A STUDY ON EFFECTIVENESS OF

BANKING
RETAIL SERVIECES
CUSTOMER SATISFICATION
TOWARDS
IN MUMBAI

SUBMITTED BY:
RANJEET KUMAR SHRIJAY KUMAR
ｱ 7NBMM039
 OBJECTIVES
To understand the future growth of the industry
To determine potential customers towards retail banking
To understand the promotional strategies provided by retail
banks
To find out various facility provided by retail banks to
customers
To find out the factors which are influence customer
satisfaction while purchasing retail banking products.
To find out the main factors which are considered the
customers purchase decision
To do the comparative study between ICICI Bank and HDFC
Bank
 INTRODUCTION
Retail banking can be crudely defined as the antonym of
wholesale or bulk banking. It is nothing, but shared business.
A deposit of Rs.1 lakh from single customer vs. small deposits
of Rs. 10,000 each from 10 different customers. The corporate
and retail divide is nothing but internal segmentations and the
customer remains always a customer.
Retail banking generally refers to offering financial services,
products related to deposits and assets to individual customers
for personal consumption.
ADVANTANGES OF RETAIL
BANKING
RESOURCE ASSET SIDE

Stable and constitute core deposits. Better yield and improved bottom line.
Less bargaining for additional interest. Good Avenue for funds deployment.
Low cost funds.
Lowe risk and NPA perception.
Builds customer base. Helps economic revival of the nation
through increased production activity.

Increases subsidiary business Improves lifestyle and fulfills aspirations of

the people through affordable credit.

A safe and convenient saving avenue. Innovative product development.

Minimum marketing efforts in a demand-
driven economy.
Risk weight in certain segments like housing
loan.
Retail Banking Functions available in
India
A banks retail offering can be broadly categorized into
Core service, facilitating service, and supporting service.

Payment services
Current account and savings account
Loan products: Consumer loans, personal loans, housing
loans, educational loans
Insurance products: Life insurance, pension schemes
 COMPETITION

CREDIT CARDS MARKET SHARE

(in lakhs)

15.77 16 CITIBANK
STAN CHART
SBI
HSBC
5.88 ALL OTHERS

9.03 14
Market Fragmentation
 SWOT ANALYSIS
STRENGTHS WEAKNESSES
_ Retail banking supermarket with the ability to cr oss-sell entire _ Efforts are concentrated m ore towards the urban consumers
range of credit products. thus ignoring the rural counterpart.
_ Innovative products _ Number and spread of branches is very low as compared to
_ Technological superiority PSU banks.
_ Wide distribution _ Excessive focus on non-branch distribution channel reducing
_ High top of mind awareness due to aggressive advertising the scope of personal interaction needed for the sale of retail
products.
_ Strong Credit controls
_ High Customer Service Standards
_ Economies of scale through growing volumes.
_ 24x7 service levels

OPPORTUNITY
_ Changing consumer outlook towards loans and related products
_ Rising consumer income levels
_ Increasing banking habits among Indian consumers
_ Being No.1 in the auto finance segment paves the way to
consolidate its market leadership across all the segments.
_ Rapid incr ease in the retail loan mar ket size to the tune of 30 ｱ
40 %
THREAT
_ Stiff competition in the housing loans segment from HDFC,
LIC Housing etc.
_ In the Credit card segment, competition fr om Citibank,
StanChart etc.
_ Of late, lots of Non Banking Financial Institutions have
emerged and have eaten up the banksｶ market share.
_ Educating people by way of advertisements might help
competitors to reap the benefits.
 ICICI

Launches a 30 year tenure home loan, the longest

available
ICICI also launches a variable rate loan with a monthly
rest basis versus the regular fixed rate loan that is on an
annual rest basis
No guarantors are required for loans up to 20 years in
most cases
No pre payment fees for any part payment as long as
the loan is not fully retired, else 2% charge on pre paid
amount. You can repay up to 33% of the outstanding
loan in any year without paying penalty.
Free accident death cover for the owner
Special 100% funding for select properties
Higher eligibility for self-employed professionals
through segment-specific schemes
 HDFC

Offer Flexible (Customized) Repayment Schemes,

Pari Passu/ Second Mortgage Arrangements
Safe Document Storage Facilities
Home Conversion Loan
A customer, after availing of a loan can approach HDFC
anytime thereafter to increase the Equated Monthly
Installment which will help him repay the loan faster

.
 ICICI
Positioning
The bank s initial positioning was mainly on service factor and now
this has changed to a customer s interest focused and a friendly bank.
Message:
With the shift in positioning there has also been change in the
message conveyed from service focused to customer interest focused.
It is the first to sign up a celebrity Amitabh bachchan for its
advertising. This conveyed a message of the bank being as popular
and famous as the celebrity.
Media
The general preference is for television, hoardings, newspapers,
magazines, radio etc.
ATMs also form an effective advertising tool as their mere presence
makes the consumer aware of the bank. Besides this, ATM machines
are also effectively utilized to cross-sell the bank s retail offerings to its
already existing customers.
 HDFC
Positioning
Expertise service.
It tries to address the financial needs of the consumers.
Message
The bankｶs presence in the housing sector for a fairly long
period is portrayed in its advertisements.
They also focus on promoting the simplicity in work
procedure, superior service. Their ads also strive to bring
the bank out of the ｵonly housingｶ image.
Media
The most preferred medium by the bank are hoardings and
print media.
They rely on word of mouth and goodwill which they have
created through 25 years of service.
 RESEARCH METHODOLOGY

Sample size
A random sample of 100 were administered with the questionnaire
and responses collected.

Research Area
The research was carried out at Borivali, Mira road, Bhayandar regions
in Mumbai

CONSUMER SURVEY
ｱ Top of mind awareness of consumers for banks offering various
retail products.
ｱ Factors influencing their purchase decision.
ｱ To study the comparative influence of various mediums of
advertisements in creating awareness amongst the consumers.
ｱ To find the immediate competitors in the minds of consumer for
every retail product.
 Respondents profile

Age Profile

17% 15%
18-25 yrs

25-40 yrs

23% 40-55 yrs

45% 55 yrs & above

Professional profile

Proffessional Profile

9 7
Students
Salaried
Businessmen
15 Retired
29
 DATA ANALYSIS
The respondents were asked to rank the following
factors according to their preferences in the extent to
which they influence their purchase decision.

INFL UENCING FACTORS

35 37

% 15

10 7 6
15
20
0
255
30
35
40
Factors
 Retail Products Availed

Others Housing
11% loan
21%
credit cards
25%

Vehicle loan
Personal Education 27%
loan loan
10% 6%

In our survey majority of the respondents had

availed Vehicle loan followed by credit cards.
 Banks Considered For Housing Loan

ICICI
OTHERS 23%
28%

SBI
12%
HDFC
37%

Majority of the respondents considered HDFC and ICICI for

availing housing loan.
25 years of superior service has helped HDFC in creating
goodwill in the mind of people and has helped the bank for
consideration.
 Banks Considered For Credit Cards

OTHERS ICICI
11% 16%

STAN CHART
20%

CITI BANK
35%
HSBC
18%

Majority of the respondents considered CITI BANK for credit cards

followed by STAN CHART and HSBC.
Being the first bank to launch credit cards and through aggressive
advertisements in the past CITI BANK has created awareness amongst
the customers and by providing superior service it CITI BANK still
acquire major share in the consideration list.
 Banks Considered For Educational
Loan
DENA BANK CORPORA TIO
8% N B AN K
OTHERS 5%
21% HSBC
9%

SBI
HDFC 35%
22%

SBI and HDFC form the major chunk for

consideration in this category followed by SBI.
 Awareness Of ICICI Through Various
Mediums
Television
Billboards / 35%
Hoardings
17%

Word Of
New spapers
Mouth 18%
& Magazines
Radio 3% 27%

ICICI in general has a high level of awareness among the

people owing to its extensive advertising.
 Awa eness O F h ugh Va i us
edium
Bill d / Television
ding 13%
22% New spapers
Magazines
39%

Word f
Mouth 21%
Radio 5%

HDFC being a private and an aggressive player, especially

in the home finance arena, has taken the print media as
its stalwart for awareness.
 Chi square
Null hypothesis H0 - retail banking is not effective towards
customer s satisfaction

Alternative hypothesis H1 retail banking is effective towards

customers satisfaction

Effectiveness Non effectiveness

Satisfaction with processing 75 25 100

time

Satisfaction with charges 40 60 100

satisfaction with after sales 65 35 100

services

180 120 300

Cont
At 10% significance level the table value is 14.605
Calculated chi value is 32.1
Since the calculated value fall outside the table value the null hypothesis is
rejected
Thus we can conclude that retail banking is effective towards customer s
satisfaction.
F0 Fe F0 - Fe (F0 - Fe) (F0 - Fe)/ fe

75 180*100/300 = 60 15 225 3.75

25 120*100/300 = 40 -15 225 5.63

40 180*100/300 = 60 20 400 6.67

60 120*100/300 = 40 20 400 10

65 180*100/300 = 60 5 25 0.42

35 120*100/300 = 40 15 225 5.63

32.1
 CONCLUSION

The scenario is becoming highly competitive in every sphere

of banking activity- more so u n respect of retail lending.
Processing time and interest rates are major influencing factor
for making purchase decision.
As per survey ICICI and HDFC are to major brand name
considered for housing, auto and personal loans.
Awareness through television is the highest level followed by
newspapers.
The future of banking is dependent on technology, marketing,
logistics.
Banks have to prepare themselves for facing a soft interest
regime.
New kind of management skills are required to manage the
retail lending portfolio.
 LIMITATIONS

Sample size selected will be small

Time constraints

Data will be collected might not be completely accurate.

Survey carried out in selected areas only

The survey will be conducted on random basis.