 Money Market

 Debt Market
 Forex Market
 Capital Market
 Central Banking Authority
 Capital Markets Regulatory Authority
 Insurance & Pension Regulators
 Reserve Bank of India Act 1934
 Banking Regulation Act 1949

 The Governor
 4 Dy. Governors
(Appointed by union government)
 15 Directors
 Generate & maintain trust in the public
 Protect investor’s interest (GTB Example)
 Ensure financial markets are both fair & efficient
 Participants measure up to the rules of the market place
 Issuance of Notes (2800 currency chests in the country)
 Banker to the Government
 Banker’s Bank
 Bank’s supervision
 Development of Financial System (Created IDBI, EXIM, NABARD)
 Exchange Control
 Monetary control
 Cash Reserve Ratio (CRR)
 SLR (Statutory Liquidity Ratio)
 Bank Rate
 Open Market Operations (OMO)
 Multiple Products (Deposits, Credit Cards, Insurance, Investments & Securities)
 Multiple channels (Branches, Call Centre, Internet & Kiosk)
 Multiple Customer Group
 Fund Based Services (Term lending, working capital financing etc)
 Non- Fund based services ( Banking Guarantee, LC, Collection of bills)
 Value Added Services
 Internet Banking Services
 Primary Market
 Secondary Market
 Stock Exchanges in India
 Equity
 Rights Issue
 Preferred Stock
 G-Sec
 Debentures
 Bond
◦ Coupon Bonds
◦ Zero coupon Bonds
◦ Convertible Bonds
 CPs
 Treasury Bills
 STT
 Rolling Settlement – nett obligations T+2 day basis

 Types of Capital Issues in the Primary Market

◦ Initial Public Offerings
◦ Further Public Offerings
◦ Rights Issue
 Public Offering
 Book Building
 Qualified Institutional Placements

 Intermediaries in an issue in the Primary Market

◦ Book Running Lead Managers
◦ Cutoff price
 Insurance Act of 1938
 IRDA Act of 1999
Factoring: Financing & Collection of accounts receivables in domestic &
international trade.

 Client
 Factor

Types of Factoring
 Recourse Factoring ( With recourse)

 Non-recourse Factoring (Without recourse)

 Domestic Factoring
 International Factoring
 Export Factor
 Import Factor
Means of finance exporter of goods avails from forfaiter against export
receivables, but without the obligation to repay the credit.

It is discounting of trade receivables such as LCs, Bills of Exchange,

Promissory notes or any other negotiable instruments.

LCs are subject to Uniform Customs & Practices for Documentary Credits
(UCPDC), of International Chamber of Commerce, Paris.
 Guarantees
 Performance Guarantee
 Financial Guarantees
 Deferred payment gurantees
 Letter of Credit
 Forward Exchange Contract
 Forward Rate Agreement & Interest Rate Swap
Indian Bank, Corporation Bank and Oriental Bank of Commerce – which
have entered into a “Strategic Alliance” in October 2006

 Sharing IT platforms initially for ATMs

 Joint appraisal cell to appraise large projects for funding
 Building common data centre
 Participating in each other’s training
 Merger
 Consolidation ( combining 2 existing cos in a new co)
 Acquisition or take-over

Consolidation in Indian Banking Scenario

 Started in 1921 with bank of bangal, bombay & madras in Imperial

bank
 Bank of tamilnadu into Indian bank
 SEBI Was introduced in 1991
 Development of Money Market
◦ CBLOs from 5th June 2000
◦ CCIL 20th Jan 2003
◦ NDS (Negotiated Dealing System)
 CPs in 1990
 CDs in 1989 – min maturity period reduced from 15days to 8days
 Development of Govt Securities Mkt (Cover short positions in 5trading days)
 Development of Capital Market (online)
 Development of Forex Market
RBIs - as on 31st March 2006 – Board for Financial Supervison

 89 Scheduled commercial banks

 133 RRBs
 1864 UCBs
 8 Development Banks
 13049 NBFCs
 Market
 Types of Market: Geographical area, product, Nature of
transaction (cash or futures) & Volume of transaction

 Marketing:
Process of determining consumer demand for a product or service,
motivating its sales & distribution it into ultimate consumption at a
profit.

Focus of marketing is “Consumer”

 Product/ service based to customer based
 Today’s focus is “Customer Relationship Management”
 Customer Satisfaction
 Survival of the fittest

Case study of Small packs of FMCG products

Sales V/s Marketing

 Selling is an operational activity
 Selling is product focused
 Oriented to the needs of the seller
 Aims at earning profits by maximizing sales volume
 Product – Variety, quality, Design, features, brand name, packaging, size,
services, warranties etc,
◦ What are the features of the product

 Price – List price, discounts, payment period, credit terms

◦ What the customer is ready to pay for this product

 Place – channels, coverage, assortments, locations, inventory, transport

◦ Where the customer wants delivery of product

 Promotion – sales promotion, advertising, public relations, direct marketing

◦ How the awareness is created among customers
 Tangible
 Homogeneous
 Production & distribution separated from consumption
 Can be stored
 Transfer of ownership possible
 Intangibility
 Inseparability
 Heterogeneity
 Perishability

How different Actually are services?

The production & consumption of services take place at the same
moment.

 Decisive moments – moments of truth

 The physical surrounding
 Mutual interaction between customers
 Banks provide services
 Aim is to satisfy customers’ needs and wants of specific nature
 The competitive element, efficiency & effectiveness are major factors
 Organizational objectives are still the driving force
Customer is the king. Living upto the expectation of the consumer.

Maslow’s hierarchy of needs;

 Physiological needs – food, drink, sleep

 Safety needs – economic security
 Social needs – friendship, affection
 Esteem needs – self-respect, recognition, status – )birthday cards to
the customers, recognition parties)
 Self-actualization – self-fulfillment
 Young Bachelor
 Half nest – married with young children
 Full nest – older couple, grown up children
 Empty nest – older couple
 Long-term customer retention
 Relationship with external market who influence or provide referrals
 Integrating marketing services, customer service and quality standards
Product levels;

 Core product
 Basic product
 Expected product
 Augmented product
 Potential product

Categories
 Non-durable
 Durable
 Services
 Consumer goods
 Industrial goods
 Product line
 Product mix
 Product item
Introduction Maturity

Growth Decline
 Name, design, term, sign, symbol or design or combination of these.

 Citi Never sleeps

 World’s local bank
 Trusted family bank
 Good people to grow with – IOB
 India’s international Bank
 Banker to every Indian
 Primary package
 Secondary package
 Shipping package
 Profit
 Survival
 Market share
 Product quality
 Communicating image
 Cost based pricing
◦ Mark-up pricing
◦ Absorption cost pricing – full cost pricing
◦ Target return pricing
◦ Marginal cost pricing

 Value-based pricing
◦ Perceived value pricing
◦ Value pricing

 Competition based pricing

◦ Going rate pricing
◦ Auction type pricing (read & understand types of auction)
◦ Group pricing
 Geographical pricing
 Price discounts & allowances
 Psychological pricing
 Promotional pricing
 Discriminatory pricing
 Market skimming pricing
 Market Penetration pricing
 Market information
 Promotion
 Contact
 Matching
 Negotiation
 Product information
 Physical distribution
 Channel 1 – Zero level
 Channel 2 – One level
 Channel 3 – Two level
 Channel 4 – Three level
 Product characteristics
 Market characteristics
 Customer
 Company resources
 Competition
 Product lines
 Branches
 Telephone banking & call centers
 ATMs
 Personal computers
 Plastic cards
 Virtual branches & automated video banking
 Advertising
 Personal selling
 Sales promotion
 Public relations
 Direct marketing

Promotion Mix Strategies

 Push Strategy
 Pull Strategy
 Direct selling
 Direct Marketing

Channels of delivery in a Bank

 ATM, net banking, phone banking, RTGS/SWIFT

 Kiosks
 Tele-calling a prospect
 Leaving messages & contacting persons other than the prospect
 No misleading statements
 Tele marketing etiquettes
 Gifts or bribes
 Appearance & Dress code