Project on Advertising Strategies of Banking Sectors in India

CHAPTER I - INTRODUCTION
1.1 Meaning of the terms Bank and Banking:
Bank is an institution which deals in money and credit. It accepts deposits from the public and grants loans and advances to those who are in need of funds for various purposes. Banking is an activity which involves acceptance of deposits for the purpose of lending or investing. In addition to accepting deposits and lending funds, banking also involves providing various other services along with its main banking activity. These are mainly agency services, but include several general services as well. A banker is one who undertakes banking activities, accepting deposits and lending money for different purposes. The Banking Regulation Act, 1949 defines banking as an activity of accepting funds from the public for the purpose of lending or investment. The essential features of banking activities are as follows:i. ii. iii. OR Investing, banks undertake activities like a) Promoting and mobilizing savings of the public;
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accepting deposits from public; incidental to the activities of accepting deposits for lending lending or investment of such deposits;

b) Providing funds to trade and industry by way of discounting bills, overdraft, cash credit facility, and transfer of funds from one place to another; c) Providing agency services to customers, such as collection of bills, payment of insurance premium, purchase and sale of securities, etc., and other general services, such as issue of travelers cheques, credit cards, locker facility, etc; d) Money deposited with the bank is assured as far as its safety is concerned. Further the depositor is allowed to withdraw it whenever required. Banks allow interest on deposits. Such interest helps in the growth of funds deposited with the bank. Thus the rate of interest provided on deposits acts as an incentive to the depositors.

1.2 Scope of Banking Activities:

Banking activities are considered to be the life blood of the national economy. Without banking services, trading and business activities cannot be carried on smoothly. Banks are the distributors and protectors of liquid capital which is of vital significance to a developing country. Efficient administration of the banking system helps in the economic growth of the nation. Banking is useful to trade and commerce. Banking activities are useful to trade and industry in the following ways. a) Money deposited in a bank remains safe. Precious articles too can be kept in the safe custody of banks in lockers. b) Banks provide credit facilities to their customers. Customers with bank accounts also enjoy better credit in the business world.

c) Banks encourage the habit of saving and thrift among people. They mobilize savings and invest them in productive activities. Thus, they help in increasing the rate of savings and investment in the country. d) Banks provide a convenient and safe means of transferring money from one place to another and facilitate business dealings transactions. e) Banks collect and realize bills, cheques, interest and dividend warrants etc. on behalf of their customers. f) Foreign trade is facilitated considerably with the help of banks12:: Business Studies which receive and make payments, provide credit and deal in foreign exchange. They protect importers from the risk of loss on account of exchange rate fluctuations. They issue letter of credit and provide information on the credit worthiness of importers. They also act as referees of their customers. g) Banks meet the financial needs of small-scale business units which are located in economically backward areas. h) Farmers and artisans in rural areas can also avail of bank credit for financing their activities. i) Commercial banks provide many other services to the general public which includes locker facility, issue of traveler's cheques and gift cheques, payment of insurance premium, etc.

Service activities of banks

Service activities of banks may be categorized as follows: i. ii. Agency services General services

Agency services
Banks undertake/various agency services for their customers. These are outlined below. a) Collection of cheques, drafts, and bills of exchange on behalf of customers. b) Collection of dividend and interest warrants of customers. c) Collection of pension of government employees. d) Purchase and sale of securities on the instructions of customers. e) Executing standing orders for payment of rent, electricity bill, insurance premium etc. f) Acting as correspondent or representative of customers in dealing with other banks. g) Acting as trustee or executor when so nominated. Nature and Scope of Banking:: 13 General Services A commercial bank also performs the following services of general utility to the public: a) Issue of letters of credit, travelers cheques and circular notes. b) Safe custody of valuables like gold, jewellery and important documents in safe deposit vaults (lockers) available on hire. c) Supply of trade information.
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d) Acting as a referee as regards financial status of customers. e) Acceptance of bills of exchange on behalf of customers. f) Underwriting loans floated by government and public bodies.

1.3USES OF BANK:
1.

Security Storing all your money in cash at home just isn't safe. Your home could be burglarized, flood, or catch on fire. In the event of a burglary, most of those places you thought were great for hiding your money will probably be found. (You aren't the first person who has considered hiding money in the produce drawer of your fridge.) If you buy your money in the back yard, the container you put it in could become damaged or start decomposing and destroy your money. Less dramatically, you could simply forget about all the places you've stashed money, or someone else who lives in or visits your household could find it and take it.

Once you have more than a few hundred dollars to your name, it's really best to have a secure place to put your money. As long as you choose a legitimate bank that has Federal Deposit Insurance Corporation (FDIC) insurance, any money you put in the bank (up to FDIC insurance limits) is protected by the U.S. government. To date, the guarantee provided by the FDIC has proved to be completely reliable, even during times of financial crisis like the banking crisis brought on by the 2008 subprime mortgage meltdown or the savings & loan crisis of the early 1990s. (To learn more about the FDIC's protection, see are Your Bank Deposits insured? and Bank Failure: Will Your Assets Be Protected?) 2. Convenience when you have money in the bank, you can access it from anywhere. A checking account also makes it much easier to pay bills - you'll no longer
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have to pay bills in person, and you won't need to purchase a cashier's check every time you need to send money through the mail. You can just write a check from your checking account and put it in the mail. You can even transfer money online, often for free. 3. Saving and investing

once you have enough money, you'll want to go beyond a checking account and start saving and investing your money to optimize your future financial situation. You simply can't take advantage of the opportunity to earn money in the stock market or earn interest on deposits if you're not willing to keep your cash anywhere except your mattress.

1.4 ROLE OF BANKING IN INDIAN ECONOMY:

1) Capital Formation: The significance of DFIs lies in their making available the means to utilize savings generated in the economy, thus helping in capital formation. Capital formation implies the diversion of the p r o d u c t i v e c a p a c i t y of t h e economy to the making of capital goods which increases f u t ur e productive capacity. The process of Capital Formation involves three distinct but interdependent activities, viz., saving financial intermediation and investment. However, poor country/economy may be, there will be a need for institutions which allow such savings, as are currently forthcoming, to be invested conveniently and safely and which ensure that they are channeled into the most useful purposes. A well-developed financial structure will therefore aid in the collections and disbursements of investible funds and thereby contribute to the capital formation of the economy. Indian capital market although still considered to be underdeveloped has been recording impressive progress during the post-interdependence period. 2 ) S u p p o r t t o t h e C a p i t al M a r k e t : The basic purpose of DFIs particularly in the context of a developing economy, is toacceleratet h e p a c e o f e c o n o m i c d e v e l o p m e n t b y i n cr e a s i n g c a p i t a l f or m a t i o n , i n d u c i n g i n v e s t o r s a n d entrepreneurs, sealing the leakages of material and human resources by careful allocation thereof, undertaking development activities, including promotion of industrial units to fill the gaps in the industrial structure and by ensuring that no healthy projects suffer for want of finance and/or technical services. Hence, the DFIs have to
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perform financial and development functions on finance functions, there is a provision of adequate term finance and in development functions there include providing of foreign currency loans, underwriting of shares and debentures of industrial concerns, direct subscription to equity and preference share capital, guaranteeing of deferred payments, conducting techno-economic surveys, market and investment research and rendering of technical and administrative guidance to the entrepreneurs. 3) Rupees loan: Rupee loans constitute more than 90 per cent of the total assistance sanctioned and disbursed. T h i s s p e a k s e l o q u e n t l y o n D F I s o b s e s s i o n w i t h t er m l o a n s t o t h e n e g l e c t of o t h er f or m s o f assistance which are equally important. Term loans supplemented by other forms of assistance had naturally put the borrowers, most of whom are small entrepreneurs, on to a heavy burdens e r v i c i n g . S i n c e t e r m f i n a n c e i s j u s t o n e o f t h e i n p u t s b u t n o t e v e r y t h i n g f o r t h e entrepreneurs, they had to search for other sources and their abortive efforts to secure other forms of assistance led to sickness in industrial units in many cases. 4) Foreign Currency Loans: Foreign currency loans are meant for setting up of new industrial projects as also for expansion, diversification, modernization or renovation of existing units in cases where a portion of the loan was for financing import of equipment from abroad and/or technical know-how, in special cases. 5) Subscription to Debentures and Guarantees: Regarding guarantees, it is well-known that when an entrepreneur purchases some machinery or fixed assets or capital goods on credit, the supplier usually asks him
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to furnish some guarantee to ensure payment of installments by the purchaser at regular intervals. In such a case, DFIs can act as guarantors for prompt of installments to the supplier of such machinery or capital under a scheme called Deferred Payments Guarantee. 6) Assistance to Backward Areas : Operations of DFIs in India have been primarily guided by priorities as spelt out in the FiveY e a r P l a n s . T h i s i s r e f l e c t e d i n t h e l e n d i n g p or t f o l i o a n d p a t t e r n o f f i n a n c i a l a s s i s t a n c e of development financial institutions under different schemes of financing. Institutional finance to projects in backward areas is extended on concessional terms such as lower interest rate, longer moratorium period, extended repayment schedule and relaxed norms in respect of promoters contribution and debt-equity ratio. Such concessions are extended on a graded scale to units in industrially backward districts, classified into the three categories of A, B and c depending upon the degree of their backwardness. Besides, institutions have introduced schemes for extending term loans for project/area years, specific infrastructure development. Moreover, in recent

development banks in India have launched special programs for intensive development of industrially least developed areas, commonly referred to as the No-industry Districts (NIDs) which do not have any large-scale or medium-scale industrial project. Institutions have initiated industrial potential surveys in these areas. 7) Promotion of New Entrepreneurs : Development banks in India have also achieved a remarkable success in creating a new class of entrepreneurs and spreading the industrial culture to newer
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areas and weaker sections of the society. Special capital and seed Capital schemes have been introduced to provide equity type of assistance to new and technically skilled entrepreneurs who lack financial resources of their own even to provide promoters contribution in view of long-term benefits to the society from the emergence of a new class of entrepreneurs. Development banks have been actively involved in the entrepreneurship development programs and in establishing a set of institutionswhichi d e n t i f y a n d t r a i n p o t e n t i a l e n t r e p r e n e u r s . A g a i n , t o m a k e a v a i l a b l e a p a c k a g e of s e r v i c e s encompassing preparation of feasibility of reports, project reports, technical and covering managementc o n s u l t a n c y e t c . a t a r e a s o n a b l e c o s t , i n s t i t u t i o n s h a v e s p o n s o r e d a c h a i n of 1 6 T e c h n i c a l Consultancy organizations practically the entire country. Promotional and development functions are as important to institutions as the financing role. The promotional activities like carrying out industrial potential surveys, identification of potential entrepreneurs, conducting entrepreneurship development programs and providing technical consultancy services have contributed in a significant manner to the process of industrialization and effective utilization of industrial finance by industry. IDBI has created a special technical assistance fund to support its various promotional activities. Over the years, the scope of promotional activities has expanded to include programs for up gradation of skill of State level development banks and other i n d u s t r i a l pr o m o t i o n a g e n c i e s , c o n d u c t i n g s p e c i a l s t u d i e s o n i m p o r t a n t i s s u e s c o n c e r n i n g industrial development, encouraging voluntary agencies in implementing their programs for the uplift of rural areas, village an cottage industries, artisans and other weaker sections of the society.
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8 ) I m p a ct o n C o r p o r a t e C u l t u r e : T h e pr o j e c t a p p r a i s a l a n d f o l l o w- u p o f a s s i s t e d p r o j e c t s b y i n s t i t u t i o n s t hr o u g h v a r i o u s instruments, s u c h a s p r o j e c t m o n i t o r i n g a n d r e p or t o f n o m i n e e d i r e c t o r s o n t h e B o a r d s o f d i r e c t o r s of a s s i s t e d u n i t s , h a v e b e e n m u t u a l l y r e w a r d i n g . T hr o u g h m o n i t o r i n g of a s s i s t e d projects, the institutions have been able to better appreciate the problems faced by industrial units. It also has been possible for the corporate managements to recognize the fact that interests of the assisted units and those of institutions do not conflict but c o i n c i d e . O v er t h e y e ar s , institutions have succeeded in infusing a sense of constructive partnership with the corporate sector. Institutions have been going through a continuous process of learning by doing and aree f f e c t i n g i m p r o v e m e n t s i n t h e i r s y s t e m s a n d p r o c e d u r e s o n t h e b a s i s o f t h e i r c u m u l a t i v e experience.The promoters of industrial projects now develop ideas into specific projects more carefully and prepare project reports more systematically. Institutions insist on more critical evaluation of technical feasibility demand factors, marketing strategies and project location and on application of modern techniques of discounted cash flow, internal rate of return, economic rate of return ed. in assessing the prospects of a project. This has produced a favorable impact on the process of decision-making in the corporate seeking financial assistance from institutions. In fact, such impact is not continued to projects assisted by them but also spreads over to projects financed by the corporate sector on its own. The association of institutions in the management of corporate bodies has considerably facilitated the process of progressive professionalism of the corporate management. Institutions have been a b l e t o c o n v i n c e t h e c o r p o r a t e managements to a p p r o pr i a t e l y r e - or i e n t their organizational
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s t r u c t u r e , p er s o n a l p o l i c i e s a n d p l a n n i n g a n d c o n t r o l s y s t e m s . I n

many cases, institutions have successfully inducted experts on the Boards of assisted companies. As part of their project follow-up work and through their nominee directors, institutions have also been able to br i n g about progressive as adoption of modern and management techniques, such c o r p or a t e planning

p e r f or m a n c e b u d g e t i n g i n t h e a s s i s t e d u n i t s . T h e pr o g r e s s i v e p r of e s s i o n a l i s m o f i n d u s t r i a l m a n a g e m e n t i n I n d i a r e f l e c t s o n e of the major qualitative changes brought about by the institutions.

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CHAPTER II- REVIEWS

In 2009, Yes Bank was the 1st mid-sized bank (balance sheet less t h a n 2 4 , 0 0 0 c r o r e) a t t h e B u s i n e s s t o d a y i n K P M G I n d i a ' s B e s t B a n k A w a r d s , 2 0 0 9 . I t w a s r a n k e d t h e 1 s t f a s t e s t gr o w i n g b a n k b y B u s i n e s s T o d a y a n d F i n a n c i a l E x pr e s s a n d b a g g e d t h e f a s t e s t G r o w i n g B a n k ( b a l a n c e s h e e t l e s s t h a n 3 0 , 0 0 0 cr o r e ) a t t h e business world best bank award. It also was rated 1st on credit quality by financial express and new economy rated Yes bank as the most innovative bank in India. Moreover, some of these a w a r d s a n d a c c o l a d e s s e e m t o c o m e e v e r y y e ar t o y e s b a n k a r a t i f i c a t i o n of g o o d w o r k t h a t t h e y d o b y t h e i n d u s t r y . T h e s e achievements, year on year feels taller when one realizes that this bank started nearly a decade later than the other private sector b a n k s . I n 2 0 0 0 , w h e n y e s B a n k m a d e i t s i nt e n t i o n s c l e a r o f entering the Indian banking sector, many felt that the bank and p r o m o t er s are over-optimistic in a highly crowded and competitive Indian banking sector. Being a later entrant in a s e c t o r w h e r e l ar g e p r i v a t e a n d p u b l i c s e c t o r b a n k s r u l e d t h e r o o s t , t h e b a n k s h a d t o c h o i c e s e i t h er t o b e a m e t o o b a n k t h a t e m u l a t e s a n d p r o v i d e s s i m i l a r s e r v i c e s t h a t ot h e r o n a n a g g r e g a t e d o or e l s e t o t r e a d t h e d i f f i c u l t p a t h o f s t r o n g di f f er e n t i a t i o n , w h e r e t h e s e r v i c e s a n d o f f er i n g o f t h e b a n k a r e u n i q u e The bank chose the latter and this uniqueness was termed by the bank as the 'knowledge banking approach'. The support for k n o w l e d g e b a n k i n g a p pr o a c h w a s t o b e l e v er a g e d o n i nf o r m a t i o n t e c h n o l o g y a n d h u m a n r e s o u r c e s . T h e b a n k d e c i d e d t o pr o v i d e
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specialized

critical

service

to

hi g h

potential

and

growing

industries through its own expert personnel. This required the b a n k t o h i r e d om a i n e x p e r t s f r o m t h e i n d u s t r y a n d l e v e r a g e t h e i r s e r v i c e s t hr o u g h e f f i c i e n t u s e of t e c h n o l o g y w a s a l s o u s e d b y b a n k s t o b e e f f i c i e n t i s e a s e of t r a n s a c t i o n s , l o w e r c o s t s , h e i g h t e n s e c u r i t y a n d of f e r o t h e r i n n o v a t i v e s o l u t i o n . T h e b a n k d e c i d e d t o o u t s o u r c e t h e i nf o r m a t i o n t e c h n o l o g y f u n c t i o n s b u t r e t a i n e d t h e domain experts. The bank went onto adopt fair and employees towards new initiatives and projects. Although the bank had been noticed in the market, many felt that the bank has to go a long way before it becomes a formidable player to bigger private banks such as ICICI and to bigger public s e c t o r s b a n k s s u c h a s S t a t e B a n k of I n d i a . I m p r e s s i v e gr o w t h when being small is much easier than when you are large. With the consolidation in the industry seems to be the 'writing on the wall'. Moreover, the decision of the government to further o p e n i n g u p o f t h e s e c t o r t o f or e i g n m u l t i n a t i o n a l b a n k s w i l l create more pressure on the Indian banking sector and all the banks therein. According to Rana Kapoor, Yes Banks founder, MD and CEO. Yes banks, incorporated in 2003, started its financial operations in the third quarter of 2004 in Mumbai as a private sector bank. The b a n k ' s pr o m o t e r s R a n a K a p o o r a n d A s h o k K a p o o r o w n t h e c o n t r o l stakes of the banks, with financial assistance from Rabobanks has a d e e p e x p e r i e n c e of m or e t h a n 2 5 y e a r s i n t h e s e c t o r a n d h i s e r s t w h i l e A s s o c i a t i o n w i t h R a b o b a n k I n d i a a s i t s CE O h e l p e d securing the above said financial assistance. Moreover, his
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previous experience with Bank of America also made him a renowned banker in India. A f t e r 1 9 9 1 , t h e b a n k i n g s e c t o r w a s o p e n e d t o f or e i g n b a n k s that came in happily considering the vast scale and scope of the Indian business and market. and This led to to competition banking and subsequent addition r ef i n e m e n t services.

Telephone banking, net banking, automated teller machines, quick and efficient banking services, and so on, became the minimum service levels for the banks, this phase especially 1993, saw n u m e r o u s I n d i a n p r i v a t e b a n k s , s u c h a s I CI C I , H D F C , a n d A X I S and after some time, Yes Bank.

1. R a j n a n d a n P a t n a i k , F i n a n c i a l E x pr e s s , T h e I U P j o ur n a l o f B u s i n e s s S t r a t e g y , v o l . VI I I , N o 2 , Pg N o . 6 1 , J u n e - 2 0 1 1 . 2. R a n a K a p o o r , Y e s B a n k s f o u n d e r , M D a n d C E O , F i n a n c i a l E x pr e s s , T h e I U P j o u r n a l o f B u s i n e s s S t r a t e g y , v o l . VI I I , N o 2, PgNo. 63, June -2011.

T hr e e n e w b a n k s h a v e p o s t e d t h e i r f i r s t a n n u a l r e s u l t i n I n d i a t h i s year. Russias S b er B a n k s w h i c h a c c o u n t f or 2 6% of that country's banking assets now has a branch in India. So does S i n g a p o r e s u ni t e d O v e r s e a s B a n k . D ur i n g t h e s a m e t i m e S w i s s i n v e s t m e n t s b a n k c r e d i t S u i s s e l a u n c h e d a br a n c h i n I n d i a t o c o m p l e m e n t i t s e x i s t i n g pr a c t i c e . T h i s i s a p a r t f r o m A u s t r a l i a s ANZ, which is back in India after selling grind lays to standard c h a r t e r e d w i l l r e p or t i t s f i r s t r e p or t n e x t y e a r .
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R e c o v e r i n g f r o m t h e l o w s of 2 0 0 9 - 1 0 , f or e i g n b a n k s h a v e p o s t e d s t r o n g n e t w o r k o f b r a n c h e s f or e i g n b a n k s i n I n d i a h a v e t h e l o w e s t c o s t o f d e p o s i t s i n t h e i n d u s t r y e v e n l o w e r t h a n I n d i a s public and private sectors banks. By focusing on online banking, t h e y a r e a b l e t o m a x i m i z e pr o f i t d e s p i t e a m i n i m u m p r e s e n c e . T h i s a l s o r ef l e c t s i n t h e i r h i g h n e t i n t e r e s t m a r g i n s Both Citi bank and HSBC India caught in a retail showdown h a v e s e e n t h e i r p r of i t s b o u n c e b a c k f r o m t h e i r l o w i n t h e pr e v i o u s y e a r . A t C i t i I n d i a a s s e t s g r e w 1 6% t o R s 1 , 1 1 , 5 8 6 cr o r e , w h i l e n e t pr o f i t h a s j u m p e d 6 6 % t o R s 1 , 4 2 4 c r o r e . H S B C b ar e l y g r e w i t s a s s e t s b y 0 . 7 9 % t o R s 9 1 , 1 4 8 c r or e , b u t n e t p r of i t i s u p t o 8 8% a t R s 1 , 5 2 7 c r o r e . A t s t a n d a r d c h a r t e r e d a s s e t s gr e w 2 0 % t o R s 1 , 0 6 , 6 8 3 c r o r e , b u t n e t pr o f i t d e c l i n e d 3 % t o R s 2 , 0 5 9 cr o r e . S t a n C m a k e s t h e h i g h e s t pr o f i t a m o n g f o r e i g n b a n k s i n I n d i a , l e a s t a f f e c t e d b y t h e cr i s i s t h a t a l m o s t e v e r y o n e e l s e w e n t t hr o u g h i n 2009-10. Investors and bankers alike were surprised when shriram transport finance corp. collected Rs1,000crore in non-convertible debentures issue a day after opening on 28 June following an o v e r s u b s c r i p t i o n of m o r e t h a n f i v e t i m e s . T h e b o n d s a l e w a s t h e c o m p a n y s s e c o n d o n e i n t w o y e ar s a n d a s i m i l a r s a l e i n J u l y l a s t year too was a success. T h e t r u c k s f i n a n c i e r p l a n s t o u s e t h e m o n e y f or f u n d i n g b u y e r s o f t h e m o n e y f or f u n di n g b u y e r s of s m a l l t r u n k s a n d o t h e r commercial vehicles. shriram's success could attract more c o m p a n i e s t o t a p r e t a i l p o c k e t f or c a s h a s o t h er a v e n u e s o f r a i s i n g f u n d s g e t s m or e e x p e n s i v e a n d l e s s a c c e s s i b l e f o r t h e m s a y
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b a n k e r s ar e r e t i c e n t a b o u t n a m i n g c o m p a n i e s i n t h e p i p e l i n e , m o s t of the issuers are among the better rated companies. "We expect a lot of issuers having interest especially from nonbanking finance companies and the real estate sector," said Ajay Saraf, executive d i r e c t or s at ICICI securities in Mumbai. " L i q u i d i t y f or s o m e c o m p a n i e s i n t h e s e s e c t o r s i n t h e s e s e c t o r s i s tight and with interest rates close to a peak, both the investors a n d t h e i s s u e r s ar e h a p p y " . I n t e r e s t r a t e s i n I n d i a h a v e b e e n r i s i n g o v er t h e p a s t t w o years as the Reserve Banks of India raised its benchmark rated 10 t i m e s i n a r o w w i t h t h e l a s t i n c r e a s e b e i n g t h a t of 5 0 b a s i s p o i n t s . t h e m a i n o b j e c t i v e s w a s p a r t l y t o u n d o t h e s e r i e s of i n t er e s t r a t e cuts starting October 2008 to of f s e t impact of the global e c o n o m i c s l o w d o w n i n 2 0 0 8 - 0 9 a n d m or e i m p o r t a n t l y t o d a m p t h e a c c e l e r a t i n g i nf l a t i o n . I nf l a t i o n r a t e a s m e a s u r e d b y t h e w h o l e s a l e p r i c e I n d e x w a s l a s t r e p or t e d a t 9 . 1% . Some bankers and economists expect interest to rise a n o t h e r q u ar t e r t o h a l f % p o i n t b ef o r e s t a b i l i z i n g . S h i r r a m p a i d a c o u p o n o f b e t w e e n 1 1 . 1 % a n d 1 1 . 6% f o r d e b e n t ur e s m a t ur i n g i n 5years. For a bank that accounts for nearly a quarter of the Indian banking industry, state banking industry, state bank of India is in a mess, with rating agency Moodys down gr a d i n g SBIs s t a n d a l o n e s r a t i n g f or m c - t o d + , l a s t f o r t n i g h t . T h e a g e n c y r a t i o n a l e i s i n f l u e n c e d b y S B I ' s d e t er r i n g a s s e t q u a l i t y i n a h i g h interest rate environment, and a sub-normal level of Tier I Capital
18

T h e m a n a g e r a t S B I b e l i e v e s t h a t t h e m ar k e t s h a v e o v e r r e a c t e d M o o d y s o v e r a l l r at i n g f o r S BI i s B a a 2 b ut s t i l l a n o t c h above the country's sovereign rating. the d+ rating is exclusive to t w o p e r p e t u a l d e b t i n s t r u m e n t s , R s 1 , 7 8 5 cr o r e a n d R s 1 , 0 0 0 c r o r e r a i s e d b y S BI i n t w o t r a n c h e s ( 2 0 0 7 f o r 1 0 y e a r s a n d a n o t h e r i n 2 0 1 0 f or f i v e y e a r s ) , w h i c h a t t h a t t i m e s q u a l i f i e d a s t i e r I c a p i t a l .Under Basel III norms, these instruments now qualify for upper T i er I c a p i t a l a n d n o l o n g e r a s T i e r I c a p i t a l . [ 5 ] 3. Ryan Maxim August, 2011. Rodriguez, Business India, P g N o- 1 0 7 , 7 t h

4 . S u m i t S h ar m a , B u s i n e s s I n d i a , P g N o - 9 3 , 2 4 t h J u l y , 2 0 1 1 . 5 . R y a n M a x i m R o d r i g u e z , B u s i n e s s I n d i a , P g N o- 1 1 2 , 3 0 t h October2011. The last time Indian public sector banks went on hiring spree was in the mid-1970s so much so that, at 100,000 employees, state b a n k o f I n d i a t o d a y h a s t h e l ar g e s t n u m b e r o f e m p l o y e e s a t a n y b a n k i n t h e w o r l d . B y t h e m i d - 1 9 9 0 s , t h e n ot a b l e h i r i n g t h a t t o o k p l a c e w a s a t pr i v a t e s e c t o r s b a n k s . T o d a y , b o t h I C I C I b a n k s a n d H D F C B a n k s h a v e gr o w n t o a n e m p l o y e e b a s e o f a r o u n d 5 0 , 0 0 0 each With not too many employees being hired, promotions at PSBs became hard to come by. But with the mid-1970s batch of employees having reached superannuation, the situation has changed dramatically. Today even the new and old private sector banks are hiring to service their rapidly expanding business. " O v e r 1 0 0 , 0 0 0 e x p e r i e n c e d e m p l o y e e s w i l l l e a v e t h e p u b l i csector bank system between 2010 and 2015," says Allen Pereira,
19

director,

NI M B

(National

Institute

of

Bank

Management).

"Almost all public sector banks have embarked upon a massive recruitment drive," he adds. Punjabi National Bank Alone will hire 12,000 employees this year. B a n k of B a r o d a h a s m a n a g e d t o d o u b l e i t s b u s i n e s s e v e r y t hr e e years, gr o w i n g by a compounded25-26%, a creditable achievement given that it is among the larger banks in the country. The banks should manage to sustain the momentum having opened nearly 500branches these years and hoping to add o t h e r 5 0 0 n e x t s y e ar s . M D M a l l y a , C M D o f b a n k o f B a r o d a , t e l l s Bruhadeeswaran R that the bank is adequately capitalized and w o u l d b e a b l e t o m e e t t h e B a s e l I I I n or m s . i n t h e n i n e m o n t h s t o D e c e m b e r t h e t o p l i n e h a s gr o w n 3 5 % y e a r - 0 n- y e a r g l o b a l l y w h i l e f o r t h e d o m e s t i c b u s i n e s s , t h e gr o w t h h a s c o m e d o w n t o 2 0 % w e h a d e a r l i e r . F or t h e c u r r e n t y e a r , w e w o u l d gr o w a t ar o u n d 2 5% i n t o p l i n e i n t h e g l o b a l b u s i n e s s a n d the domestic growth would be compensated with the accelerated growth in the international business. Every three years we have doubled our business as of March 2008. So we are expecting the business for March 2012 from what it was in March 2009. 6. Ryan Maxim Rodriguez, Business India, P g N o- 8 5 , 1 1 t h December, 2011. 7 . M D M a l l y a , C M D of b a n k o f B a r o d a , T h e f i n a n c i a l E x p r e s s , PgNo13, March 2011. 8. corporation banks has been growing its loan book by about 2 5 % i n e a c h of t h e l a s t t h r e e y e a r s b u t h a s remain pr o f i t a b l e with its m ar g i n managed to stable at
20

relatively

b e t w e e n 2 . 5% a n d 3% . A j a y K u m a r C M D , c o r p or a t i o n b a n k , t e l l s B r u h a d e e s w a r a n R t h a t t h e b a n k s w i l l f o c u s o n r ur a l l o a n s b e c a u s e o f t h e o p p or t u n i t i e s t h er e . T h o u g h w e h a v e l a r g e s h a r e s o f c or p o r a t e l o a n s , w e h a v e been strategically adding to retail and SME assets in the last six t o n i n e m o n t h s a n d t h e r e t a i l p or t f o l i o n o w a c c o u n t s f or 1 8% of o u r t o t a l l o a n . C o r p o r a t e l o a n s , w h i c h n o w a c c o u n t f or 4 7% of t h e l o a n b o o k , w i l l c o n s t i t u t e a s m a l l e r s h a r e i n t h e f u t u r e .[ 8 ] O v e r t h e p a s t t hr e e y e a r s H D F C b a n k , r o l e m o d e l f or t h e b a n k i n g industry with steady profitability and low delinquencies, has c h a n g e d t h e w a y i t w o r k s . T h e pr i v a t e s e c t o r s b a n k s h a s m o v e d o u t i n t o s e m i u r b a n a n d r ur a l ar e a s , w h i c h n o w b r i n g i n 4 0 % of t h e b u s i n e s s . A d i t y a P ur i , t h e M D a n d C E O o f H D F C b a n k , t e l l s Shobahana Subramanian that leading even to very small c o n s u m e r s c a n b e a pr o f i t a b l e i n i t i a t i v e t h a t w i l l f o s t e r f i n a n c i a l i n c l u s i o n . M o r e i m p or t a n t l y , P u r i i s c o n v i n c e d t h e m o d e l i s scalable and is looking to lend to 10milion small borrowers in the n e x t f o u r y e ar s . U d a y K o t a k h a s b e e n r e m a r k a b l y p r e s c i e n t i n pr e f e r r i n g s m a l l t i c k e t s l o a n s a n d i n n ot l e a d i n g t o t h e i nf r a s t r u c t u r e s e c t o r s .t h e executive vice-chairman and MD of kotak Mahindra bank has ree n g i n e e r e d t h e b a n k s m o d e l o v e r t h e p a s t c o u p l e of y e a r s s o t h a t c o r e b a n k i n g n o w b r i n g i n t h e b u l k of t h e p r o f i t s . K o t a k b e l i e v e s t h a t t h e m a r k e t i s p er h a p s a l a d t o o o p t i m i s t i c o n t h e r e v e r s e of t h e i n t er e s t r a t e c y c l e a n d t e l l s s h o b a h a n a S u br a m a n i a n t h a t i t
21

s e e m s u nl i k e l y t h e c e n t r a l b a n k w i l l c u t p ol i c y r a t e s b y m or e t h a n i n f l a t i o n c o u l d r em a i n a t 7% t h r o u g h t h e y e a r . 9. Ajay 10. 11. Kumar CMD of c o r p or a t i o n bank, the financial

E x pr e s s , P g N o 1 7 , M a r c h 2 0 1 1 . A d i t y a P u r i , t h e M D a n d CE O of H D F C b a n k , t h e U d a y K o t a k v i c e - c h a i r m a n a n d M D of k o t a k v i c e f i n a n c i a l E x pr e s s , P g N o 2 1 , M a r c h 2 0 1 1 . c h a i r m a n , t h e f i n a n c i a l E x pr e s s , P g N o 2 5 , M a r c h 2 0 1 1 .

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CHAPTER III METHODOLOGY

Banking Industry plays great role for the healthy economic growth of the country .the economic significance of any d e v e l o p m e n t pr o g r a m .

3.1Objectives of Study
T h e m a i n o b j e c t i v e o f t h e s t u d y i s t o u n d er s t a n d t h e v a r i o u s advertising strategies of the banks To understand the advertising done by the banks through different medium of advertising. To understand the advertising expenses incurred by the banks in India.

3.2 Hypotheses
The topic, I selected that the financial institutions is very i n t e r e s t i n g . T h e f i n a n c i a l i n s t i t u t i o n s p l a y a v er y i m p o r t a n t r o l e f or d e v e l o p m e n t of t h e s o c i e t y . F or t h e w e l f a r e o f t h e s o c i e t y & help the consumers to take a right decision. So that reason, the topic is to enhance & to provide financial services to the customers.

3.3 Methodologies
Though this study fact finding in nature a lot on secondary data ar e require for its successful completion hence it is
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necessary to explain in details the methods by which these Data are sough.

3.4 Collections of Secondary Data

T h i s r e s e a r c h s t u d y i s p ur e l y r e l i e d o n t h e s e c o n d a r y d a t a . t h e s e c o n d a r y d a t a r e q u i r e d f or t h e s t u d y c o u l d b e o b t a i n e d m o s t l y f r o m b o o k s , j o ur n a l s , m a g a z i n e s , e f f o r t s w o u l d b e m a d e a s m u c h i n f or m a t i o n f r o m t h e i n t e r a c t a b o u t t h e b a n k i n g i n d u s t r i e s i n India.

3.5 Statistical Tools

G e n e r a l pr o b l e m c o u l d b e s u b j e c t e d t o s c i e n t i f i c t r e a t m e n t only taking recourse to certain time honored statistical tool of a n a l y s i s . A s f ar a s t h e p r e s e n t s t u d y i s c o n c e r n e d t h e S t a t i s t i c a l t o ol s a r e w o r t h t r y i n g .

3.6 Diagrams & Graphs

These are the major statistical tool meant for the effective i n t e r pr e t a t i o n o f a n y s e t of d a t a . T h e y w o u l d g i v e a n y c a s u a l r e a d e r a b r i ef o f t h e r e s e a r c h p r o j e c t t h e s i s . T h e b a n k i n g industries in India could be clearly interpreted with the help of t a b l e a n d d i a gr a m s f u r t h e r t h e b a s i s t r e n d a b o u t t h e a c t u a l contribution made by the banks to generate performance of banking in India could be made intelligible with the help of t a b l e s & d i a g r a m s . T h e i n v e s t i g a t o r d o e s n ot w a n t t o c o n s i d e r a n y o t h e r t o o l s f or f u r t h er i n t e r pr e t a t i o n .

24

3.7 The uses of study

T o k n o w a b o u t t h e v a r i o u s p r o m o t i o n a l t o ol s o f pr i v a t e banks &public sector banks in India. T o m a k e a n a n a l y s i s o f c u s t o m e r p e r c e p t i o n f or p r o m o t i o n a l s t r a t e g i e s of p r i v a t e & p u b l i c s e c t o r s b a n k s i n I n d i a . T o f i n d o u t t h e k e y p r om o t i o n a l t o o l s f o r b a n k i n g s e r v i c e o n t h e basis of customer's responses.

3.8 Advantages & Disadvantages

I n or d e r t o d e v e l o p a n a d v er t i s e m e n t s t r a t e g y , e a c h a s p e c t m u s t b e e x a m i n e d f or b o t h a d v a n t a g e s a n d d i s a d v a n t a g e s . D ur i n g t h e p r o c e s s , c o s t i s u s u a l l y f a c t or e d i n t o w e i g h i n g t h e p r o s a g a i n s t t h e c o n s of a s t r a t e g y . Although an advantage might be to bring in new customers, the disadvantage to the strategy could be it could cost too much to gain the new customers. I f a m ar k e t i n g s t r a t e g y c o n c e r n s i t s e l f w i t h d i s t r i b u t i o n , examining and accessing the cost of different distribution m e t h o d s w i l l r e v e a l i f t h e s t r a t e g y s h o u l d b e i m p l e m e n t e d . Fo r e x a m p l e , o n e w a y t o d i s t r i b u t e i n f or m a t i o n i s t hr o u g h e m a i l marketing. Although the advantage is email marketing is relatively inexpensive, the disadvantage is that because of the h i g h v o l u m e o f s p a m j u n k m a i l , m a n y I n t e r n e t s e r v i c e p r o v i d er s h a v e s e t u p e l a b o r a t e f i l t er s t o k e e p o u t u n s o l i c i t e d e m a i l s .

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3.9 Scopes of Study

The study of the project helps to define the various problems relating to financial institutions in clear & precise m a n n e r . T h e s t u d y of t h e p r o j e c t ar e i m p or t a n t t o i m p r o v e t h e d e c i s i o n m a k i n g s k i l l s i n a pr a c t i c a l p o i n t of v i e w b y a n a l y s i s of the financial institutions & helps to give clear picture about the P r a c t i c a l k n o w l e d g e a b o u t t h e w or k i n g a c t i v i t i e s of t h e f i n a n c i a l institutions. T h e r e i s a b i g g a p b e t w e e n t h e t h e o r y k n o w l e d g e & pr a c t i c a l k n o w l e d g e . S o , t h e s c o p e o r i m p or t a n c e of s t u d y of t h e p r o j e c t i s t o f i n d t h e p r a c t i c a l pr o b l e m e f f e c t i v e l y & i m p r o v i n g t h e d e c i s i o n making skills.

3.10 Statement of the Problem

T h e p r e s e n t r e s e a r c h p r o j e c t a t t e m p t t o h i g h l i g h t t h e f a c t or s r e s p o n s i b l e f or t h e s t a r p e r f or m a n c e b a n k i n g i n d u s t r i e s i n I n d i a . Till date no systematic research project study on the p e r f or m a n c e of banking become w or t h w h i l e to promote the overall performance of banking industries.

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CHAPTER IV ADVERTISING STRATEGIES OF BANKING SECTORS IN INDIA

4.1ADVERTISING
Advertising is a form of communication used to persuade an audience i.e. viewer, readers or listeners to take some action with respect to products, ideas, or services. Most commonly, the desired result is to drive consumer behavior with respect to a commercial offering, although political and ideological advertising is also common. Advertising messages are usually paid for by sponsors and viewed via various traditional media, including mass media such as newspaper, magazines, television commercial, radio advertisement, outdoor advertising or direct mail; or new media such as websites and text messages. Commercial advertisers often seek to generate increased consumption of their products or services through "Branding," which involves the repetition of an image or product name in an effort to associate certain qualities with the brand in the minds of consumers. Non-commercial advertisers who spend money to advertise items other than a consumer product or service include political parties, interest groups, religious organizations and governmental agencies. Nonprofit organizations may rely on free modes of persuasion, such as a public service announcement (PSA).Modern advertising developed with the rise of mass production in the late 19th and early 20th centuries.
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In 2010, spending on advertising was estimated at more than $300 billion in the United States and $500 billion worldwide. Internationally, the largest "big four" advertising conglomerates are Interpublic, Omnicom, Public is, and WPP. Advertising is all over the places, on T.V and Radio, in newspapers and magazine, on Billboard and even posters across the sides of the buses. It is persistence and persuasive, but it would be simplistic, to believe that the power of advertising has over us in just about how we spend our money. If an advertising can really persuade us to buy a product. Surely it can be just as effective in persuading us to buy a product; surely it can be just as effective in persuading us to think is a certain way. Advertising serves two purposes: To recruit new customers To increase use of goods and services among existing customer.

4.2 SERVICE ADVERTISING

Here the focus is not on a factory manufactured item or product but a company providing a service. This could be a bank, the railways a call centre or travel agency. The ads usually show the company as a leading service provider in its particulars field. As such the services are more difficult to evaluate due to intangible nature the advertising is important. Similarly, banks are found to advertise their saving schemes and loan facilities that they offer for buying homes and vehicles. Such all other services, interest rates, facilities are advertise through banks.
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4.3

Advertising media selection

Advertising media selection is the process of choosing the most cost-effective media for advertising, to achieve the required coverage and number of exposures in a target audience. In addition to the characteristics of the media themselves, a number of other important factors must be taken into account in selecting the media mix for a particular advertising campaign. These factors are: The characteristics of the target audience. The level of exposure of the target audience to the communication. The impact which advertising will have on the target audience. The extent to which the effects of a particular advertising message wear out over time The cost of advertising through a particular medium.

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4.4TYPES OF ADVERTISING MEDIA

The type of media is influenced by the characteristics of each medium and their ability to achieve the specified promotional objectives. Selection of the media outlet through which an ad will be presented has important implications for the success of a promotion. Each outlet possesses unique characteristics though not all outlets are equally effective for all advertisers. Thus, choosing the right media can be a time consuming process requiring the marketer to balance the pros and cons of each option. While just a few years ago marketers needed to be aware of only a few media outlets, todays marketers is well-versed in a wide range of media options. The reason for the growing number of media outlets lays with advances in communication technology, in particular, the Internet. The following are most common type of media and their characteristics:

1. Television 2. Radio
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3. Print Publications Newspaper Magazine/journal 4. Internet 5. Direct Mail 6. Signage 7. Product Placement 8. Mobile Devices 9. Sponsorships 10. Other Media Outlets

1) Television Advertising

If ones choice of bank were based solely on the TV ads that banks have been coming out with, consumers would definitely have a tough time choosing one over the other. And isnt that what advertising is all about? Boosting the banks image and getting the customers interest more than a little piqued?

31

While bank commercials and catchphrases have been around for the longest time, many banks still have yet to learn to say what the customers want to hear. Nowadays though, most bank ads are so smartly conceptualized, wittily worded, and perfectly produced so as to clearly communicate with millions of potential bank clients. The recent months have seen a surge in commercials that have elicited more than the usual yawns and the been there, done that responses from bank customers. Here are some of the latest bank ad campaigns and the banks values they intended to convey. These ads had people informed, amused, inspired, and most importantly, got them thinking.

Advantages

Television permits you to reach large numbers of people on a national or regional level in a short period of time Independent stations and cable offer new opportunities to pinpoint local audiences

Television being an image-building and visual medium, it offers the ability to convey your message with sight, sound and motion

Disadvantages

Message is temporary, and may require multiple exposure for the ad to rise above the clutter Ads on network affiliates are concentrated in local news broadcasts and station breaks

Preferred ad times are often sold out far in advance

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Limited length of exposure, as most ads are only thirty seconds long or less, which limits the amount of information you can communicate

Relatively expensive in terms of creative, production and airtime costs

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2)

Radio Advertising

At the time, it sounded like a great idea. A financial institution (that shall remain nameless) had a successful print advertising campaign that it wanted to convert to radio. The ads featured images of diamonds, symbolizing the bank's strength and stability. The proposed radio script talked about how--deep inside the earth--it took millions of years of pressure for carbon to be compressed into diamonds. The highlight of the spot was supposed to be a sound effect of "diamonds being made." When the radio producer saw the script, he scratched his head. What sound would the average listener instantly recognize as that of carbon being converted into diamonds? The script was visual and abstract--written by someone who knew little about radio's unique requirements. The concept ultimately had to be discarded in favor of another that was more "radio friendly." "I had a client who gave me a script that called for sound effects of a man sleeping on a screened-in porch," says Paul Fey, president and chief creative officer at World Wide Radio, a large radio commercial production company in Hollywood,
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Calif. "Clearly, the writer was used to working for television. He was forcing a visual image into an audio medium. It didn't work." These two stories symbolize a problem that is common in radio advertising for the financial services industry. Many bank marketers don't understand radio and, all too often, either create or approve radio commercials that are weak, unworkable or ineffective. The difficulty is particularly noticeable at community banks where, for budget reasons, radio is sometimes the only broadcast advertising that the institutions buy. Bad radio can hurt. "A truly awful commercial can actually annoy people," notes Fey, whose company annually produces hundreds of new radio commercials for clients including such financial service companies as Wells Fargo & Co., Cal Fed and Bank of America. "An annoying ad leaves a negative impression of your brand." ABA Bank Marketing magazine asked several seasoned radio-advertising experts to assess the special challenges of the medium and to pinpoint the common mistakes that financial institutions make with it.

Advantages
Radio is a universal medium enjoyed by people at one time or another during the day, at home, at work, and even in the car. The vast array of radio program formats offers to efficiently target your advertising dollars to narrowly defined segments of consumers most likely to respond to your offer. Gives your business personality through the creation of campaigns using sounds and voices
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 Free creative help is often available Rates can generally be negotiated During the past ten years, radio rates have seen less inflation than those for other media

Disadvantages
Because radio listeners are spread over many stations, you may have to advertise simultaneously on several stations to reach your target audience Listeners cannot go back to your ads to go over important points Ads are an interruption in the entertainment. Because of this, a radio ad may require multiple exposure to break through the listener's "tune-out" factor and ensure message retention Radio is a background medium. Most listeners are doing something else while listening, which means that your ad has to work hard to get their attention

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3)

Print Publications Advertising

Print publications such as magazines, newspapers and Special Issue publications offer advertising opportunities at all geographic levels.

Newspaper Magazines (a) Newspaper

Newspapers have also incorporated color advertisements, though their main advantage rests with their ability to target local markets. Special Issue publications can offer very selective targeting since banks give advertisements to show the progress and new schemes provided by banks.

Advantages
Allows you to reach a huge number of people in a given geographic area You have the flexibility in deciding the ad size and placement within the newspaper
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 Your ad can be as large as necessary to communicate as much of a story as you care to tell Exposure to your ad is not limited; readers can go back to your message again and again if so desired. Free help in creating and producing ad copy is usually available Quick turn-around helps your ad reflect the changing market conditions. The ad you decide to run today can be in your customers' hands in one to two days.

Disadvantages
Ad space can be expensive Your ad has to compete against the clutter of other advertisers, including the giants ads run by supermarkets and department stores as well as the ads of your competitors Poor photo reproduction limits creativity Newspapers are a price-oriented medium; most ads are for sales Expect your ad to have a short shelf life, as newspapers are usually read once and then discarded. You may be paying to send your message to a lot of people who will probably never be in the market to buy from you. Newspapers are a highly visible medium, so your competitors can quickly react to your prices
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 With the increasing popularity of the Internet, newspapers face declining readership and market penetration. A growing number of readers now skip the print version of the newspaper (and hence the print ads) and instead read the online version of the publication.

(b)

Magazines

Magazines especially those that target specific or specialized interest areas, are more narrowly targeted compared to broadcast media. Additionally, magazines offer the option of allowing marketers to present their message using high quality imagery e.g., for e.g. banks offer various schemes on loans, interest on bank accounts ,etc.

Advantages

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 Allows for better targeting of audience, as you can choose magazine publications that cater to your specific audience or whose editorial content specializes in topics of interest to your audience. High reader involvement means that more attention will be paid to your advertisement Better quality paper permits better color reproduction and full-color ads The smaller page (generally 8 by 11 inches) permits even small ads to stand out

Disadvantages
Long lead times mean that you have to make plans weeks or months in advance The slower lead time heightens the risk of your ad getting overtaken by events There is limited flexibility in terms of ad placement and format. Space and ad layout costs are higher

4)

Internet Advertising

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Entering the web advertising can help keep you up on Bank ad Trends by showing you how other Bank ad advertising compare to the overall Internet standards. You also can make Bank ad news if you have the Best Bank and Bank ad newsletters will want to cover you win bringing you additional visibility within your industry. Two key reasons for this shift rest with the Internets ability to: 1) Narrowly target an advertising message 2) Track user response to the advertisers message. The Internet offers many advertising options with messages delivered through websites or by email.

Internet advertising is huge

Entering the Web Awards can help keep you up on Bank ad Trends by showing you how other Bank ad advertising compare to the overall Internet standards. You also can make Bank ad news if you have the Best Bank and Bank ad newsletters will want to cover you wins bringing you additional visibility within your industry. In today's modern society, the growing role of electronic banking in our day-to-day lives has become ever present. Most large banks now offer their customers the ability to manage and transfer funds, view and print past statements, and arrange recurring automatic utility payments -- all from home or on the go via any wireless
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Internet connection. Specific and deliberate marketing techniques have helped online banking been grow in popularity and maintain its longevity.

(a) Email Advertising

Using email to deliver an advertisement affords marketers the advantage of low distribution cost and potentially high reach. In situations where the marketer possesses a highly targeted list, response rates to email advertisements may be quite high. Emails sent from the Bank are marked Confidential. However you acknowledge that emails are transmitted over the internet which is an unsecure public domain and because of the risks of unlawful interception, corruption, nondelivery or mis-delivery the Bank cannot guarantee that loan documentation sent through the email service will: Remain confidential, Be free from contamination by viruses, worms or Trojans, Be free from interference, Be delivered in a timely manner or at all

5) Direct Mail Advertising

This method of advertising uses postal and other delivery services to ship advertising materials, including postcards, letters, brochures, catalogs and flyers, to a physical address of targeted customers. Direct mail is most effective when it is designed in a way that makes it appear to be special to the customer. For instance,
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a marketer using direct mail can personalize mailings by including a message recipients name on the address label or by inserting their name within the content of marketers message. Direct mail can be a very cost-effective method of advertising, especially if mailings contain printed material. This is due to cost advantages obtained by printing in high volume since the majority of printing costs are realized when a printing machine is initially setup to run a print job and not the because of the quantity of material printed. Consequently, the total cost of printing 50,000 postcards is only slightly higher than printing 20,000 postcards but when the total cost is divided by the number of cards printed the cost per-card drops dramatically as more pieces are printed. Obviously there are other costs involved in direct mail, primarily postage expense. Gone are the days when you could walk into any bank in the country and get down-home service straight out of a Frank Capra movie. Technology, mergers and the current financial crisis have all but put an end to that. But some recent mail campaigns from a few financial institutions show that demonstrating good oldfashioned customer service is key to getting and keeping customers in these stilltroubled times.

Advantages

Your advertising message is targeted to those most likely to buy your product or service. Marketing message can be personalized, thus helping increase positive response

Your message can be as long as is necessary to fully tell your story. Effectiveness of response to the campaign can be easily measured.
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You have total control over the presentation of your advertising message. Your ad campaign is hidden from your competitors until it's too late for them to react

Active involvement - the act of opening the mail and reading it -- can be elicited from the target market.

Disadvantages

Some people do not like receiving offers in their mail, and throw them immediately without even opening the mail. Resources need to be allocated in the maintenance of lists, as the success of this kind of promotional campaign depends on the quality of your mailing list.

Long lead times are required for creative printing and mailing Producing direct mail materials entail the expense of using various professionals - copywriter, artists, photographers, printers, etc.

Can be expensive, depending on your target market, quality of your list and size of the campaign.

6)

Signage and Billboard Advertising

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The use of signs to communicate a marketers message places advertising in geographically identified areas in order to capture customer attention. The most obvious method of using signs is through billboards, which are generally located in high traffic areas. Outdoor billboards come in many sizes, though the most wellknown are large structures located near transportation points intending to attract the interest of people traveling on roads or public transportation. Indoor billboards are often smaller than outdoor billboards and are designed to attract the attention of foot traffic (i.e., those moving past the sign). For example, smaller signage in airports, train terminals and large commercial office space fit this category. Digital signage gives banks and credit unions a powerful tool for engaging customers in the branch. Discover the benefits and best practices for deploying digital signage in banks. While billboards are the most obvious example of signage advertising, there are many other forms of signage advertising include:

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7)

Product Placement Advertising

Product placement is an advertising approach that intentionally inserts products into entertainment programs such as movies, TV programs and video games.

Placement can take several forms including:

Visual imagery in which the product appears within the entertainment program Actual product use by an actor in the program Words spoken by an actor that include the product name Product placement is gaining acceptance among a growing number of marketers for two main reasons. First, in most cases the placement is subtle so as not to divert significant attention from the main content of the program or media outlet. This approach may lead the audience to believe the product was selected for inclusion by program producers and not by the marketer. This may heighten the credibility of the product in the minds of the audience since their perception, whether accurate or not, is that product was selected by an unbiased third-party.

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Second, entertainment programming, such as television, is converging with other media, particularly the Internet. In the future a viewer of a television program may be able to easily request information for products that appear in a program by simply pointing to the product on the screen. With the information they may get the option to purchase the product. As this technology emerges it is expected that product placement opportunities will become a powerful promotional option for many marketers.

8)

Mobile Device Advertising

Mobile banking (also known as M-Banking, mbanking) 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, a service known as SMS banking. With the introduction of the first primitive smart phones with WAP support enabling the use of the mobile web in 1999, the first European banks started to offer mobile banking on this platform to their customers. Mobile Banking refers to provision and an ailment of banking- and financial services with the help of mobile telecommunication devices. The scope of offered services may include facilities to conduct bank and stock market transactions, to administer accounts and to access customized information.
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9)

Sponsorship Advertising

A subtle method of advertising is an approach in which marketers pay, or offer resources and services, for the purpose of being seen as a supporter of an organizations event, program or product offering. Sponsorships are a valuable part of Standard Bank Group's social responsibility and marketing communication strategies. Sponsorships are essential in building the brand and creating relevance in markets where Standard Bank Group operates, and they provide a platform for us to engage with our customers. Development is key to our deciding on what sponsorships we undertake. Currently, we look at initiatives that support community up liftmen, the arts and sport.

10) ADVERTISING SLOGANS

Advertising slogans also plays an important role in advertising as it appeals to the people or customers that they value their feelings. Following are some banks having slogans.

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Bank of Baroda - India's International Bank

Citibank -1 Your Citi never sleeps 2 because the Citi never sleeps 3 Citi. Live Richly 4 The whole world in one bank 5 where money lives

HSBC - World's Local Bank

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IDBI - (Hindi-India) Aao Sochein Bada

Morgan Stanley investment bank - One client at a time

SBI - (Hindi-India) Sirf Banking Aur Kuch Nahi (Pure Banking..

Nothing Else)

Union Bank of India - Your Dreams Are Not Yours Alone

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4.4

PAST ADVERTISING & BANKS ADVERTISING

Past Advertising In the past, studies of bank advertising have a focused primarily on advertising as a method for achieving a particular marketing strategy. For eg, a traditional advertising campaign may promote the services , products, cost saving, or investment returns available at a particular bank. In addition , bank advertising may emphasize the financial image of the bank. Bank Advertising The first requirement of a relationship between a customer and a bank is to establish the customers awareness of the bank and its services. The customers awareness of the bank can be increased by the banks advertising and by personal contacts between the customer and personal representing the bank. In smaller communities, however, customer awareness of a particular bank is generally assumed. Bank advertising then can be designed to achieve other goals such as promoting the image of the bank as one that cares about its customers and serves the community.

1)Reason for bank advertising

A customer is likely to have a good relationship with the bank if the customer perceive the bank cares about his or her wellbeing. Banks and their personnel can demonstrate this caring in many ways. Friendly service, recognizing customer by
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name and providing services not contractually may all be effective tools. Another way is to direct the banks advertising to deliver a message of caring for both customer and community. Positive relationships with their customers benefit banks in a number of important ways. If a customer has a good relationship with a bank, the customer finds satisfaction in the banks success and is often willing to conduct business with the bank even when more favorable terms are availaibleelse where. Customers place a high value on personalized quality service and conclude the maintaining this relationship with customers is essential to the bankks attempt to attract and keep high-income customers. They also conclude that product development in pastyears, accelerated by deregulation, appears far less important than enhancement of personalized services Small banks have atleast one significant advantage over larger banks. they report that in many rural areas people have grown up with and developed a relationship with the local banks. Large banks attempting to enter the market are often viewed as outsiders and are required to earn the trust of and build a relationship with the community to be successful. Small banks are generally viewed as friendlier and approve loans more often than large banks. This image is an advantage for smaller banks.

Union bank of India

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(UBI) started advertising on television. This was a first in the banks 88 year history and it did so in style, picking the third edition of popular game show KaunBanegaCrorepati on star plus channel and also the ICC Cricket World Cup although that didnt end well for India and Indian advertisers. The bank wanted to make their brand more relevant to the youth and these two events seemed appropriate for that. UBI isnt alone of late, several other public sector banks have embarked on ambitious and expensive advertising campaigns. Their reasons for doing so include centenary celebrations, the desire to compete with marketingsavvy private and foreign bank for a slice of the retail market, or a combination of two. Mudra group has also suggested the bank to concentrate on youth as such it comprises of the 55% of the population thus it suggested to reinvent the brand for younger customers.

Expenditure
Media owners and advertising agencies arent complaining : UBI hired Mudra group to do its advertising the banks annual ad-spends are likely to go up from rs.25 crore in 2006-07 to rs.50 crore in 2007-08.

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Bank of India

Bank of India (BOI) has recently hired O&M, one of Indias bestknown advertising agencies, to create a campaign that appeared in print andon radio and television. According to a senior executive at Bank of India,who does not wish to be identified, the bank spent around rs.20 crore on the exercise and the volume of advertising by public-sector banks on TV increased 33% in 2006 (over 2005), in print, it increased 62%. Executives advertising in the banking and industry believe

advertising Volumes and consequently spend, will rise this year too.

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1)

Public Banks Advertising

The State Bank of India

Created public financial awareness through innovative ad campaign created by Inter pub The State Bank of India (SBI) India's premier bank, has unveiled an innovative advertising campaign, which was conceptualized and created by Interpublicity Advertising Agency (Interpub) to facilitate greater public awareness of financial products and services.The first-of-its-kind national campaign leverages concept branding and establishes SBI as thought leader. Interpub a full service communication agency founded in 1964, created a series of advertisements (ads) with the intent of addressing a specific target customer profile and ensuring a better understanding of the various aspects of financial and banking instruments. The ads don't endorse SBI directly, but inform the common man especially in small towns and cities about the Do's and Don'ts pertaining to routine banking facilities such as ATM, Netbanking, Net Shopping, credit cards, debit cards, mutual funds, etc. The challenge for the advertising agency, Interpub was well defined: create communication that would not only target specific issues but also encompass a wide range of audience. While one ad talks about the fact that "The best place to keep all your savings? In your pocket?", another one quickly points out that "Credit Card offers both: advantages and problems! And thankfully, you can select either". While one ad illumines that "You can't predict the future but atleast you can plan for it", the other extols, "Leave behind not only your memories. Leave back your wealth as well."
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Talking about the strategy, Mr.Yogendra Gouti, Managing Director, Interpub, said, "Research showed that SBI customers had several unanswered questions about various facets of banking. The overall aim was to cover a wide section of the population while also delivering the targeted message in a clear and communicative manner. We are proud tohave created an ad campaign that communicates with all the professionalism and seriousness that reflects the SBI's intent and purpose." The campaign has its origin in the fact that customers from different socioeconomic classes always posed lots of questions to SBI. For e.g., How safe is Net banking? What is CBS and what are its uses? Is nomination important? Questions galore but not many customers had the answers. SBI initiated its efforts of getting a solution with the aim of providing clarity and to establish its role as India's thought-leader in banking. What emerged is a series of eye-catching educational ads revolving around the "Pure Banking, Nothing Else" theme. Interpub started off with a far-reaching market survey, which was conducted with respondents skewed towards the small cities and towns. Revealing facts were thrown up --- Like the existence of "knowledge pockets"; i.e., specialized and indepth familiarity about certain topics but total lack of in-depth awareness about generic topics. This meant that consumers had "zoned in" on topics that they considered "important" while ignoring topics that they considered "not as important". This resulted in lop-sided knowledge and a risk to overall financial awareness. For e.g., a shopkeeper would be familiar with details of small business loans but would be unaware about the importance of a nomination facility on his savings account! Interpub felt that the need was for communication that would address the different issues while also being relevant to the varying target audiences. The aim being to
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create a well-rounded knowledge base so that people would be better able to leverage the financial opportunities available while also creating an overall enhanced fiscal behavior pattern. The campaign would have to translate into a better understanding of financial tools and also infuse background knowledge of the operating conditions of various financial bodies. Topics short-listed by the agency and SBI ranged from credit card payments to building up ones credit record; Maintaining security while banking via the computer to enhancing loan eligibility. A wide variety ofads touched upon the entire gamut of subjects and harnessed the potential of clear, concise communication in an impactful and relevant manner. Each ad was created with the specific intent of addressing a specific target profile. A clear course of action was provided and physical retention devices were inbuilt into each ad.

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2) Private Sector banks advertising

IndusInd Bank launches IndusMobile

Private lender IndusInd Bank appears to have focused on the convenience of its interface. In a statement, the Mumbai-based provider spoke about the anytime, anywhere appeal of mobile banking, highlighting that consumers can both access their account information and complete transactions from their phone at no extra cost. IndusMobile has provided its customers with the expected balance inquiries, statements and payments but it has also built in some handy extras. With the app, consumers can book airline and movie tickets, and make mobile to mobile money transfers. This functionality should be well received by Indias cell phone-enthusiastic consumers. Users of the app can access NEFT and IMPS, RBIs inter-bank payment service. A first achieved by the IndusMobile app is card-less cash withdrawal, which supports transactions made using just the phone. Via this feature, beneficiaries can take cash out of IndusInd Bank ATMs without needing to use an ATM or Debit card.
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IndusInd Bank claims that its the first provider in India to offer such a possibility. The mobile banking space continues to grow, both in India and overseas. A recent Antenna Software survey found that over one in three US consumers with a smartphone uses mobile banking.

This service still has a strong connection with youth another study, conducted in the UK by YouGov polling, found that over half of those surveyed in the 18-24 age group wanted to use mobile banking. Which was very different to the over 55 sector, who only offered a 21% interest. It will be interesting to watch how financial providers like IndusInd Bank promote their apps. Should they appeal to already-excited, tech-savvy consumers, or put effort into educating those more senior?

Mass Media Advertising: Most Preferred mode for marketing of Banking Services
Mass media advertising includes TV commercials and advertising in national level newspapers which have a wide coverage. Advertising in these has made maximum people aware about the offerings of the banks and established most of the bank names as big brands. In a recent survey ICICI Bank has been considered as the most popular banks in private sector. The use of umbrella branding works well in promotion of banking services. Different types of advertisement campaigns have been seen in form of TV commercials and as print ad in newspapers. Print ads
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mainly focus on corporate image advertising of banks as well as a new offering of the bank such as increase in interest rate on deposits or decrease in the interest rates in loans and so on. TV commercials mainlyfocused on corporate advertising, where banking service is promoted as a whole rather than a particular product of banks.

Themes and appeals used in TV commercials of banking:

Advertising appeal is the method used to draw the attention of consumers and to influence their feelings toward the product, service, or cause. There are hundreds of different appeals that can be used as the foundation for advertising messages. These are the central idea of an ad which has been used to catch the attraction of customer by heart. The theme of a commercial strikes a person in depth and forces him/her to act in the desired manner. Generally advertising appeals are broken into two categories: rational appeals and emotional appeals.

Uses of Appeals in Banking Services Advertising:

Name of Bank Union Bank of India Royal Bank of Scotland Group HSBC IDBI Broad Category Emotional Appeal Emotional Appeal Personal/Social Social/Parental Affection Personal/Style Marketing Approach Security and Future benefit Differentiation Theme/Punch Line Because your dreams are not only yours. In years a player comes who change the way the game is played. Not two people are the same Banking for All

Rational

State Bank of India

Customization of Service Offering Rational Practical Comprehensivenes s of Services offering Emotional Personal/Reliability Supporting the Security customers

Practical

With you all the way

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Personal Selling is being very much popular and effective for private banks in India. It is concerned with face to face meeting with the customer and making the presentation of the service offering to the prospect and making the person customer of the bank. This process has its own advantages and disadvantages. Banks may have some complex service offer which may include so many charges and facilities ofdifferent types. The biggest advantage of personal selling in banking services is that the salesperson can make the prospect well understood about the product. Further customers may prefer it because they need not to go anywhere the sales person comes to them. But there is certain limitation also people usually do not give their time to meet and talk on issue. It also does not become cost effective if the sales are not closed in a handsome number. Banks are going to be societal now and taking care of environment the plantation Bank of Baroda and Punjab National Bank is the examples of the same. Consumers are always emotional about the Brands doing social and national services. Banks wants to win the faith of the customers and also wants to come out from their typical financial image. Societal marketing really helps to attain this objective. Sales promotional has become popular due to the popularity of the usage of debit and credit cards. The offers are also given to the customers for registering and transacting with internet banking.

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4.5

Banking Sector advertising on TV in the year 2006

Key Findings:

49 per cent rise in ad volumes of banking sector on TV in the year 2006 over 2005. 'Products and Services' garnered 82 per cent share of ad volumes in banking sector on TV in year 2006.

Q4 saw maximum ad volumes on TV across the years 2005-2006.

Advertising skewed towards Business and Hindi News channels.

Private Banks had a higher 67 per cent share whereas PSUs contributed 33 per cent share on TV in 2006.

ICICI Bank was the Top advertiser on TV. Bank of Baroda (endorsed by Rahul Dravid) had the maximum share in celebrity endorsed advertising.

This week, AdEx India looks at the advertising trends in the Banking Sector in the year 2006.

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Growth in Banking Sector advertising on TV in 2006 compared to previous year.

49 per cent rise was registered in ad volumes of Banking sector on TV in the year 2006 compared to 2005.

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A huge 82 per cent share of ad volumes were contributed by Products and Services in Banking sector on TV in the year 2006.

Retail Banking and Banking related Services had a share of 6 per cent and 5 per cent respectively followed by 4 per cent share in Corporate advertising.

Top Growing categories of Banking Sector on TV in 2006 compared to the previous year.
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Maximum 2.8 times growth in ad volumes observed in Investment Banking on TV in the year 2006 over 2005. Other three categories with maximum rise in ad volumes in 2006 were Agricultural, Banking related services and Products and Services.

Seasonality trend of advertising by Banking Sector on TV across years 20052006.

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The fourth quarter saw a peak in ad volumes of banking sector on TV across

the years 2005-2006. High advertising by categories like Products and Services and Banking

related services results in the peak in fourth quarter.

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Channel Genres used by the Banking Sector on TV in the year 2006.

Top five channel genres contributed 78 per cent share of ad volumes in Banking sector on TV in the year 2006. Business channels had the maximum 21 per cent share closely followed by Hindi News channels with 20 per cent share.

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Contribution of Private and Public Banks in Banking sector on TV in the year 2006.

High advertising by Private banks with 67 per cent share on TV in year 2006 whereas Public banks had a share of 33 per cent.

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Growth of advertising by Private and Public Banks on TV in year 2006 over 2005.

110 per cent rise in ad volumes of Private banks in the year 2006 over the previous year. PSUs saw a dip of 6 per cent in ad volumes in year 2006.

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Top five Advertisers of Banking Sector on TV in the year 2006.

Top five Advertisers contributed 51 per cent share of ad volumes on TV in the year 2006.

ICICI Bank leads advertising in Banking sector with 18 per cent share followed by HSBC with 13 per cent share.

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Contribution of Categories in new brands launched in banking sector on TV in the year 2006

Among the new brands launched in the Banking sector on TV in the year 2006, 49 per cent were contributed by Products and Services. Corporate saw 17 per cent of new brands.
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Top ten New Brands launched in the Banking sector on TV in the year 2006

Among the new entrants in the Banking sector in 2006, HSBC Premier topped advertising on TV. Citigroup Global E Service and ABN Amro Van Gogh were on second and third position respectivelyely.

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Top five Brands with maximum Celebrity endorsement in Banking sector on TV in the year 2006.

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CHAPTER V Finding and Suggestions FINDING:

T h e p o t e n t i a l r ol e a d v e r t i s i n g i n c o m m u n i t y b a n k i n g u s i n g d a t a t h a t r e c e n t l y b e c a m e a v a i l a b l e f or a l ar g e s a m p l e o f U . S . b a n k s . B e f o r e u n d e r t a k i n g t h e s t u d y , m y p r i or w a s t h a t t h e r e s u l t s Obtained by studies that rely on 1960s and 1970s data, which were also subjected to important selection negative but i n s i g n i f i c a n t r el a t i o n s h i p b e t w e e n p r o f i t a b i l i t y a n d a d v e r t i s i n g intensity, though my results become statistically significant for the smallest bank subsample. The collection of item RIAD0497 Advertising Expenses starting w i t h t h e M a r c h 2 0 0 1 C a l l R e p o r t s f o r a l a r g e n u m b e r of U . S . b a n k s c r e a t e s a n e w o p p o r t u ni t y f o r e x a m i n i n g t h e r o l e of A d v e r t i s i n g i n c o m m e r c i a l b a n k i n g . D e s p i t e i t s l a c k of d e t a i l , t h e newly introduced Call Report item provides a promising venue for f u t ur e r e s e a r c h . H e r e a r e f e w s u g g e s t i o n s f or t e s t i n g of o l d a n d n e w a d v er t i s i n g - e c o n o m i c s h y p o t h e s e s u s i n g b a n k i n g d a t a . F i r s t , a n u m b e r o f t h e or e t i c a l m o d e l s a d d r e s s f i r m s c o - or d i n a t i o n o f p r i c e a n d n o n - pr i c e c o m p e t i t i o n ( f or e x a m p l e , M i l g r o m a n d Roberts, 1986; Chintagunta, Rao, and Vilcassim, 1993; H e r t z e n d o r f a n d O v e r g a ar d , 2 0 0 0 ) . H a n n a n a n d B e r g e r ( 1 9 9 1 ) f i n d t h a t d e p o s i t i n t er e s t r a t e s h a v e h i g h e r r i g i d i t y f or s m a l l b a n k s a n d b a n k s o p e r a t i n g i n c o n c e n t r a t e d m ar k e t s , w h e r e a s
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Kahn, Pennacchi, and Sopranzetti (1999) find that deposit interest r a t e s a r e a l s o s t i c k y i n t h e s e n s e t h a t t h e y ar e c l u s t e r e d a r o u n d i n t e g e r s a n d e v e n f r a c t i o n s . G i v e n t h e s e f i n d i n g s , a n i n t er e s t i n g question is the joint price (interest rate) and n o n - pr i c e competition decisions of banks. Second, the argument about the advertising economies of scale suggests that advertising may play a n i m p or t a n t r o l e a m o n g f i r m s p r o d u c t i o n i n p u t s . T o t h e b e s t of my knowledge, no one has formally examined the role of a d v e r t i s i n g i n b a n k pr o d u c t i o n e c o n o m i e s , a s r e f l e c t e d i n a c o s t o r pr o f i t - f u n c t i o n o r f r o n t i er . T h i r d , a s m o r e q u ar t e r l y C a l l reports become available, one could formally test Telsers (1964) market share stability hypothesis: if advertising can be used to c r e a t e e n t r y b a r r i e r s , t h e n m ar k e t s h a r e s t a b i l i t y s h o u l d i n c r e a s e w i t h h i g h e r a d v e r t i s i n g i n t e n s i t y ( f or e x a m p l e , M u e l l e r a n d Rogers, 1980). Finally, the collection of item BHCK0497 Advertising and Marketing Expenses starting with March 2002 Y-9 Reports, allows extending advertising economics research to BHCs.

SUGGESTIONS:
Thus I would like to recommend that: The banks should concentrate on advertising to attract new customers and to retain existing customers. The banks should more advertise in T.V and newspaper so as get d i f f e r e n t t y p e s of c u s t o m e r h a s s u c h i s t h e g r e a t e s t m e d i u m t o r e a c h t h e p e o p l e e v e n i n t h e r ur a l a r e a s .
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The banks should also use the internet for advertising their p r o d u c t s a n d s e r v i c e s d u e t o t h e i m pr o v e m e n t i n t h e t e c h n o l o g y

CONCLUSION:
Thus I would like to conclude that advertising is an important tool of marketing used as a promotional tool of the banks. The various media of advertising plays a very important role in advertising. Media like television, newspaper, radio, and internet are the major media. The other media includes billboards, banners ads, sponsorship ads, cinema ads, email advertising, etc. the banks in including private sector and public sectors banks in India. Both the banks advertise through different media. The private sector bank spends a huge amount on advertising whereas the public bank spends relatively less on advertising.

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BIOBLIOGRAPHY: Books referred:

Sharma Sangeeta, Singh Rahuvir, advertising planning and implementation, Prentice-Hall of India Pvt. Ltd, New delhi. Apte Govind, oxforduniversity press, service marketing. Palmer Adrain, International Edition 2001, Principle of service marketing third Adition, Washington, DC Business India, magazine.

Website name:
www.adcraker.com www.cashcow.com http://www.entrepreneur.com/encyclopedia/term/82660.html http://www.textart.ru/database/english-advertising-slogans http://www.time.com/time/magazine/article www.economicstimes.com www.sbi.com

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