and Chakravarthy, S.P. (2001), Frontier Cost Functions and Bank Efficiency, Economic Letters, Vol.72, Issue 2. 2. Arun Shourie (2003), Before the Whining Drowns it Out, Listen to the New India,The Indian Express. 3. Ashok H. Advani (2000), Indias Best Banks, Business India.

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ROLE OF JUDICIARY AND MOTOR VEHICLE INSURANCE A CRITICAL ANALYSIS B. Venugopal Assistant Professor, Department Of Legal Studies, University Of Madras Chepauk, Chennai 600005,India. The word Accident means an event that is without apparent cause, or is unexpected, an unfortunate event especially one causing physical harm or damage brought about unintentionally by a mishap. Any person including a Minor, Adult, Blind person, a pedestrian, a cyclist, a scootorist. A motor car owner or driver, passenger who puts his feet on the road, Focus are at the risk of becoming a victim in automobile accidents. Road accident which leads to serious injuries including death or maiming of innocent and ignorant human beings become a matter of grave concern. Various types of motor vehicle accidents i.e., buses, trucks, two wheelers, three wheelers a large number of accidents take place day in and day out. A motor vehicle may be defined as any mechanically self propelled vehicle in use on roads and not running on rail. The purposes of insurance, of motor vehicles are classified into three broad categories viz private cars, two wheelers and commercial vehicles. Vehicles in each category may be covered under two types of policies available in India the act covers only policy (A policy) and comprehensive policy (B policy).i Accident liability is covered under the motor vehicle act 1988 which says no person shall use or allow others to use a motor vehicle in a public place without a policy of motor insurance. A public place is defined as any place way, street, lane, by lane to which members of public have a general right of access. Chapter XII of the act provides the limits of liability, every motor owner thus has the following two types of compensation: (i) Third party personal injury including death the liability is unlimited and depends on the amount awarded by a court of law. (ii) Third party property damage to a limit of Rs 6000/- per accident. Passenger carrying vehicle gets cover for legal liability to passengers in the event of death or bodily injury to the passenger. The policy also covers death or bodily injury to any paid driver conductor or ticket examiner in a public vehicle or employees carried in goods vehicle is covered. This is a liability payable under the workmen compensation act. The above cover is in respect to third party liability for all class of vehicles.ii The insured declared value (IDV) is the value declared by the insured in proposal is called IDV and it is deemed to be the sum insured for the purpose of tariff. The IDV is arrived at on the basis of manufacturers listed selling price of the brand and model at the time of commencement of insurance renewal and adjusted for depreciation. The insurer will indemnify the loss or damage to the vehicle insured by fire explosion, self ignition, lightning, burglary, house breaking or theft, riot and strike, earth quake, flood, tycoon , hurricane , storm , tempest , inundation, cyclone, nail storm, frost, damage caused by accidental external means, malicious act by terrorist activity, vehicles whilst in transit by road, inland water way, lift elevators or air by landslide, rockslide and other liability besides third party liability as per the provision of motor vehicle act. To general exception cases the company shall not be liable under this policy in respect of loss or damage. General exceptions are as follows: 1. Caused, sustained or incurred outside the geographical area 2. Arising out of any contractual liability 3. Being used otherwise in accordance with limitations as to use and without proper permit 4. Any consequential loss

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5. Arising from ionizing radiations or contamination 6. Caused or contributed by or arising from nuclear weapon materials 7. In connection with war, corrosion, the act of foreign enemy.iii In polavarepu sormerjyam V Andhrapradesh Road Transport Corporation Hyderabad.iv The question arose as to what is the meaning of Compensation in the context of the claim in question. Is it restrictive or wider in its scope and amplitude. A distinction was being drawn between scope and ambit of the word Damage and Compensation. The word Compensation was thus rightly interpreted to be wider in its context than the word Damage. While defining the word compensation. In the case of M.Ayyappan V Muktar Singhv learned judge of the High court observed thusIt is clear that the compensation is a more comprehensive term, and the claim for compensation includes a claim for damage and hence the petitioners could have put forward their suit claims before the motor accidents claim tribunal. Law speaks of compensation and not damages. Sec 166 (110A old) of The Motor Vehicle Act 1988 states that an application for grant of compensation arising out of accident may be moved. Thus the act does not speak of damages. In Smt.Amarjit Kaur V M/S Vanguad Insurance Co Ltd.vi Damages are given for an injury suffered. Compensation is by way of atonement for the injury caused with intent to put either the injured party or those who may suffer on account of the injury in position as if the injury was not caused making pecuniary atonements. In Rajasthan State Road Transport Corporation V Jhani Bai Kanhiyalal A rickshaw puller has lost his life in an accident and his family members had to struggle hard to get compensation. The High Court held that a welfare state committed to ultimate object of poor and downtrodden to a ultimate object of eradication of poverty and for providing utmost priority to protect of the poor and downtrodden. In National Insurance Company V Nicolleta Rohtagsvii The Supreme Court observed that motor vehicle accident claim is a tortious claim directed against tort. Feasers who are insured and the driver of the vehicle and the insurer comes to the scene as a result of statutory liability created under the motor vehicle act. The legislature has ensured by enacting sections 149viii of the act that the victims of motor vehicles are fully compensated and protected. It is for that reason that insurers cannot escape from its liability to pay compensation on any exclusionary cause in an insurance policy except those specified in the sec 149(2) ofix Act or where the condition precedent specified in section 170 is satisfied. In National Insurance Company Ltd V Swaran Singhx The Supreme Court has constructed and determined the scope of clause (ii) of sub section (2). Section 149 of the act and held if on facts it is found that accident was caused solely because of some other unforeseen or intervening causes like mechanical failure and similar other causes having no nexus with driver not possessing requisite type of license. The insurer will not allow avoiding its liability merely for technical breach of conditions concerning driving licence. Compensation by Multiplier Method: While fixing an amount of compensation payable to a victim of an accident, the damages have to be assessed separately as pecuniary damages and special damages. Pecuniary damages are those which the victim has actually incurred and which are capable of being calculated in terms of money. Multiplier method is also known as Lord Wrights Formula (A-E) x(Y)-Total compensation for loss of dependency as well as loss to the estate where; A represents the amount of net wages which the deceased was earning E represents the expenditure incurred by the deceased of his himself Yrepresents the number of years purchase (A-E) covers the amount of dependency as well as amount of accretion to the estate.

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In U.P State Transport Corporation V Krishnan Bala 2006xi The Court held that the choice of the multiplier is determined by the age of the deceased and by the calculation as to what capital sum, was invested at a rate of interest appropriate to a stable economy, and would yield the multiplication by way of annual interest. In ascertaining this regard should also be had to the fact that ultimately the capital sum should also be consumed up or the period for which the dependency is expected to as loss. In Shanthi Latadass Vs State Of Orissa 1996xii The High Court adopted a multiplier of 15 years. In this case the deceased who met with a fatal accident was a young man of 27 years. In New India Assurance Company Ltd V Pandyat Kuniyil Pushperallyxiii The High Court of Kerala adopted a multiplier of 20 years in case of laborer of 30 years who died in a motor accident. The findings of the tribunal were upheld by the high court in this case. In Transport Corporation Trivandrum V Susma Thomasxiv The High Court disapproved the decision of adopting of any other method from a multiplier formula while calculating compensation for the heirs of the victim of motor accidents. In Sona Dixit V Balwant YadavxvThe Supreme Court ruled on its earlier decision General Manager Kerala State Transport Trivandrum V Susma Thomas while adopting the multiplier it held that a scientific basis for arriving at a proper multiplicant and multiple has been already supplied in that case. The apex court considered in detail, appropriate method of arriving at proper multiplier in fatal accident cases in the light of decided cases in the country as well as principles laid down for computing compensation in motor vehicle accident case. In Sarla Varma V DTCxvi it was held that compensation awarded does not become just compensation, merely because the tribunal considers it to be just. just compensationis adequate compensation which is fair and equitable on the facts and circumstances of the case to make good the loss suffered as a result of the wrong, as for as money can do so, by applying Section 163A contains a special provision for payment of compensation on the basis of the structured formula as indicated in the second schedule which contains a table comprising the compensation to be awarded in accordance with age and income of the deceased. i.e. (i) Non earning persons Rs.15000/- per annum or spouse 1/3 or income of the earning /surviving spouse. In Arunkumar Agarwal Vs National Insurance Co Ltdxvii it was held that the deceased was deeply involved in the family affairs but calculated the amount of compensation taking Rs 5000/- per month as income at the time of accident if the husband of the deceased getting Rs.15416/- per month ie 1/3rd of the salary of the spouse and multiplier as though that will come to Rs. 6 lakhs .The tribunal awarded Rs.2,50,000/- only and the High Court also declared the compensation awarded by the tribunal as Rs.2,50,000/- as just and fair.Fundamental right to life is the most precious human right and this forms the arc of all other rights. The preservation of human life is therefore most important because ones life lost cannot be restored. It is therefore appropriate that the legislation should make a suitable provision in motor vehicle act so as to pay adequate compensation by properly evaluating the precious life of a citizen in its true perspective rather devolving human lives on the basis of an artificial mathematical formula. In motor vehicle insurance cases the judiciary applied has no exact uniform ends for measuring the value of the human life and measuring the damages cannot be arrived at by precise mathematical calculation but the amount recoverable depends on the particular facts and circumstances of each cases. The judiciary has very well recognized the tiresome work of the house makers and also held that it is not possible to quantify the amount in lieu of the services rendered by the wife or mother to family and children of the deceased male member of the family. The judiciary steps in at the time of crisis in a family and renders monetary help like a friend in need. *****

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7PS IN INSURANCE INDUSTRY J.Senthil Velmurugan, 2B.G.Ramaraj and 3S.Kavitha, 1 Assistant Professor, Periyar University, Salem. 2& 3 Ph.D Research Scholar, Periyar Institute of Management Studies, Salem. INTRODUCTION Insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the insurance; the insured, or policyholder, is the person or entity buying the insurance policy. The amount to be charged for a certain amount of insurance coverage is called the premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice. Since then the insurance industry has gone through many sea changes .The competition LIC started facing from these companies were threatening to the existence of LIC .since the liberalization of the industry the insurance industry has never looked back and today stand as the one of the most competitive and exploring industry in India. The entry of the private players and the increased use of the new distribution are in the limelight today. The use of new distribution techniques and the IT tools has increased the scope of the industry in the longer run. AN OVERVIEW OF INDIAS INSURANCE MARKET Insurance in India used to be tightly regulated and monopolized by state-run insurers. Following the move towards economic reform in the early 1990s, various plans to revamp the sector finally resulted in the passage of the Insurance Regulatory and Development Authority (IRDA) Act of 1999. Significantly, the insurance business was opened on two fronts. Firstly, domestic private-sector companies were permitted to enter both life and non-life insurance business. Secondly, foreign companies were allowed to participate, albeit with a cap on shareholding at 26%. With the introduction of the 1999 IRDA Act, the insurance sector joined a set of other economic sectors on the growth march. During the 2003 financial year, life insurance premiums increased by an estimated 12.3% in real terms to INR 650 billion (USD 14 billion) while non-life insurance premiums rose 12.2% to INR 178 billion (USD 3.8 billion). The strong growth in 2003 did not come in isolation. Growth in insurance premiums has been averaging at 11.3% in real terms over the last decade. INSURANCE DEVELOPMENT At the end of 2003, the Indian insurance market (in terms of premium volume) was the 19th largest in the world, only slightly bigger than that of Denmark and comparable to that of Ireland. This was despite India being the second most populous country in the world as well as the 12th largest economy. Yet, there are strong arguments in favor of sustained rapid insurance business growth in the coming years, including Indias robust economic growth prospects and the nations high savings rates. The dynamic growth of insurance buying is partly affected by the (changing) income elasticity of insurance demand. It has been shown that insurance penetration and per capita income have a strong non-linear relationship. Based on this relation and other considerations, it can be postulated that by 2014 the penetration of life insurance in India will increase to 4.4% and that of non-life insurance to 0.9% 7 PS OF INSURANCE INDUSTRY
1

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The Insurance business deals in selling services and therefore due weight-age in the formation of marketing mix for the Insurance business is needed. The marketing mix includes sub-mixes of the 7 P's of marketing i.e. the product, its price, place, promotion, people, process &physical distribution .One more physical attraction or evidence is help in growth of insurance business and maintain a signage touch to every insurance company. PRODUCT: A product means what we produce. A product is both what a seller has to sell and a buyer has to buy. Thus, an Insurance company sells services and therefore services are their product. A service is a bundle of features and benefits. However these benefits have relevance to a specific target market. Hence while developing a service package it is important that the package of benefits in the service offer must have a customer perspective. The first level is that of basic service package which includes core service, facilitating services and supporting services. The second level is that of an augmented service offering where accessibility interaction and customer participation is given equal importance in delivering the service product. The third level is that of the market communication of the service offering as in its absence the augmentation Service package doesn't have any relevance to the customer. Apart from offering insurance policies, they also offer underwriting and consulting services. When a person or an organisation buys an Insurance policy from the insurance company, he not only buys a policy, but along with it the assistance and advice of the agent, the prestige of the insurance company and the facilities of claims and compensation. It is natural that the users expect a reasonable return for their investment and the insurance companies want to maximize their profitability. Hence, while deciding the product portfolio or the product-mix, the services or the schemes should be motivational. 2. PRICING: ` A particular product or service is acceptable to the customer at a particular price and if the price increased it is likely that the same product or service might become less acceptable to the customer. Service pricing follows the principles and practices of pricing of goods and therefore they are either cost based or market based. Following aspects should be taken into consideration while pricing services: 1. Demand fluctuations should be successfully handled 2. Service prices should be based on costs so as to take into account the tangible clues 3. Service pricing should be such as to provide value addition and quality indication 4. The pricing strategy should come up with the degree of competition. With a view of influencing the target market or prospects the formulation of pricing strategy becomes significant. In a developing country like India where the disposable income in the hands of prospects is low, the pricing decision also governs the transformation of potential policy holders into actual policy holders. The strategies may be high or low pricing keeping in view the level or standard of customers or the policyholders. The pricing in insurance is in the form of premium rates. The costs of processing, commission to agents, insurance companies as well as registration are into the cost of installments and premium sum and form the integral part of the pricing strategy. The rate of interest is one of the major factors which determine people's willingness to invest in Insurance. People would not be willing to put their funds to invest in Insurance business if the interest rates provided by the banks or other financial instruments are much greater than the perceived returns from the insurance premiums. 3. PLACE: This component of the marketing mix is related to two important facets

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(a) Managing the Insurance personnel, and (b) Locating a branch office. The management of agents and insurance personnel is found significant with the view point of maintaining the norms for offering the services. This is also to process the services to the end user in such a way that a gap between the services promised and services offered is bridged over. In a majority of the service generating organizations, such a gap is found existent which has been instrumental in making worse the image problem. The transformation of potential policy holders to the actual policy holders is a difficult task that depends upon the professional excellence of the personnel. The agents and the rural career agents acting as a link, lack professionalism. The front-line staff and the branch managers also are found not assigning due weight-age to the degeneration process. The insurance personnel if not managed properly would make all efforts insensitive. Even if the policy makers make provision for the quality upgrading the promised services hardly reach to the end users. It is also essential that they have rural orientation and are well aware of the lifestyles of the prospects or users. They are required to be given adequate incentives to show their excellence while recruiting agents, the branch managers need to prefer local persons and provide them training and conduct seminars. 4. PROMOTION: The Insurance services depend on effective promotional measures. In a country like India, the rate of illiteracy is very high and the rural economy has dominance in the national economy. It is essential to have both personal and impersonal promotion strategies. In promoting insurance business, the agents and the rural career agents and banks play an important role. Due attention should be given in selecting the promotional tools for insurance, agents and rural career agents and even for the branch managers and front line staff. They also have to be given proper training in order to create impulse buying. 5. PEOPLE: Understanding the customer better allows to design appropriate products. Being a service industry which involves a high level of people interaction, it is very important to use this resource efficiently in order to satisfy customers. An essential ingredient to any service provision is the use of appropriate staff and people. Recruiting the right staff and training them appropriately in the delivery of their service is essential if the organisation wants to obtain a form of competitive advantage. Consumers make judgments and deliver perceptions of the service based on the employees they interact with. Staff should have the appropriate interpersonal skills, aptitude, and service knowledge to provide the service that consumers are paying for. 6. PROCESS: The process should be customer friendly in insurance industry. The speed and accuracy of payment is of great importance. The processing method should be easy and convenient to the customers. Installment schemes should be streamlined to cater to the ever growing demands of the customers. IT & Data Warehousing will smoothen the process flow. IT will help in servicing large number of customers efficiently and bring down overheads. The product describes the features provided by the insurer like maturity bonus, claims allowed etc. The agent who brings this proposal is termed as a base servicing agent for the proposal. The proposal will go through various stages of approval & risk evaluation by the "Central Processing Centre" of the company. Upon final approval, a legal agreement, termed as policy, between the insurer and the client is prepared whereby the insurer covers the client for the sum assured. The client is also entitled for some additional benefits, if any, depending on the features of the product taken in the policy. 7. PHYSICAL DISTRIBUTION:

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Distribution is a key determinant of success for all insurance companies. Today, the nationalized insurers have a large reach and presence in India. Building a distribution network is very expensive and time consuming. If the insurers are willing to take advantage of India's large population and reach a profitable mass of customers, then new distribution avenues and alliances will be necessary. Initially insurance was looked upon as a complex product with a high advice and service component. Buyers prefer a face-to-face interaction and they place a high premium on brand names and reliability. As the awareness increases, the product becomes simpler and they become off-the-shelf commodity products. Today, various intermediaries, not necessarily insurance companies, are selling insurance. The financial services industries have successfully used remote distribution channels such as telephone or internet so as. Finance companies and banks can emerge as an attractive distribution channel for insurance in India. In service industry role of physical evidence is like care taker that have all response to save cared person and he keeps him neat and clean. Every insurance customer want to know about their policies it is possible only through physical evidence that policies status is provide by the companies time to time through agent. Physical Evidence is the element of the service mix which allows the consumer again to make judgments on the organisation. *****

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FARMERS PERCEPTION TOWARDS AGRICULTURE INSURANCE COMPANY A CASE STUDY OF NAGAPATTINAM DISTRICT IN TAMIL NADU
1

K. Babu and 2Mohammed Musthafa Assistant Professor and 2Student, Dept of Economics, Loyola College, Chennai -34.

Introduction In India, more than half of the farming is practiced as rain-fed agriculture and is at the mercy of the weather. The technological advances and institutional support have made little impact on the risk factor in farm production and done little to raise the risk bearing capacity of the farmers. Traditional agriculture is supposed to be rational and efficient. However several studies have noted that the farmers who are rational but poor will be averse to risk and will under-invest in modern techniques that are thought to be more risky than the traditional techniques (Roumasset 1979)1. Substantial evidence exists about the risk averse attitude of farmers that inhibits maximization of returns from available resources (Dillon and Anderson, 19712; Lin et al, 1974 2; Binswanger 19783; Hamal and Anderson 1982)4. The risk aversion of the farmers result in the continuation of traditional practices and cultivation of traditional crop varieties instead of High Yielding Varieties (HYVs), which are assumed to be more risky when compared to traditional or local varieties. In the absence of formal strategies of risk diffusion, farmers do adopt traditional risk minimizing practices like inter/mix cropping, crop diversification or risk sharing strategies through share cropping and tenancy markets and other contractual arrangements (Jodha 1975)5. The traditional risk sharing practices do not optimize social welfare and most of the time, implicit insurance premiums are biased against the insured. Objectives The objective of the present study is to assess the nature and extent of crop insurance in Tamil Nadu and to identify their causal factors. To assess the factors that determines farmers Perception toward Agriculture insurance company of India Limited. Methodology A sample of 320 respondents has been randomly selected from the village Sembanarkoil in Agriculture Extension Centre (AEC) of Taragambadi Taluk, Nagapattinam District in Tamilnadu. Farmers Perception toward agriculture insurance company The researcher made an attempt to analysis the farmers perception towards agriculture insurance company. The 15 statements mentioned in the below have been given to all 320 respondents and they were asked to indicate on a five point scale (1=strongly disagree 2=Disagree 3. No opinion 4=Agree 5=strongly agree). The opinion given by the respondents of different groups are used for factor analysis to identify the factors. The Statement of Factor Analysis Farmers Perception towards Agricultural Insurance - Crop wise Analysis

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Statements The good thing about agricultural insurance is that it is not compulsory Agricultural insurance is worth it I like to see what other farmers do before buying insurance I am aware of insurance benefits I feel relaxed with having crop insurance Crop insurance is to help damaged farmers Crop insurance reduces my stress With crop insurance I feel that government supports me Crop insurance pays more than what you paid for in your premiums Insurance coverage does not always cover the whole loss I think of crop insurance as personal savings Crop insurance protects against future fluctuations in the economy Crop insurance is a policy instrument to provide equal protection among farmers Crop insurance is just another way to get qualified for getting access to resources such as loan and input supplies Crop insurance is just a policy instrument for paying for damages

Variables Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12 Q13 Q14 Q15

Factor Analysis Results Farmers Perception Factors and Loading All Farmers Total 1 2 3 Factor Name AWARENESS PERSONAL THINKING ACCESSEBLITY Q1= 0.781 Q6= 0.571 Q11= 0.571 Variables/ Q2= 0.835 Q7= 0.719 Q12= 0.739 Loading Q3= 0.834 Q8= 0.732 Q13= 0.773 Q4= 0.757 Q9= 0.835 Q14= 0.738 Q5= 0.627 Q10= 0.667 Q15= 0.689 % of variance 41.49 13.37 9.18 Total Variance extracted by three factors 64.057 Factor Analysis for all farmers to Farmers Perception towards Agriculture Insurance The result is obtained by the principle component analysis. There are three factors which has the Eigen values of more than one. These three factors extracted together account for 64.057 percent of the total variance. From the rotated component matrix the researcher observed that the variables 1, 2, 3, 4, and 5 have loadings of 0.781, 0.835, 0.834, 0.757, and 0.627 respectively on factor one. This suggests that factor one is a combination of the above mentioned five original variables. Factor one can be named as AWARNESS, about crop insurance. Factor two is a combination of the variables 6, 7, 8, 9, and 10 with the loading of 0.571, 0.719, 0.732, 0.835, and 0.667 respectively. This factor can be named by the researcher as PERSONAL THINKING. These variables are mainly expressed the personal thinking about the crop insurance. The last factor is a linear combination of the variables 11, 12, 13, 14, and 15 with the loadings 0.571, 0.7393, 0.773, 0.738, and 0.689 respectively. These variables are mainly expressing the access

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from the policy about the crop insurance. Hence these factors may be named as ACCESSEBLITY. Conclusion Crop insurance was conceived as an instrument of risk management in agriculture and as a measure to provide relief to farmers whose crops were damaged by one or the other means. One of the underlying assumptions of the agricultural insurance scheme was that its introduction would encourage farmers to positively change their farming practices. Specifically NAIC was established for farmers to have more access to essential farm resources that would motivate them to embrace the use of modern farming practices with the assumption that such practices will lead to increase the quality and quantity of farm production and food supplies to the market. The study discovered that NAIC exerts influence on the range of inputs and production methods farmers used on the farm. *****

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RELATIONAL ELECTRONIC HUMAN RESOURCE MANAGEMENT (E-HRM): A MODERN APPROACH IN HRM PRACTICES P.S.Ravindra and 2E.V.P.A.S.Pallavi 1 Associate Professor & H.O.D, Miracle School of Management, Miracle Educational Society Group of Institutions Miracle City, Bhogapuram, Vizianagaram (Dist)-535216, Andhra Pradesh, India 2 Assistant Professor, School of Management Studies, M.V.G.R. College of Engineering, Vijaynagar campus, Chintalavalasa, Vizianagaram (Dist)-535005 1. INTRODUCTION: The Human Resources Managements function in any organization is crucial, because it deals with a very important and difficult to manage resource. Firms need to recruit, find the best person-job fit and retain talented employees. Besides, HRM departments are created to manage all issues connected with the organizations workforce. Such duties include employees performance, human resources planning, staffing, training, payments, compensations, employees benefits etc. HRM as a way of managing the organizations most important asset- the people who contribute to the companys success either individually or collectively- in a planned and strategic way. During the last decade, HRM has been adapting to various changes and improvements. One of them is technology which has greatly affected the way HRM departments in organizations work. The development of the Internet and other IT tools drive companies to utilize its possibilities in doing business and improving performance. The HRM function is subject to radical and dramatic change because of the implications of web- based organizing. As a result of this particular change, electronic Human Resources Management (e-HRM) has become more and more popular in the last years. E-HRM strives to implement all the operational activities that the HRM is concerned with the help of technological tools in a fast and accurate way. It has been widely used to facilitate the recruitment and selection processes, from the simple task of uploading a CV to a webpage platform, filling an online job application to the moment of the actual hiring. Also, online training options and accessing performance information online is becoming more and more popular. Electronic Human Resources Management (e-HRM) is a term that includes all HRM processes which are performed with the help of information technologies to generate value for organizations. Moreover it offers the opportunity to automate administrative HRM work and to optimize value creating HRM processes. 2. SOURCE OF RELATIONAL E-HRM: E-HRM have divided into three types i.e. operational, which involves strictly administrative functions (salary and personnel data administration), relational, concerned with business processes (such as recruitment, training and performance appraisal) and
1

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transformational, related to strategic human resources actions, such as organizational change and strategically re-orientation. This division was also described as goals of conventional HRM. According to Parry & Tyson e-HRM is supposed to support the role of traditional HRM in fulfilling its goals. Those are similarly divided into: operational, relational and transformational. As for operational goals, they mainly concern the reduction of costs and improvements of efficiency. Further, relational influence of e-HRM helps employees to administer their data themselves (i.e., performance measurements, training options online) and managers to speed up some important processes (i.e. selection of job applicants). Lastly, transformational e-HRM provides employees with endless possibilities when it comes to communicating from different parts of the world and during different times of the day. 3. MAGNITUDE OF RELATIONAL E-HRM Relational e-HRM takes less care about the administrative processes and focuses more on developing advanced activities regarding the interpersonal field; it means activities that have the closest contact with the people and their role within the company. This type takes an important part in our research since it controls the first degree of interaction between employers and employees. Moreover, relational e-HRM aims at tools that enhance basic HRM processes such as recruitment and selection of new personnel, training, performance management and appraisal, motivation and rewards. Furthermore, it provides new ways of interaction between individuals that are spatially separated, and creates heterogeneous networks within the departments of a company, enhancing the integration and communication; not only between people inside the organization but also with different outside stakeholders such as job candidates, external information sources and other HR professionals. The far reaching potential of relational e-HRM, leads to standardization of processes between actors, no matter the culture, language or country where the company has its operations. In addition, relational e-HRM decentralizes the execution of the Human Resources activities and helps to centralize the policy making on the head HR department. Considering specific parts of relational e-HRM, for recruitment, an organization can decide where to seek new employees and in what ways to select them. It could be done in an electronic form, through a webpage or a web-based recruitment platform, or in traditional paper solutions (newspaper advertisements, paper applications and letters). For some parts of training, a firm can decide to invest in an online platform for employee development. This is particularly useful for companies with many locations that want to provide training for geographically dispersed workforce. Additionally, using performance appraisals online could result in better access to past information, and in turn better efficiency and productivity results. 4. COMPONENTS AND USE OF RELATIONAL E-HRM: 4.1 E-Recruitment: One of very important components of relational e-HRM is e-recruitment. As stated in Barber, recruitment performs the essential function of drawing an important resource- human capital- into the organization. As conventional staffing is timely and costly, organizations have to adopt strategies that would minimize the time and money used. This is why online

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recruitment has become more and more popular in the last decade, and nowadays, most companies use it as the first stage tool in their recruitment process. According to Sylva & Mol, organizations that want to stay competitive need to adopt electronic recruitment strategies. After reading and analyzing different approaches from various authors, we understand that e-recruitment can be considered as the process by which employers advertise and share openings through web-based platforms or Internet. One of the main objectives of the erecruitment process is to share the job vacancies with the biggest amount of potential candidates, this means, attract and filter key applicants who have the necessary skills for the job offered. Through online recruitment systems, organizations can not only share important details about the positions available but also more specific information such as job descriptions, organizations culture or brand identity and job incentives. It was found that the appearance of a companys webpage has a positive relation to employment incentives. Online job advertising allows companies to open all this information to the applicants since the first contact. In addition to all the characteristics mentioned, web-based recruitment tools, also give future employees the chance to experiment what it is like to work inside the organization on a regular day with different visual aids (videos, picture galleries, animations etc.) that can help applicants to evaluate if their needs will be satisfied with the job and decide whether to continue with the process or head to a different direction. For instance, companies such as Google and Skype, have created interactive sections on their web pages where anyone can have an inside view of their offices. By streaming a set of videos and some other aids, these companies promote a relaxed atmosphere and well equipped facilities which aim to assure future employees a pleasant workplace. In accordance to this, organizational goals and culture play an important role in recruitment process; web-based systems are more likely to be effective if they enable organizations to attract applicants who meet organizational expectations than if they do not. Therefore, the recruitment process should provide both employers and applicants with information useful to match the candidate with the specific job, reducing time and costs involved. Usual recruitment is mostly handled by junior HRM managers. Therefore, reducing the time of performed operations through e-recruitment will not be of so much value to the organization. However, it will help companies reduce the number of HR personnel, which could result in efficiency savings. On the other hand, the automation of the recruitment process has increased the speed of the process and helped HRM professionals to devote more time to value adding activities. Additionally, e-recruitment allows storing great amounts of CVs online, which makes the process unconstrained by geographical locations. 4.2 E-learning/ training: An additional component of relational e-HRM is e-learning or e-training. This process is being implemented in companies since it does not have the limitations of traditional training, such as time and location. Moreover the fast development of telecommunications has made elearning possible and advantageous. E-learning is also less expensive than traditional training because companies do not have to book training rooms, pay for travel costs and trainers. To have

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a better understanding of this term, we decided to use the definition below. The American Society of Training and Development defines e-learning as a wide set of applications and processes, such as web-based learning, computer-based learning, virtual classrooms, and digital collaboration As mentioned previously, the time and location restrictions have been eliminated with the help of technological advances. The connection between mentor and trainee can occur in different geographical locations and in different time zones. In addition, standardization of training, self-learning, and the availability of learning content has made elearning an attractive option for organizations that have the necessary resources. For a company to make the transition from traditional to new ways of training, it must com pare the two methods and analyze how elearning could bring benefits to the firm and its employees. Before implementing e-learning, companies used traditional training to help employees develop their skills. This method is characterized by a teacher giving a course to a class with learners in a specific location and a specific time. To overpass the time and location obstacle, more companies are applying e-learning techniques. This method allows employees to train whenever they want. Having the freedom of training employees and not paying for travel costs allows companies to save money. IBM saved US $200 million in 1999 by using new e-training techniques. A characteristic of e-learning that can be of advantage over traditional training is that the mentor and the learner do not go through the learning process face-to-face. In the first stage of mentoring, the apprentice can be intimidated and show lack of openness due to the instructors higher status. E-training may decrease those initial feelings because the interaction is done through a computer or other technological tools. In addition, since the interaction between the parties does not occur at the same time, the trainee has time to think about the response he or she will give and can be more reflective. Traditional face-to-face training is limited to smaller groups in order to have better results. In this type of training, having a big group meant more work for the trainer and the risk of not getting everyones attention. With e-training, organizations have the ability to coach more personnel simultaneously. Multinational corporations can have trainings with different personnel from their subsidiaries from different locations at the same time and cut down costs. Companies must be aware of positive and negative characteristics if they want to implement e-training. Cost saving is an important goal for every organization but the consequences brought by this goal must be monitored carefully. It is said that e-learners have the need to socialize with people in order to feel involved in the learning role. In other words, once a person is trained, he or she needs to make sure the learning outcome was achieved. A good way of doing this is by having interaction with trainers and other trainees face-to-face. For this reason, companies are implementing what is called blended learning. Blended learning is the use of two or more methods to improve the content of a course and the learning experience of a learner. E-learning is creating benefits by saving time, eliminating location constraints, cutting down costs and creating standardization in training processes. On the other hand, it still lacks the socialization part of the learning process. Employers need to mix both electronic training with

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personal interaction to guarantee better results. Depending on the training, Employees should be supervised by tutors when taking part of e e-trainings. For this reason, it is important for companies to implement blended learning which will bring benefits to the company and at the same time, be beneficial to its employees.

4.3 Online performance appraisal systems: One of the issues that relational e e-HRM is concerned with h are online performance appraisal systems (e-PA). PA). In fact, the fastest growing e e-HRM HRM trend is employee self-service self systems, which give them the possibility to manage their own information in an online network. On the other hand, companies use managerial self- service, that allows the managers to access employees information and complete performance evaluations. Electronic or online performance appraisal refers to the use of technology necessary to create systems and processes by which the employees are evaluated and rated, according their performance on the tasks needed within a company.

Figure 4.1: Features of effective appraisal. In order to understand online performance evaluations, it is crucial to first look at general features of appraisals. According to the model of effective appraisal in the figure above there are several features that have to be fulfilled to give useful and valuable feedback. Appraisal should highlight employees strengths and weaknesses, as well as show the road for pros prospective development. In order for the process to be considered reliable, the information used should be objective and not loose and casual. Lack of objective data could result in the perceived lack of transparency and injustice among employees. Moreover Moreover, , the evaluation should be transparent and confidential. It may seem like these two criteria exclude themselves, however there is an explanation for it. The appraiser should be strictly confidential with all the information accessed

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and gained, and needs to ensure the respondents that their data will not be tampered with. Additionally, mutual respect and trust should be of no doubt, and should be contained throughout the whole year and not only in the evaluation period. This model presents ten key criteria for an effective appraisal. The benefit of this is that hardly anything is omitted, however it may seem overwhelming. The model cannot be fully applied to online or web-based solutions for performance evaluations. Features like mutual respect could only be used for face-to-face conversations; it is hard to respect a computer system. However, we should look beyond the obvious. Therefore, we think mutual respect suggest an attitude towards the appraisal. Managers should keep in mind, that it is people on the other side who will receive the evaluation and (in the perfect situation), will have a personal meeting with the manager to discuss the feedback. Furthermore, some of the factors in this model are automatically fulfilled by the use of an online performance appraisal (PA). For instance, transparency is easily achieved with online PA systems, as well as the continuity of the process. Previous research has shown that online performance appraisal systems reduce companies costs and increase the speed of the process. Additional advantages of those systems include the storage of historical data that helps managers to compare the employees results and evaluations for the last years in an easier way. Thanks to that, employees see the differences and similarities in received feedback and can access it at any time, and therefore control their own work in terms of suggested improvements at any time of the year. Besides from the system being accessible at all time, it can also be restricted by user names and passwords. In some pieces of software, it can be viewed who accessed the system and left comments. This can improve the transparency of performance appraisals and help the accountability of the rater also made the assumption that online performance systems may help the perception of information being kept secure, instead of being placed in employees files in offices. However, the later research has shown that this was not the case and the perceptions have not differed from the traditional paper-and-pencil (P&P) performance approach. The general wrapping up from previous research is that online performance appraisal systems have either a positive or no effect on various parts of evaluation, i.e. security of the ratings or rater accountability. However, organizations should ensure that all users of those systems are given necessary trainings on how to use them, in order to feel comfortable with them and receive benefits from its usage. 5. Conclusion: Relational e-HRM focuses mainly on interpersonal activities regarding an organization. These are processes in which personal interaction is present and fundamental.. Many authors have stated different objectives for the implementation of e-recruitment such as communicating information about job opportunities and other important data about the organization. In addition, it is said that e-recruitment decreases the time of the process allowing employees to dedicate more time doing other activities. E-learning saves costs because companies do not spend on travel expenses, room booking or employing tutors. Online performance appraisal is used by organizations in form of electronic systems to give evaluations and keep track of employees performance. In our research we discovered that these form of evaluation should

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emphasize staffs weaknesses and strengths and give direction for development. The theory collected shows that online appraisals reduce costs and increase the speed of the evaluation process. Additionally, companies have the advantage to use these systems to store personnels information and keep track of their performance. It was found that e-recruitment is the most popular part of relational e-HRM. The most significant benefits that are brought to the organizations with its usage are time savings and the possibility to reach a great amount of people at once, as well as achieved standardization between different locations. More companies around the world are using electronic tools in their HRM processes. They should keep in mind that by implementing e-HRM they should not discard face-to-face interaction and personalization. In addition, companies that want to implement these new forms of HRM should evaluate if the results are greater than with previous personnel management processes. Moreover, measures for e-HRM effectiveness should be developed. Perhaps time saving and reduction of costs should be compared with Return on Investment (ROI).

References: 1. Appelbaum S.H., Roy M. & Gilliland T. (2011). Globalization of performance appraisals: theory and applications. Management Decision, 49(4), pp.570-585. 2. Bondarouk, T. V., & Rul, H. J. M. (2009). Electronic Human Resource Management: challenges in the digital era. The International Journal of Human Resource Management, 20(3), pp.505-514. 3. Dickinson, D., Tatton, K. (2011). Using technology for smarter recruitment. Strategic HR Review, 10(2). 4. Kasprisin, C.A., Single, P.B., Single, R.M., & Muller, C.B. (2003). Building a better Bridge:testing e-training to improve e-mentoring programmes in higher education. Mentoring& Tutoring, 11(1), pp.68-78. 5. Laumer, S., Eckhardt, A., Weitzel, T. (2010). Electronic human resource management in an business environment. Journal of Electronic Commerce Research, 11(4), p. 240-250. 6. Oiry, E. (2009). Electronic human resource management: organizational responses to role conflicts created by e-learning. International Journal of Trainning and Development,12, pp.111123. *****

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A STUDY ON BANKING ISSUES FACED BY THE CUSTOMERS IN ACCORDANCE WITH THE BANKING OMBUDSMAN SCHEME 2006 M.JAYANTHI and 2S.MALATHY 1 Associate Professor and 2Research Scholar, PSG College of Arts and Science, Coimbatore. The word Ombudsman means a public official who is appointed to investigate the citizens complaints against the Administration. He is to intervene for the ordinary citizens in his dealings with the complex machinery of the establishment. HISTORY OF BANKING OMBUDSMAN RBI had introduced the Banking Ombudsman Scheme (BOS) in India on June 14, 1995 to provide an expeditious and inexpensive forum to bank customers for resolution of their complaints relating to deficiency in banking services provided by commercial banks, regional rural banks and scheduled primary co-operative banks. There are 15 Offices of Banking Ombudsman (OBOs), spread across the country. The feedback gathered in the course of administering the BOS has been used by RBI to modify the Scheme in 2002, 2006, 2007 and 2009, interalia, to include customer complaints on new areas such as credit card complaints, internet banking, deficiencies in providing the promised services by both bank and its sales agents (DSAs), levying service charges without prior notice to the customers, non- adherence to the Fair Practices Code adopted by individual banks, etc. RBI operates the BOS, free of cost, so as to make it common people oriented. In order to increase its effectiveness and utility, BOS is fully staffed and funded by RBI. Vision and Goals of the Banking Ombudsman Offices Vision To be a visible and credible system of dispute resolution mechanism for common persons utilizing banking services. Goals To ensure redressal of grievances of users of banking services in an inexpensive, expeditious and fair manner that will provide impetus to improved customer services in the banking sector on a continuous basis. To provide feedback/suggestions to Reserve Bank of India towards framing appropriate and timely guidelines to banks to improve the level of customer service and to strengthen their internal grievance redressal systems To enhance the awareness of the Banking Ombudsman Scheme. To facilitate quick and fair (non-discriminatory) redressal of grievances through use of IT systems, comprehensive and easily accessible database and enhanced capabilities of staff through training. OBJECTIVES OF THE STUDY To analyze the trend in the number of complaints received. To sort out the area wise complaints and give a brief view about the area in which more number of complaints are received throughout the years.
1

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To find out the part of population which files more number of complaints (Rural, urban or semi-rural) To analyze the main causes or reasons for the complaints filed with the BO offices. To give an insight about the number of cases and complaints settled and the mode taken for settlement of these complaints. ANALYSIS Table - 1 No. of Complaints Received No. of Complaints Rate of increase (% over previous year) 47,887 24 69,117 44 79,266 15

Period 2007-08 2008-09 2009-10

It shows that No. of Complaints Received during the year 2008-09 has increased to 44%, followed by 2007-08 has increased to 24%. Internet banking related complaints were added as a new ground for complaint as per the February 3, 2009 amendment of the Scheme. Increased awareness among the public about the BOS and online accessibility to BO office through internet also contributed to the increase in receipt of complaints. Table 2 Region-wise receipt of Complaints Region 2007-08 2008-09 2009-10 Rural 8,418 13,915 25,055 Semi Urban 6,641 9,817 10,741 Urban 10,978 15,723 16,423 Metropolitan 21,850 29,662 29,662 Total 47,887 69,117 69,117

(% Increase) 80% 9% 5% -9% 15%

The number of complaints from rural areas increased by 80 % during the year 2009-10, complaints from the semi-urban areas increased by 9 % and complaints from the urban areas increased by 5% only . On the other hand, complaints from the metros had decreased by 9%. Table 3 Mode wise Receipt of Complaints 2007-08 2008-09 No. % No. % 7,138 15% 15,927 23% 7,662 16% 9,352 14% 33,042 69% 43,838 63% 47,887 100 96,117 100

Mode Email On line Letter, PostCard, Fax, etc., Total

2009-10 No. % 9,221 12% 11,400 14% 58,645 74% 79,266 100

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It shows that the receipt of complaints through the postal mode has increased from 63% to 74% during the current year, indicating the less access to internet facilities. Email complaints have decreased from 23 % to 12 % of the total complaints during the year. Table - 4 Complaints Group-wise Receipt of Complaints Complaints 2007-08 2008-09 2009-10 Category No. % No. % No. % Individual 42,294 88 62,327 90 71,341 90 Individual1,602 3 1,446 2 2,742 3 Business Partnership 336 1 329 0 367 0 Limited 743 2 930 2 1,099 1 Company Trust 102 0 87 0 191 0 Association 267 1 222 0 519 1 Government 318 1 262 0 477 1 Department PSU 114 0 429 1 115 0 Others 2111 4 3085 5 2,415 4 TOTAL 47,887 100 69,117 100 79,266 100 It shows that 90% of the complaints received from Individual Person, followed by 4% of the complaints received from other category and 3% of the complaints received from Individual Business Person. The majority of complaints are received from individuals Since the Scheme is primarily meant for common individual customers. Table 5 Bank-Group-wise Receipt of Complaints Bank Group Nationalized Banks SBI Group Private Sector Banks Foreign Banks Scheduled Primary Cooperative Banks RRBs TOTAL 2007-08 No. 12,033 13,532 14,077 6,126 295 % 26 29 29 13 1 2008-09 No. 14,974 18,167 21,982 11,700 302 % 22 27 32 17 1 2009-10 No. 19,092 22,832 22,553 11,450 183 % 25 30 29 15 -

826 46889

2 100

846 67,971

1 100

785 76,895

1 100

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It shows that the complaint received from Nationalized Bank and SBI Group has increased by 3%. Private Sector Banks and Foreign Banks have decreased by 3% and 2% respectively. Table 6 Bank-Group-wise Receipt of Complaints Complaints Received during % aggregate Complaints 2007-08 2008-09 2009-10 2008-09 2009-10 5,612 6,706 3,681 9.7 4.7 5,213 10,129 6,054 3,740 5,335 17,648 8,174 4,794 5,708 18,810 6,612 4,764 7.7 25.5 11.8 6.9 7.2 23.7 8.3 6.0

Nature of Complaints Deposit Accounts Remittances Credit Cards Loans and Advances Charges without notice Pension Failure to meet commitments DSAs and recovery agents Notes and coins Others Out of Subject TOTAL

1,582 6,388

2,916 11,824

4,821 11,569

4.2 17.2

6.1 14.6

3,128

3,018

1,609

4.4

2.0

141 5,900 47,887

113 8,589 69,117

158 18,840 2,684 79,266

0.2 12.4

0.2 23.8 3.4 100

100

Complaints relating to credit cards (comprising 24 % of the total complaints in 2009-10 as compared to 25.5% previous year) show a declining trend this year. These complaints include complaints related to debit cards and ATM cards also. The types of card-related complaints consist of items like issuance of unsolicited credit cards and unsolicited insurance policies and recovery of premium charges, charging of annual fee. Complaints under the head Others constituted 24 % of the total complaints as against 12.4% during the previous year. These include mainly non-adherence to prescribed working hours, refusal to accept or delay in accepting payments towards taxes as required by RBI/ Government of India, refusal to accept/delay in issuing or failure to service or delay in servicing or redemption of Government securities, refusal to close or delay in closing of accounts, etc. Complaints relating to failure on commitments ranked the third major item of complaint this year at 15 % of the total complaints as compared to 18% during the previous year and showing a declining trend. This points to the lack of sensitivity, transparency and need for

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improved MITC at the point of sales. As these complaints mostly relate to basic banking facilities, banks need to address these issues on priority basis without any demur. Table 7 Disposal of Complaints by BO Offices 2007-08 2008-09 54,992 75,009

Particulars Complaints received during the year including complaints brought forward from previous year Complaints disposed of the year Complaints carried forward to next year No. % No. %

2009-10 88,699

49,100 89 5,892 11

65,576 87 9,433 13

83,336 94 5,363 6

Banking Ombudsman Offices disposed of 94% (83,336) of the 88,699 complaints received during the year 2009-10, as against disposal of 87% of the complaints received during previous year, indicating promptness in disposal of cases at all the BO offices.

Particulars No. of complaints disposed by mutual settlement or by issue of awards. No. of complaints not admitted/ rejected due to various reasons Total Complaints disposed during the year

Table 8 Mode of Disposal of Complaints 2007-08 2008-09 No. % No. % 29,295 60 22,388 34

2009-10 No. % 31,489 38

19,735

40

43,115

66

51,847

62

49,100

100

65,576

100

83,336

100

It shows that 38% (31,489) of the complaints dealt with have been settled by way of mutual settlement or by issue of awards while 62% (51847) of the complaints have been disposed of (rejected), citing reasons like : First resort complaints (19.4%), Subject matter outside the BO Scheme (14.4%), Complicated complaint requiring elaborate evidence (3%),

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Complaint without sufficient cause (7.7%), bank branches outside the BO jurisdiction (5%),incomplete address (7.7%), Complaints dealt with earlier (1.6%), etc FINDINGS & SUGGESTION The Complaints have increase by 44% in the year 2008-09 . Increased awareness among the public about the BOS and online accessibility to BO office through internet also contributed to the increase in receipt of complaints. The offices of the Banking Ombudsman received maximum number of complaints from rural and metropolitan areas during the year 2009-10. This is a testimony to the success of the awareness efforts undertaken by the Offices of the Banking Ombudsman as well as the RBI Regional Offices through personal/village visits, media campaign etc. The receipt of complaints through the postal mode has increased from 63% to 74% during 2009-10, indicating the less access to internet facilities in the rural/semi urban areas as compared to the urban and metro. The Scheme is primarily meant for common individual customers. The SBI Group and Private Sector banks continue to have a larger share in the number of complaints. 24% complaint relating to credit cards in 2009-10. These complaints include, complaints related to debit cards and ATM cards also. 94% of the complaints are disposed by Banking Ombudsman. It indicating promptness in disposal of cases at all the BO offices. 62% of the complaints are rejected due to various reasons like First resort complaints, Subject matter outside the BO Scheme, Complicated complaint requiring elaborate evidence, Complaint without sufficient cause, bank branches outside the BO jurisdiction, incomplete address etc., SUGGESTIONS Banking Ombudsmen are also interacting with LIONS / Rotary Clubs, Chamber of Commerce to spread awareness of the BO Scheme by participating in Seminars / Conclaves arranged by these Organisations. To strengthen customer service in banks branches, and to evaluate its service from the customer-end, some of the OBOs undertook incognito visits to some bank branches to get a firsthand experience of difficulties faced by the public. The Banking Ombudsmen have used services of All India Radio and Doordarshan for an audio-visual campaign regarding the Scheme and also conducted interactive phone - in sessions on All India Radio. CONCLUSION The Banking Ombudsman Scheme (BOS) was formally launched in 1995 to provide an alternative cost effective dispute resolution mechanism. The BOS has served the country and its banks customers well. The feedback gathered in the course of administering the scheme has been used by the RBI to modify the scheme with a view to cover the maximum customer touch points and products. The growing number of complaints under the BOS in an indicator of the increasing awareness of our customers and also the timely action taken by the RBI to focus customer centric. *****

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CONSUMER AWARENESS AND PERCEPTUAL VALUE ON INSURANCE PRODUCTS AND SERVICES S.Edwin Christopher Abstract Consumer is the King and dictates the terms and conditions of existence to the marketers in terms of their products and services offered and available in the market. The marketer who is the producer of various goods and services renders the smooth functioning of the marketing requirements in the market and thereby buying and selling takes place. However, the concept of buying and selling is just not as simple as we say it in words and phrases, as the environment that surrounds the market and the consumer have called for several changes to happen and each one connected to it get accustomed to it. The behaviour of every consumer in the market is very unique and exemplary experience to be studied and understood as we find plethora of changes in the marketing environment, government policies, buying behaviour, available products and services and the geographical market available for the products and services available in the present conditions. Hence, the study of consumer behaviour and the role they play in the life span of products and services, the influence they have on the marketer and how they decide the success and failure of the products and services keep changing in tune to the time and environment and hence makes an good effort and study and abreast our understanding on the subject. Unlike the western countries, where insurance is an forceful and lawful commitment, Insurance products and services is the subject matter of solicitation in the Indian territories and hence until and unless it is asked by a consumer individual, the products and services cannot be sold by force and compulsion. In Indian context, insurance is still considered or of the opinion that it is an plan for the future for which the expenses need to be incurred today and in all these the insurance for life is the one that has been widely accepted. However, things are changing for better in the market today and it found that health, travel, house, accident insurances are gaining momentum and definitely has large potential market that needs to be explored. Savings and investment Key words: Consumer Behaviour, Insurance products and services, Indian market and buyers

Introduction Marketers have been noticing several recurring key changes in the attitude, perception, understanding, interpretation of their understanding and in their overall decision making about products and services in the market. With these changes very much noticeable, the organisation

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are developing new set of marketing capabilities to beat the consumer trend and overcome to influence their decisions towards positive end for their products and services in the market. This shift in the field is attributed to emerging factors like fierce competitive marketing environment, market and economy deregulation, privatization and globalization. These factors have made it possible for introduction of new products and services and existing ones to have very less life cycle. The cascading effect of these on individuals has resulted in dynamic consumer behaviour and changes in preferences as fast as one could imagine and develop new thoughts and ideas. In order to remain in the business and sustain in the market, it is seen that a marketer has understood clearly that they need to understand the consumer needs and just not stop at that, but effectively make efforts to fulfill their needs and enhance their level of satisfaction to gain brand loyalty in the long run. This realization in marketer has given an new thrust and emphasis to seek information on consumer and it is found that the most successful organisations in marketing are those who get hands on information on consumers, their needs and their behaviour towards products and services by which the marketer is able to identify, understand and provide for those needs at the earliest. Objective of the Research To understand the general awareness of the consumers about Insurance To know the key areas through which they are aware of Insurance products and services To understand their perceptional value and their reasons To know what consumers expect from the organisation that offers insurance products and services. Scope of Research The research work undertaken is qualitative in nature as to unearth the actual perceptional value of consumer towards Insurance products, their expectation from the products and the organisation that renders the services and finally to analyse the media through which they are aware of the products and services available and to ascertain to what extent these can influence the behaviour of consumer towards products and services. Data Collection The research would collect both Primary and Secondary data and the method of data collection under each of the category are ascertained as below: Primary Data refers to the first hand information collected from the respondents of the study from the town of Kolar Gold Fields and all those who are employed, earning remuneration and has surplus resources or not are considered to be the prospective respondents for the study. Secondary Data refers to information that has already been published in form of books, information bulletin, magazines, periodicals, company literature, leaflet, government orders, etc., and information that is available on the World Wide Web and through other storable devices. Sample Size refers to the number of respondents drawn from the total population for the study. Here for the study a sample size of 100 respondents were selected on simple random sampling technique. The entire population who are employed and earning remuneration formulated the total population for the study of which 100 sample respondents were drawn for the study using the simple random technique.

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Analysis and Interpretation The data collected through primary sources were tabulated and respective tables were drawn to interpret the data in the tabular form and percentage value of the data interpreted was drawn to ascertain its value for the total. The data was further subjected using coefficient correlation and the analytical relationship between the selective data was drawn to find the factors influencing the consumers attitude towards insurance products and services and the final utility value of the product and services offered to the consumers. Inferences were drawn based on the overall findings from the study as to what the consumer feel and perceive towards insurance products and services and what are the basic factors that influences them to accept or reject the products and services and what is their overall expectation from the organisation that offers these products and services. Summary of Findings 1. 49% Majority of respondents are having the perception that insurance means an investment and savings plan while 19% of them see it as a health emergency plan. 2. Majority of the respondents are aware of the insurance products and services through TV advertisements followed by insurance agent and news paper advertisement. 3. Majority of the respondents of the study are aware of LIC as an organisation for insurance products and services followed by HDFC, Bajaj Alliance, ICICI, ING Vysya, SBI and Birla Sun Life. 4. News paper advertisement, TV advertisement and Insurance agent are the main sources of awareness to be aware of their insurance organisations. 5. 55 % of them do not own an insurance cover and 45 % of them own an insurance cover. 6. Among 45% of the respondents who own a insurance cover, it is found that 49% of them have only ONE insurance cover and 34% of them own TWO insurance covers. 63% of the respondents taken for the study are aware of LIC of India and few other players considerably known are HDFC, ICICI, Bajaj Alliance, ING Vysya, Birla Sun Life while others are unknown. 7. Majority of the respondents taken for the study have selected their choice of insurance organisation for their Brand Image of the company, trust worthiness of the organisation and policy features as the major reasons. 8. Majority of the respondents say that insurance means future protection to them in terms of children education, future savings and children marriage. 9. 57 of the respondents still say that they would not buy a insurance cover as on date and the reason are , not interested to buy a insurance cover no money to save and invest and not interested in future money plays a major role while no guarantee and no surplus money follows. 10. Life and Health insurance are the two major products in which the respondents taken for the study are interested to procure in future.

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11. Future protection like childrens education, future savings and childrens marriage are the major reasons to buy an insurance cover, followed by investment plan and secured income for future. 12. Respondents expect guaranteed money, good service back up, promises to be delivered are the major expectations from the insurance organisations. Suggestions An awareness campaign should be evolved by all the market players about insurance and how an insurance cover would be beneficial to the individual. Insurance organisations should involve Government and Government agencies in creating awareness and also initiating insurance covers for at least the BPL in the society as defined and identified by the competent authorities.If exclusive policies with exclusive features just to cover an event of life are publicized and campaigned the individuals in need would prefer them than with multiple benefits and high premium payments. Since life and health insurance products are most preferred, it would be suggestive that these products should be more affordable and made to reach the mass. Conclusion Insurance market in India is still wide open for major business threshold and still remains to be covered and the need for the insurance market players to understand and hold the potential of the market remains in them understanding the pulse of the individual and moderating the behaviour of consumer.Hence, understanding consumer behaviour and responding to their requirements can be addressed and adhered to keeping in mind the interest of the market, individual consumers and the insurance players of the market. *****

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INNOVATIVE HR PRACTICES BY ORGANIZATIONS ACROSS DIFFERENT SECTORS Senthilvelmurugan and 2Malini.T.N 1 Asst. Prof., PRIMS, Periyar University, Salem-11 2 Lecturer, Brindavan College, Bangalore-63 Introduction Companies are taking up people related Initiative as there is a need to manage human resource advantageously so as not to lose the competitive edge in talent that they have built. In managing their human resources companies have time and again focused on values invested in personnel, emphasized in HR process. Companies across different sectors should train the right people in the right area that impact business so as to get maximum returns on investment In todays fast changing and cut throat competition, no company can survive, not to speak of flourishing until and unless it has human resources which innovative who come forward with new ideas, new concepts, new designs, and new strategies and so on. Companies have adopted innovative strategic HR Practices that distinguish them from their competitors and sustains their development during the economic turmoil. Some of the Innovative Practices: Robust Feedback Mechanism Listening attentively to employee feed back and changing HR polices accordingly has also been getting popular. In order to assuage the injured feelings of the employees and keep them happy and motivated, the employers have been depending heavily on the employees feedback. Infosys has been continuously changing its HR polices to keep its troops happy and motivated and thus to retain them. Infosys has a robust feedback mechanism in the company and policies are not static. The task force that has been created in the company to improve employee engagement is a best practice at Infosys where employee feedback is always listened to. Building employee loyalty through Keeping once family happy As one of the innovative strategy now a days companies are started paying importance to their families. Get together, parties and picnics are par for the course as companies realize the influence that the family wields in an employees decision. Companies are trying to create emotional bound with their employees. Some of the HR managers believe that if they want a loyal and satisfied employees, keep their family happy. The companies like Bharti Airtel, LG, Max Bupa have come up with innovative concepts like Inner circle, which creates a platform for members of employees family to interact on regular basis, Babys Day Out, women employees are encouraged to bring their children to work, Appointment of family ambassadors for its blue collar workers, sending thank you note for the family over every new recruit , the company even invites their kids to the office on a designated day to show them where there parents are working. Spiritual Work life: It is a proven fact that a strong connection exists between mind and body. Physical ailments create emotional depression, which in turn produces stress that worsens the underlying physical condition. Fascinatingly, modern science shows conversely that a positive attitude can improve
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health which in turn can increase longevity. The advocates of this concept believed that spirituality will have a positive influence in organization work culture; it will help to faster ethical behavior, to induce creativity and to reduce stress. It has seen the positive results demonstrated through measurable benchmarks for managers and staff alike as Spirituality in the Workplace exudes strong work values and moral ethics. When their best intentions direct their efforts, employees do not have to engage in conduct that repents for errors in their work performance. The time saved from practicing Spirituality in the Workplace can assure time for creativity, innovation, and higher productivity with great success.the companies like IBM, Accenture, Philips ,P & G etc.. are practicing this from years and found the better results. Mentoring: Reverse mentoring Based on old paradigm mentoring where a more senior person (in terms of age, position or experience) mentors a junior, reverse mentoring places the more junior person as the mentor. The key to success in reverse mentoring is the ability to create and maintain an attitude of openness to the experience and dissolve the barriers of status, power and position. Peer Mentoring Two people form a mentoring partnership and take turns in mentoring each other as peers. Each one simply facilitates the mentoring process by asking questions, listening and reflecting. As in most types of mentoring, there is a place for offering another perspective, expressing an opinion or providing information. However, the decision-making responsibility always resides with the person who will implement and experience the consequences of their own actions. Because the partners recognize each other as peers, it can be easier to offer and receive input as information rather than advice. Group Mentoring One mentor can be teamed with several mentorees who meet at the same time. A wonderful synergy can develop in this environment. As the mentor poses questions, listens and reflects he or she engages all members of the group into the conversation. Each one has their own experience and insight to share and can draw their own learning from the discussion. Micro Mentoring Micro Mentor is a free online service that connects small business owners with business mentors. Micro Mentor puts experience to work by offering business professionals meaningful volunteer opportunities and by offering entrepreneurs one-on-one advice to help build successful businesses. The main aim is to help small businesses grow faster, generate more revenue, and employ more people. Work Environment: Flexible Workplaces: Recently a new study shows a rising tide of work in third places that are neither home, nor the company office. Business people in India are increasingly opting for a third place, a flexible working option at a convenient location within the reach of their homes, to reduce travel time and improve their work life balance. These third places encompass business centers, clubs, libraries and informal areas such as coffee shops. The third place working brings bundles of benefits, includes improved work life balance, and reduces stress and improved productivity for the employee, as well as cost effectiveness scalability and reduced property commitment for businesses. Job Shadowing

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IT is the NOKIA Company in India started inducting its employees through its Shadow program in late 2010.As the part of the program, every new employee is assigned to a person from the top/senior leadership team of Nokia as a mentor for a week. The employee assists the leader as their shadow accompanying them on all business meetings and other work related activities. This helps in familiarizing the employee to the business environment, work ethics/values of the company and helps in building his / her confidence and trust in the organization. At a personal level it helps the shadow to build a rapport with the senior management as they act as a mentor for some week. Building women employees: Some companies are making sincere effort to increase the ratio of women employee in the country. For example, at IBM, efforts are on to increase the overall women employee strength to 45% in India from 25% now. In order to materialize the above IBM actually rewards Head hunters with extra bucks for each reference of a candidate who is recruited. As a company philosophy TCS does not break the service records of the women employees who discontinue work due to family responsibility. Some companies provide the opportunities of flexible working hours, working from home to relaxation room, telecommunication and work part time at special circumstances to support and to encourage the women work force. India's second-largest IT company, Infosys, which employs about 33,700 women has opened lactation centres at its campuses. Wipro has increased the maternity leave from six months to one year. All the top IT companies are today offering work-from-home policies for women, and some even are open to relocate them to a city of their choice if their husbands get transferred. 720 degree Performance Appraisal: Today, these are two points of view about 720 degree performance appraisals as follows: Internal and external of appraisal:In traditional 360 degree appraisal, raters include: Boss Peers immediate & functional colleagues Direct reporters Colleagues and internal customers Then, 540 degree appraisal add more external customers and suppliers Of courses, 720 degree would also take the feedback from stakeholders & family. So that in 720 degree appraisal, feedback is taken from external sources such as stakeholders, family, suppliers, communities. Work environment: Team building with music: Music is a great tool for engaging, innovating and reenergizing teams and even helps in building creative team that works and gets desired results. Teambuilding singing develops confidence, listening skills, lifts employee morale, creates team spirits and a sense of achievement. Many n organizations have amateur musicians among their employees and music can be utilized to strengthen teamwork within the organization. These employee musicians together will form a onetime band to perform a few songs at company events. The companies like Vodafone, BP, Tata AIG, Siemens, pricewaterhouse Coopers etc.. are the companies who are practicing this music session. Aromatherapy at work place: Aromatherapy by definition is the application of particular fragrant substances, like essential oils, inhalants and lotions in an attempt to alter mood and promote health. Aromatherapy rub is a therapy of having one or more essential natural skin oils that are comforting,

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refreshing and stress reducing. It not only relieves physical tension, but, helps in altering emotions. Psychologically, it can excite and clear the mind, while emotionally it can enhance the mood and promote cooperation and constructive relationship at workplace among staff, with customers and whoever comes in the office/ workplace. In fact corporates like Hindalco, Bisleri International, Nerolac and Dominos also utilize anti stress fragrance diffusers to fragrance their offices and reduce stress levels among their employees. M- Learning (Mobile Learning) Due to high speed net connections and communication tools/ applications available for learning which are present in mobile devices it has become easier for learners to learn in and out of the class room. Mobile learning supports learning experiences that are personalized, handy and shared. The mobile productivity applications are to do lists, notes, calendars, reminders, checklists, rubrics, quizzes and portfolios. Contents can be bought on mobile social media by mobile blogging, mobile photo/video/ voice blogging, mobile book marking and social tagging, and mobile RSS. Also, mobile social networking works through SMS messaging networks, friends/ community networks, personal content networks, and location based social networks. The companies like Microsoft, DUKE University, Black and Decker, Deloitte and Touch use it. Conclusion: The new policies and rules emerged giving rise to new workplace order, wherein innovative HR practices by companies managed to work the numbers in their favor. Such innovative HR practices helps in building competencies, raise productivity and capabilities of the workforce. Highly motivated and committed employees give their best to the organization they work for. Companies across different sectors have opted for those HR practices which will stand them in good stead in long run. To conclude it can be said that those companies that have invested considerable time and resources in building a solid Human capital management foundation are better positioned to weather the storm. Reference: 1. Dr. R.C. Sharma, Vavsudha Dhingra,(2010) , Innovative Practices in HRM, Journal of IMS Group, Vol 7 No 2, July- Dec 2010,pg 89-95. 2. Pallavi, Arvind Kumar Mishra, (2010), Innovative HR Practices by Organization Across different Sectors, HRM Review, May 2010,pg 10-18 3. Prathigya, Swetha,(2011),Spiritual Workplace, Challenges and opportunities for business in the new Millenium, National Conference Proceedings, Oct 14-15, 2011,Brindavan College, Bangalore, Pg.9 4. Arva Shikari, (2011) M- learning, Training Trends, Human Capital, Vol.15 No3 Aug 2011, Pg 64-65 5. Indian Find New Flexi Workplace(Research Article), Human Capital, Vol.15 No. 7, Dec 2011, Pg 14 6. Arva Shikari,(2011), Trends, Team Building with Music, Human Capital, Vol.15 No.5, Oct2011,Pg 60-61 7. Arva Shikari(2011), Power of aromapathy at workplace, Trends, Human Capital, Vol. 15,NO.6,Nov2011,Pg 74-75 8. Mahima Puri,(2011) Cos keep family happy, Ensures employee Layalty, Economic Times- Bangalore, 31 May 2011, tue, Pg 6. *****

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BUILDING BEST AND INNOVATIVE ORGANIZATIONAL CULTURE: EMPLOYEES PERCEPTION TOWARDS THE ORGANIZATIONAL CULTURE AT BANKING SECTORS, CHENNAI J.M.ARUL KAMRAJ and 2P. SELVAMANI Assistant Professor, Department of Social Work, Loyola College, Chennai 34 2 Assistant Professor, Department of Social Work, Hindustan College of Arts & Science, Coimbatore.
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INTRODUCTION Organizational culture is a totality of various levels of interaction among organizational & organismic factors centering on concern for work. It is a framework within which the behaviours of the members take place. One can understand organizational culture as a pervasive underlying set of beliefs, assumptions, values, shared feelings & perceptions, which influence the action and decisions taken by organizational members. It does not only shape behaviours but also determines the manner in which people normally interpret and respond to any given organizational situation. Organizational culture determines what the organization ought to be and look like, how it should deal with its environments, how to manage and integrate its internal sub-systems and their inter-relationships and what kind of an image it should project to its external client systems. The various meanings attributed to organizational culture range from behavioral to cognitive, from explicitly stated to tacitly followed, from being consciously enacted to being unconsciously felt. Organizational culture involves two sets of activities: external adaptation and internal integration. External adaptation explores goals with regard to outside agencies the task to be accomplished, means to achieve the goals and methods of coping with success & failures. Internal integration signifies the creation of a collective identity of members and ways of working together harmoniously. Organizational culture in a sense is a vehicle for members to make sense of the situation and guide employee behaviour. This creates a collective identity of members and norms percolate through the system and members work together to reach organizational goals with a sense of commitment. Organizational culture is a vehicle for members to make sense of the situation and guide employees behaviours. Culture Facilitates Induction and Socialization : Induction is a process through which new entrants to an organization are socialized and indoctrinated in the expectation of the organization, its cultural norms, and undefined conduct. Different organizations follow different practices for induction. Established senior members share with the newcomers stories of heroes, founders, and charismatic team leaders with vision. Culture Promotes Code of Conduct : A strong culture in an organization explicitly communicates accepted modes of behavior so that people are conscious that certain behaviours are expected and others would never be visible. The presence of a strong culture would be evident where member share a set of beliefs, values and assumptions which would influence their behavior in an invincible way.

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Sub- Cultures Contribute to Organizational Diversity: Sub cultures, and sub-system of values and assumptions which may be based on departmentalization activity center, or geographical locations, provide meaning to the interests of localized, specific groups of people within the macro organization. Sub-cultures can affect the organization in many ways: (i) they may perpetuate and strengthen the existing culture (ii) they may promote something very different from those existing (iii) they may promote a totally opposite subculture (beliefs & value) or counter culture when in a difficult situation.

The other major functions performed by culture are Culture provides shared pattern of cognitive perception or understanding about the values or beliefs held by the organization. This helps the organizational members to think and behave as expected of them. It also provides shared patterns of feelings to the organizational members, to make them know, what they are expected to value & feel. It provides a boundary that creates distinctions between one organization and other. Such boundary defining helps identify members and non-members of the organization. Culture facilitates the generation of commitment to something larger than ones individual self-interest It enhances social stability by holding the organizational members together by providing them appropriate standards for which the members should stand for. It serves as a control mechanism that guides and shapes the attitudes and behaviours of organizational members. It helps organizational members stick to the conformity to the prescribed and expected mode of behaviour. Culture finally ensures that everyone is pointed in the same direction. MANAGING ORGANIZATIONAL CULTURE Managers have to manage the perceptions of employees of the organizational culture as major changes are made. They could modify organizational culture through stories, rituals and myths, and the management could attribute new meanings to important company events. However, changing old norms and values is a time consuming process but the benefits might make it worthwhile. A dynamic climate is created through the cumulative efforts of managerial actions, technology and initiatives from employees themselves. Working together towards a change in the product line, structure or processes, facilitates the creation of a new ethos. Continuous self assessment and organizational development interventions help bring about a change in organizational culture when emphasis on customer and stockholders is a significant focus. STATEMENT OF THE PROBLEM The topic chosen focuses on the study of employees perception towards organizational culture with special reference to Banking Sectors at Chennai. It also aims at studying the complex pattern of beliefs, expectation, ideas, values attitudes & behaviours shared by the members of an organization. The topic has been chosen because it dictates the norms that are shared by teams throughout the organization as well as the philosophy that guides an organizations policies towards its employees and customers, in this case with respect to Banking Sectors employees. The statement of the research problem also throws an insight on the dominant values held by an organization in union with the shared feelings perceptions and

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assumption of the organization as they help influence the actions and decisions taken within the organization. NEED AND IMPORTANCE OF THE STUDY Every organization requires a sound organizational culture to realize its goals& objectives. The study of the culture of an organization is necessary for an insight into important dimensions such as co-operation, employees satisfaction, morale etc. An organization is likely to be more effective if there is two way communication and employees are co-operative and have better perception of the organization. Such employees have higher Job satisfaction and feel committed to the organization. Thus good organizational climate is instrumental to higher employees satisfaction ,better human relations and higher productivity. When organizational culture is conducive to the needs of the individuals one would expect goal directed behavior to be high. It has to be understood that if culture is favorable there would he greater organizational effectiveness. Organizational culture is also receiving considerable attention from researchers and managers who consider it to be a socializing influence as well as creator of organizational climate. It is assumed that organizational culture can override national culture and in an multinational organization people belonging to different culture can assimilate. Organizational culture performs function like giving member a sense of identity and increasing their commitment, providing shared pattern of feelings ,facilitating generation of commitment to large organizational interests and serving as a control mechanism for shaping the employees behavior. Thus the understanding and insight of an organization culture is inevitable to the growth& development of an organization. OBJECTIVES To know the personal data of the respondents. To understand the need and how organizational culture are developed, maintained and changed. To Study the influence of Organization Culture on the ethical behavior of employees. To analyze the general cultural pattern of the organization towards the employee. To Understand the organizational and individual objectives To analyze the influence of motivation on the performance of an employee within the organization. To Study the professional ethics governing organization al culture within an organization.

RESEARCH METHODOLOGY The researcher adopted Descriptive Research Design to this study. In this research study, the researcher describes about the employees perception towards organizational culture. So the descriptive research is the most suitable research design to this study. In this research 10 respondent were drawn from the total population of employees for the pre-test by the researcher. The researcher adopted Cluster Random sampling to this study. The total sample size selected by the researcher was 100 which was a portion of the total population of employees. The sample selected (100) would help in drawing inferences about the organizational culture of the

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whole population of employees in Banking sectors. The tool chosen for data collection is a questionnaire. The questionnaire chosen comprises of six parts including personal details, general culture, organizational & Individual objectives, professional ethics, motivation and general details. It consists of a total of 36 questions, with a mix of both open and close ended question. The researcher personally visited the various branches several times for data collection he obtained responses from each respondent individually. The data was collected from 100 respondents. MAJOR FINDINGS In this research, majority (58 percent) of the respondents belong to the age group of 46 years and above. In this research, majority (62 percent) of the respondents are male and the remaining 38 percent are female. In this study, half (50 percent) of the respondents have completed their Under-graduation. Majority (54 percent) of the respondents have work experience of 15 years and above. Majority (59 percent) of the respondents are partially aware of the underlying norms of the organization, making awareness ratio sufficiently high. Majority (72 percent) of the respondents are able to relate to the core beliefs of the organization. Majority (67 percent) of the respondents partially feel that the values and feelings of employees influence the organizational culture. In this research majority (60 percent) of the respondents adhere to a set of assumptions that is representative of organizational culture. Majority (61 percent) of the respondents completely agree that social entity is a byproduct of organizational culture. In this research, most (84 percent) of the respondents are aware of the objectives of the organization. As per the study, each 44 percent of respondents are completely satisfied and partially satisfied with the objectives of the organization. More number (39 percent) of respondents felt that their individual goal towards the organization is completion of daily duties and achievement of targets. In this research study more number (44 percent) of respondents felt that the superiors motivation in the organization helps in achievement of the personal goals. Majority (68 percent) of the respondents absolutely believed that objective of organization leads to project maximization. In this study, majority (57 percent) of the respondents agreed that culture pattern reflect the objectives of members. Majority (70 percent) of the respondents agreed that the organization follows professional ethics of key significance. Majority (66 percent) of the respondents felt that the consensus between organization and individual ethics could be moderate. In this research, majority (59 percent) of the respondents felt that there is a match between organizational values with the cultural requirements of the society. In this study, majority (64 percent) of the respondents considered shaping and embedding the organizations values, the most important challenge of the organization.

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In this research 32 percent of respondents consider participation with full responsiveness, the most important value in the organization. As per the study, majority (74 percent) of the respondents felt that loyalty to ones profession forms a part of organizational value, to a great extent. Majority (76 percent) of the respondents are aware of the motivational factors offered in the organization. In this research study, majority (54 percent) of the respondents felt that promotions are the motivational factor offered in the organization. In this research 32 percent of respondents consider their superiors to be the key motivational force behind the organizational culture. In this study, majority (75 percent) of the respondents felt that their organization is most definitely oriented towards achievement. Majority (56 percent) of respondents completely agreed that culture interacts to develop in each employee, a motivation pattern. In this research majority (62 percent) of the respondents is satisfied with the organizational culture existing in their organization. As per the study, majority of the respondents (55 percent) are partially satisfied with the behavior of the superior at the organization. In this research, half (50 percent) of the respondents are partially satisfied with the overall-rules of the organization. Majority (56 percent) of the respondents had a good opinion on organizational culture. In this research, majority (62 percent) of the respondents felt that corporate culture determines the ethical standards for the organization. In this study, each 32 percent of the respondents valuable suggestion to improve organization culture includes, encouraging collective employee motivation and team work and provision of note-worthy customer service.

SUGGESTIONS Based on the analysis, which focuses on the general culture, organizational and individual objectives, professional ethics and motivational pattern of the nature of organizational culture of the employees of the organization, certain suggestions to improve and enhance the nature of organizational culture are presented below: Since 59 percent of the respondents were partially aware of the underlying norms of the organization, the organizationl could help its members to enable them to be aware of the multiple identities and new perspectives of the underlying norms. As 22 percent of the respondents had no idea about the core-beliefs of the organization, the organization could help its members rejuvenate, regenerate and rediscover the organization culture in relation to the core-beliefs of the organization, leading to actualizing the ideal culture. In this study 64 percent of respondents only partially felt the influence of values and feelings in organizational culture. Thereby, the employees of the organization could be taught to gain interpersonal and intrapersonal processes and transactions which helps them

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to deal with their feelings and values in a wholesome way, so as to stretch the level of its influence in organizational culture. In this research 44 percent of the respondents were partially satisfied of organizational objectives thereby it is suggested that the organization could ensure that, feedback on the effectiveness and usefulness of the organizational objectives could be obtained, and thereby the organization could make sure based on performance appraisal, better satisfaction on organizational objective. The organization could help 22 percent of its respondents felt that the organization is oriented towards achievement by making them reflect on roles, responsibilities, authority, commitment to quality and potential enrichment of roles, and thereby increase their physical and mental achievement enhancing the performance driven aspect of the culture belonging to the organization. The organization could arrange family get togethers, performance counseling, whereby employees can sort out their difficulties, share there happiness, to feel one with the organization and become more contributive and proactive members of the organization culture. The organization could develop skill-training programs, to facilitate employee motivation and team work. Interdepartmental audit and dialogue of ensuring quality of work with standards can be employed to promote quality of products to customers and excellent service to customers, so that goodwillof the organization among customers and employees is also boosted qualitatively.

CONCLUSION In this study, an attempt is made to study the organizational culture of the various Banking sectors which focuses on dimensions like individual identity, norms, values, professional ethics, core-belief, set of assumption, social entity, reward system, management motivation and culture interaction which helps in forming the integration and combined whole of organizational culture. The study has been undertaken to understand the presence, perception and prominence of organizational culture in fulfilling organizational goals. The organizational culture of various banking sectors could be conclusively deserved as one that is supportive, facilitative and pro-active towards the needs, values and feelings of its members. The culture sustaining in the organization could take steps towards recognizing and guaranteeing the autonomy, identity and initiatives of each of its members towards securing organization culture .The vision with which the organization has developed its major fold of members who are cohesively, collaboratively and constructively working towards ensuring, enhancing and evolving the organizational culture pattern exercised and pragmatically practiced by the organization. This research study will be useful in delving in to the norms that are shared within the organization, as well as the philosophy that guides an organizations policies. This research study will provide an understanding and insight of the Organizational Culture of Banking sectors, which is inevitable to the growth& development of an organization collaboratively. *****

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QUALITY OF WORK LIFE OF WOMEN EMPLOYEES IN BANKS - A STUDY Usha Devi.N, 2Sri. Janardhan TG, 3Smt. Bhagya GB and 4Bhargavi.V Associate professor, Dept. of commerce, MLA First Grade College for women, Bangalore. 2 Associate professor, Dept. of Commerce, MES College, Bangalore 3 Vice Principal, Dept. of Commerce & Management, NITTEE College, Bangalore 4 Assistant professor, Dept. of Commerce & Management, Sheshadripuram College, Bangalore
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1. THEORETICAL BACKGROUND: Quality of Work Life is not a unitary concept, but it is a multidimensional thought, which includes not only work-based factors such as Working conditions, Job security, Financial and non financial incentives, Superior subordinate relationships, Employee participation and involvement, Career advancement opportunities, Working hours, Protection of employee rights etc., but also includes the factors that reflects well being and life satisfaction of the employees. In other words, QWL is nothing but the development of organizational programs that support the welfare of employees. They cover everything from security and safety to participation and meaningful work. Therefore, there is evidence to say that QWL not only affect job satisfaction of the employees but will also have impact on satisfaction in other life domains such as family life, leisure life, social life, financial life and so on. (Passmore, 1985)1. This employee friendly concept was first introduced in 1972 by Louis Davis, in an attempt to establish that performance is linked to involvement and satisfaction of employees at workplaces. Later on it has been increasingly applied in many employment theories and practices. Today, Quality of Work Life has received more attention due to its potential impact on work performance of the employees and organizational success. Even research studies convey that high Quality of work life (QWL) is essential for organizations to attract and retain employees and achieve sustainable growth. (Hian and Einstein, 1990)2. It is very interesting to note that the very basis of QWL is in UK in the sense that the Tavistock institute of human relations, UK carried out research on socio-technical system from which the concept of QWL emerged. Further, Richard E. Walton an American professor played a major role in developing this concept. In fact, the eight factors (i.e. Adequate and fair compensation, Safe, healthful working conditions, Opportunity to develop human capacities, Opportunity for carrier growth, Social integration in the work force, Constitutionalism, Work and quality of life, Social relevance) which he proposed to measure QWL made the task easy worldwide. On the other hand, Japan has always been first in introducing labor welfare programs, maintaining sound labor management relations and practicing any new concept which ensure good industrial atmosphere. In case of QWL-improvement programs, their success in implementing this value based scheme can be attributed to the positive attitudes of both management and employees and also extensive support from Government in all possible ways. (Camman, C.,1984)3, But, QWL improvement was not considered as important factor in India until recently, because improving quality of work life involves considerable amount to be spent by the management and they were hesitant to spend. This has given negative attitude to employees. But the scene has changed. (Chander, S., Singh P ,1993)4, Now, QWL has become a buzz word in the industries these days and even Laymen talk about it, because workplace wellness has become crucial in Indian companies to promote healthier working environment.

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1.1. QUALITY OF WORK LIFE MEANING: Although there is no formal definition of quality of work life (QWL), industrial psychologists and management scholars define quality of work life as the workplace strategies, operations and environment that promote and maintain employee satisfaction with an aim to improve working conditions for employees and organizational effectiveness for employers (Danna and Griffin) 5. Further, the concept of Quality of Work Life is widely used to refer to a philosophy in organizations that may increase the dignity of all workers, introduce changes in an organizational culture and improve the physical and emotional well-being of employees (Ngambi 2000)6. According Robins 7 Quality of Work Life (QWL) is a philosophy, a set of principles, which holds that people are the most important resource in the organization as they are trustworthy, responsible and capable of making valuable contribution and they should be treated with dignity and respect. According to Straw and Huckster 8 Quality of work life is a process of work organization which enables its members at all levels to participate actively and effectively in shaping the organizations environment, methods and outcomes. It is this value based process which is aimed towards meeting the twin goals of enhanced effectiveness of the organization and improved quality of life at work for the employees. Most of the definitions aim at achieving the effective work environment that meets with the organizational and personal needs and values that promote health, well being, job security, job satisfaction, competency development and balance between work and non-work life. 1.2. WORK EFFICIENCY MEANING: Cunningham JB and EBerle T 9 , in their paper made an attempt to define work efficiency. According them, Work Efficiency refers to doing things in a right manner. Basu KS 10 , author while describing the work efficiency, suggested the following factors as important components of work efficiency: Acquisition of knowledge, Proficiency in required skills, Developing good plans, Good decision making, Translating decisions into actions, efficient use of available resources, Coordinating different activities.etc. The Employees today are different. As soon as they feel dissatisfied with the current employer or the job, it affects their work efficiency. The efficiency of an employee is his resultant behavior on task which can be observed and evaluated. It refers to the contribution made by an individual in the accomplishment of organizational objectives. Efficiency can be possible by satisfying the employees needs, which can be fulfilled by implementing Quality of work life activities. For creating a performing organization and to sustain the performance, HR orientation needs to be top-down and should also involve the line managers to ensure sustainable peak performance. Quality of work life activities helps the employees to acquire and/or develop technical, managerial and behavioral knowledge, skills and abilities and moulds the values, beliefs and attitudes necessary to perform present and future rules. I. Concept of Work efficiency (WE) and its Components Gupta, P. Khandelwak,P (1987)19, Work efficiency is defined by the author as the output to input ratio and focuses on getting the maximum output with minimum resources. Author stressed that interpersonal relationships aspects such as respecting others, working together, faith in others and information sharing are the main factors that affects work efficiency of the employees. Author also said that stable and secured job have significant and positive relationship with employee work performance. Chatterjee SS (2003)20, According him, efficient employee is one, who has up-to-date knowledge, decision making power, self reliance, regard for others, social

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sensitivity and emotional stability. He also said that Work environment such as ergonomics, recent ICTs availability, harmony environment and safety working environment has an impact on work efficiency. Therefore, employee friendly work environment should be created in the organization. Summer CS (2006)21, author states that knowledge factors, Attitude factors and ability factors are the three important aspects, which will have impact on work efficiency of the employees. According to the author, knowledge factors relate to ideas, concepts or principles that are conscious, able to be expressed and accepted. Attitude factors relate to those beliefs, feelings, desires and values that may be based on emotions and that may not be subjected to conscious verbalization. Ability factors constitute skill, art, judgment and wisdom. He also said that the knowledge, Attitude and ability factors will have positive and significant impact on employee performance. Therefore, the organizations are required to build these aspects in their employees by implementing user-friendly HRD practices. M.Shamsuddin Elias and Nitai Kumar Saha (1974)22, author conveyed that an organization is like a tune; it is not constituted by individual sounds but by their syntheses. The success of an organization will therefore depend on its ability to measure accurately the performance of its members and use it objectively to optimize them as a vital resource. II. Quality of work life and work efficiency The QWL programs followed and work efficiency of the employees in public and private sector companies has improved, after implementing TQM and such programs found to be highly significant. But the areas like flexible working hours, flexible organizational structure, health, safety and environmental issues and holding family days to motivate employees has to be improved to make the work environment more favorable to the well being and growth of all employees. (Usha devi.N 2001)23 . M.Shamsuddin Elias and Nitai Kumar Saha (1974)24, have pointed out that a balance between work and life can be maintained and work efficiency can be enhanced, when there is no conflict between work and family demands. Though this seems to be idealistic situation, what the corporate need to remember is that the conflicts should not reach unacceptable levels where it would tend to affect the productivity of the employee. The employees of today put their commitment to organizations they work for only if the management recognizes the importance of their personal and family life. 1.3. CONCEPTUAL MODEL: A conceptual model, diagrammatically represented, explaining the components of QWL is shown in figure 1 for easy and comprehensive understanding. COMPONENTS OF QWL 2. STATEMENT OF THE PROBLEM: One of the professions where women can gain an upper hand is as bank employee. Though many women joined Banks with the hopes of being bank servants and supporting their families, their dreams are shattered once they realized that it is very difficult for them to maintain work life balance. The present study is therefore, undertaken to examine the issue, analyze the cause and offer possible solutions to the situation. 3. SCOPE OF THE PRESENT STUDY:

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This is a study on the QUALITY OF WORK LIFE OF WOMEN EMPLOYEES IN BANKS. It is presumed that the results of the present study will be of great value to the Banksto enhance the Quality of work life of their women Employees. Further, the results of the investigation would throw new light on the components of Quality of work life. The outcome of the study would also help the banks to formulate suitable programs and use appropriate methods to improve the work efficiency of the women employees. 4. OBJECTIVES OF THE STUDY: 1. To identify and study the Demographic variables with reference to women employees. 2. To study the assessment level of respondents on Job related, Organizational related variables of women employees. 3. To recommend suggestions based upon the findings 5. METHODLOGY AND SOURCES OF DATA: For the purpose of the study both primary and secondary data is collected, to achieve the formulated objectives. The primary data is collected from the women employees having a minimum of five years of work experience. The secondary data is collected from journals, books and websites. 5.1. SAMPLING DESIGN: This study is based on data collected from women employees. The study followed multi stage sampling design. In the first stage, 30 banks were selected based on the following criteria: The bank should have the minimum of 15 women employees In the second stage, ten women employees having a minimum of five years of work experience were randomly approached to fill in the developed questionnaire and thus making total number of respondents to three hundred for the study. 5.2. VARIABLES USED IN THE STUDY: Keeping the objectives of the study in view, Quality of work life is considered as independent variable and Work efficiency is considered as the dependent variable. Twenty independent variables and eight dependent variables were included in the present study. Further, Independent variables were classified under the three broad categories, viz., (1) Demographic variables; (2) Job related variables and (3) Organizational related variables. 5.3. ADMINISTERING THE SCALE The final scale consisted of 93 statements. These statements were then administered to the respondents of the selected 30 Banks. 5.4. DATA COLLECTION INSTRUMENTS: The method adopted to collect data was questionnaire method, which covers the following aspects: Quality of work life Demographic variables, Job related variables and Organizational related variables. 5.5. FIELD WORK:

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The field work on the project started during January 2011 and continued up to July, 2011. The researcher in person requested the respondents of 30 banks to fill the questionnaire for the purpose of the study. The collection of data from the banks involved much time and the data could be obtained from them only after giving six to nine visits. 5.6. PLAN OF ANALYSIS: In this study, Percentages are calculated to study the demographic variables. Mean percentage, standard deviation is used to measure the Quality of work life 6. FINDINGS: The present survey aims to study the Quality of work life of women employees in Banks. In order to facilitate logical treatment, the results are presented under the following two headings: 6.1.Demographic variables 6.2.Assessment level of respondents on Job related, Organizational related variables 8.1. Demographic Variables: Demographic variables like age group, education level, marital status, Work Experience, Self Income, Residence, Type of the family, Size of the family, Number of dependents, Family Income are included to study the Demographic characteristics of the women employees in banks. Table-1: Demographic Variables: Characteristics Category Respondents Number Percent 1. Age (years) 18-25 25-30 30-35 SSLC PUC Graduate Unmarried Married Widow 0-5 5-10 10-15 Below Rs.5000 5000-7000 7000-10000 Rural Urban Semi urban 82 146 72 40 140 120 123 135 42 00 200 100 135 76 89 171 88 41 27.3 48.7 24.0 13.3 46.7 40.0 41.0 45.0 14.0 00.0 66.7 33.3 45.0 25.3 29.7 57.0 29.3 13.7

2. Education

3. Marital Status

4. Work Experience (years)

5. Self Income - PM

6. Residence

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7. Type of the Family

Nuclear Joint 1-2 3-4 5-6

210 90 78 134 88 97 146 57 130 79 91

70.0 30.0 26.0 44.7 29.3 32.3 48.7 19.0 43.3 26.3 30.4

8. Size of the Family (members)

9.Number of Dependents < 2 2-3 4-6 10.Family Income - PM < Rs.10000 Rs.10000-15000 Rs.15000-30000

Source: Primary Data Majority of the women employees belong to the age group of less than 30 years with less than ten years of work experience. This indicates that many youngsters are opting for bank job. Again married women from rural areas with low income and having more than two dependents are more in number than that of unmarried women employees in banks. This reveals that the financial constraints and many other family related factors have made married women to take up bank job. 8.2. Assessment level of respondents on Job related, organizational related variables of women employees in banks 1. Assessment level of respondents on Job Related Variables For the purpose of present survey, Family matters, work pressure, physical and mental health, safety of the employees, nature of job, self care, Job training, empowerment, recognition, motivation and time management aspects are included to study Job related Variables. Table 2: Assessment level of respondents on Job Related Variables Assessment Level Category Respondents

Number Low Moderate High Total Source: Primary Data n =300 50 % Score 51-75 % Score > 75 % Score 112 118 0 300

Percent 37.3 62.7 0.0 100.0

It is very disheartening to note that none (0%) of the women employees have high level of satisfaction with regard to Job related variables, due to the following reasons:

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1. They could not reconcile work and family matters as they are experiencing frictions, conflicts and tensions with the family members in the matter of utilization of their earnings and not returning home in time. 2. They are not able to concentrate on their work due to home matters. This has made them to have either limited number of children or put off having children for the time being. 3. Very often they suffer from back/ hands/wrists/arms/ shoulders pains and they are under stress/depression. Because of this they are not able to take care of themselves and sleep well. They face many interruptions and disturbances while on duty and they have constant time pressure due to a heavy work load and frequently thinks of quitting their job

2. Assessment level of respondents on Organizational Related Variables In the present survey, Commitment, Support from male/female colleagues, Harassment, Ethics training programs, Salary and fringe benefits are included to study Organizational related variables. TABLE 3: Assessment level of Respondents on Organizational Related Variables Assessment Level Category Respondents

Number Low Moderate High Total Source: Primary Data 50 % Score 51-75 % Score > 75 % Score 56 244 0 300

Percent 18.7 81.3 0.0 100.0

Women employees do not have high level of satisfaction (0%) even with regard to organizational related variables, due to the following reasons: 1. They were threatened or harassed by the comale employees while they were on the job 2. They are discriminated on the basis of community by the branch manager 3. They say that their income is not enough to meet their familys monthly expenses 4. They are not satisfied with Leave facility, Crche Facility and other incentives given by banks.

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8. SCHEME OF SUGGESSTIONS: Based on the findings, the following suggestions are recommended for improving the work efficiency of women bus conductors by enhancing their quality of work life For the banks: Research employees requirements to design benefits and rewards and then fix reasonable salary in order to facilitate employees to maintain an acceptable standard of living. Banks can have a full time doctor; because they can counsel the employees to a state of wellness. Many ailments like back pains, Poor eyesight, spondilytis, discomfort, fatigue, tension, depression, irritability and obesity etc. which go unattended till the time they dont start disrupting the day to day work can be resolved in the very start. This service may be made available to employees free of cost. Banks must ensure that all its employees are covered under insurance scheme (both life and medical), so that employees can get right medical treatment at the right time. On the other hand, Lack of care by the employees can lead to long-term ailments, wherein not only the person concerned, but their entire family has to suffer. Informal gathering can be arranged at least once a year to motivate employees and to make them feel that they are the part of the organization. This also develops in them more cohesiveness and commitment towards the organization. All employees should assemble at one place in the organization and do universal prayers every morning. This brings unity and harmony within the organization, which in turn creates an environment of purity, positiveness, cooperation and love. Send appreciation letters to home address of the employees, as appreciation from the spouse or parents improves the morale of the employees and motivates them to do their work efficiently. Vipasana meditation /Neuro linguistic programming / Transcendental meditation/ rekhi can be practiced in the organization regularly, as it helps employees to develop positive qualities of generosity, tolerance, self confidence, discipline, creativity, will power, sense of gratitude, ability to learn, kindness, humility, forgiveness and compassion. Such qualities in turn improve the mental and physical health of the employees. Paternity leave can be introduced along with maternity leave benefits for women employees. Further, on site or near site child development centers may be provided. Banks can make arrangements to have a well-equipped gym for its employees. As, such a facility not only helps a employees to keep their mind and body fit, but also serves as a de-stressing factor. Periodical training sessions on interpersonal skills, moral values, job sharing and time management should be conducted. It is suggested that, the BMTC should concentrate more on the promotion welfare schemes and grievance handling. For women employees: Proper planning and realistic goal setting in life, developing healthy personal habits, controlling anxiety and anger, developing positive thinking, practicing yoga is the guru mantra for physiological stress management.

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They should evaluate their priorities and focus their attention on them so that they are able to give their best. As they have problems of sleeping, they can eat a banana an hour before bedtime. This fruit has natural sedative powers that will help people to relax and sleep more confidently. Women employees can perform SWOT analysis on themselves, to assess their strengths and recognize their weaknesses, so that they can build a successful future. Have fun at work i.e laughter is the best medicine, but use only appropriate humor. Damaging someone else's self-esteem for the fun of it is no laughing matter.

SCOPE FOR FURTHER RESEARCH: Author believes that future research should employ longitudinal data for this type research topic. In addition, future studies should use different groups of employees or similar groups in other states to further validate the research findings. REFERENCES: 1. Passmore, W. (1985), A comprehensive approach to planning an QWL strategy, In Warrick, D (ed.), Contemporary organization development: Current thinking and applications, Glenview, IL: Scott Foresman and Company. 2. Hian, C.C. and Einstein, W.O. (1990), Quality of Work Life (QWL): What can unions do?, SAM Advanced Management Journal, 55(2), pp 17-22 3. Camman, C., (1984), Productivity of Management Through QWL Programs, In Frombun, Editor, Strategic Human Resource Management, New York: Wiley. 4. Chander, S., Singh P(1993), Quality of work life in a University: An Empirical Investigation, Management and Labor Studies, 18(2), 97-107 5. Danna, K. and Griffin, R.W (1999), Health and Well being in the workplace, Journal of Management, 25(3), pp 357 384. 6. Ngambi HC, (2000), Can job sharing improve quality of work life in south Africa? Http:www.sabisinessreview.co.za/july2000/articles/job- sharing.htm 7. ibid 8. May, B.E., Lau, R.S.M., and Johnson, S.K.(1999), A Longitudinal Study of Quality of Work Life and Business Performance. South Dakota Business Review,58(2), pp.3-7. 9. Cunningham, J.B., and Eberle, T. (1990), A guide to job enrichment and redesign.Personnel67(2) 56-61 10. Basu KS(2003), The Human factor in Management Training Division, Dept. of personnel, Cabinet Secretary, New Delhi 11. G Nasl Saraji and H Dargah (2006), Study of Quality of Work Life (QWL), Iranian J Public Health, 35 (4), pp 8-14 12. Lawler E, E, Ledford, G. E, (1982), QWL and Productivity, National Productivity Review, 1(1), pp 23-36 *****

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HUMAN RELATIONSHIP MANAGEMENT IN BANKING & INSURANCE SECTORS V.R.Palanivelu and 2T.Srividhya 1 Reader PRIMS and 2Ph.D Scholar, Periyar University,Salem
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Introduction: Today, many businesses such as banks, insurance companies, and other service providers realize the importance of Human Relationship Management (HRM) and its potential to help them acquire new customers, retain existing ones and maximize their lifetime value. At this point, close relationship with customers will require a strong coordination between IT and marketing departments to provide a long-term retention of selected customers. This paper deals with the role of Human Relationship Management in banking & insurance sector and the need for Human Relationship Management to increase customer value by using some analytical methods in HRM applications. HRM is a sound business strategy to identify the banks most profitable customers and prospects, and devotes time and attention to expanding account relationships with those customers through individualized marketing, repricing, discretionary decision making, and customized service-all delivered through the various sales channels that the bank uses. Under this case study, a campaign management in a bank is conducted using data mining tasks such as dependency analysis, cluster profile analysis, concept description, deviation detection, and data visualization. Crucial business decisions with this campaign are made by extracting valid, previously unknown and ultimately comprehensible and actionable knowledge from large databases. The model developed here answers what the different customer segments are, who more likely to respond to a given offer is, which customers are the bank likely to lose, who most likely to default on credit cards is, what the risk associated with this loan applicant is. Finally, a cluster profile analysis is used for revealing the distinct characteristics of each cluster, and for modeling product propensity, which should be implemented in order to increase the sales. Human Relationship Management: In literature, many definitions were given to describe HRM. The main difference among these definitions is technological and relationship aspects of HRM. Some authors from marketing background emphasize technological side of HRM while the others considers IT perspective of HRM. From marketing aspect, HRM is defined by [Couldwell 1998] as a combination of business process and technology that seeks to understand a companys customers from the perspective of who they are, what they do, and what they are like. Technological definition of HRM was given as .. the market place of the future is undergoing a technology-driven metamorphosis [Peppers and Rogers 1995]. Consequently, IT and marketing departments must work closely to implement HRM efficiently. Meanwhile, implementation of HRM in banking sector was considered by [Mihelis et al. 2001]. They focused on the evaluation of the critical satisfaction dimensions and the determination of customer groups with distinctive preferences and expectations in the private bank sector. The methodological approach is based on the principles of multi-criteria modeling and preference disaggregation modeling used for data analysis and interpretation. [Yli-Renko et al. 2001] have focused on the management of the exchange relationships and the implications of such

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management for the performance and development of technology-based firms and their customers. Spesifically the Human Relationships of new technology-based firms has been studied. [Cook and Hababou, 2001] was interested in total sales activities, both volume-related and non-volume related. They also developed a modification of the standard data envelope analysis (DEA) structure using goal programming concepts that yields both a sales and service measures. [Beckett-Camarata et al. 1998] have noted that managing relationships with their customers (especially with employees, channel partners and strategic alliance partners) was critical to the firms long-term success. It was also emphasized that Human Relationship management based on social exchange and equity significantly assists the firm in developing collaborative, cooperative and profitable long-term relationships. [Yuan and Chang 2001] have presented a mixed-initiative synthesized learning approach for better understanding of customers and the provision of clues for improving Human Relationships based on different sources of web customer data. They have also hierarchically segmented data sources into clusters, automatically labeled the features of the clusters, discovered the characteristics of normal, defected and possibly defected clusters of customers, and provided clues for gaining customer retention. [Peppers 2000] has also presented a framework, which is based on incorporating e-business activities, channel management, relationship management and back-office/front-office integration within a customer centric strategy. He has developed four concepts, namely Enterprise, Channel management, Relationships and Management of the total enterprise, in the context of a HRM initiative. [Ryals and Knox 2001] have identified the three main issues that can enable the development of Human Relationship Management in the service sector; the organizational issues of culture and communication, management metrics and cross-functional integration especially between marketing and information technology. HRM Objectives in Banking Sector: The idea of HRM is that it helps businesses use technology and human resources gain insight into the behavior of customers and the value of those customers. If it works as hoped, a business can: provide better customer service, make call centers more efficient, cross sell products more effectively, help sales staff close deals faster, simplify marketing and sales processes, discover new customers, and increase customer revenues. It doesn't happen by simply buying software and installing it. For HRM to be truly effective, an organization must first decide what kind of customer information it is looking for and it must decide what it intends to do with that information. For example, many financial institutions keep track of customers' life stages in order to market appropriate banking products like mortgages or IRAs to them at the right time to fit their needs. Next, the organization must look into all of the different ways information about customers comes into a business, where and how this data is stored and how it is currently used. One company, for instance, may interact with customers in a myriad of different ways including mail campaigns, Web sites, brick-andmortar stores, call centers, mobile sales force staff and marketing and advertising efforts. Solid HRM systems link up each of these points. This collected data flows between operational systems (like sales and inventory systems) and analytical systems that can help sort through these records for patterns. Company analysts can then comb through the data to obtain a holistic view of each customer and pinpoint areas where better services are needed. In HRM projects, following data should be collected to run process engine:

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Responses to campaigns, Shipping and fulfillment dates, 3)Sales and purchase data, Account information, Web registration data, Service and support records, Demographic data, Web sales data. HRM Development: To be prepared to the changing economic conditions and, in particular, to a rapidly decreasing inflation rate scenario in Bank has started timely to focus on developing a Human Relationship management (HRM) system. The total number of customers is presently around two millllions, but an increase to roughly three millions is foreseen as merging are achieved and the present growth targets are reached. The importance for the bank of managing the relationships with their customers has been the drive of the joint projects that have been developed with IBM in the last three years. During the projects a number of crucial technological and architecture choices have been made to implement the entire process. Realizing the importance of customer information availability the first of these projects has focused on the problem of routinely collecting and cleansing data. The project has been undertaken by the bank with the spirit that has characterized the whole HRM development. The project has promoted a massive involvement of the branches, namely of the portfolio managers and campaigns have been launched for popularizing among branch staff the importance of gathering and maintaining reliable customer data. Another set of methods have been tested for customer not included in portfolios (pool customers), such as mailing or distributing questionnaires in the branches or using automatic teller machines (ATM) and the call center. Methods for data checking and testing have been developed to be routinely employed by the bank's staff. Results obtained are very good: for portfolio customers data available are respectively 98% for the commercial ones and 85% for the retail ones. For pool customers availability goes down to 65%: this is a well-known phenomenon due to the loose relationship with the latter customers. Conclusion: Results obtained by extensive usage of customer data to develop and apply Relational Marketing have convinced the Bank to proceed along the line undertaken. As lists of customers eligible for four very important banking product/services are available, as above described, the following actions are now being deployed : extension of promotions to a larger customer population by having sales people in the branches contacting progressively huge customers Targeted campaigns through Internet and the call center for customers actively using one or both of these innovative channels for their banking operations. The same approach is now being extended to small and medium businesses and to commercial customers. Moreover the analytical and strategic HRM cycle is being completed by developing an application analyzing customers' attrition and deploying strategies to reduce it. *****

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MICRO BANKING AND FINANCIAL INCLUSION IN INDIA A.Xavier Mahimairaj Assistant Professor, PG and Research Department of Commerce, Loyola College, Chennai.

1) Introduction: Banking in India is as old as its civilization. But in its present form it started as British Model in 18th century. However, the commercial banking in India till 1947 was characterized by four things. Firstly, it was urban banking. Secondly, Indian commercial banking was for elite class banking system; thirdly, the banks were conservative. Finally, Business houses promoted their own banks. In short, in pre independence India, the banking system was too meager and just providing banking services to urban mass. After independence, need for creation of financial institutions to support the planned socioeconomic development was felt and to achieve this various schemes to finance agriculture and allied section was evolved. The major thrust to rural banking was given by nationalization of 14 commercial banks in 1969, under which banks were forced to expand and establish their branches tin rural areas. In 1978, another six major commercial banks were nationalized. This gave further enhancement to the role of commercial banks in rural sector. Cooperative banks played a significant role in reaching the rural mass. The share of the Co-operatives in the total borrowings of rural household sector grew from 3% in 1951 to over 25% in 1974. However, the formal financial institutions have not been able to reach poor households and particularly women in the unorganized sector. Lack of infrastructure in rural areas, poor creditworthiness of the rural mass and high cost in providing banking services to rural sector continues to be major concerns and challenge. All this gave a rise to the concept of micro credit for the poorest segment along with a new set of credit delivery techniques with the support of NGOs an informal sector comprising small SHGs started mobilizing savings of their members and lending these resources among the members on a micro scale. A concept of Micro Banking essentially related to a) Creation of an alternative means of alleviating poverty. b) Providing access of credit to poor. C) Creating the habit of thrift among poor and enabling them to save despite their low level of income. 2) Objectives of the study The main objectives of this study are: 1. To study the status of financial inclusion in India. 2. To study the impact of Micro Banking in India. The above objectives are examined through an exploratory study of the financial inclusion in India through the secondary data and available related literature in the field of micro finance. 3) Concept of Micro Finance

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The Microfinance Handbook (1999) published by the World Bank defines Microfinance as, a development approach that provides financial and/or social intermediation. The financial intermediation includes the provision of savings, credit and insurance services, while social intermediation involves organizing citizens groups to voice their aspirations and concerns for consideration by policy makers, development of self-confidence etc. The microfinance institutions includes all kinds of lenders, who supply small loans to poor people- NGOs, government and commercial banks, non-banking financial institutions, informal lenders like moneylenders, pawnbrokers etc. Ultimately it is an effort to include the excluded. In common parlance as well as in the literature the terms micro banking, microcredit and microfinance are often used interchangeably. Microcredit is a component of microfinance in that it involves providing credit to the poor, but microfinance also involves additional non-credit financial services such as savings, insurance, pensions and payment services. In Indian context, Task Force on Micro Finance (NABARD 1999) defined micro finance as provision of thrift, credit and other financial series and products of very small amounts to the poor in rural, semi urban or urban areas for enabling them to raise their income levels and to improve living standards. 4) Micro finance programmes in India Micro finance programmes are important institutional devices for proving small credit to rural poor in order to empower them socially and economically. Micro financing programmes through SHGs, introduced and expended by Non Governmental Organizations ( NGO) in several parts o f India have the potential to minimize the problem of inadequate access of banking services to the poor. While there is no published data on private MFIs operating in the country, the number of MFIs is estimated to be around 800. One set of data indicates that about a dozen MFIs have an outreach of 100,000 microfinance clients. A large majority of them operate on much smaller scale with clients ranging between 500 to1, 500 per MFI. It is estimated that the MFIs share of the total institution-based microcredit portfolio is about 8% (2006). There is a scattered distribution of SHGs across the states. About 60% of the total SHG credit linkages in the country are concentrated in the southern states.

5) Self Help Group Approach A self help Group is a small economically homogeneous and affinity group of rural poor generally not exceeding 20 members voluntarily coming together to save, to mutually agree to contribute to common fund, to meet their needs , to have collective decision through collective leadership and to provide collateral free loans with terms decided by the group at market driven rate. The concept of SHG mainly revolves around the reasons that they may lead to the genesis of self help as a way to mitigate the problems faced by a set of people. A Self Help Group in its strict social content can be defined as a self governed and controlled informal group of people with the similar socio economic background and having a desire to collectively perform a common purpose. In late eighties, NABARD had initiated certain research projects on SelfHelp Groups. In 1988 -89, NABARD in collaboration with some of the member institutions of

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Asia- pacific rural and Agricultural Credit Association (APRACA), under took a survey to study the functioning of SHGs and their collaboration possibilities with banking system. It is found that SHGs are working as financial intermediaries owned by the poor. 6) Self help group linkage model and financial inclusion: In spite of Indian banking sector having witnessed a spectacular progress in spread of banking networks and extending financial outreaches across the country in the recent past, the relative decline in the supply of credit in rural areas poses the biggest challenge to achieve hundred percent financial inclusion before Indian formal financial system. In this context, self help group bank linkage model launched by NABARD (1992) can be conceived as an alternative model to bridge the gaps which could not be filled up by formal banking system. It facilitates extending financial services to unbanked vulnerable section of society. NABARD led SHG bank linkage model is widely accepted as one of the largest and successful micro finance model in the world. There are three kinds of model are being emerged under SHG linkage programme. They are: Model-1: SHGs are financed, guided and promoted by banks. Model-2: SHGs are promoted by Non Government Organizations/Government Agencies but financed by bank. Model-3: SHGs are promoted by NGOs but financed through financial intermediaries like NGOs or by any formal agencies. 7) Progress of SHG linkage programme in India It is inferred from the following details that there has been a remarkable growth of SHGs and bank finance during the span of 1992 to 2011. Total 255 SHGs had been linked to banks with loan amount of Rs.28, 90,000 in the year 1992. In the year 2009-10 the total number of SHGs linked with banks is 69.53 lakhs with total loan outstanding Rs 14453.30 crore. NABARD led SHG bank linkage programme witnessed a significant progress in the recent past. As on March 2009, total 6121147 SHGs were having Rs 5545.62 cr savings with banks .On the other hand total 12253.51 cr loan have been disbursed to 1609586 SHGs and thereby registered 38.5% and 31.1% growth respectively.(Report by NABARD 2008- 09).. 7.1) Physical Total number of SHGs savings linked with banks : 69.53 lakh Out of total [of which] exclusive Women SHGs : 53.10 lakh Out of total [of which] SGSY SHGs : 16.94 lakh Total number of SHGs credit linked during 2009-10 : 15.87 lakh Out of total [of which] exclusive Women SHGs credit linked : 12.94 lakh Out of total [of which]-SGSY SHGs credit linked : 2.67 lakh Total number of SHGs having loans outstanding as on 31 March 2010 : 48.51 lakh Of which exclusive Women SHGs : 38.98 lakh Of which-SGSY SHGs : 12.45 lakh Estimated number of of families covered upto 31 March 2010 : 97 million 7.2) Financial Total savings amount of SHGs with banks as on 31 March 2010 : Rs 6198.71 crore Out of total savings of exclusive Women SHGs : Rs 4498.66 crore Out of total savings of SGSY SHGs : Rs 1292.62 crore Total amount of loans disbursed to SHGs during 2009-10 : Rs 14453.30 crore

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Out of total loans disbursed to Women SHGs : Rs 12429.37 crore Out of total loans disbursed to SGSY SHGs : Rs 2198.00 crore Total amount of loans outstanding against SHGs as on 31 March 2010 : Rs 28038.28 crore Out of total loans o/s against Women SHGs : Rs 23030.36 crore Out of total loans o/s against SGSY SHGs : Rs 6251.08 crore Average loan amount outstanding per SHG as on March 2010 : Rs 57795 Average loan amount outstanding per member as on 31 March 2010 : Rs 4128 Source: Report on status of micro finance in India, NABARD 8) Impact of Financial Inclusion Experience shows that micro finance can help the poor to increase income, build viable businesses, and reduce their vulnerability to external shocks. It can also be a powerful instrument for self-empowerment by enabling the poor, especially women, to become economic agents of change. Poverty is multi-dimensional. By providing access to financial services, micro finance plays an important role in the fight against the many aspects of poverty. For instance, income generation from business helps not only the business activities expand but also contribute to household income and its attendant benefits on food security, children's education, etc. Moreover, for women who, in many contexts, are secluded from public space, transacting with formal institutions can also build confidence and empowerment. 9) Evidences for impact of financial inclusion in India Chavan and Ramakumar (2002) in their study compared NGO led micro credit programme of various countries with state led poverty alleviation scheme and observed marginal improvement in members income as a result of micro credit programme. Puhazhendi and Badatya (2002), observed a significant improvements in the savings SHG members during post SHG situations. The programme also improves the borrowing pattern of SHG member households in terms of strengthening credit widening and credit deepening Bekaert et.al (2005), in their study examined a positive impact of equity market liberalization on real economic growth. Further, they also observed the positive impact of capital account liberalization and quality of financial institutions on economic growth. Sanghwan (2006) studied the extent financial inclusion across various states. He also tried to examine the role of SHG bank linkage programme in achieving financial inclusion. The study suggested a significant role of SHG led programme in achieving financial inclusion. Beside this, it also tried to examine the role of other factors like banking density, financial literacy and per capita income in achieving financial inclusion. Sharma Mandira (2007), observed that the Financial inclusion also imparts formal identity, provides access to the payments system and to savings safety net like deposit insurance. Hence it is considered to be critical for achieving inclusive growth; which itself is required for ensuring overall sustainable overall growth in the country.

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Sharma (2008), through cross country empirical study examined a close relationship between financial inclusion and development. Further, the study found a positive relation between financial inclusion and different socio-economic variables like income, inequality, literacy, physical infrastructures. Sahoo et.al (2008), had attempted to develop index of financial inclusion to examine the progress of financial inclusion and various determinants of financial inclusion using secondary data from various sources. In their study, they observed a positive impact of infrastructure development, education; self help group formation on financial inclusion both from financial widening and deepening perspectives. Based on the in Report of the committee on Financial Inclusion 2008, it is quite evident that the following outcomes have been evident due to the initiatives of Self help group linkage model in our country. Reduced the incidence of poverty through increase in income, and also enabled the poor to build assets and thereby reduce their vulnerability. Enabled households that have access to it to spend more on education than non- client households. Families participating in the programme have reported better school attendance and lower dropout rates. Empowered women by enhancing their contribution to household income, increasing the value of their assets and generally by giving them better control over decisions that affect their lives. Reduced child mortality, improved maternal health and the ability of the poor to combat disease through better nutrition, housing and health - especially among women and children. Contributed to a reduced dependency on informal money lenders and other noninstitutional sources. Facilitated significant research into the provision of financial services for the poor and helped in building capacity at the SHG level. Finally, it has offered space for different stakeholders to innovate, learn and replicate. As a result, some NGOs have added micro-insurance products to their portfolios, a couple of SHG federations have experimented with undertaking livelihood activities and grain banks have been successfully built into the SHG model in the Eastern Region. SHGs in some areas have employed local accountants for keeping their books, and IT applications are now being explored by almost all for better management information systems (MIS), accounting and internal controls. (Source: Report of the committee on Financial Inclusion in 2008) 10) Way Forward: Financial inclusion is a complex issue which cannot be solved alone by any actors in the system. Formal financial institutions such as, banks, insurance companies, mutual funds, pension companies will have to join hands with small NGO-MFIs, and technology providers to enable inclusion. The strengths of these institutions will have to be put together through sound collaborations for financial inclusion. Local and national presence organizations have to ensure that these partnerships look at both commercial and social aspects to help achieve scale, sustainability, and impact. This collaborative model will have to tackle exclusion in two main ways: By ensuring that there is a supply of

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appropriate and affordable services available to those that need them. By stimulating demand for appropriate financial products, services and advice with appropriate delivery mechanism. 11) Conclusion The present paper attempted to study the impact of self help group bank linkage programme as a model of micro banking in achieving financial inclusion in India. The various statistics available from micro finance institutions and other earlier research work done in this field show a positive and significant impact of Self Help Group bank linkage programme on financial inclusion in terms of credit deepening. Self Help group linkage model is one of the successfully operated models of Microfinance in India. Under this model, the SHGs are financed by bank without any collateral, peer group pressure is considered as collateral by the lenders. Self Help Group bank Linkage Model also helps to reduce transaction costs facilitates proper monitoring of funds by group members, economic empowerment of SHG members by collective decision making etc. In spite of the increased spread of formal banking network in the recent past, access to basic financial services are still beyond the reach of large sections of society. SHG bank linkage model exhibits the potential to provide an alternative mechanism to extend financial services to large unbanked sections of the society. References 1. Bekaert, Geert, Harvey Campbell R and Lundblad Christian (2005):Does Financial liberalization spur growth?" Journal of Financial Economics, Volume 77, July 2005, Pages 3-55. 2. Chavan pallavi and Ramakumar R., (2002): Micro-Credit and Rural Poverty: An Analysis of Empirical Evidence, Economic and Political Weekly, Vol. 37, No. 10 (Mar. 9-15, 2002), pp. 955-965. 3. Puhazhendi V. and Satyasai K.J.S. (2000), Micro-finance for Rural People: An Impact Evaluation, NABARD. 4. Report of the Internal Group to Examine Issues Relating to Rural Credit and Microfinance (2005), Reserve Bank of India. *****

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Analyzing Consumer Market And Buyer Behavior With Special Reference To Banking Sector N. Maria Das Lecturer in Economics, Dept. of Commerce Loyola Academy Degree & P.G. College, Old Alwal, Secunderabad 500 010, [A.P.]

Introduction:The aim of marketing is to meet and satisfy target customers needs and wants. The field of consumer behavior studies how individuals, groups and organizations select, buy, use and dispose of goods, services, ideas or experiences to satisfy their needs and desires. Understanding consumer behavior and knowing consumers is never simple. Customers may say one thing but do another. They may not be in touch with their deeper motivations. They may respond to influences that change their mind at the last minute. Small companies, such as a corner grocery store and huge corporations such as Whirlpool, stand to profit from understanding how and why their customers buy. Philip Kotler on marketing: -The most important thing is to forecast where customers are moving and to be in front of them. Consumer behavior is the study of when, why, how, and where people do or do not buy a product. It blends elements from psychology, sociology, social anthropology and economics. It attempts to understand the buyer decision making process, both individually and in groups. It studies characteristics of individual consumers such as demographics and behavioral variables in an attempt to understand people's wants. It also tries to assess influences on the consumer from groups such as family, friends, reference groups, and society in general. Customer behavior study is based on consumer buying behavior, with the customer playing the three distinct roles of user, payer and buyer. Relationship marketing is an influential asset for customer behavior analysis as it has a keen interest in the re-discovery of the true meaning of marketing through the re-affirmation of the importance of the customer or buyer. A greater importance is also placed on consumer retention, customer relationship management, personalization, customization and oneto-one marketing. Social functions can be categorized into social choice and welfare functions.

Each method for vote counting is assumed as social function but if Arrows possibility theorem is used for a social function, social welfare function is achieved. Some specifications of the social functions are decisiveness, neutrality, anonymity, monotonicity, unanimity, homogeneity and weak and strong Pareto optimality. No social choice function meets these requirements in an ordinal scale simultaneously. The most important characteristic of a social function is identification of the interactive effect of alternatives and creating a logical relation with the ranks. Marketing provides services in order to satisfy customers. Classification into operational and socio-psychological product motives It is more meaningful to classify product motives as operational and socio-psychological product motives. Products have a utility dimension as well as prestige dimension. A buyer can

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gain satisfaction from the function or physical utility of a product and/or the socio-psychological significance he attaches to the product. The former is the operational product motive and the latter the socio-psychological product motive. II] Patronage motives: The impulse, desires and considerations that make people buy from particular firm/shop are called patronage motives. Patronage motives can also be grouped into emotional and rational categories. Emotional patronage motives are those that persuade a buyer to buy from shops, without much logical reason behind that action. She may like the place for purely subjective reasons and may consider the shop as her favorite shopping place. However, if she selects a shop because she knows that it offers a wide selection, or the latest models, or good after-sales services, then she is influenced by rational patronage motives. But, as said earlier, in every patronage, there is a combination of the rational and emotional motives. Knowledge of product motives and patronage motives of buyers is important to marketers, as their main job is to secure the buyers loyalty and patronage. 2) Buying Habits: Buying habits can be best studied in relation to the types of products purchased. Consumer goods have been classified into 3 types: i. Convenience goods ii. Shopping goods iii. Specialty goods i] Convenience goods: Convenience goods are products, which consumers like to purchase with the least possible effort. The items are purchased frequently and their unit price is low. There is not much planning behind such purchases. Products of daily consumption like toothpaste, soap, cigarettes, etc., come under this category. As there is a recurring need of these items, the consumer would desire to get it at an easily accessible place. Marketers of such products know that they have to be made available within easy reach of customers. So, they make these products available in as many outlets as possible, ensuring maximum exposure. The consumer is not prepared to make a special shopping trip for buying such products. And he/she may readily switch to a substitute product or brand that is available in the immediate vicinity. ii] Shopping goods: Items like clothes, shoes, electrical appliances, etc., are not purchased so frequently. There is an element of planning behind their purchase. They are not necessarily purchased at an easily accessible store. The buyer is ready to make more than one shopping trip to buy such items. Unlike the purchase of convenience goods, purchase of these products involves considerable expenditure. The buyer would like to compare the prices, quality, models, etc., in a number of stores before finalizing the purchase. Such products are normally not standardized items, they are differentiated offers. These products are termed as shopping goods.

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iii] Specialty goods: Specialty goods are high-priced goods and include products like cars, luxury watches, high priced dresses, and ornaments, etc. purchases of specialty goods involve substantial investments and the periodicity of purchase is less frequent as compared to shopping goods. Specialty goods are not purchased on the basis of instant decisions. The various aspects of the purchase the cost angle, the utility angle, the prestige angle, the alternatives available and the experience of others who have purchased the product are analyzed before any decision is taken. Normally, the entire family takes part in the decision-making process for purchasing specialty goods. Since buyers of such products are prepared to make special efforts in buying them, the manufacturers need not have a wide distribution network. They normally deal through a small number of outlets, located in potential markets. They go in for selective distribution entrusting the job to selected retailers. In certain cases, they sell the product through their own showrooms. 1] CULTURAL FACTORS: - Culture, subculture and social class are particularly important in buying behavior. Culture is the fundamental determinant of a persons wants and behavior. The growing child acquires a set of values, perceptions, preferences and behaviors through his/her family and other key institutions. Each culture consists of smaller subcultures that provide more specific identification and socialization for their members. Subcultures include nationalities, religions, racial groups and geographic regions. When subcultures grow large and affluent enough, companies often design specialized marketing programs to serve them. Such programs are known as diversity marketing, a practice which was pioneered during the 1980s by large companies like Coca Cola. Diversity marketing grew out of careful marketing research, which revealed that different ethnic and demographic niches did not always respond favorably to massmarket advertising. Virtually all human societies exhibit social stratification. Stratification sometimes takes the form of a caste system where the members of different caste are reared for certain roles and cannot change their caste membership. More frequently it takes the form of social classes, relatively homogenous and enduring divisions in a society, where are hierarchically ordered and whose members share similar values, interests, and behavior. 2] SOCIAL FACTORS: - In addition to cultural factors a consumers behavior is influenced by such social factors as reference groups, family and social roles and statuses. a) Reference groups: A person reference group consists of all the groups that have a direct or indirect influence on the person attitudes or behavior. Groups having a direct influence on a person are called membership groups. Some membership groups are primary groups, such as family, friends, neighbors and co-workers, with whom the person interacts fairly continuously and informally. People also belong to secondary groups, such as religious, professional, and trade-union groups, which tend to be more formal and require less continuous interactions. b) Family: The family is the most important consumer-buying organization in society, and family members constitute the most influential primary reference group. The family has been researched exclusively. We can distinguish between two families in the buyers life. The family of orientation consists of parents and siblings. From parents a person acquires an orientation towards religion, politics and economics and a sense of personal ambition, self-worth and love. Even if buyer no longer interacts very much with his/her parents, their influence on the buyers behavior can be significant. In countries where parents live with grown children, their influence

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can be substantial. A more direct influence on every day buying behavior is the family of procreation namely, once spouse and children. c) Roles and statuses: A person participates in many groups family, clubs, and organizations. The persons position in each group can be defined in terms of roles and status. A role consists of the activities a person is expected to perform. Each role carries a status. A Supreme Court justice has more status than a sales manager, and a sales manager has more status than an office clerk. People chose product that communicate their role and status in society. Company presidents often drive Mercedes, wear expensive suits and drink Chives Regal Scotch. Marketers must be aware of the status-symbols potential of products and brands. 3] PERSONAL FACTORS:A buyers decisions are also influenced by personal characteristics. These include the buyers age and stage in life cycle, occupation, economic circumstances, lifestyle and personality and self-concept. a) Age and stage in life cycle: - People buy different goods and services over a lifetime. They eat baby food in the early years, most foods in the growing and mature years, and special diet in the later years. Taste in clothes, furniture and recreation is also age related. b) Occupation and economic circumstances: - Occupation also influences consumption patterns. A blue-collar worker will buy work clothes, work shoes and lunch boxes. A company president will buy expensive suits, air travel and country club membership. Marketers try to identify the occupational groups that have above-average interest in their products and services. A company can even tailor its products for certain occupational groups: Computer software companies, for example- design different products for brand managers, engineers, lawyers and physicians. c) Lifestyle: - People from the same subculture, social class and occupation may lead quiet different lifestyle. A lifestyle is a persons pattern of living in the world as expressed in activities, interests and opinions. Lifestyle portrays the whole person interacting with his/her environment. Marketers search for relationship between their products and lifestyle groups. For example, a computer manufacturer might find that most computer buyers are achievementoriented. The marketer may then aim the brand more clearly at the achiever lifestyle. d) Personality and self-concept: - Each person has personality characteristics that influence his/her buying behavior. By personality, we mean a set of distinguishing human psychological traits that lead to relatively consistent and enduring responses to environmental stimuli. Personality is often described in terms of such traits as self-confidence, dominance, autonomy, difference, sociability, defensiveness and adaptability. Personality can be useful variable in analyzing consumer brand choices. The idea is that brands also have personalities and that consumers are likely to chose brands whose personality match their own. 4] PSYCHOLOGICAL FACTORS:A persons buying choices are influenced by four major psychological factors motivation, perception, learning, beliefs and attitudes.

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a) Motivation: A person has many needs at any given time. Some needs are biogenic; they arise from physiological states of tension such as hunger, thirst or discomfort. Other needs are psychogenic; they arise from psychological states of tension such as the need for recognition, esteem, or belonging. A need become s a motive when it is aroused to a sufficient level of intensity. A motive is a need that is sufficiently pressing to drive the person to act. b) Perception: A motivated person is ready to act. How the motivated person actually acts is influenced by his/her perception of the situation. Perception is the process by which an individual selects, organizes and interprets information inputs to create a meaningful picture of the world. Perception depends not only on the physical stimuli but also on the stimulis relation to the surrounding field and on conditions within the individual. The key point is that perceptions can vary widely among individual exposed to the same reality.

MASLOWS HIERARCHY OF NEEDS c) Learning: When people act, they learn. Learning involves changes in an individuals behavior arising from experience. Most human behavior is learned. Learning theorists believe that learning is produced through the interplay of drives, stimuli, cues, response and reinforcement. Learning theory teaches marketers that they can build up demand for a product by associating it with strong drives, using motivation cues and providing positive reinforcement. A new company can enter the market by appealing to the same drives that competitors use and by providing similar cue configurations, because buyers are more likely to transfer loyalty to similar brands or the company might design its brand to appeal to a different set of drives and offer strong cue inducements to switch. d) Beliefs and attitudes: Through doing and learning people acquire beliefs and attitudes. These in turn influence buying behavior. A belief is a descriptive thought that a person holds about something. Peoples beliefs about a product or brand influence their buying decision. CONCLUSION To understand how consumers actually make buying decisions, marketer must identify who makes and has input into the buying decision; people can be initiator, influencer, decider, buyer or users and different marketing campaigns might be targeted to each type of person. Marketers must also examine buyers levels of involvement and the number of brands available to determine whether consumers are engaging in complex buying behavior, dissonance-reducing buying behavior, habitual buying behavior, or variety- seeking buying behavior. Consumer behavior is influenced by four factors: cultural [culture, subculture, and social classes]; social [reference groups, family, and social roles and statuses]; personal [age, stage in the life cycle, occupation, economic circumstances, lifestyle, personality, and self-concept]; and psychological [motivation, perception, learning, beliefs and attitudes]. Research into all these factors can provide clues to reach and serve consumers more effectively. *****

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E - BANKING SCENARIO IN INDIA A CASE STUDY OF HDFC A. Kalpana and 2P.Krishnama Chary 1 Asst. Professor, Commerce & Business Management, Kakatiya Institute of Technology & Science, Warangal. (A.P) 2 Professor, Department of Commerce & Business Management, Kakatiya University, Warangal. (A.P)
1

INTRODUCTION: E Banking is the banking of the era. Making banking products and services available to wholesale and retail customers, through an electronic distribution channel is called e banking. E banking is the outcome of technological innovations and competition. In fact, banks have been using electronic and telecommunication networks for delivering a wide range of value added products and services. The devices have been telephone, personal computers including Automated Teller Machines (ATM). The delivery channels have been direct dial up connections, private and public networks. To this newer editions of e banking are being added e.g. Internet banking and Mobile banking. The use of ATMs lead to the concept of any where and any time banking. Through the use of ATM cards, one can operate his bank account to withdraw money from any of the banks ATM installed or available at the nearest site. This had broken down the time and space barriers. The new banks are providing some of the services exclusively through ATMs. The growing popularity of personal computers, easy access to Internet and World Wide Web (www), has increased the use of Internet by banks as a channel for receiving instructions and also delivering their products and services to the customers. This is generally referred to as Internet Banking or I- Banking or Net banking. This is one of the newer forms of e- banking which is gaining popularity and its other popular name is online banking The main advantages of E-banking are: The operating cost per unit services is lower for the banks. It offers convenience to customers as they are not required to go to the banks premises. There is very low incidence of errors. The customer can obtain funds at any time from ATM machines. The credit cards and debit cards enables the Customers to obtain discounts from retail outlets. The customer can easily transfer the funds from one place to another place electronically. The Indian scenario: Internet banking has gained wide acceptance internationally. In India also the things are changing fast. India is on the threshold of a major banking revolution with the introduction of Net Banking. In the year 2002, only a dozen or so banks are providing services at different levels. However, almost double those numbers are ready to make entry. Others may be compelled to follow. Expanding business: At present the number of Internet users in the country is around a million. However, this is likely to multiply by 8 to 9 times in a year or so. This will also expand the use of I-banking. The expansion is likely to be exponential. For example in 1998 only 1% of Internet users used it for banking services. However by 2000, the percentage of users went up to 17.

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The trend is likely to catch up as banks are also likely to discourage the physical visits by customers by offering incentives. In any case, this will be the preferred mode for non-resident Indians or others who want to operate or use their accounts, while sitting in an arm-chair. Decreasing costs: E-banking channels have reduced the transaction costs significantly. For example, a transaction at the Teller costs Rs.1, than the ATM transaction cost paise 45 only, a tele banking transaction cost paise 35 only and a debit card transaction cost paise 20 only. In the case of net banking the cost of paise 10 only i.e. only one - tenth of the cost of transaction at teller. Thus the banking through e-banking channels is going to be very less. Future scenario in India: The Indian banks lag far behind the international banks in providing online banking. In fact, this is not possible without creating sufficient infrastructure or presence of sufficient number of users. The experience of ICICI Bank Ltd. And HDFC Bank Ltd. Shows that the number of transactions carried out on the Net are very limited. Some of the reasons and problems being faced are as follows: 1. Although security options in e-banking are available, there is no certification of the appropriate Certification Authority. 2. The available communication bandwidth available is not enough to meet requirement. 3. Most of the banks lack uninterrupted power supply, which is essential for such services. 4. The interact details for such services are one-sided, with banks enjoying supremacy. this does not give confidence to the customers (ATM & tele banking get preference). 5. In Internet geographical boundaries are eliminated. Cyber crimes are difficult to control. There is urgent need to have appropriate cyber laws. However, despite these hindrances, it is becoming popular and certain steps are being undertaken to promote E banking. a. Department of telecommunication is making additional bandwidth available. b. Steps have been initiated to appoint Certification Authority. c. As Chief Vigilance Commissioner is insisting on more computerization, and Credit Information Bureau is proposed to be set up, this will help I-banking. d. The RBI has put the real-time funds transfer through the Real Time Gross Settlement (RTGS) system in place. The access will be through only one specified gateway. This will ensure rigorous access control. e. Various levels of security are being ensured by RBI. f. Dematerialization of share has made significant progress, this will help I-banking. g. The payment gateways being created by ICICI bank and HDFC bank will give boot to I-banking. h. The RBI has set up a group to examine various issues regarding i-banking and technology. This will help in creating the right kind of infrastructure. i. In fact certain things have already been initiated.

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E-BANKING AT HDFC BANK: All HDFC Bank account holders are offered net banking facility without charging a single penny. It is done to ensure HDFC Bank net banking is of any help for such individuals to enjoy error free and secure net banking HDFC that are the highlights of such banking operations. An individual can be one of the smart account holders to keep control over the bank through HDFC bank net banking facilities. It is true that net banking HDFC helps one understand many facets of HDFC bank and global banking experience. All third party transfers, fund withdrawals and checkbook requests etc., are major advantages of HDFC net banking that is an important feature of net banking HDFC. Every now, and then, newer options are introduced in hdfc bank net banking which keeps pleasure for every HDFC bank account holder to avail benefits of the value of HDFC bank at par from the rest. It is of HDFC net banking for secure banking services. Much noticeable advancement in HDFC NET banking is the only option to choose for banking. Regular improvements are done in HDFC net banking that is of great value though it is true that HDFC bank net banking is a secured banking option unlike others. Mostly people assume that net banking of HDFC is a pleasurable experience and bank account holders know it well that HDFC net banking is not only secure but also easily accessible. That is what creates a big difference in HDFC bank net banking that one can think of in net banking HDFC only unlike the rest. Additional features that keep HDFC net banking secure are what attract people towards HDFC bank. LAUNCH OF E-BANKING IN HDFC:In 1998: HDFC Bank has become the first bank in India to link up its Automated Teller Machine (ATM) network with all the three major payment systems World-wide. It is the first bank in the Asia-Pacific region to connect the American Express (Amex) payment system. HDFC Bank is expanding its ATM network to connect to American Express interchange based in phoenix, Arizona, USA. With this connectivity, HDFC bank proposed to launch tele-banking. For the first time in June, in Mumbai at its Chandiveli branch. The bank will also provide phone-banking facility in Bangalore.

In 2000: Hutchison Max Telecom and HDFC Bank introduced the countrys Firstever mobile-banking services in the city. HDFC Bank is also launching an online electronic banking solution called E-net which will allow corporate to access their over the net and carry out trade related transactions and cash management functions. Bank plans to extend its mobile phone banking when it introduces its Internet on-line trading in July. In 2002: BPL Mobile has tied up with HDFC Bank to offer Internet banking through the mobile phone. HDFC Bank has tied up with about 25 equity brokerages for enabling third party transfer of funds and securities through its business-to-business portal e-Net. HDFC Bank and Cosmos Bank launched a co-branded ATM card. The Bank has opened four ATM outlets in Bangalore at Coles Road, RT Nagar, Rajaji Nagar and jaya Nagar on March 26.

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In 2003: HDFC Bank launches Indias first mobile payment solution. It has also launched an online bill payment facility for its customers who are also subscribers to Tata Teleservices. The following are the services for the e banking provided by HDFC: 1. Net banking on Mobile, 2. Internet banking, 3. Credit Cards Online, 4. Phone Banking, 5. Insta Alerts, 6. Mobile Banking, 7. ATM, 8. Email Statements and 9. Branch Network 1. NET BANKING ON MOBILE: Customers dont need a laptop or PC to access net banking anymore, one can do it on their mobile phone through Net banking on Mobile. On customer Internet enabled mobile handset, can conduct transactions on a WAP site specially configured for mobile phones. Net banking on Mobile is best viewed on the following mobile platforms and higher versions: Symbian (S60 5th Edition OS), BlackBerry (OS 5.0), Android (OS 2.1) I Phone (I Phone 3G/3GS/4) and Windows (OS 5.0) 2. INTERNET BANKING: Internet Banking lets to handle many banking transactions via personal computer. For instance, computer to view an account balance, request transfers between accounts, and pay bills electronically. Internet banking system and method in which a personal computer is connected by a network service provider directly to a host computer system of a bank such that customer service requests can be processed automatically without need for intervention by customer service representatives. The system is capable of distinguishing between those customer service requests which are capable of automated fulfillment and those requests which require handling by a customer service representative. The system is integrated with the host computer system of the bank so that the remote banking customer can access other automated services of the bank. The method of the invention includes the steps of inputting a customer banking requests to a host computer banking request received, automatic logging of the service request, comparing the receive request to a stored table of request types. Save time on cash withdrawal transactions by pre-setting preferred language/account/ amount. One can be assured of complete privacy when use HDFC Banks Net banking facility. To maximize the security and confidentiality of customers requests, customers password is not accessible to anyone, not even to bank employees. When customer is log-in to net banking, his/her last date and time of log-in will be displayed so that you can make sure that nobody has accessed your account after that time. Net banking saves time and provides the convenience of transacting from home/office various benefits of using net banking include free stop statement Request, Bill Pay facility, & preferred rates for Demand Draft. 3. CREDIT CARDS ON LINE: HDFC Bank Net banking service is now available for Credit Cards also. Using HDFC Bank, Credit Card has become more convenient and time saving. One can access Credit Card account form home or office even while travelling. With Net banking customer can view card account information and do much more just at the click of a button. Currently the following credit cards Net features are available. Account Information, Unbilled Transactions, Credit Card Statement, Download Card Statement (up to last 6 months), Autos pay Register (Only for HDFC Bank account holders), Auto pay Deregister, Statement on E-mail, Credit Card ATM PIN, Register New Card, Deregister Card and Credit card payment

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(only for HDFC bank account holders). This service is offered completely free and customer can be assured of complete privacy when customer uses HDFC Net banking facility.

4. PHONE BANKING: Phone Banking services are a combination of IVR and Agent offering, depending on the type of transaction. For all transactions that cannot be completed on the IVR such as reporting loss of cards, logging complaints, requests & queries, phone Banker assisted services are available. Following services via Phone Banking can be availed: Customer can check account balance Get up to the second details of savings or current Accounts and Fixed Deposits. One can also get the details of the last 5 transactions on account or have a mini statement of last 15 transactions faxed across. Enquire on the status Customer can use Phone Banking to check on the status of issued or deposited from anywhere in India. Order a Book/ Account Statement - Just cal Phone Banking and get your Book or latest Account Statement delivered at doorstep. Stop Payment Stop payment of a single or a series of for 24hours a day. Loan related queries Customer can get details of the outstanding loan amount, Enquire about loan account, request for an interest for an interest certificate and repayment schedule etc. 5. INSTA ALERTS : Customer can get regular updates on bank of account on his Mobile Phone or Email Id. Registering for Insta Alert service and receiving updates of account as and when the select transaction happens all the without visiting the branch or ATM. Customer can register for any or all the following alerts. * Debit transactions greater than Rs. 5, 000/- Rs.10, 000/Rs 20,000/Rs. 50,000 * Credit in account greater than Rs. 5,000/Rs. 10,000/ Rs. 20,000/Rs. 50,000 * Account Balance below Rs. 5,000/Rs. 10,000/ Rs. 20,000/ Rs. 50,000 * Weekly account balance, Salary Credits, Utility bill payment due Alert. 6. MOBILE BANKING: Mobile Banking is a service that allows doing banking transactions on mobile phone without making a call using the SMS facility. Mobile Banking works on the Text Messaging Facility also called the SMS that is available on mobile phones. This facility allows sending a short text message from mobile phone instead of making a phone call.

Following are the eligibility criteria for availing I- Mobile banking services: Customer needs to have a mobile phone connection. Customer need to have a Savings/Current/Fixed Deposit Account with HDFC Bank to be able to use this facility. This service is brought FREE from HDFC Bank. Also, since customers are using the text messaging service from mobile phone, not incur any airtime charges in making a phone call from mobile phone. However, the Cellular Service provider may levy a nominal Value Added Services (VAS) charge for the SMS facility. No need to pre-register the beneficiary. Transfer of funds is real time i.e., the money is created in beneficiarys account almost instantaneously.

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7. AUTOMATED TELLER MACHINES (ATM): An unattended electronic machine in a public place, connected to data system and related equipment and activated by a customer to obtain cash withdrawals and other banking services. Also called automatic teller machine, also called money machine. An aut0kated teller machine or automatic teller machine (ATM) is an electronic computerized telecommunications device that allows a financial institutions customers to directly use a secure method of communication to access their bank accounts, order or make cash withdrawals (or cash advances using a credit card) and check their account balances without the need for a human bank teller. Many ATMs also allow people to deposit cash, transfer money between their bank accounts, top up their mobile phones, pre-paid accounts or even buy postage stamps. On most modern ATMs, the customer identifies him or herself by inserting a plastic card with a magnetic stripe or a plastic smartcard with a chip that contains his or her account number. With over 6,838 ATMs present across India, customer can withdraw cash and do much more at HDFC Bank ATM. The sophisticated, computerized network gives flexibility of accessing account. For current account debit card holders balance enquiry is free and cash withdrawal is Rs. 20 per transaction. And for salary and saving account debit card holders balance enquiry is free.In case of cash withdrawal there will be 5 free cash withdrawal transactions per month at Non-HDFC Bank ATMs. And additional transactions done at Non-HDFC Bank ATMs are Rs. 20 per transaction; the revised charges are applicable effective from 15th October 2009 and are inclusive of service tax there is no charge for using the card at a merchant location. However, at petrol pumps and railway stations transactions charges are levied as per Industry practice. The customer can make payment of HDFC Bank Credit Card dues using the ATM. The primary account of Debit/ATM card will be debited. Save time on cash withdrawal transactions by pre-setting preferred language/account/amount. 8. EMAIL-STATEMENTS: HDFC Bank introduces Email statements for all its Savings & Current account holders. Customer can now receive statements via email without any delays. Customers can also have the option to maintain the statement on email, print it or save it on a CD. Essentially, one will receive the same information would normally receive by mail, but now, one has to click the button. Benefits of E mail Statements: A customer having savings account will get free monthly statements. One can have a current account and can opt for daily/weekly/monthly Email statements. Physical statements will be discounted if opt for Email statements. Email statements will follow a staggered cycle, based on the date of account opening. Even if a customer is registered for hold mails, he can opt for Email Statements. Customers covered under Imperia, Preferred and Classic programmes will receive combined Email statement for all accounts (across Savings, Current and Fixed Deposits) linked to the primary Customer Id. 9. BRANCH NETWORK: A customer can open an account at any branch nearest to his residence or office and access it at any branch in the city or anywhere in the

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country. The sophisticated computerized network gives the flexibility of accessing savings or current account from any of HDFC over 2,150 branches and over 6,838 ATMs across India.

REFERENCES: 1. www.hdfc.com 2. Financial Institutions and Markets, By Shashi K. Gupta, Nisha Aggarwal & Neeti Gupta, Kalyani Publishers.2004 Edition. 3. Financial Services in India, By V.A. Avadhani. Himalaya Publishing House, 2010 Edition. 4. E-Commerce, Concepts, Models, Strategies. C.S.V. Murthy, Himalaya Publishing House.2009 Edition. 5. E Banking management issues, solutions and strategies By Mahamood shah & Steve Clarke. Published by I.G.I Global. 6. Banking & Finance on the Internet by John Wiley & sons, ISBN-0471292192 7. E-banking in India - Challenges and Opportunities, By R.K. Uppal & Rimpi Jatana, 2007 Edition. 8. https:# net banking hdfcbank.com 9. m.hdfcbank.com,

*****

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E-BANKING & E-INSURANCE R.GEETHA DEPARTMENT OF BUSINESS MANAGEMENT, SRI VASAVI COLLEGE, ERODE INTRODUCTION Online banking or Internet banking allows customers to conduct banking, financial and insurance transactions on a secure and protected website operated by their retail or virtual bank. Normally the customer would have to make a trip to the bank to do these transactions, but with the advent of internet banking the ease of account operation for customers has gone up. All the customer requires is a PC with an internet connection and internet banking login id and password to use this facility. MAJOR FACTORS OF E-BANKING: Some of the major factors that have driven the banks strategy for Internet Banking include: 1. Competitive Pressure. 2. Cost Efficiencies (Cost Reduction). 3. Expand customer contact through increased geographical reach & lower cost delivery channels. 4. Branding. 5. Customer Demographics & Loyalty. SERVICES RENDERED BY E-BANKING : Some of the features which can be availed through E-Banking around the globe are: Banking: Fund Transfer, Bill Payment, Account Enquiry, Time Deposit, Foreign Currency/Gold, Currency Switching, e-Statement/e-Advice. Investment: Securities, IPO, Investment Fund, Equity Linked Investment, Forex/Gold Margin, Capital Protected Investment Deposits, Maxi Interest Deposits, e-Invest Advice. Insurance: Travelsure, Home Care, Full-time / Part-time Domestic Helper, Hospital Cash, Personal Accident, Credit Care. Wealth Management: Financial Planning, Investment Portfolio Management. Personal Credit: Instalment Loan, Revolving Loan, Tax Comforter, Overdraft Facility. Mortgage: Valuation, Mortgage Loan. Credit Card: Credit Card Application, Cash Dollars Gift Parade, Low Interest/Instalment Offer, Card Security Services. ADVANTAGES OF ONLINE BANK TRANSFERS Rapid payment The merchant is informed of a successful payment the second it is concluded, and can immediately send the goods or grant access. Secure payment method Only banks and other reliable firms, which are validated by an external government authority (in Germany, the TV), can offer online bank transfer services. No payment reversals

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100% security of payment. An online bank transfer can not be reversed.. Widely available Some 99% of all customers with an online banking account can pay by online bank transfer. Secure PIN/TAN [Personal Identification Number / Transaction Number] processing Customers are familiar with the PIN/TAN process and trust it. Rapid delivery Goods can be shipped immediately. The merchant need not wait two or three business days, because the payment is guaranteed. Ideally suited for impulse purchases. Reasonable Charges Costs run from 1% to 2,5% of the billing amount much cheaper than credit cards. Single payment Not appropriate for recurring payments. The ideal internet payment method for onetime payments in e-commerce.

In this basic model, we have 3 pairs of interactions between the bank and the customer. The basic model is more or less the same for all services or functions of Banking, Financial Services and Insurance. Only the number of transactions would vary based on the complexity of the service or function being used. E-INSURANCE INTRODUCTION TO E-INSURANCE E-insurance can be broadly defined as the application of Internet and related information technologies (IT) to the production and distribution of insurance services. In a narrower sense, it can be defined as the provision of an insurance cover whereby an insurance policy is solicited, offered, negotiated and contracted online. While payment, policy delivery and claims processing

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may all be done online as well, technical and regulatory constraints may not allow these elements to be subjected to full e-commerce application in certain countries. The anticipated efficiency effect of e-insurance is twofold:E-insurance should reduce internal administration and management costs by automating business processes, permitting real-time networking of company departments, and improving management information. It should reduce the commissions paid to intermediaries since it can be sold directly to clients. For insurance sold to individuals, agents typically receive a commission of 10 to 15 percent for non-life policy sales. Insurance companies offering services through Internet can be classified into the following categories Web Sites Almost every insurance company has homepage providing information about the company and products. However, these homepages are little more than passive online versions of the companys brochures. Product Portals Portals are sites that provide a collection of links to sites of interest. Point-of-Sale Portals Unlike most other commodities, the sale of insurance products is initiated by the sellers. Certain sites exploit this approach by offering insurance products while selling insurable goods such as cars or while providing information on health or college education. Intermediate Brokers Brokers are intermediate sites that do not sell insurance products directly but assist clients in matching their requirements with the policies offered by insurance companies. Reverse Auction In this case, the client is usually an organization interested in group insurance. The client announces its requirements and selects the best offer made by an insurance company. Aggregators Aggregators are sites that compare quotes from different insurance companies. The service is often supplemented with general information on products as well. SCOPE OF E-INSURANCE As 22% of insurable population is covered by the insurance companies there is huge scope of insurance in India Globalisation International companies are entering into the market to acquire market share. New Entrants In the financial services industry the major entry barrier is distribution, which the Internet can overcome. Changing Needs Of Consumers The Internet may lead to products becoming more customer-centric CHALLENGES FACED BY E-INSURANCE The obstacles which are faced by e-insurance is:

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Resistance to change Lack of technology Complex Insurance cycle Unique requirements among states and jurisdictions CONCLUSION E-banking has its own advantages and disadvantages. The main advantage of implementing e-banking is an increase in customer satisfaction. This is because customers do not have to go to the branches in order to access their accounts, make withdrawals and deposits. They can also check it anytime of the day, a feature that physical branches do not offer thus creating a good relationship with the bank and the customer. E-banking is also advantageous not only for customer but also for the bank because it reduces costs in setting up a branch and the resources to process transactions. Insurance industry is gearing up for e-insurance. To succeed as e-insurer, it has to be cheaper and better than the traditional offline option; Insurance is an information intensive enterprise and Is thus suitable for e-commerce. Adopting e-insurance is an incremental process, not an event, and should stem from a fundamental Need to reengineer and modernize business process Websites functionality requires a proper definition of Customer and product profiles Lot of work has to be done Power of internet should be harnessed to improve Consumer protection and education and awareness Building It appears that insurers are unfortunately not making the best out of the web. *****

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IMPACT OF ECONOMIC MELT DOWN ON UNEMPOLYMENT S.Kalaiselvi Asst. Prof J.H.A Agarsen college Introduction: With the recent economic downturn, unemployment is an unavoidable fact of life for many people through out world. The unemployment rate has remained near or above 9 percent since mid-2009, which is much longer than other spikes in unemployment associated with a recession. The recession caused the initial decline in unemployment, but there are economic forces at work that are keeping it high. One problem is that, while some employers are hiring and people are looking for work, the unemployed population's skills don't always match what many employers are looking for. This is especially true in newer industries, like information technology and green energy There are job openings out there, but employers still aren't hiring at the rate they were pre-recession, and there are two major factors at play. Computer technology has make it easier to produce more with fewer workers, and instead of hiring, many companies are updating equipment to make their operations more efficient rather than hiring more people. The country in which is having large number of skill lab ours is affecting more in the economic meltdown. Objectives: 1.To increase the gainful employment to the urban poor unemployment and under employed. 2.To improve the Self employment ventures and provision of wage employment. 3..To contribute towards formulating and evaluating the Long tem and short term policies Impact on Developing countries: In the labour market, the current crisis has affected men more than women. The construction, financial services and automotive sectors, all of which traditionally employ more men, have been hit especially hard. Between late 2002 and early 2007, the unemployment gender gap was stable at around 1.3 percentage points, with a higher rate for women. But in the last two years, most markedly since the first quarter of 2008, the rates have converged. In the first quarter of 2009, the male unemployment rate has moved to only 0.3 percentage points below the female rate. Unemployment has been rising sharply in the European Union (EU) since March 2008 as a result of the global economic crisis. The increase is felt in every Member State, although the severity varies widely between countries and groups. Men are clearly affected more than women. Young people also appear to be more vulnerable. All of the crazy money printing that the Federal Reserve and other central banks have been doing is putting inflationary pressure on agricultural commodities, oil and precious metals. Some nations are now actually hoarding food, and in other nations rising prices have sparked food riots. The price of oil has been moving back towards $100 a barrel, and if it stays at a high level for an extended period of time that is going to have very serious consequences for the global economy.

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In addition, the growing sovereign debt crisis could erupt again at any time. Half a dozen nations in Europe are on the verge of insolvency, Japan's national debt is now well over 200 percent of GDP, and the global financial system is growing increasingly concerned about the exploding national debt of the United States. The truth is that the entire world financial system is a house of cards balanced on a razor's edge and it could come down at any time. The unemployment rate is an important indicator with both social and economic dimensions. From an economic perspective, unemployment indicates unused available labour. Rising unemployment may also result in loss of income for individuals and increased pressure on government spending on social benefits. The unemployment rate according to the International Labour Organization (ILO) definition is the most widely used labour market indicator because of its international comparability and relatively timely availability. Besides the unemployment rate, indicators such as employment and job vacancies also give useful insight into labour market developments. The time series on unemployment are used by the EU and other public institutions and the media as an economic indicator. Banks use the data for business cycle analysis. Finally, the general public is generally interested in changes in unemployment. The unemployment rate is considered a lagging indicator. When there is an economic downturn, it usually takes several months before the unemployment rate begins to rise. Once the economy starts picking up again, employers are usually still cautious and it takes several more months for the unemployment rate to start falling. Reason for economic meltdown: The Price of Cotton has more than doubled over the past year this will affecting the manufacturing the clothing with resulting of the compulsory layoff for the laboures The Commodity Price of Essential Commodity has doubled since 2009

The UN projects that thhe global price of food will increase by another 30% by the end of 2011.In the UK , the official rate of inflation is now twice as high as the target rate of inflation . Today 46% of all American carry a credit card balance from month to month

How will the economic melt down affect the people lives Relatively easy availability of credit was to some extent a substitute for weak wage growth over the recent period. Workers will be forced to look more closely at their wages, and increases in them, to compensate for rises in the cost of living

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To the extent that inflation remains high, prices for Luxury goods as well as necessities.It is prices for the later, particularly food and fuel, that have driven inflation recently. . Current expectation It is likely that both absolute and relative poverty (inequality) will increase. For instance, as far as absolute poverty is concerned, the International Labour Organization (ILO) predicts that unemployment could rise by 20 million across the world and that the number of people working for less than the US$2 per day poverty line will rise by 100 million.15 According to reports, the World Bank expects 40 million people to fall into poverty as a direct result of the economic meltdown. Impact of Indias Economy: Economic growth declined to 7.3% in 2008. down from 9.3% in 2007. CurrentGovernment estimates are for the approximate 6.5% to 7.5% growth in 2009, but the IMF forecast is for growth to fall to 5.1%. Demand Labour has fallan Rising umempolyment and underemployed. Downward pressure on wages.

Impact on Rural Employment Although the main transmission channels have primarily affected urban labour markets, the consequent effect on the rural economy, employment and household income cannot be underestimated. Jobless in export manufacturing often affect the rural to urban migrates and their income support to their rural families. Workers who are not able to find new urban employment whether in formal or informal sector seek rural work opportunities. Process of reverse migration, this shift will often coincide with reduced wages and household incomes. Rising Unempolyment: Rising Unempolyment in the Asia-Pacific region Low estimates:7.2 million additional unemployed High estimates:23.3 million additional unemployed Over 2009 and 2010, an estimated 20.3 million additional jobs will be needed to absorb Indias growing labour force.

Policy Recommendation:

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Employment and Income should be Central forms of the governments fiscal stimulates packages. Give priority to public spending programmes that have high multiplier effect on employment Spead public spending and creation broadly (including education, health, pension system) Target credit constrained businesses(including SMES), consumers (poor and low income household) Conclusion I conclude that the government was ill prepared for the crisis, and its inconsistent response added to the uncertainty and panic in the financial markets. As part our charge , it was appropriate to review government action taken in response to the developing crisis, not just these policies or action the preceded it to determine if any of these response contribute to or exacerbated crisis. There was a systematic breakdown in accountability and ethics. The integrity of our financial markets and publics trust in those markets are essential to the economic well being of our nation. *****

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E-HRM Technologies Vickram & 2A. Xavier Mahimairaj 1&2 Assistant Professor, Department of Commerce, Loyola College, Chennai. INTRODUCTION Competitive business environments have compelled the organizations to think speedily to innovate and excel for their survival. Technology advancement is one of the powerful driving forces. It has reshaped the way we communicate, live, work and also the way a business is conducted. Corporations need to shift from physical technology to information technology, from capital centered economy to human centered economy, and further from conflict to cooperative working relationships. Since many years now, information technology seems to be affecting individuals and organizations communication and behaviors. The change in Information Technology is faster than any other processes in the organization. One of the major hurdles which the HR department needs to cross, is the changing technological environment. The IT possibilities for HRM are endless; in principal all HR processes can be supported by IT. Computers have simplified the task of analyzing vast amounts of data and they can be invaluable aids in HR management, from payroll processing to record retention. With computer hardware, software and databases, organization can keep records and information better as well as retrieve them with greater ease. E-HRM is the relatively new term for this IT supported HRM, especially through the use of web technology. E-HRM is the new field of technology that is widely spreading in organizations around the world. It aims at transforming the HR functions into one that is paperless, more flexible and resource efficient. With the state of IT, HRM has become more effective through the use of e-hrm technologies. E-HRM has the potential to change the way traditional HRM functions are performed. For e.g. in the analysis and design of work, employees in geographically dispersed locations can work together in virtual teams using videos, e-mail etc. Under recruitment function, job openings can be posted online, and candidates can apply for jobs online. On compensation and benefits issues, e-hrm will make it easy for employees to review salary and bonus information and seek information about bonus plans. OBJECTIVE To study what is e-hrm (its objectives, scope, limitations, function, benefits, goals, outcomes and consequences) and how e-hrm is shaping an organization in a technology driven environment. IMPORTANCE As technology is playing an important role in every business, so it is important for every business organization to study why e-hrm is important and what all benefits they will get in implementing e-hrm. REVIEW OF LITERATURE Literature review examines recent research studies, company data, or industry reports that act as a basis for the proposed study. According to Biswanath Ghosh [2002], in an organization the most valuable input is the human element. The success or failure of an organization depends to a large extent on the
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persons who manage and run the organization. In business the greatest asset is the human resource of the enterprise and not the plant, equipment or the big buildings it owns. There was a time when manpower was considered as a cost factor but not it is recognized as an investment. The e-HRM can range from basic personnel records to sophisticated networks of sub-systems with definite purposes. Today most of these will be computer systems. The manpower information system can provide necessary information in a form which can be integrated with any other business data. With most data base systems, there are facilities to pull out any of the data and present them in the required form. In the view of Michael Armstrong [2003] the e-HR provides the information required to manage HR processes. These may be core employee database and payroll systems but can be extended to include such systems as recruitment, e-learning, performance management and reward. The system may be web-based, enabling access to be remote or online and at any time. The information provided by the e-HR process can be communicated across organizations. If posts static data such as information on HR policies and communications about employer facilities such as learning opportunities and flexible benefits. It can include links that enable managers and other employees to interface directly with HR applications and make changes or enquiries. RESEARCH METHODOLOGY Research Design: Descriptive study. Research Tools: Secondary data. Data collected from the various websites, journals, and magazines. DISCUSSION EVALUATION OF E-HRM The evaluation of the E-HRM department is based on six driving forces. These forces need to be harnessed and responded to as companies approach the 21st century. The following six forces must be addressed by HRM departments that want to continuously increase their value while reducing costs. Information technology; HRM professionals are facing a digital future. The rapid growth in the field of computer hardware, software, networking, and telephony services is absolutely essential to the virtual HRM movement. It is not accident that virtual HRM departments will become the norm in the near future. This is especially true with the increase sophistication and lower costs of information age technology and automated processes. Processes reengineering; strategic HRM managers are constantly looking for ways to streamline and improve core business processes to make them efficient. All business processes especially those in the HRM department can be reengineered and improved through the skillful application of information technology. High-speed management; to be competitive, all companies must work smarter and faster. Virtual HRM is definitely a smarter and quicker form of service delivery than traditional HRM. Networked organizations; virtual HRM departments are more likely to emerge in networked organizations than in traditional and bureaucratic companies. The proliferation of information technology such as local area networks, e-mail, and corporate intranets are the trademarks of a flatter networked company. These new-wave organizations offer state-of-the-art technology and information sharing to empower all levels of personals.

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Knowledge workers; the 21st century organization will compete on strategic information and knowledge. These learning organizations will be staffed with self-directed and computer savvy, knowledge workers. These workers will excel at using information to quickly identify and capture lucrative business opportunities while also diligently identifying and resolving costly problems. Globalization; to complete successfully in the 21st century, nearly all companies must develop a global business strategy. This means that HRM departments must be capable of providing services to their employees anywhere on earth. Obviously, a technologyassisted HRM department that is skilled at traversing the information superhighway, is in the best position to support a globalize workforce.

In summary, all of the aforementioned forces are designed to get rid of outmode organizational processes, procedures, layers and boundaries that add cost and form barriers between the HRM department and the company employees. Moreover, all of these forces reflect the enormous impact that information technology has, and will continue to have, on every process and procedure in the HRM department. Successful information of a virtual HRM department will clearly increase a companys competitive advantage. OBJECTIVES E-HRM is designed to achieve the following objectives: To offer an adequate, comprehensive and on-going information system about people and jobs at a reasonable cost; To provide support for future planning and also for policy formulations; To facilitate monitoring of human resources demand and supply imbalances; To automate employee related information; To enable faster response to employee related services and faster HR related decisions and; To offer data security and personal privacy. SCOPE OF E-HRM A decisive step towards a paperless office; Higher speed of retrieval and processing of data; More consistent and higher accuracy of information/report generated; Fast response to answer queries; A higher internal profile for HR leading to better work culture; More transparency in the system; Significant reduction of administrative burden; Adaptability to any client and facilitating management; Integral support for the management of human resources and all other basic and support processes within the company; A more dynamic workflow in the business process, productivity and employee satisfaction. BENEFITS OF E-HRM Standardization Ease of recruitment, selection and assessment Ease of administering employee records Reductions to cost, time and labour

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Access to ESS training enrolment and self development Cost and ESS Location and timeliness

IMPLEMENTATION SUPPORT SYSTEM (ISS) A concept of Electronic Human Resource Management (e-HRM) as an Implementation Support System (ISS) for HRM has been offered by the researchers. Basically e-HRM is a concept of Implementation Support System (ISS) which helps to HRM for taking a decision to manage a resource for a given task. The Implementation Support System (ISS) also helps to take decision to HRM the right time of recruitment and of new technological skills. We can say that working of Implementation Support System (ISS), e-HRM can better utilize their available Human Resource in the organizations. THE STATE OF HRM IN AN ORGANIZATION E-HRM is a way of implementing HR strategies, policies, and practices in organizations through a conscious and directed support of and/or with the full use of web-based channels. EHRM is a concept -a way of doing HRM. This is not to ignore the fact that E-HRM can transform the nature of HRM strategies, policies and practices. Researchers are searching for relevant and adequate theory that can fully grasp the concept of E-HRM, and frequently present fragmented empirical evidence, particularly on E-HRM sub-fields such as e-recruitment and elearning, the so-called early bird areas where web technology was first adopted. E-HRM GOALS What goals drive stakeholders when deciding about E-HRM? Based upon a scan of professionally-oriented and academic journals, there are three types of goals identified: 1. Improving the strategic orientation of HRM, 2. Cost reduction/efficiency gains, and 3. Client service improvement/facilitating management and employees. E-HRM TYPES The researches have distinguished three types of E-HRM: a) Operational E-HRM, b) Relational E-HRM, and c) Transformational E-HRM. Within all the types of HRM, choices have to be made in terms of which HRM activities will be offered face-to-face, and which will be offered through web-based HR. E-HRM OUTCOMES Researchers have distinguished four possibilities: a) High commitment, b) High competence, c) Cost effectiveness, and d) Higher congruence. These outcomes, in turn, may change the state of HRM in an organization, or through individuals and/or groups within an organization actually result in a new HRM state. Literature suggests that the various goals of E-HRM and the different types of E-HRM are expected to

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result in outcomes including more efficient HRM processes, a higher level of service delivery and a better strategic contribution. Such expected outcomes can be encapsulated in one concept, which could be counted as HRM effectiveness. E-HRM, as the matter of fact, is expected to contribute to the effectiveness of HRM, which consequently could help achieve the organizations goals.

E-HRM TOOLS E-Performance Management E-Recruitment E-Succession Planning And Career Development E-Training E-Discipline And Grievance Management IMPLEMENTATION OF E-HRM There are five phases in the implementation of e-hrm business solution: Analysis Business processes in the company Implementation Implementation and Training Maintenance

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INTERNET BANKING AN OVERVIEW Prof.D.Fennala Agnes Iylin and 2R.Ganesan I M.Com, Department of Commerce, Bishop Heber College (Autonomous). Banking is no longer confined in the branches, as customers are being provided with additional delivery channels via ATMs, Internet banking, Mobile banking, etc, Each of these channels has its own specific advantages in terms of improved customer service and reduced transaction cost. Out of various delivery channels, Internet banking is taking the lead and has become the most popular and convenient mode of banking amongst the customers. MEANING Banking transaction that takes place in a virtual ambience on the website of a banking company or a financial institution is termed as Internet banking. The essence of Internet banking lies in on-line access by customers of banking and financial services. INTERNET BANKING VS. TRADITIONAL BANKING The basic difference between Internet banking and traditional banking is that in traditional banking the customer has to visit the branch in person for the basic banking needs viz. withdrawal or deposit of cash, transfer of funds, statement of accounts, etc.In Internet banking, on the other hand, these operations can be performed through the PCs without physically visiting the bank branch. It is a win-win solution both for customer and the bank. The customer is not put to inconvenience of traveling, and the time so saved can be effectively utilized in other productive ways, whereas the bank earns by having lower overheads, establishments, premises and maintenance costs, in turn resulting into reduced per transaction cost. The greatest advantage of Internet banking is that it enables a customer to perform basic banking transactions through PC or Laptop, located anywhere in the world. Through the internet, customer accesses the banks website for viewing the account details or performing the basic banking transactions. The other major advantages emerging out of Internet banking are as follows: The customer can perform basic banking transactions, round the clock. No personal visit to the branch is required. One can access and operate ones account from anywhere in the world. The extensive, geographically divergent, traditional brick and mortar structure of the branch need not be there. The requirement of staff at branches gets optimized. Easy, convenient, efficient and speedy banking services both for the bank and the customer. Transaction is automatically reconciled and posted in all required data tables, thus reducing the workload. MECHANICS OF INTERNET BANKING The basic steps involved in completing transactions through Internet banking are extremely simple and are available in a user-friendly environment. One does not necessarily need to possess detailed computer knowledge to complete transactions through internet banking. The availability of a user-friendly demo version of the site as well as on-line help means that even first time users are able to use the facility. The entire mechanism involved in Internet banking is outlined below:
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Access the Banks website Click on the option which provides Internet Banking Enter the User-ID, Password/PIN Perform the requisite transactions Logout Mechanics of Internet Banking
Customer Internet Service Provider (ISP)

Logging in Internet Banking Service (IBS) Accessing World Wide Web Site

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Performing Banking transactions

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SERVICES Internet banking service offers banking services on-line with the same personal effort that is received at the branch. On-line request are processed by a proactive team of personal bankers adhering to service quality standards. Services offered include the following: Sending in request for a cheque book from the convenience of home Viewing accounting statements on-line Notification of change of address so as to update the records Requesting for a draft on-line to be couriered at the mailing address specified by the customer Transferring funds between one accounts of the customer to another account of the same customer. Viewing details of past 3 months transactions

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7. Updating of foreign exchange currency rates 8. Intimating on-line about a stop payment 9. Notification of lost/stolen ATM card The internet banking service adds more value to NRIs who can view their balances online and also effect fund transfer, just at the click of a mouse. Moreover, Internet banking has no time zones and is accessible round the clock without restricting it to any geographical boundary. DRAWBACKS OF INTERNET BANKING Despite the fact Internet banking has come to revolutionize the whole way the banking is transacted in modern times, it is not free from criticism. Following are some of the drawbacks of Internet banking: Needs a Computer In order to use the Internet banking services, the user needs a computer and time to log on to the website of the bank. This means that the target clientele is restricted to those who have a home PC or can access the net through the office or cyber cafes. The customer has to pay every time to check the balance. This can be done free at an ATM. Restricted Use Another drawback of Internet banking is that it is not possible that all transactions can be carried out electronically. Many deposits and some withdrawals require the use of postal services, which can be slow and reliable even in developed economies. Unreliable Communication Facility The use of Internet banking requires the use of uninterrupted telecommunication facility. Where phone connections are not perfect and where on a home PC the modem often gets disconnected, frequent and tedious log-on becomes necessary. Slow Browsing Often it becomes frustrating to browse the Internet to be able to access he host of financial products that are made available in the website of the bank. Navigating around websites on home computers is often slow and frustrating. Pages take inordinately long time to load and, as Internet users have a particularly low irritation threshold; a few frustrated attempts could put the user off, quite seriously. Lack of Trust The use of Internet banking services depend much on the trust reposed by the customers of a bank on the Internet banking initiative of the bank. It therefore becomes an imperative that Internet start-ups gain the trust of depositors before they will make deposits. Customers may get less protection that with established banks. Absence of Validity Absence of necessary legal framework for recognizing the validity of banking transactions is another impediment for the Internet banking. Safety Problem Security threats on the Internet leads to perception of Internet banking as an unsafe channel. This dissuades the customers in making popular use of the Internet banking It is to be noted that most of the problems mentioned above are in the nature of teething problems and bankers are quite alive to them and it is expected that these would be eliminated over period of time.

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INTERNET BANKING MAJOR ISSUES There is a fear that in banking and in any other industry, the Internet may destroy basic business pricing models. At the same time, it also opens up abundant opportunities. The major issues relating to the use of Internet in the realm of banking and financial services are discussed below: Sustainability The internet banking creates perfect market conditions where customers have access to more information and can more readily compare rates and financial products offerings. This would pose considerable problems for banks as it would be difficult for them to differentiate quality of customer service pricing and reliability through internet channels. This would ultimately affect the banks sustainability as regards profit margins. No Entry Barriers Internet banking has no entry barriers. This encourages even new banks to establish a physical distribution channel to successfully compete with current banking majors. This way, Internet banking makes possible new start-up players to launch retail banking services more economically. Cost Factor Many a time, Internet banking has resulted in pushing up the cost of bank operations. This mat be due to fact that banks that start Internet banking operations, although automate their front-end process for the customers, still largely depend upon manual processes at the backend. A case in point is that the Internet customers receive their statement on-line but paper statements are also sent. Similarly, customers complete account opening application on-line which is sent electronically to the bank. Many banks print the account application and enter the application data into another system, thereby increasing the operational overheads. Similarly, mail and distribution costs are still necessary as the statement, cheques etc. are still mailed. Dominant Traditional Banking The development of Internet banking allows for the efficient delivery of a wide variety of web based banking products. It simply adds to proliferation of technology based delivering channels such as ATMs, phone banking, on-line banking etc. However, customers, by and large, support traditional branch banking. Moreover, Internet based transactions are generally not fully automated, as the same may require additional telephone calls, paper work, data entry etc. No Float Benefit For quite a long time, banks are traditionally taken benefits of income from floats, the short term us of funds during the period the funds are allowed to reach the destination. The revenue from these resources will reduce since electronic channel like Internet banking, speedup settlement processes. Marketing Challenges The proliferation of Internet Banking throws a challenge to the banking sector in that it warrants banks to undertake changes in current structure and functional processes so as to allow for the provision of efficient banking service. It often becomes difficult for the banks to deliver information quickly as they are trapped by unaligned organizational structure and costly legacy systems. Marketing Advantage

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Internet banking facilitates easy marketing of banking and financial products and services. For instance, it allows customers to easily compare all the products and sign-up for all the products irrespective of location. 8. Advantage for New Players New players in the realm of Internet banking would find the going advantageous to them. They command cost advantage over the older banks. This would prompt the new banks to indulge in undercutting of prices, thus paving the way for greater competition to old banks. 9. Higher Ratings Generally, stock markets tend to form a conservative opinion about old banks because of their slow rate in adoption of technology. On the other hand, the internet advantage would enable the new entrants to secure higher ratings. This would help them raise money needed for business cheaply. This way, the new banks would attack the old banks either organically or through acquisitions. CONCLUSION In nutshell, the internet banking is emerging as an effective delivery channel for banks. In spite of the potential hazards and challenges; it is believed that Internet has the potential to provide banks with substantial benefits. However; banks need to be aware of the potential drawbacks and should have requisite processes in place to mitigate the negative outcome of the Internet banking. As many banks have launched Internet sites globally, banks cannot longer differentiate by having themselves an Internet presence. Other value added services like on-line banking, completing on-line credit card application, and even bill payment may become industry standards over a period of time. Internet banking is expected to grow as the customers become more familiar and more comfortable with Internet transactions. This would require banks to extend functionality and content on their website moving beyond the basic services to more personalized services and sales. The future of Internet banking lies in offering personalized Internet based services that are not only valued by their customers but are also unique to them. This would help distinguish themselves from the crowd .This would also help them evolve continuously to meet customers needs, capitalizing on new technology to build stronger customer relationship REFERENCES 1. Premkumar.N B and Esther Gnanapoo.J "E-Banking the essential need of today" Kisan World, March 2008, Vol.35,No.3, PP:17-19. 2. Vasudevan V.,"Theory of banking", S.Chand & Company Ltd., Delhi, Nov -1986 P.43. 3. Dr.S.Gurusamy Banking Theory Law and Practice Tata McGraw-Hill Publishing Company Limited., New Delhi,P.91-93 4. Gopinath M.N. Banking Principles and OperationsKetan Thakkar for Snow White Publications Pvt Ltd,Mumbai,P.-240-241 *****

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GLOBAL FINANCIAL CRISES: ITS CASCADING EFFECTS ON INDIAN BANKING AND FINANCIAL SECTOR Sangameshwara Kademani, B.K. Assistant Professor, Department of Management & Commerce, CMR Institute of Management Studies, Bangalore 560 043. Introduction: The international financial crisis originated in the sub-prime mortgage crisis which surfaced nearly three years ago in the U.S. With interest rates rising and home prices falling, there was a sharp jump in defaults and foreclosures. However, this would have remained as a purely mortgage market crisis but for the fact that these sub-prime mortgages were securitized and packaged into products that were rated as investment grade. Once doubts about these assets arose they turned illiquid; it also became very hard to price them. As a result, it started affecting a host of institutions which had invested in these products. These institutions were not confined to U.S. alone. Financial institutions in Europe and to a much lesser extent in East Asia had such assets on their books. With the failure of a few leading institutions and most notably Lehman Brothers, the entire financial system was enveloped into an acute crisis. There was mutual distrust among the financial institutions which led to freezing up of several markets including the inter-bank market. The impact of the financial crisis is felt by the developing economies as well. Growth is slowing down in all these countries. Indias growth rate in 2008-09 was 6.7 per cent as compared to 9 per cent in the earlier years. Prospects for forthcoming year do not appear to be better. With regard to financial markets, India witnessed a reversal of capital inflows following the collapse of Lehman Brothers. Due to a heavy sell-off by Foreign Institutional Investors (FIIs) there was a significant downward movement in the domestic stock markets. The withdrawal by FIIs and the reduced access of Indian entities to external funds exerted significant pressure on dollar liquidity in the domestic Foreign Exchange (FX) market. This created adverse expectations on the Balance of Payments (BOP) outlook, leading to downward pressure on the Indian rupee and increased FX market volatility. While the banking system was sound and well capitalised, some segments of the financial system such as Mutual Funds (MFs) and Non-Banking Financial Companies (NBFCs) came under pressure due to reduced foreign funding and a subdued capital market. Moreover, the demand for bank credit increased due to the drying up of external sources. Impact of Global Financial Crises on Financial Channel in Indian: With the increasing integration of the Indian economy and its financial markets with rest of the world, there is recognition that the country does face some downside risks from these international developments. The risks arise mainly from the potential reversal of capital flows on a sustained medium-term basis from the projected slow down of the global economy, particularly in advanced economies, and from some elements of financial contagion. The global contagion of the crisis has spread to India through all the channels the financial channel, the real channel and the confidence channel. All these channels had come under pressure from a number of directions. This study focuses only on the financial channel in India i.e. financial markets equity markets, money markets, forex markets, credit markets and Indian banks.

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India is experiencing the knock-on effects of the global crisis, through the monetary, financial and real channels all of which are coming on top of the already expected cyclical moderation in growth. Our financial markets equity market, money market, forex market and credit market have all come under pressure mainly because of the substitution effect of: (i) drying up of overseas financing for Indian banks and Indian corporates (ii) constraints in raising funds in a bearish domestic capital market and (iii) decline in the internal accruals of the corporates. All these factors added to the pressure on the domestic credit market. Simultaneously, the reversal of capital flows, caused by the global de-leveraging process, has put pressure on our forex market. The sharp fluctuation in the overnight money market rates and the depreciation of the rupee reflected the combined impact of the global credit crunch and the deleveraging process underway. A. Global Financial Crisis & Indian Banks: For long, Indian banks have been known to be prudent and well-capitalised. But recent days Indian banks have really faced stress because foreign investors have pulled out of the economy. When money leaves the country, it creates a money vacuum. There is suddenly less money available to use, borrow or lend. Foreign demand for currency drops and the rupee depreciates. Banks are forced to come up with money to meet demands. The ongoing crisis has an adverse impact on Indian banks. The large investment banks originally from the US, had invested substantially in the stocks of Indian banks. The banks, in turn, have invested in derivatives, which might have exposure to these investment bankers. Public sector banks, which have exposure towards derivatives, are the worst hit by the crisis. The Indian economy is for the first time since 2009, showing signs of a slowdown. Policymakers have cut the GDP (Gross Domestic Product) growth forecasts for the current fiscal from 9% to 8% on account of an unfortunate mishmash of rising interest rates, skyrocketing commodity prices and the economic turmoil in the developed economies. This has led many Indian companies to either restructure or default on their debt. As a result, the non-performing assets have been piling up on the balance sheets of Indian banks. Several recent reports have been sounding the alarm bell for the banking sector. For instance, a report by IDFC Securities suggests that at least 17% of Indian banks' outstanding loan assets could be on the verge of default. The Indian rating agency, Crisil, expects overall bad loans held by Indian banks to rise from 2.3% to 2.6% in the financial year 2011-12. The Reserve Bank of India, too, has raised concerns about the deteriorating credit condition. The Indian central bank has warned that non-performing assets could rise by 25% this year to 2.92% of total portfolios. Public sector banks, especially, are witnessing a large share of this deterioration in asset quality. These banks are, however, blaming the shift to a system-based recognition of NPAs for the sudden increase in bad loans. Earlier, the calculation for these banks was done at a branch level, and was thus, subject to the discretion of managers. With the loss of this human element of forgiveness, NPAs have shot up. On the positive side, this helps us get a more accurate picture of the bank's asset quality. Nonetheless, due to the shift in NPA accounting system coupled with the high interest rate regime, their quarterly profits have grown by single digits on account of higher provisioning. Now Indian banks are really suffering from inadequacy of capital as the return on such capital does not encourage new investors. Era of cheap capital is over and investors are also wary of the volatility of returns. Newer instruments and techniques would be required to attract

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investors. While creation of enabling conditions for capital flow to the sector would continue to remain on the top of the reform agenda, banks would need to grow their balance sheets by raising capital from the markets rather than count on government. Considering the back-to basics common equity focus of Basel II, growing bank balance sheets will increasingly pose the challenge of balancing interests of shareholder and depositors/financial stability. Global Financial Crisis & Local Money Market in India: Initially, the direct impact of the subprime crisis on the financial sector was very less because of their limited exposure to the troubled assets, the prudential policies put in place by the Reserve Bank and the relatively low presence of foreign banks in the Indian banking sector. But there was a sudden change in the external environment following the failure of Lehman Brothers in mid-September 2008. The knock-on effects of the global financial crisis manifested themselves not only as reversals in capital inflows but also in adverse market expectations, causing a sharp correction in asset prices on the back of sell-offs in the equity market by Foreign Institutional Investments (FIIs) and exchange rate pressures. The indirect impact of the global financial turmoil was also evident in the activity in the certificate of deposit (CD) market. The outstanding amount of CDs issued by scheduled commercial banks (SCBs), declined during end of 2008 as the global financial market turmoil intensified. With the easing of liquidity conditions, the CD volumes picked up in the last quarter of 2009. The weighted average discount rate (WADR) of CDs, which had increased with the tightening of liquidity conditions, started declining from December 2008 onwards. Commercial paper market developments were similar. As explained above, the rates in the unsecured (call) market went above the LAF corridor as a consequence of the liquidity pressure in the domestic market. The rates in the collateralised money market Collateralised Borrowing and Lending Obligation (CBLO) and repo markets moved in tandem but remained below the call rate. The Indian repo markets were affected by the global financial crisis. Currently, only government securities are permitted for repo and a select set of participants (regulated entities) is permitted to participate in repos. All repo transactions are notated by the Clearing Corporation of India and settled on a guaranteed basis. The interbank repo markets continued to function, without freezing, during the period of global financial turmoil. Global Financial Crisis & Indian Stock Market: An eventful week of great turbulence has begun in the global financial scenario as stock prices dipped across much of the globe on news that investment bankers, Lehman Brothers Holdings filed for bankruptcy and Merrill Lynch & Cos forced sale to Bank of America. The investments in Indian firms by these U.S. investment bankers are a major worry for Indian investors. Indian stock market has seen its worst time with the global financial crises. Mostly all the industrial sectors experienced a consistent low in their stock prices. The IT sector has been badly hit. Nearly half of the IT sector firms revenues come from banking and financial institutions. The IT companies have these investment banks as their clients. With the effect of financial crises, IT companies are not able to enhance their business with these investment banks, and, in turn, started retrenching their employees. Apart from the financial crises, the employees turnover is creating turmoil in the market as well. Job security is the biggest fear among people.

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Recently stock market crash in India dashes middle class dreams of investors. The Indian stock market crash of 2011 is leaving many investors jaded and shaken up. In these tough times, many investors are asking what was the cause, what does it mean to their financial planning, what the hell is going on and what investing should they do next should they sell their stocks and cut losses; should they buy more or should they just hang in there hoping for the markets to go up? On August 5th 2011, Standard & Poors struck off the AAA rating of the US for the first time since 1914. An AAA rating is considered the Gold standard in the world of finance and this loss of reputation meant the stock market world over was going to scramble. The euro zone crisis is there to add fuel to fire and Indias ongoing battle with inflation and the continuous rate hikes by RBI is not helping either. So as investors, does one really need to worry about this Indian stock market crash? It is clear from the Dow versus the Sensex chart; the Indian markets had been underperforming the global equities, especially compared to the developed markets, for several quarters. However, the Indian markets and several Asian markets did not fall as much as the global indices in the recent crash. This has confused the domestic investors because they can't make out if the Indian market is nearing its bottom or not. Global Financial Crisis & Indian Debt Market: The Indian government securities markets have been broadly insulated from the global financial crisis. There has been no incidence of settlement failure or default. The muted impact of the global crisis on the Indian government securities markets can be attributed, inter alia, to the calibrated opening of the markets to foreign players. Internationally, it has been observed that capital flows to EMEs dried up during the crisis period on account of the flight to safety, despite the interest rate differentials. In the Indian context, however, the investment limits for FIIs in the Indian government securities markets have been put in place to contain the volatility and are being revised in a calibrated manner, taking into consideration macroeconomic factors. The yields began to firm up in March 2008, tracking the policy rates in the wake of inflationary pressures and the benchmark 10 year yield reached a peak of 9.48% in mid July 2008. The failure of Lehman Brothers and the subsequent global developments followed by sharp reductions in policy rates (the repo rate was reduced from 9.00% to 4.75% during the period October 2008April 2009 and the reverse repo rate was reduced from 6.00% to 3.25% during the period December 2008April 2009) resulted in a softening of government security yields coupled with higher turnover in the secondary market. However, the increased borrowing requirements by the central and state governments on account of various countercyclical fiscal measures taken to stimulate the economy resulted in a huge supply of government securities impacting on the interest rates. The benchmark 10 year yield, which had touched a low of 5.27% on 31 December 2008, rose to around 7.41% during early September 2009 on account of concerns over excess supply and inflationary expectations. The Reserve Bank subsequently employed a combination of measures involving monetary easing and the use of innovative debt management tools such as synchronising the Market Stabilisation Scheme (MSS) buyback auctions and open market purchases with the governments normal market borrowings and de-sequestering of MSS balances. By appropriately timing the release of liquidity to the financial system to coincide with

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the auctions of government securities, the Reserve Bank ensured a relatively smooth conduct of the governments market borrowing programme, resulting in a decline in the cost of borrowings during 200809 for the first time in five years. Global Financial Crisis & Foreign Exchange Market in India: The withdrawal of funds from the Indian equity markets, as in the case of other emerging market economies (EMEs) and the reduced access of Indian entities to international market funds exerted significant pressure on dollar liquidity in the domestic Foreign Exchange (FX) market. With a view to maintaining orderly conditions in the FX market which had become very volatile, the Reserve Bank scaled up its intervention operations, particularly in October 2008. However, the FX market remained orderly in 200910 with the rupee exhibiting a two-way movement against major currencies. The FX market remained orderly during 200910, with the rupee exhibiting a two-way movement against major currencies. During 2009-10 financial year, the rupee appreciated by 9.7% against the US dollar and 2.6% against the Japanese yen, whereas it depreciated by 5.7% against the pound sterling and 3.2% against the euro. In terms of the real exchange rate, the sixcurrency trade-based real effective exchange rate (REER) moved up from 96.3 at end-March 2009 to 104.2 by 23 October 2009. The current financial year rupee depreciated against the US dollar and other major currencies in the world. The forex market came under pressure because of reversal of capital flows as part of the global deleveraging process. Simultaneously, corporates were converting the funds raised locally into foreign currency to meet their external obligations. Both these factors put downward pressure on the rupee. Rupee value: Rupee value against the US dollar has weakened dramatically. One reason might be the foreign fund inflow into India that was so prominent in the last couple of years, has turned negative. Financial institutional investors have deleveraged globally. Part of the reason has been the crunch they have faced in home markets, and part of it has been the flight to safety of US treasury paper. This net FII flow has been the single most important reason for the Rupee's fall. RBI Measures so far: The RBI has taken several measures aimed at infusing rupee as well as foreign exchange liquidity and to maintain credit flow to productive sectors of the economy. Measures aimed at expanding the rupee liquidity included significant reduction in the cash reserve ratio (CRR), reduction of the statutory liquidity ratio (SLR), opening a special repo window under the liquidity adjustment facility (LAF) for banks for on-lending to the non-banking financial companies (NBFCs), housing finance companies (HFCs) and mutual funds (MFs), and extending a special refinance facility, which banks can access without any collateral. The Reserve Bank is also unwinding the Market Stabilisation Scheme (MSS) securities, roughly synchronised with the government borrowing programme, in order to manage liquidity. Measures aimed to manage forex liquidity include upward adjustment of the interest rate ceilings on the foreign currency non-resident (banks) [FCNR(B)] and non-resident (external) rupee account [NR(E)RA] deposits, substantially relaxing the external commercial borrowings (ECB) regime, allowing the NBFCs and HFCs access to foreign borrowing and allowing

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corporates to buy back foreign currency convertible bonds (FCCBs) to take advantage of the discount in the prevailing depressed global markets. The Reserve Bank has also instituted a rupee-dollar swap facility for banks with overseas branches to give them comfort in managing their short-term funding requirements. Measures to encourage flow of credit to sectors which are coming under pressure include extending the period of pre-shipment and post-shipment credit for exports, expanding the refinance facility for exports, counter-cyclical adjustment of provisioning norms for all types of standard assets (except in case of direct advances to agriculture and small and medium enterprises which continue to be at 0.25 per cent) and risk weights on banks' exposure to certain sectors which had been increased earlier counter-cyclically, and expanding the lendable resources available to the Small Industries Development Bank of India (SIDBI), the National Housing Bank (NHB) and the Export-Import Bank of India (EXIM Bank). Measures to improve the flow of credit to productive sectors at viable costs so as to sustain the growth momentum, the Reserve Bank signaled a lowering of the interest rate structure by reducing its key policy rate viz., the repo rate by 250 basis points from 9.0 per cent as on October 19 to 6.5 per cent by December 8, 2008. Although, we remain vulnerable to global financial and economic developments, the measures taken so far have eased the liquidity and credit flow situations considerably. I must also add that in managing the impact of the global crisis, we have been mindful that no policy initiative is totally costless. Managing this delicate balance between costs and benefits has been one of our challenges. In the circumstances, the stance of the RBI has been to respond to the evolving situation swiftly and effectively, and to the extent possible, in anticipation of immediate developments. We do have a road map that is comprehensive and practical. It would be our endeavour to adapt this road map to the evolving global developments and implement it flexibly and pragmatically. Our approach, as indeed of every prudent central banker around the world, has been to "cross the river by feeling the stones". The RBI will continue to be on vigil and do everything possible within its mandate to mitigate the impact of the crisis on the Indian economy. The challenges ahead: The major challenges facing by the banking system in the country, particularly in the wake of the global financial crisis are: The first challenge: maintaining the credit flow. The outlook, both for the world and for India, continues to remain uncertain. The future trajectory of the global crisis is not yet clear. There was a noticeable decline in the credit demand during 2008 but it is not yet clear if it was a one off episode or it reflects a trend. If it is indicative of slowing economic activity, it would be a major challenge for the banks to ensure healthy flow of credit to the productive sectors of the economy. As you know, economic growth, even in normal times, requires efficient financial intermediation. An economic downturn, therefore, requires even more efficient financial intermediation and this is a major challenge that the banking community. There is a need to ensure a steady credit flow to the real sector of the economy in order to sustain demand even while maintaining credit quality. There are two aspects to lending viz., availability and cost of credit. While the availability of credit should not be an issue, the cost of credit seems to be an issue at the current juncture. There seem to be two reasons inhibiting the banks from extending credit: first, a high weighted-average cost of funds because of high interest rates on deposits; and second, concerns about credit quality, which makes the banks risk averse, particularly in lending to certain

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segments. The second challenge: how does the reform regulate the financial sector? So far, the most contentious and most voluble debate triggered by the crisis has been about the flaws in the regulatory architecture of the financial sector. Several issues have come to the fore. Some of those are; how can complex derivative products, which transmitted risks across the system, be made more transparent? What are the financial stability implications of structured products like credit derivatives? Are exchange traded derivatives better than over-the-counter (OTC) derivatives? How do we eliminate the drawbacks of the originate-to-distribute model? Is universal banking, the model that the United States has now turned to, appropriate? Can we apply the same regulatory regime for both wholesale and retail banks? The third challenge: regulatory forbearance and relaxing regulatory norms. There has been a sustained demand from various quarters for exercising regulatory forbearance in regard to extant prudential regulations applicable to the banking sector. There are demands for further regulatory forbearance. For example, there has been a demand to relax the asset classification norms by increasing the period of delinquency beyond the current norm of 90 days after which the loan asset is required to be classified as non-performing. The objective underlying the demand is to permit the banks to avoid recognizing non-performing loans (NPLs) for a longer period. Is it desirable to change the NPL norm by relaxing the 90 day rule? The demand is presumably premised on the argument that the relaxation in the norm will make the banks' financials look better, allow them to reserve less, conserve capital, and may even allow them to offer more credit. Conclusion: The global financial crisis has spread to Indian banking and financial sector. No doubt, Indian banks, financial markets equity market, money market, forex market and credit market have all come under pressure. It is mainly due to the substitution effect like drying up of overseas financing for Indian banks and Indian corporates; constraints in raising funds in a bearish domestic capital market and decline in the internal accruals of the corporates. The Reserve Bank of India has been actively engaged in policy action to minimise the impact of the global crisis on Indian Economy. The policy response of the Reserve Bank has helped certain extent to avoid the impact of global financial crisis on functioning of Indias banks and financial markets and in arresting the growth moderation. But still banking and financial sectors are facing crisis. Hence, Reserve Bank of India needs to take effective action to minimise the impact of the crisis and restore the economy to a high growth path consistent with price and financial stability. REFERENCES 1. Calvo, Guillermo (2009), Lessons from Systemic Financial Crises, presentation at India Policy Forum 2009, New Delhi, July 14-15. 2. CMIE (2009), Monthly Review of the Indian Economy, Economic Intelligence, CMIE, July, pp 80-81. 3. Reserve Bank of India (2009) Macroeconomic and Monetary Developments First Quarter Review 2009-10, M *****

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