Indian Banking System

Indian Banking System
INDEX
SR.NO PARTICULARS PAGE NO
1. CHAPTER I 1-28
Introduction to Bank
History of Banks
Functions of Bank
Banking Products
Financial Services
Features
Importance of Financial Services
Source of Revenue
Causes
Various Channels
2. CHAPTER II 29-35
Profile of Bank of Baroda
About SBI
Investments in Banks
3. CHAPTERIII 36-46
CRM In Banking
Importance of CRM
Implantations
CRM Mantra
CRM Principles
4. CHAPTER IV 47-56
Finding & Analysis
5. CHAPTER V 57-61
Conclusion
Bibliography
Annexure
Page 1
CHAPTER 1
1.1 INTRODUCTION TO BANK
A bank has been described as an institution engaged in accepting deposits and

granting loans. It is the institution which deals in money and credit. It can also
be described as an institution which borrows idle resources, makes fund
available to those who need it and helps in cheap remittance of money from one
place to another. In the modern time term bank is used in wider term. Now it
does not refer only to particular place of lending and depositing money but it
also acts as an agent which looks after the various financial problems of its
customers.
1.2 HISTORY OF BANKS:
The banking system in India is based on British banking company which is

largely branch banking. Commercial banks in India were started during the
latter half of 19th century Bank of Bengal, Bank of Bombay and Bank of
Madras were later amalgamated to form one bank called as Imperial bank of
India under the Imperial bank of India Act 1920. The Imperial bank carried with
business of commercial bank manages the public debt office of central and state
government. The second half of 19th century saw establishment of Bank of
Baroda, Allahabad bank, and Punjab National Bank. These banks were set up
by merchants and traders to combined trading with banking. These led to the
series if failures of banks. The strengthening of banking system took place after
the establishment of Reserve Bank of India, 1939 as is empowers to regulate the
banking money, inspection of mergers and acquisition in terms of Banking
Companies Act 1949 which later came to be known as Banking Regulation Act
1949.
Page 2
1.3 FUNCTIONS OF BANKS
Though borrowing and lending constitute the main functions of banking, yet they
are not only functions of commercial banks. Commercial banks are involved in
diversified activities and perform varieties of function. The functions of a
modern bank are classified under the following heads:
CHART: FUNCTION OF BANKS
ACCEPTING
OF
DEPOSITS
FUNCTION ADVANCE
AGENCY
OF
FUNCTIONS OF BANKS
LOANS
OTHER
FUNCTIONS
1.4 BANKING PRODUCTS

Banks in India have traditionally offered mass banking products. Most common
deposit products being Savings Bank, Current Account, Term deposit Account
and lending products being Cash Credit and Term Loans. Due to Reserve Bank
of India guidelines, Banks have had little to do besides accepting deposits at
rates fixed by Reserve Bank of India and lend amount arrived by the formula
stipulated by Reserve Bank of India at rates prescribed by the latter. PLR (Prime
lending rate) was the benchmark for interest on the lending products. But PLR
itself was, more often than not, dictated by RBI. Further, remittance products
were limited to issuance of Drafts, Telegraphic Transfers, and Bankers Cheque
Page 3
and Internal transfer of funds.
In view of several developments in the 1990s, the entire banking products
structure has undergone a major change. As part of the economic reforms,
banking industry has been deregulated and made competitive. New players have
added to the competition. IT revolution has made it possible to provide ease and
flexibility in operations to customers. Rapid strides in information technology
have, in fact, redefined the role and structure of banking in India. Further, due to
exposure to global trends after Information explosion led by Internet, customers
- both Individuals and Corporate - are now demanding better services with more
products from their banks. Financial market has turned into a buyer's market.
Banks are also changing with time and are trying to become one-stop financial
supermarkets.
A few foreign & private sector banks have already introduced customized
banking products like Investment Advisory Services, SGL II accounts, Photo-
credit cards, Cash Management services, Investment products and Tax Advisory
services. A few banks have gone in to market mutual fund schemes. Eventually,
the Banks plan to market bonds and debentures, when allowed. Insurance
peddling by Banks will be a reality soon. The recent Credit Policy of RBI
announced on 27.4.2000 has further facilitated the entry of banks in this sector.
Banks also offer advisory services termed as 'private banking' - to "high
relationship - value" clients.
1.5 INTRODUCTION TO FINANCIAL SERVICES
The Indian financial services industry has undergone a metamorphosis since
1990. During the late seventies & eighties, the Indian financial services industry
was dominated by commercial banks and other financial institution which cater
to the requirements of the Indian industry. The economic liberalization has
brought in a complete transformation in the Indian financial services industry.
The term Financial Services in a broad sense means mobilizing and
allocating savings. Thus it includes all activities involved in the transformation
Page 4
of savings into investment. The financial service can also be called financial
intermediation. Financial intermediation is a process by which funds are
mobilized from a large number of savers and make them available to all those
who are in need of it and particularly to corporate customers. Thus, financial
service sector is a key area and it is very vital for industrial developments. A
well developed financial services industry is absolutely necessary to mobilize
the savings and to allocate them to various investable channels and thereby to
promote industrial development in a country. Financial services, through
network of elements such as financial institution, financial markets and
financial instruments, serve the needs of individuals, institutions and corporate.
It is through these elements that the functioning of the financial system is
facilitated. Considering its nature and importance, financial services are
regarded as the fourth element of the financial system.
1.6 FEATURES OF FINANCIAL SERVICE
Customer-Oriented: Like any other service industry financial service
industry is also a customer-oriented one. That customer is the king and
his requirements must be satisfied in full should be the basic tenent of any
financial service industry. It calls for designing innovative financial
products suitable to varied risk-return requirements of customer.
Intangibility: Financial services are intangible and therefore, they cannot
be standardized or reproduced in the same form. Hence, there is a need to
have a track record of integrity, reputation, good corporate image and
timely delivery of services.
Simultaneous Performance: Yet another feature is that both production
and supply of financial services have to be performed simultaneously.
Therefore, both suppliers of services and consumers should have a good
rapport, clear-cut perception and effective communication.
Dominance of Human Element: Financial services are dominated by
human element and thus, they are people-intensive. It calls for competent
Page 5
and skilled personnel to market the quality financial products. But,
quality cannot be homogenized since it varies with time, place and
customer to customer.
Perishability: Financial services are immediately consumed and hence
inventories cannot be created. There is a greater need for balancing
demand and supply properly. In other words, marketing and operations
should be closely inter-linked..
1.7 IMPORTANCE OF FINANCIAL SERVICES

Economic Growth: The financial service industry mobilizes the savings
of the people and channels them into productive investment by providing
various services to the people. In fact, the economic development of a
nation depends upon these savings and investment.
Promotion of Savings: The financial service industry promotes savings
in the country by providing transformation services. It provides liability,
asset and size transformation service by providing large loans on the basis
of numerous small deposits. It also provides maturity transformation
services by offering short-term claim to savers on their liquid deposit and
providing long-term loans to borrowers.
Capital Formation: The financial service industry facilitates capital
formation by rendering various capital market intermediary services
capital formation in the very basis for economic growth. It is the principal
mobilizer, of surplus funds to finance productive activities and thus it
promotes capital accumulation.
Provision of Liquidity: The financial service industry promotes liquidity
in the system by allocating and reallocating savings and investment into
various avenues of economic activity. It facilitates easy conversion of
financial asset into liquid cash at the discretion of the holder of such
assets.
Page 6
Financial Intermediation: The financial service industry facilitates the
function of intermediation between savers and investors by providing a
means and a medium of exchange and by undertaking innumerable
services.
Contribution to GNP: The contribution of financial services to GNP has
been going on increasing year after year in almost all countries in recent
times.
Creation of Employment Opportunities: The financial service industry
creates and provides employment opportunities to millions of people all
over the world.
1.8 SOURCES OF REVENUE

Accordingly, there are two categories of sources of income for a financial
service company namely: fund based &fee- based. Fund-based income comes
mainly from interest spread, lease rentals, income from investments in capital
market and real estate. On the other hand, fee based income has its sources in
merchant banking, advisory services, custodial services, loan syndication etc.
income has its sources in merchant banking, advisory services, custodial
services, loan syndication etc. A major part of income is earned through fund-
based activities. At the same time, it involves a large share of expenditure in the
form of interest & brokerage. It means that such companies should have to
compromise the quality of its investment. On the other hand fee-based income
does not involve much risk.
Page 7
1.9 OBJECTIVES OF FINANCIAL SERVICES
Fund raising: Financial services help to raise the required funds from a
host of investors, individuals, institution and corporate. For this purpose,
various instruments of finance are used.
Funds deployment: An array of financial services is available in the
financial markets which help the players to ensure an effective
deployment of funds raised. Services such as bill discounting, parking of
short-term funds in the money market, credit rating &securitization of
debts are provided by financial services firms in order to ensure efficient
management of funds.
Specialized services: The financial service sector provides specialized
services such as credit rating, venture capital financing, lease financing,
mutual funds, credit cards, housing finance, etc besides banking and
insurance. Institutions and agencies such as stock exchanges, non-
banking finance companies, subsidiaries of financial institutions, banks &
insurance companies also provide these services.
Regulation: There are agencies that are involved in the regulation of the
financial services activities. In India, agencies such as the Securities and
Exchange Board of India (SEBI), Reserve Bank of India (RBI) and the
Department of Banking and Insurance of the Government of India,
regulate the functioning of the financial service institutions.
Economic growth: Financial services contribute, in good measure, to
speeding up the process of economic growth & development.
1.10 CAUSES OF FINANCIAL INNOVATION

Financial intermediaries have to perform the task of financial innovation to meet
the dynamically changing needs of the economy. There is a dire necessity for
the financial intermediaries to go for innovation due to following reasons:
Page 8
VARIOUS CHANNELS THROUGH WHICH PRODUCTS & SERVICES
ARE OFFERED BY BANKS
CHARTS: VARIOUS CHANNELS OF SERVICES
BRANCHES
INTERNET BANKING
MOBILE BANKING
TELEPHONE BANKING
ATM
BRANCHES
A branch, banking center or financial center is a retail location where a bank,
credit union, or other financial institution offers a wide array of face-to-face and
automated services to its customers.
In the period from 1100-1300 banking started to expand across Europe and
banks began opening branches in remote, foreign locations to support
international trade. Historically, branches were housed in imposing buildings,
often in a neo-classical architecture style. Today, branches may also take the
form of smaller offices within a larger complex, such as a shopping mall.
Traditionally, the branch was the only channel of access to a financial
institutions services. Services provided by a branch include cash withdrawals
and deposits from a demand account with a bank teller, financial advice through
a specialist, safe deposit box rentals, bureau de change, insurance sales, etc. As
Page 9
of the early 21st Century, features such as Automated Teller Machine (ATM),
telephone and online banking, allow customers to bank from remote locations
and after business hours. This has caused financial institution to reduce their
branch business hours and to merge smaller branches into larger ones. They
converted some into mini-branches with only ATMs for cash withdrawal and
depositing; computer terminals for online banking and cheque depositing
machines.
Some financial institutions, to show a friendlier image, offer a boutique or
coffee house-like environment in their branches, with sit-down counters,
refreshments, interactive displays. Some branches also have drive-through teller
windows or ATMs.
MOBILE BANKING
Mobile banking also known as M-Banking, SMS Banking is a term used for
performing balance checks, account transactions, payment etc. Over the last few
years, the mobile and wireless market has been one of the fastest growing
markets in the world and it is still growing at a rapid pace. With mobile
technology, banks can offer services to their customers such as doing funds
transfer while travelling, receiving online updates of stock price or even
performing stock trading while being stuck in traffic.A specific sequence of
SMS messages will enable the system to verify if the client has sufficient funds
in his or her wallet and authorize a deposit or withdrawal transaction at the
agent.
Many believe that mobile users have just started to fully utilize the data
capabilities in their mobile phones. In Asian countries like India, China, where
mobile infrastructure is comparatively better than the fixed-line infrastructure,
and in European countries, where mobile phone penetration is very high, mobile
banking is likely to appeal even more.
Page 10
Mobile Banking Services
Account Information
1) Mini-statement and checking of account history
2) Alerts on account activity
3) Monitoring of term deposits
4) Access to loan statements
5) Access to card statements
6) Mutual fund/ equity statements
7) Pension plan management
8) Insurance policy management
9) Status on cheque, stop payment on cheque
10) Ordering cheque books
11) Balance checking in the account
12) Recent transactions
13) Due date of payment
14) PIN provision
15) Blocking of cards
Payments, Deposits, Withdrawals and Transfers
1) Domestics and international fund transfers
2) Micro-payment handling
3) Mobile recharging
4) Commercial payment processing
5) Bill payment processing
6) Peer to Peer payments
7) Withdrawal at banking agent
8) Deposit at banking agent
Page 11
TELEPHONE BANKING
Telephone banking is a service provided by a financial institution , which
allows its customers to perform transactions over the telephone. Most telephone
banking services use an automated phone answering system with phone keypad
response or voice recognition capability. To guarantee security, the customer
must first authenticate through a numeric or verbal password or through security
questions asked by a live representative.
With the obvious exception of cash withdrawals & deposits, it offers virtually
all the features of an automated teller machine: account balance information and
list of latest transactions, electronic bill payments, funds transfers between a
customers accounts.etc
Usually, customers can also speak to alive representative located in a call centre
or a branch, although this feature is not always guaranteed to be offered 24/7. In
addition to the self-service transactions listed earlier, telephone banking
representatives are usually trained to do what was traditionally available only at
the branch: loan applications, investments purchases and redemptions, cheque
book orders, debit card replacements, change of address, etc
Banks which operate mostly or exclusively by telephone are known as phone
banks. They also help modernize the user by using special technology.
INTERNET BANKING
Internet banking or E-banking means any user with a personal computer and a
browser can get connected to his bank -s website to perform any of the virtual
banking functions. In internet banking system the bank has a centralized
database that is web-enabled. All the services that the bank has permitted on the
internet are displayed in menu. Any service can be selected and further
interaction is dictated by the nature of service. The traditional branch model of
bank is now giving place to an alternative delivery channels with ATM
network. Once the branch offices of bank are interconnected through terrestrial
Page 12
or satellite links, there would be no physical identity for any branch. It would a
borderless entity permitting anytime, anywhere and any how banking
INTERNET BANKING SERVICES
1) Bill Payment Service: You can facilitate payment of electricity and
telephone bills, mobile phone, credit card and insurance premium bills as
each bank has tie-ups with various utility companies, service providers
and insurance companies, across the country. To pay your bills, all you
need to do is complete a simple one-time registration for each biller. You
can also set up standing instructions online to pay your recurring bills,
automatically. Generally, the bank does not charge customer for online
bill payment.
2) Fund Transfer: You can transfer any amount from one account to
another of the same or any another bank. Customers can send money
anywhere in India. Once you login to your account, you need to mention
the payees account number, his bank and the branch. The transfer will
take place in a day or so, whereas in a traditional method, it takes about
three working days.
3) Credit Card Customers: With Internet banking, customers can not
only pay their credit card bills online but also get a loan on their cards. If
you lose your credit card, you can report lost card online.
4) Investment: You can now open an FD online through funds transfer.
Now investors with interlinked demat account and bank account can
easily trade in the stock market and the amount will be automatically
debited from their respective bank accounts and the shares will be
credited in their demat account. Moreover, some banks even give you the
facility to purchase mutual funds directly from the online banking system.
5) Recharging your Prepaid Phone: Now just top-up your prepaid mobile
cards by logging in to Internet banking. By just selecting your operator's
Page 13
name, entering your mobile number and the amount for recharge, your
phone is in action within no time.
6) Shopping: With a range of all kind of products, you can shop online and
the payment is also made conveniently through your account. You can
also buy railway and air tickets through Internet banking.
AUTOMATED TELLER MACHINE (ATM)

Automated Teller Machine is a mechanism which enables the customer to
withdraw money from his account without visiting the bank branch. An ATM
card is issued to the customer by the bank in order to make cash withdrawals at
cash machine. This service helps the ATM customer to withdraw money even
when the banks are closed. This can be done by inserting the card in the ATM
and entering the Personal Identification Number & secret password.
ATMs act as off-site branches of banks and provide almost all services that are
available from a manually operated branch. The customer can, not only
withdraw cash, but also deposit money, get account statements, enable transfer
of funds etc. The customer who wants to deposit cash should put the notes in the
pouch available at the ATM counter close it, seal it by signing & put it in the
slot provided for this purpose. The bank staff will collect the packet when they
come for loading cash in the machine & credit the amount to the account.
However, the customer has to sign an undertaking with the bank that he would
not dispute on the amount credited. ATM has gained prominence as a delivery
channel for banking transactions in India. Now customers will not be levied any
fee on cash withdrawals using ATM & debit cards issued by other banks. This
will in turn increase usage of ATMs in India. ATM allows customers:
To view account information
To deposit cheques or cash
To order cheques and receive cash.
Page 14
VARIOUS PRODUCTS & SERVICES OF BANKS
Deposits
Banks provide various deposit schemes for keeping the savings of people. Some
of these schemes are common in nature. Banks have to comply with the Know
Your Customer (KYC) norms introduced by the Reserve Bank of India while
opening & allowing operations in the accounts. A few deposit schemes offered
by banks are as follows:
CHART: TYPES OF DEPOSITS
Current
Account
Safe-
Fixed
Deposits
Deposit
Lockers
Demat Savings
Account Account
Reccurin
g Deposit
1) Current Account:
Current account is primarily meant for businessmen, firms, companies and

public enterprises etc. that have numerous daily banking transactions.
Individuals generally do not open this account. Current accounts are meant
neither for the purpose of earning interest nor for the purpose of savings but
only for convenience of business hence they are non-interest bearing accounts.
In a current account, a customer can deposit & withdraw any amount of money
any number of times, as long as he has funds to his credit.As per RBI directive,
Page 15
banks are not allowed to pay any interest on the balances maintained in Current
Accounts. However, in case of death of the account holder his legal heirs are
paid interest at the rates applicable to Savings bank deposit from the date of
death till the date of settlement. Because of the large number of transactions in
the account and volatile nature of balances maintained, banks usually levy
certain service charges for opening a Current Account.
2) Fixed Deposits:
Bank Fixed Deposits are also known as Term Deposits. In a Fixed Deposit
Account, a certain sum of money is deposited in the bank for a specified time
period with a fixed rate of interest. The rate of interest for Bank Fixed Deposits
depends on the maturity period. It is higher in case of longer maturity period.
There is great flexibility in maturity period & it ranges from 15 days to 5 years.
The interest can be compounded quarterly, half-yearly or annually and varies
from bank to bank. Loan facility is available against bank fixed deposits upto
75-90 % Premature withdrawal is permissible but it involves loss of
interest.Fixed deposits with banks are nearly 100% safe as all the banks
operating in the country, irrespective of whether they are nationalized, private or
foreign are governed by the RBIs rules & regulations and give due weightage
to the interest of the investors.
3) Savings Bank Account:
Savings Bank accounts are meant to promote the habit of saving among the
citizens while allowing them to use their funds when required. The main
advantage of Savings Bank Account is its high liquidity and safety. Savings
Bank Account earn moderate interest. The rate of interest is decided and
periodically reviewed by the government of India. Savings Bank Account can
be opened in the name of an individual or in joint name of the depositors.
The minimum balance to be maintained in an ordinary savings bank account
varies from bank to bank. It is less in case of public sector banks and
Page 16
comparatively higher in case of private banks. Savings Bank Account can now
be accessed through ATMs & internet.
4) Recurring Deposit Account:
Under recurring deposit account, a specific amount is invested in bank on

monthly basis for a fixed rate of return. The deposit has a fixed tenure, at the
end of which the principal sum as well as the interest earned during that period
is returned to the investor. Recurring Bank Account provides the element of
compulsion to save at high rates of interest applicable to Term Deposits along
with liquidity to access those savings any time. Loan/ Overdraft facility is also
available against Recurring Bank Deposits.The deposit for RD account is paid
in monthly installments and each subsequent monthly installment has to be
made before the end of the month and is equal to the first deposit. In case of
default in payment, penalty is levied for the delayed deposit.
5) Demat account:
Some banks are depository participants. These banks offer demat accounts to
their corporate clients. Demat account is just like a bank account where actual
money is replaced by shares. Just as a bank account is required if we want to
save money or make cheque payments, we need to open a demat account in
order to buy or sell shares. A Demat Account holds portfolio of shares in
electronic form and obviates the need to hold shares in physical form. The
account offers a secure and convenient way to keep track of shares and
investment without the hassle of handling physical documents that get mutilated
or lost in transit. The Securities and Exchange Board of India (SEBI) mandates
a demat account for share trading involving more than 500 countries.
6) Safe-Deposit Lockers:
Safe deposit locker is a facility provided by banks to their customers to keep

their valuables like jewellery, title deeds etc. Safe deposit locker is a steel
Page 17
cabinet having multiple cubicles. The safe deposit locker is kept inside the safe
room and can be accessed only with the permission of the bank officials. A
customer who is in need of a locker has to approach the bank. Customer has to
mention a password in the application form for identification purpose when he
comes for operating the locker. The customer has to remit annual rent for using
the locker facility. The customer has full privacy in operating the locker.
As per RBI guidelines, the place where the locker is kept should be segregated
from the place where cash and valuables are stored using iron grill. When the
customer wants to open the locker, he has to identify himself by telling the
password and sign in a register noting the date and time of opening the locker
which will be countersigned by the bank officials. The agreement of locker is a
contract of bailment and the bank can terminate the agreement and demand the
customer to vacate locker if any of the terms and conditions in the agreement
are violated or the annual rent is not remitted for a long period. At present all
the banks are having safe deposit locker facility.
3.2 CREDIT CARDS:
Credit cards are innovative ones in the line of financial services offered by
commercial banks. Credit card culture is a old hat in the western countries. In
India, it is relatively a new concept that is fast catching on. Since the plastic
money has today become as good as legal tender more people are using them in
their day-to-day activities. A credit card is a card or mechanism which enables
cardholders to purchase goods, travel and dine in a hotel without making
immediate payments. It is a convenience of extended credit without formality.
Credit cards can be classified as follows:
Page 18
CHART: TYPES OF CREDIT CARDS
OLD CREDIT CARDS NEW CREDIT CARDS
Corporate Credit
Credit Card
Card
Charge Card Business Card
In-store Card Smart Card
Debit Card
ATM Card
Virtual Card
Old types of Credit Cards:

1) Credit Card:
It is a normal card whereby a holder is able to purchase without having to pay

cash immediately. Generally, a limit is set to the amount of money a cardholder
can spend a month using the card. At the end of every month, the holder has to
pay a percentage of outstanding. Interest is charged for the outstanding amount
which varies from 30 to 36 per cent per annum. An average consumer prefers
this type of card for his personal purchase.
2) Charge Card:
A charge card is intended to serve as a convenient means of payment for goods

purchased at Member Establishments rather than a credit facility. Instead of
paying cash or cheque every time the credit card holder makes a purchase, this
facility gives a consolidated bill for a specified period, usually one month.
There are no interest charges and no spending limits either. The charge card is
useful during business trips and for entertainment expenses which are usually
Page 19
borne by the company. Andhra Bank card, BOB cards, Can card, Diners Club
card etc. belong to this category.
3) In-Store Card:
The in-store cards are issued by retailers or companies. These cards have
currency only at the issuers outlets for purchasing products of the issuer
company. Payment can be on monthly or extended credit basis. For extended
credit facility interest is charged. In India, such cards are normally issued by
Five Star Hotels, resorts and big hotels.
NEW TYPES OF CREDIT CARDS
1) Corporate Credit Cards:
Corporate cards are issued to private and public limited companies and public
sector units. Depending upon the requirements of each company, operative
Add-on cards will be issued to the persons authorized by the company. The
name of the company will be embossed on Add-on cardholder. The transactions
made by Add-on cardholders are billed to the main card and debits are made to
the Companys Account.
2) Business Card:
A business card is similar to a corporate card.it is meant for the use of

proprietary concerns, firms, firms of Chartered Accountants etc. This card helps
to avail of certain facilities for reimbursement and makes their business trip
convenient.
3) Smart Card:
It is a new generation card. When a transaction is made using the card, the value
is debited and the balance comes down automatically. Once the monetary value
comes down to nil, the balance is to be restored all over again for the card to
become operational. The primary feature of smart card is security. It prevents
card related frauds & crimes.
Page 20
4) Debit Cards:
Debit card is popularly known as ATM card on the move. The debit card gives
the freedom to access savings or current account through ATMs at merchant
locations. Debit cards are also issued independent of ATM in which case the
card is presented to the merchant establishment at the time of purchase as in a
case of credit card. However, the account of the card holder will be debited
instantly when the charge slip is presented by the merchant establishment
instead of the card holder remitting the money as is being done in the case of
credit card. Therefore, the card holder has to keep sufficient balance in his
account before he uses the card. The debit card does have a daily limit which
could be somewhere around Rs 15000 at ATMs and Rs 10000 at merchant
locations. This again is subject to the balance available in the account.
5) ATM Card:
An ATM (Automated Teller Machine) card is useful to a card holder as it helps

him to withdraw cash from banks even when they are closed. This can be done
by inserting the card in the ATM installed at various bank location.
LOANS
It is an arrangement by which a bank advance loans against any security like
jewels, shares or debentures or insurance policy or personal security of the
borrower. The interest is payable on the entire loan amount as decided by the
bank. Loans can be classified as follows:
Page 21
CHART: VARIOUS TYPES OF LOANS
Personal Loans
Housing Loans
Educational Loans
Automobile Loans
Mortgage Loans
1) Personal loans:
The personal loans are granted to any customer or the non-custome if the bank
is satisfied with the repayment capacity of the borrower. The borrower should
have a steady income. Installment can be paid by depositing post dated cheques,
authorization to debit the amount to the borrowers savings or current account,
authorization to transfer interest on term deposit to the loan account,
authorization to deduct the installment from the salary by the employer and
remit to the bank etc. The interest varies from bank to bank. Normally banks
allow 12 months to 60 months for repayment.Banks also charge time processing
fee ranging from 1 to 3 percent per annum. Personal loans are generally
unsecured because in most cases there is no primary security. Therefore, many
banks demand collateral security in the form of landed property, gold
Page 22
ornaments, third party guarantee etc. Some banks instead of third party
guarantee insist that another person should join as co-obligant. Many banks
prefer co-obligant as a guarantor because a co-obligant signs the original loan
documents along with the borrower & therefore has a joint liability. The
documentation is quite simple because there will be only a promissory note.
2) Housing Loans:
Housing loans are given as direct loans and indirect loans. Direct loans are those
loans given to the individuals or group of individuals including co-operative
societies. The indirect loans are the term loans granted to housing finance
institution, housing boards etc primarily engaged in the business of supplying
serviced land and constructed house units. Banks are permitted to extend term
loans to private builders. Banks are also granting loans under priority sector for
housing purpose.
3) Educational Loans:
Educational loans are extended with the aim to provide financial support from
the banking system to deserving students for pursuing higher education in India
& abroad. The main emphasis is that every student should get an opportunity to
pursue education with financial support from the banking system on affordable
terms and conditions. All banks are offering educational loans, but the schemes
differs from bank to bank. The scheme aims at providing financial assistance on
reasonable terms to the poor and needy to undertake basic education.
4) Mortgage Loans:
Mortgage loan is a financing arrangement in which a lender extends finance for

acquisition of real estate against the security of the real estate purchased out of
the loan. The borrower executes a mortgage deed which registers a lien on the
property in favour of the lender. The title will be re-transferred when the
Page 23
borrower repays the loan in full with interest. Banks provide loan/overdraft
facility against mortgage of property at low rate of interest to people engaged in
trade, commerce and business and also to professionals and self employed,
partnership firms, companies, NRIs and individuals with high net worth
including salaried people. The product provides an opportunity to customers to
borrow against a fixed asset at short notice.
INVESTMENT
Investment is the employment of funds with the aim of getting return on it. It is
the commitment of funds which have been saved from current consumption
with the hope that some benefits will receive in future. Thus, it is a reward for
waiting for money. Savings of the people are invested in assets depending on
their risk and return. Investment avenues are the outlets of funds. In India,
investment alternatives are continuously increasing along with new
developments in the financial market. An investor can himself select the best
avenue after studying the merits and demerits of different avenues. Even
financial advertising, newspapers supplements on financial matters and
investment journals offer guidance to investors in the selection of suitable
investment avenues.
Page 24
CHART: ALTERNATIVES AVENUES FOR INVESTMENT
Real
Estates
Bonds
GOI
&
Savings
Debentu
Bond
Investmen res
t Avenues
Public Gold &

Provide Silver
nt Fund
1) Public Provident Fund (PPF):

Public Provident Fund is one attractive tax sheltered investment scheme for
middle class and salaried persons. It is even useful to businessmen and
higher income earning people. The PPF scheme is very popular among
the marginal income tax payers.
2) Government of India Savings Bond:
The GOI has recently started issuing 6.50% bonds which are reasonably
attractive and secured investment for individuals and institutions.
3) Real Estate Properties:
Investment in the real estate is popular due to high saleable value after some
years. Such properties include buildings, commercial premises,
industrial land, plantations, farmhouses, agricultural land etc. They
purchase such properties at low prices and do not sale them unless there
is substantial increase in the market price. The resale price will be
attractive in due course when they can recover 4 times the price paid.
This is one attractive as well as profitable avenue for investment.
Page 25
4) Investment in Gold, Silver:
In India, there is attraction for gold and silver since the early historical
period. These two precious metals are used for making ornaments and
also for investment of surplus funds over a long period. The prices of
both the metals are continuously increasing. These metals are highly
liquid, also provides a sense of security to the investors. The benefit of
capital appreciation is also available. As a result, investment in gold and
silver is one avenue for investment.
5) Bonds & Debentures:
It is possible to purchase bonds and debentures of joint stock companies for
investment purpose. Debenture indicates loan given to the company at a
specific rate of interest. Debentures are more popular than shares due to
the safety and security available. Easy transferability by endorsement
and delivery. Investment exempted from wealth-tax. Maturity period
from 5-25 years.
Page 26
INNOVATIVE FINANCIAL PRODUCTS AND SERVICES
1) Merchant Banking:
A merchant banker is a financial intermediary who helps to transfer capital from

those who possess it to those who need it. Merchant banking includes a wide
range of activities such as management of customer securities, portfolio
management, project counseling and appraisal, underwriting of shares and
debentures, loan syndication, acting as banker for the refund orders, handling
interest and dividend warrants etc. Thus, a merchant banker renders a host of
services to corporate and thus promotes industrial development in the country.
2) Loan Syndication:
This is more or less similar to consortium financing. But, this work is taken up
by the merchant banker as a lead manager. It refers to a loan arranged by a bank
called lead manager for a borrower who is usually a large corporate customer or
a Government Department. The other banks who are willing to lend can
participate in the loan by contributing an amount suitable to their own lending
policies. Since a single bank cannot provide such a huge sum of loan, a number
of banks join together and form a syndicate.
3) Leasing:
A lease is an agreement which a company or a firm acquires a right to make use

of capital asset like machinery, on payment of a prescribed fee called rental
charges. The lessee cannot acquire any ownership to the asset, but he can use it
and have full control over it. He is expected to pay for all maintenance charges
and repairing and operating cost. In countries like the U.S.A., the U.K. and
Japan equipment leasing is very popular and nearly 25% of plant and equipment
is being financed by leasing companies. In India also, many financial companies
have started equipment leasing business by forming subsidiary companies.
4) Mutual Funds:
Page 27
A mutual fund refers to a fund raised by a financial service company by pooling
the savings of the public. It is invested in a diversified portfolio with a view to
spreading and minimizing risk. The fund provides Investment Avenue for all
small investors who cannot participate in the equities of big companies. It
ensures low risk, steady returns, high liquidity and better capital appreciation in
the long run.
5) Factoring:
Factoring refers to the process of managing the sales ledger of a client by a

financial service company. In other words, it is an arrangement under which a
financial intermediary assumes the credit risk in the collection of book debts for
its clients. The entire responsibility of collecting the book debts passes on to the
factor. His services can be compared to del credre agent who undertakes to
collect debts. But, a factor provides credit information, collects debts, monitors
the sales ledger and provides finance against debts. Thus, he provides a number
of services apart from financing.
6) Forfeiting:
Forfeiting is a technique by which a forfeitor (financing agency) discounts an

export bill and pay ready cash to the exporter who can concentrate on the
export front without bothering about collection of export bills. The forfeitor
does so without any recourse to the exporter and the exporter is protected
against the risk of non-payment of debts by the importers.
7) Venture Capital:
A venture capital is another method of financing in the form of equity

participation. A venture capitalist finances a project based on the potentialities
of a new innovative project. It is in contrast to the conventional security based
financing. Much thrust is given to new ideas or technological innovations.
Finance is being provided not only for start-up capital but also for
Page 28
development capital by the financial intermediary.
8) Reverse Mortgage:
In 2007-08, the National Housing Bank and commercial banks have introduced
an innovative product viz., reverse mortgage to enable the senior citizens to
fetch value out of their property without selling it. In normal mortgage, a home
buyer borrows money to finance his home. In a Reverse Mortgage (RM) the
owner of a house property surrenders the title of his property to a lender and
raises money. Again, in normal mortgage the borrower gets 60-70% of the
money upfront. But, in a RM generally the lender does not pay the entire
amount. On the other hand, he pays out a regular sum each month for the agreed
time. The owner, normally a senior citizen, can use the property and stay with
his spouse for the rest of their lives. Thus, the owner can ensure a regular cash
flow in times of need and enjoy the benefit of using the property. Usually, after
the death of the owner, the spouse can continue to use the property. In case,
both die during the period of the RM scheme the lender will sell the property,
take his share and distribute the rest among the heirs. It is called reverse
mortgage because the payment steam is reversed. Instead of making monthly
payments to the lender, as in the case of a regular mortgage, a lender makes
regular payments to the senior citizen. A RM facilitates to convert an
immovable asset into an income generating one
Page 29
CHAPTER II
Profile of Bank
BANKF OF BARODA
Bank Of Baroda, is a Body Corporate (Nationalised Bank) constituted under The Banking
Companies (Acquisition and Transfer of Undertakings) Act, 1970, with its Head Office at
Mandvi, Baroda and Corporate Office at Mumbai. Bank of Baroda, a leading global Bank of
Indian origin has been expanding its international presence with footprints in 25 countries
and a Pan India network of 2853 branches is a fifth largest bank in India. Bank of Baroda is
one of the oldest banking institutions in India, having been established in 1908 from a small
building in Baroda, Gujarat State. B.O.B has a core set of values and culture that it adhere to
& at all times seeks to be trustworthy, international, courageous, determined and responsive.
Today the bank employs 39,529 people. It also has four subsidiaries, BOB Housing Finance
Ltd., BOB Asset Management Co. Ltd., BOBCARDS Ltd. and BOB Capital Markets Ltd.For
financial year ending 31 March 2008, the bank reported a net profit of Rs.1436 crore. The
bank had a total business of Rs.2,59,000 crore, as on March 31, 2008, and is eyeing 22 per
cent growth to Rs.3,10,000 crore by the end of this financial year. It is looking at a growth of
20 per cent in deposits and 23 per cent in advances. Bank of Baroda sanctions loans/credit
assistance to Small Scale Industries for acquisition of fixed assets (factory land/buildings &
machinery) and working capital requirements at very competitive interest rates and against
soft margins Rate of interests effective from 01.06.2003
History
Bank of Baroda was founded on July 20, 1908 with a paid up capital of Rs.10 lakhs by
Maharaja Sayajirao Gaekwad III of Baroda, one man who made a difference, rooted in Indian
values. Yet Global in vision, rock solid in fundamentals. Nurture a culture where success
does not come in the way of the need to keep learning a fresh, to keep innovating, to keep
experimenting. It has now come a long way to becoming the strong trustworthy financial
institution. It is growing day by day. The emblem of Bank of Baroda represents wealth,
safety, industrial development and an inclination to better and promote the companys
agrarian economy. It is a coin with an unpraised arm indicating wealth that indicated that the
depositors money is in the safe hands. Since then bank has traversed an eventful and
successful journey of almost 100 years. Today, Bank of Baroda has a network of 2853
branches. In mid-eighties, the Bank of Baroda diversified into areas of merchant banking,
Page 30
housing finance, credit cards and mutual funds. In 1995 the Bank raised Rs.300 crores
through a Bond issue. In 1996 the Bank tapped the capital market with an IPO of Rs.850
crores. Bank of Baroda took the lead in shifting from manual operating systems to a
computerized work environment. Today, the Bank has 1918 computerized branches, covering
70% of its network and 91.64% of its business. Bank of Baroda gives high priority to quality
service. In its quest for quality, the Bank has secured the ISO 9001:2000 certifications for 15
branches by end of the 2005-06.
Nature
The nature of the business that decide the company belongs to which industry and it helps the
many stakeholders and parties like government, NGO, etc, to decide the parameter and other
concerned issue binding to the organization, for e.g. environmental protection, tax rate,
incentives, and rules and regulations. The Bank of baroda belongs to the service sector, which
provides various types of financial solution related to banking industry. As Indian economy is
emerging as a major services provider in the world, which can be seen by its contribution in
GDP of India which is closed to 55%.
Mission
To be a top ranking National Bank of International Standards committed to augmenting
stake holders' value through concern, care and competence Banks new logo is a unique
representation of a universal symbol. It comprises dual B letterforms that hold the rays of
the rising sun. Bank of baroda calls this the Baroda SunThe sun is an excellent
representation of what bank stands for. It is the single most powerful source of light and
energy its far reaching rays dispel darkness to illuminate everything they touch. At Bank of
Baroda, it seeks to be the source that will help all its stakeholders realise their goals. To
banks customers, it seeks to be a one-stop, reliable partner who will help them address
different financial needs. To its employees, it offers rewarding careers and to its investors and
business partners, maximum return on their investment. The single-colour, compelling
vermillion palette has been carefully chosen, for its distinctivenes as it stands for hope and
energy. It also recognize that bank is characterised by diversity. Its network of branches
spans geographical and cultural boundaries and rural-urban divides. Its customers come from
a wide spectrum of industries and backgrounds. The Baroda Sun is a fitting face for its brand
because it is a universal symbol of dynamism and optimism it is meaningful for its many
audiences and easily decoded by all.
Page 31
Organizational Structure
Organizational structure is one of the most important decision mode by top management
before starting the business, as it generally depend on the nature and size of the company, it
has lot to do with the job description and job specification. The organizational structure is
nothing but hierarchical and departmental process. Every organization differ in structure.
There is a well defined system in the Bank regarding decision making process. Lending and
administrative decisions are taken at various levels from JMGS I to Top Executive grade
Scale VII and also by Executive Director and Chairman & Managing Director depending
upon their positions as per the discretionary lending powers delegated to them by the Board.
Branches receive applications for credit facilities and recommend to the appropriate
sanctioning authority. In the case of major retail loan products applications are processed at
branches and Centralised Credit Processing Cells at select centers. There is a well defined
organizational structure and clear system of accountability based on RBI / CVC guidelines.
All credit decisions approved by any sanctioning authority are reported to the next higher
authority for control purpose. The system of exercising proper delegation of power and
submission of control reports is in place and they are monitored by control officers and
through internal inspection. By observing the following is a common structure as per
company guidance.
Product Profile
Followings are the main products of The Bank of baroda.
Deposits
Gen-next
Loans
Credit Cards
Debit Cards
Services
Lockers
Page 32
Introduction of SBI
The origin of the State Bank of India goes back to the first decade of the nineteenth century
with the establishment of the Bank of Calcutta in Calcutta on 2 June 1806. Three years later
the bank received its charter and was re-designed as the Bank of Bengal (2 January 1809). A
unique institution, it was the first joint-stock bank of British India sponsored by the
Government of Bengal. The Bank of Bombay (15 April 1840) and the Bank of Madras (1
July 1843) followed the Bank of Bengal. These three banks remained at the apex of modern
banking in India till their amalgamation as the Imperial Bank of India on 27 January 1921.
Primarily Anglo-Indian creations, the three presidency banks came into existence either as a
result of the compulsions of imperial finance or by the felt needs of local European
commerce and were not imposed from outside in an arbitrary manner to modernise India's
economy. Their evolution was, however, shaped by ideas culled from similar developments
in Europe and England, and was influenced by changes occurring in the structure of both the
local trading environment and those in the relations of the Indian economy to the economy of
Europe and the global economic framework.The State Bank of India, the countrys oldest
Bank and a premier in terms of balance sheet size, number of branches, market capitalization
and profits is today going through a momentous phase of Change and Transformation the
two hundred year old Public sector behemoth is today stirring out of its Public Sector legacy
and moving with an agility to give the Private and Foreign Banks a run for their money. The
bank is entering into many new businesses with strategic tie ups Pension Funds, General
Insurance, Custodial Services, Private Equity, Mobile Banking, Point of Sale Merchant
Acquisition, Advisory Services, structured products etc each one of these initiatives having
a huge potential for growth. The Bank is forging ahead with cutting edge technology and
innovative new banking models, to expand its Rural Banking base, looking at the vast
untapped potential in the hinterland and proposes to cover 100,000 villages in the next two
years. It is also focusing at the top end of the market, on whole sale banking capabilities to
provide Indias growing mid / large Corporate with a complete array of products and
services. It is consolidating its global treasury operations and entering into structured
products and derivative instruments. Today, the Bank is the largest provider of infrastructure
debt and the largest arranger of external commercial borrowings in the country. It is the only
Indian bank to feature in the Fortune 500 list. The Bank is changing outdated front and back
end processes to modern customer friendly processes to help improve the total customer
experience. With about 8500 of its own 10000 branches and another 5100 branches of its
Page 33
Associate Banks already networked, today it offers the largest banking network to the Indian
customer. The Bank is also in the process of providing complete payment solution to its
clientele with its over 8500 ATMs, and other electronic channels such as Internet banking,
debit cards, mobile banking, etc. With four national level Apex Training Colleges and 54
learning Centres spread all over the country the Bank is continuously engaged in skill
enhancement of its employees. Some of the training programes are attended by bankers from
banks in other countries. The bank is also looking at opportunities to grow in size in India as
well as Internationally. It presently has 82 foreign offices in 32 countries across the globe. It
has also 7 Subsidiaries in India SBI Capital Markets, SBICAP Securities, SBI DFHI,
SBI Factors, SBI Life and SBI Cards - forming a formidable group in the Indian Banking
scenario. It is in the process of raising capital for its growth and also consolidating its various
holdings.
Throughout all this change, the Bank is also attempting to change old mindsets, attitudes and
take all employees together on this exciting road to Transformation. In a recently concluded
mass internal communication programme termed Parivartan the Bank rolled out over 3300
two day workshops across the country and covered over 130,000 employees in a period of
100 days using about 400 Trainers, to drive home the message of Change and inclusiveness.
The workshops fired the imagination of the employees with some other banks in India as well
as other Public Sector Organizations seeking to emulate the Program. An important turning
point in the history of State Bank of India is the launch of the first Five Year Plan of
independent India, in 1951. The Plan aimed at serving the Indian economy in general and the
rural sector of the country, in particular. Until the Plan, the commercial banks of the country,
including the Imperial Bank of India, confined their services to the urban sector. Moreover,
they were not equipped to respond to the growing needs of the economic revival taking shape
in the rural areas of the country. Therefore, in order to serve the economy as a whole and
rural sector in particular, the All India Rural Credit Survey Committee recommended the
formation of a state-partnered and state-sponsored bank. The All India Rural Credit Survey
Committee proposed the take over of the Imperial Bank of India, and integrating with it, the
former state-owned or state-associate banks. Subsequently, an Act was passed in the
Parliament of India in May 1955. As a result, the State Bank of India (SBI) was established
on 1 July 1955. This resulted in making the State Bank of India more powerful, because as
much as a quarter of the resources of the Indian banking system were controlled directly by
the State. Later on, the State Bank of India (Subsidiary Banks) Act was passed in 1959. The
Page 34
Act enabled the State Bank of India to make the eight former State-associated banks as its
subsidiaries. The State Bank of India emerged as a pacesetter, with its operations carried out
by the 480 offices comprising branches, sub offices and three Local Head Offices, inherited
from the Imperial Bank. Instead of serving as mere repositories of the community's savings
and lending to creditworthy parties, the State Bank of India catered to the needs of the
customers, by banking purposefully. The bank served the heterogeneous financial needs of
the planned economic development.
Branches
The corporate center of SBI is located in Mumbai. In order to cater to different functions,
there are several other establishments in and outside Mumbai, apart from the corporate
center. The bank boasts of having as many as 14 local head offices and 57 Zonal Offices,
located at major cities throughout India. It is recorded that SBI has about 10000 branches,
well networked to cater to its customers throughout India.
ATM Services
SBI provides easy access to money to its customers through more than 8500 ATMs in India.
The Bank also facilitates the free transaction of money at the ATMs of State Bank Group,
which includes the ATMs of State Bank of India as well as the Associate Banks State Bank
of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Indore, etc. You may also
transact money through SBI Commercial and International Bank Ltd by using the State Bank
ATM-cum-Debit (Cash Plus) card.
Subsidiaries
The State Bank Group includes a network of eight banking subsidiaries and several non-
banking subsidiaries. Through the establishments, it offers various services including
merchant banking services, fund management, factoring services, primary dealership in
government securities, credit cards and insurance.
The eight banking subsidiaries are:
State Bank of Bikaner and Jaipur (SBBJ)

State Bank of Hyderabad (SBH)
State Bank of India (SBI)
State Bank of Indore (SBIR)
State Bank of Mysore (SBM)
State Bank of Patiala (SBP)
State Bank of Saurashtra (SBS)
Page 35
State Bank of Travancore (SBT)
Products And Services

Personal Banking
SBI Term Deposits SBI Loan For Pensioners

SBI Recurring Deposits Loan Against Mortgage Of Property
SBI Housing Loan Loan Against Shares & Debentures
SBI Car Loan Rent Plus Scheme
SBI Educational Loan Medi-Plus Scheme
Other Services
Agriculture/Rural Banking
NRI Services
ATM Services
Demat Services
Corporate Banking
Internet Banking
Mobile Banking
International Banking
Safe Deposit Locker
RBIEFT
E-Pay
E-Rail
SBI Vishwa Yatra Foreign Travel Card
Broking Services
Gift Cheques
The CNN IBN, Network 18 recognized this momentous transformation journey, the State
Bank of India is undertaking, and has awarded the prestigious Indian of the Year Business,
to its Chairman, Mr. O. P. Bhatt in January 2008
Page 36
INVESTMENT
MUTUAL FUND EQUITY SCHEMES
DABT SCHEMES
BALANCED SCHEMES
EXCHANGE TREADED SCHEMES
LIFE INSURENCE Unit Linked Products: Pension Products:Pure Protection
Products:Protection cum Savings Products:Money Back
Scheme Products:SBI Life - SARAL ULIP Protection
Plans: Specialized Term Insurance:Retirement Solutions:
SBI Life - Swadhan (Group): SBI Life - Dhanaraksha
Plus: SBI Life - Grameen Shakti, Health Products:
EQUITY ALL TYPES
SBI Mutual Fund is Indias largest bank sponsored mutual fund and has an enviable track
record in judicious investments and consistent wealth creation.
The fund traces its lineage to SBI - Indias largest banking enterprise. The institution has
grown immensely since its inception and today it is India's largest bank, patronised by over
80% of the top corporate houses of the country.
SBI Mutual Fund is a joint venture between the State Bank of India and Socit Gnrale
Asset Management, one of the worlds leading fund management companies that
manages over US$ 500 Billion worldwide.
Mumbai, August 26, 2008 SBI Life Insurance has achieved a unique distinction of
ranking third globally in terms of number of Million Dollar Round Table (MDRT) members.
Of the 40,000 SBI Life Insurance Advisors, 1,662 have qualified for the prestigious MDRT
membership. Among these, 124 qualified for Court of Table (COTs) and 20 for Top of Table
(TOTs).
Page 37
2008
RANK COMPANY NAME COUNTRY MEMBERS
1 Samsung Life Ins Korea 2,486
2 New York Life USA 2,167
3 SBI Life Insurance India 1,662
4 Northwestern Mutual USA 1,411
5 AIA-Hong Kong Hong Kong 1,159
11 LIC of India India 595
14 BOB Standard Life India 536
22 Max New York Life India 343
68 BOB Pru India 125
69 Birla Sunlife India 124
Management
The bank has 14 directors on the Board and is responsible for the management of the
Banks business. The board in addition to monitoring corporate performance also carries out
functions such as approving the business plan, reviewing and approving the annual budgets and
borrowing limits and fixing exposure limits. Mr. O. P. Bhatt is the Chairman of the bank. The
five-year term of Mr. Bhatt will expire in March 2011. Prior to this appointment, Mr. Bhatt was
Managing Director at State Bank of Travancore. Mr. Bhatt has more than 30 years of experience
in the Indian banking industry and is seen as futuristic leader in his approach towards technology
and customer service. Mr. Bhatt has had the best of foreign exposure in SBI. We believe that the
appointment of Mr. Bhatt would be a key to SBIs future growth momentum. Mr. T S
Bhattacharya is the Managing Director of the bank and known for his vast experience in the
banking industry. Recently, the senior management of the bank has been broadened considerably.
The positions of CFO and the head of treasury have been segregated, and new heads for rural
banking and for corporate development and new business banking have been appointed. The
managements thrust on growth of the bank in terms of network and size would also ensure
encouraging prospects in time to come.
Page 38
CHAPTER III
CRM IN INDIANBANKS
3.1 CRM IN INDIAN BANKS

In recent years, the banking industry around the
world has been undergoing a rapid transformation. In
India also, the wave
of deregulation of early 1990s has created heightened
competition and greater risk for banks and other
financial intermediaries. The
cross-border flows and entry of new players
and products have forced banks to adjust the product-
mix and undertake rapid changes in
their processes and operations to remain competitive. The deepening of technology
has facilitated better tracking and fulfillment of commitments, multiple delivery channels for
customers and faster resolution of miscoordinations. Unlike in the past, the banks today are
market driven and market responsive. The top concern in the mind of every bank's CEO is
increasing or at least maintaining the market share in every line of business against the
backdrop of heightened competition. With the entry of new players and multiple channels,
customers (both corporate and retail) have become more discerning and less "loyal" to banks.
This makes it imperative that banks provide best possible products and services to ensure
customer satisfaction. To address the challenge of retention of customers, there have been
active efforts in the banking circles to switch over to customer-centric business model. The
success of such a model depends upon the approach adopted by banks with respect to
customer data management and customer relationship management.
Over the years, Indian banks have expanded to cover a large geographic & functional
area to meet the developmental needs. They have been managing a world of information
about customers - their profiles, location, etc. They have a close relationship with their
customers and a good knowledge of their needs, requirements and cash positions. Though
this offers them a unique advantage, they face a fundamental problem. During the period of
planned economic development, the bank products were bought in India and not sold. What
our banks, especially those in the public sector lack are the marketing attitude. Marketing is a
Page 39
customer-oriented operation. What is needed is the effort on their part to improve their
service image and exploit their large customer information base effectively to communicate
product availability. Achieving customer focus requires leveraging existing customer
information to gain a deeper insight into the relationship a customer has with the institution,
and improving customer service-related processes so that the services are quick, error free
and convenient for the customers.
Furthermore, banks need to have very strong in-house research and market
intelligence units in order to face the future challenges of competition, especially customer
retention. Marketing is a question of demand (customers) and supply (financial products &
services, customer services through various delivery channels). Both demand and supply
have to be understood in the context of geographic locations and competitor analysis to
undertake focused marketing (advertising) efforts. Focusing on region-specific campaigns
rather than national media campaigns would be a better strategy for a diverse country like
India.
3.2 IMPORTANCE OF CRM IN INDIAN BANK
For long, Indian banks had presumed that their operations were customer-centric,
simply because they had customers. These banks ruled the roost, protected by regulations that
did not allow free entry into the sector. And to their credit, when the banking sector was
opened up, they survived by adapting quickly to the new rules of the game. Many managed to
post profits. For them an unexpected bonanza came from government bonds in which most
were hugely invested.
Ironically, the Reserve Bank of India's moves to cut aggressively the interest rates after
1999, pushed up the prices of bonds. So banks had a windfall doing almost nothing. The bond
profits, like manna from heaven, improved the balance-sheets of all banks irrespective of
their core performance. However, the era of lazy banking is soon to end. The mesh of rules
that propped up the Indian banking industry is now being dismantled rapidly.
According to a RBI road-map, India will have a competitive banking market

after 2009. As one of the most attractive emerging market destinations, India will see foreign
banks come in, what with more freedom to come in, grow and acquire. Therefore, it is
Page 40
imperative that Indian banks wake up to this reality and re-focus on their core asset the
customer. A greater focus on Customer Relationship Management (CRM) is the only way the
banking industry can protect its market share and boost growth.
CRM would also make Indian bankers realize that the purpose of their business is to
"create and keep a customer" and to "view the entire business process as consisting of a
tightly integrated effort to discover, create, and satisfy customer needs."
What is CRM, and what will it deliver to the banks? CRM is, probably, one of the
least clearly defined business acronyms, as there is no single definition for it. It is probably
easier to say what CRM is not. Unfortunately, CRM has also become a misnomer for a range
of solutions from IT vendors, each providing its own spin on the idea.
CRM is variously misunderstood as a fancy sales strategy, an expensive software

product, or even a new method of data collection. It is none of these. Customer Relationship
Management (CRM) in the Indian banking system is fundamental to building a customer-
centric organization. CRM systems link customer data into a single and logical customer
repository. CRM in banking is a key element that allows a bank to develop its customer base
and sales capacity. The goal of CRM is to manage all aspects of customer interactions in a
manner that enables banks to maximize profitability from every customer. Increasing
competition, deregulation, and the internet have all contributed to the increase in customer
power. Customers, faced with an increasing array of banking products and services, are
expecting more from banks in terms of customized offerings, attractive returns, ease of
access, and transparency in dealings. Retaining customers is a major concern for banking
institutions which underscores the importance of CRM. Banks can turn customer relationship
into a key competitive advantage through strategic development across a broad spectrum.
This book examines issues related to changing banking industry in India and the challenges in
CRM.
CRM is a simple philosophy that places the customer at the heart of a business
organizations processes, activities and culture to improve his satisfaction of service and, in
turn, maximize the profits for the organization. A successful CRM strategy aims at
understanding the needs of the customer and integrating them with the organizations
strategy, people, and technology and business process. Therefore, one of the best ways of
launching a CRM initiative is to start with what the organization is doing now and working
Page 41
out what should be done to improve its interface with its customers. Then and only then,
should it link to an IT solution.
While this may sound quite straightforward, for large organizations it can be a
mammoth task unless a gradual step-by-step process is adopted. It does not happen simply by
buying the software and installing it. For CRM to be truly effective, it requires a well-
thought-out initiative involving strategy, people, technology, and processes. Above all, it
requires the realization that the CRM philosophy of doing business should be adopted
incrementally with an iterative approach to learn at every stage of development.
3.3 IMPLEMENTATION OF CRM IN INDIAN BANKS

Although CRM as a concept is of recent origin its tenets have been around for sometime.
Field officers in the banks have always promoted close relation-ship with customers, but the
focus on customer orientation rather than product orientation as a commitment has been on
the Indian banking scene for nearly a decade. But the fact remains that implementing
customer relationship management is not easy
3.4 Customers Relationship Management A new mantra in

Indian banking
Nowadays banks have to work keeping in mind the position of the financial market
and anticipate change in the market place and prepare themselves accordingly. They have to
make new resolutions to build further on their own strengths to explore new avenues of
Customers Relationship Management. This is the only strategic weapon to be pursued for
excellence in the pursuit of performance and achievement. Both the retention of old business
as well as to search for new business, CRM is the only choice. CRM, being the essence of
modern banking, a sound understanding of the key principles, its theories and practices
should be revisited and redefined to provide a road map to new ideas and techniques in the
field. Over the years, banking institutions have been feeling the pressing need of putting up
greater thrust on this initiative for improving their operations and appearances.
Page 42
3.5 CRM PRINCIPLES
The main principles of CRM can be grouped into seven guiding factors:
1. Customer focus
The first and foremost important guiding principle in CRM is customer focus. Who
is a customer? This question is very fundamental. A
customer is a person or group of persons who receives the
product or servicethe final output of a process or group
of processes. A customer is the final arbiter of quality,
value and price of a product or service. A satisfied
customer only assigns value to a service, on the contrary,
to a dissatisfied customer a product or service has no
value, even if the concerned service or product has been
designed with lot of effort, energy and cost after a
thorough planning.
A satisfied customer motivates his fellow
members to go in for the service or product that he has
already acquired. But a dissatisfied customer always counsels his friends, and fellow
members not to go to banks where his experience proved to be wrong or other-wise. So
customers delight or customers satisfaction is the essence of any CRM program. As a
part of this focus on customers, banks should ensure that clients are identified; their
requirements are determined, understood and met enhancing customers satisfaction.
The main thrust of CRM is to improve an organizations efficiency, economy and
effectiveness through reduction of sales cycle times and selling costs, identification of new
markets and channels for expansion, improvement of customer value, satisfaction,
retention and thereby increasing profitability and market share of the enterprise. Successful
CRM focuses on understanding the needs and desires of the customers and is achieved by
placing these needs at the heart of the business by integrating them with the organizations
strategy, people, technology and business processes. (Heygate, 1999). There must be total
commitment for the enterprise towards this end.
2. Leadership
Persuasion, judgment and decision-making abilities are the main attributes of

quality leadership. When there is a slight chance of getting a business but the client is
Page 43
hesitating or in a fix, or not in a position to decide properly, it should be followed up by
the relationship manager by patient hearing, mild counseling and to stand by the side of
the prospective client to help clear his doubts and to make him feel happy by realizing that
he is going in the right direction and he is very right in choosing his requirements.
The following points may be found helpful in this regard:
(a) It is to be communicated to all employees that all customers should be given a proper
hearing and it should be supported from all levels.
(b) Ways and means should be identified and practiced of getting and staying closer to
customers.
(c) Proper respect should be extended to the customers. All relevant information should be
collected from them with humble and polite approach. Proper value should be given to
their feedback.
(d) There should be proper re-action to the information and feedback provided by the
customers in designing, developing and providing desired products at afford-able cost.
3. Process approach
A process transforms an input into desired output by the use of resources, energies
and time. In producing an output there may one single process or a group of inter-related
processes. In case of inter-related processes, often the output from one process directly
forms the input to the next. For effective functioning of an organization, it has to identify
and manage numerous linked activities with the help of different processes for
accomplishing its goal.
Proper attention should be given to the following points:
(a) All processes should be de-signed keeping in view the requirements and desires of the
customers, within the policy, resource availability, strategy of the company.
(b) All processes should meet the legal and statutory requirements to perform the activity
or deliver the product or service.
(c) Time involved in processing should be minimum with least waiting time to the
customers. If required delegation of authority and assignment of account-ability at various
executive levels should be addressed, revised and fine-tuned to meet the requirements.
(d) All the processes should be properly integrated to meet the goal congruence and should
not function at cross-purpose.
(e) There should be in built control mechanism for ease of measuring, reviewing and
taking corrective action.
Page 44
4. System approach
Customers requirement is one level of commitment. That level implies a system
that is reactive and provides to customers what they want but the target should be to
achieve more and to exceed the customers expectation to accommodate future
requirement and to build a cushion against the competitors attributes.
CRM denotes the management of the entire system and is not confined to only one
or the other sub-systems or functional departments. CRM is based on a system approach to
management. Its primary objective is to increase value to customers on a continuous basis
by designing and improving organizational processes and systems on a ongoing basis.
Meeting Each sub-system may have its own goal but the goal and objectives of all sub-
systems are to be integrated to achieve the overall goal.
There may be one sub-system to acknowledge the customers order, a separate one
to deliver the product within the delivery schedule, another sub-system to comply with the
complaints of the customers etc, but all directed to accomplish the goalvalue to the
customers. The total system as a whole should decide what product to make or what
service to offer, what should be the quality involved, what should be the price, what
markets and customers to target upon and similar other issues.
5. Involvement of people
The fundamentals of CRM bear the genes of customer relationship through
involvement of people, i.e., the work-force at the disposal of the organization. The whole
gamut of CRM is for the people, of the people and by the people. People involvement at
all levels is essential for the success of a CRM program. The bank managers and staff must
be in a position to exploit the concept of customer relationship completely.
Customer relation may be defined as that dimension of relationship marketing that
seeks and ensures customer loyalty by fulfilling promises and continuing to satisfy
customers wants and needs so that defection is zero. It comprises of three levels of
relationships; financial relationship, social relationship and structural relationship.
The main focus of financial relationship is frequency marketing programs based on
financial incentives such as reduction of processing fees, lower rate of commitment
charges, organization of loan mela on special occasions etc. A social relationship program
revolves round a social bonding between company and its customers and establish brand
loyalty. Bankers, nowadays, make house calls, offer different services outside their for-mal
activities, share the feelings and emotions of clients and even send clients flowers on
Page 45
birthdays and anniversaries. A marketing relation with the middleman and interested
groups is developed in an in-side-out manner mainly based on software, which would help
in data warehousing, data mining and data analysis. The optimization of structural
relationship lies in the replacement of physical resources by total service replacement.
Drawing of money through ATMs instead of physical presence in the branch for
withdrawal of cash through cheques or withdrawal forms may be sited as example. To
obtain the full benefits of people involvement, the human resource management should
focus on employee empowerment, productivity linked reward, zero defeat service oriented
train-ing and total quality management.
6. Mutually beneficial customer relationship

The relationship with the customer should be based on a mutually beneficial
relation-ship. A bank should not concentrate its attention towards earning of profits only,
but focus should be directed to the customers wealth creation or value enhancement with
the motto of earning through service.
As an example we can talk of a savings account thats fixed up to give you more
interest. It ensures that any balance in your savings account above a certain amount, say,
Rs 3,000 automatically gets transferred to a fixed deposit to give you higher returns, which
will be swept back into your savings account, when you need it.
Sometimes, other benefits are also extended, such as, free personal accident
insurance coverage along with fixed deposit scheme above a certain amount and above a
certain term. Banks are no more restricting their activities to deposit and advances; rather
they work with the mot-to of offering Integrated Total Package Solutions to all needs of a
customer. Banks have gone to the extent of booking cinema tickets, paying utility bills,
school fees etc. for the ease of their clients who are very busy and do not find time for
such work. Many of such activities are not profitable in terms of time and efforts spend by
the bank. But banks are carrying out such services for mutual benefits, which pays in the
long run.
Wealthy individuals are in the habit of placing all sorts of demands on their private
bankers and a bank has to respond to such requests not merely for income generation but
as a gesture of goodwill and at times such activities add a consider-able percentage to a
banks fee based income. According to an estimate, a bank can earn Rs 35,000 to Rs
100,000 per an-num for a good customer. But generally it is found that earnings start after
Page 46
the first two- three years of dealing with the customer. In a mature relation-ship, such fee-
based income is a regular feature and is very much crucial in todays banking where
interest spread is getting reduced due to competition and fee based income can increase the
bottom line. But in many instances, the expenses in terms of time, effort, recognizing
individual needs and offering a customized investment solution are high.
\
7. Continual improvement
Another objective of CRM is the efforts towards continuous improvement in the
customer relationship through the provision of value added ser-vices at favorable cost.
Business processes in the areas of finance, system integration, human resource
management etc. are to be automated and optimized with an aim to increase the efficiency
and effectiveness of operations.
The most effective way of improvement lies in innovation and change
management. Todays successful organizations must stimulate and foster innovation and
master the art of change. Organizations that maintain their flexibility, spontaneity and
unpredictability, continually improve their quality and, beat their competitors to the market
place with a constant stream of innovative products and services, will be the winners.
The major areas to be targeted are:
(i) Improving the effectiveness of marketing.
(ii) Implementing multichannel trigger driven marketing.
(iii) Implementing a strategic analysis capability to support strategic decision making.
(iv) The ability to deliver the increasing levels service demanded by customers.
(v) Building a transparent communication system and employee participation to better
define the needs of the customers and deliver the right services and products
Page 47
CHAPTER IV
Finding & Analysis
1. What is your assessment of your readiness for the new Basel proposals with respect to
capital requirements?
CREDIT RISK MARKET RISK OPERATIONAL RISK

FULLY 50 50 50
PREPARED
PARTIALLY 30 30 30
PREPARED
NOT YET 20 20 20
PREPARED
60%
50% 50% 50%

50%
40%
30% 30% 30% Credit Risk

30%
Market Risk
20% 20% 20% Operational Risk
20%
10%
0%
Fully Prepared Partially Prepared Not Yet Prepared
Explanation:-
From the above graph we analyze 50% of respondent are Fully Prepared for Credit Risk,
Market Risk and Operational Risk. While 20% of respondent are Partially Prepared for Credit
Risk, Market Risk and Operational Risk. There are also 30% of respondent who are not yet
Prepared for Credit Risk, Market Risk and Operational Risk.
Page 48
2. Have you done a gap analysis between current risk management practice and new
capital requirements?

YES 80 80 80
NO 20 20 20
90%
80% 80% 80%
80%
70%
60%
50%
Yes
40% No
30%
20% 20% 20%
20%
10%
0%
Credit Risk Market Risk Operational Risk
Explanation:-
From the above graph we analyze 80% of respondent have done Gap analyze between for
Credit Risk, Market Risk and Operational Risk. While 20% of respondent have not done Gap
analyze between for Credit Risk, Market Risk and Operational Risk.
Page 49
3. Do you have assigned Credit risk, Market risk and Operational risk manager in your
bank?

YES 50 50 50
NO 50 50 50
60%
50% 50% 50% 50% 50% 50%

50%
40%
Credit Risk
30%
Market Risk
Operational Risk
20%
10%
0%
Yes No
Explanation:-
From the above graph we analyze 50% of Banks aasigned for Credit Risk, Market Risk and
Operational Risk. While 50% of Banks are not Assigned for Creidt Risk, Market Risk and
Operational Risk.
Page 50
4. What is the assigned managers time dedicated to this activity?

0-20% 60 60 60
20-50% 40 40 40
>50% 70 70 70
80%
70% 70% 70%
70%
60% 60% 60%
60%
50%
40% 40% 40% CREDIT RISK
40%
MARKET RISK
30% OPERATIONALRISK
20%
10%
0%
0-20% 20-50% >50%
Explanation:-
From the above graph we analyze 50% of Bank Managers are assigned for Credit Risk,
Market Risk and Operational Risk of 0-20%. While 40% of respondent are Partially Prepared
for Credit Risk, Market Risk and Operational Risk of 20-50%. There are also 60% of
respondent who are not yet Prepared for Credit Risk, Market Risk and Operational Risk not
more than > 50%
Page 51
5. How many people work in this department?
1-3 50 50 50
3-5 50 50 50
5-10 50 50 50
>10 50 50 50
70%
60% 60%
60%
50%50%50% 50%50%50% 50%

50%
40%40%40%
40% CREDIT RISK
MARKET RISK
30%
OPERATIONAL RISK
20%
10%
0%
1 BY 3 3 BY 5 5 BY 10 > 10
Explanation:-
From the above graph we analyze 50% of People work in this Department for Credit Risk,
Market Risk and Operational Risk of 1-3. While 50% of People are Work in this Department
for Credit Risk, Market Risk and Operational Risk of 3-5. There are also 50% of People who
are Work in the Department for Credit Risk, Market Risk and Operational Risk 5-10.
Page 52
6. Do you have a Risk Committee?

YES 50 50 50
NO 60 60 60
70%
60% 60% 60%

60%
50% 50% 50%

50%
40% CREDIT RISK

MARKET RISK
30%
OPERATIONAL RISK
20%
10%
0%
YES NO
Explanation:-
From the above graph we analyze 50% of Respondent are having Risk Committee for Credit
Risk, Market Risk and Operational Risk. While 60% of respondent are not Having Risk
Committee for Credit Risk, Market Risk and Operational Risk.
Page 53
7. Are you produce reporting for

REGULATORY 50 50 50
PURPOSE
MONITORING 40 40 40
DECISION 60 60 60
MAKING
PURPOSE
70%
60%
60%
50% 50% 50% 50% 50% 50%
50%
40% 40%
40%
CREDIT RISK
30% MARKET RISK
OPERATIONAL RISK
20%
10%
0%
REGULATORY PURPOSE MONITORING DECSION MAKING
PURPOSE
Explanation:-
From the above graph we analyze 50% of Respondent Producing Report for Regulatory
Purpose in Credit Risk, Market Risk and Operational Risk. While 50% of Respondent
Producing Report for Monitoring Work in Credit Risk, Market Risk and Operational Risk
There is also 60% of Respondent who produce Reporting in Decision Making Purpose in
Credit Risk, Market Risk and Operational Risk
8. Does external reporting drive your internal reporting?

VERY 60 60 60
SIGNIFICANTLY
SIGNIFICANTLY 40 40 40
NOT AT ALL 50 50 50
SIGNIFICANTLY
Page 54
70%
60% 60% 60%

60%
50% 50% 50%

50%
40% 40% 40%

40% CREDIT RISK
MARKET RISK
30%
OPERATIONAL RISK
20%
10%
0%
VERY SIGNIFICANTLY SIGINFICANTLY NOT AT ALL
Explanation:-
From the above graph we analyze 50% of Respondent Having Internal Reporting Very
Significantly in Credit Risk, Market Risk and Operational Risk. While 50% of Respondent
Having Internal Reporting Significantly in Credit Risk, Market Risk and Operational Risk
There is also 60% of Respondent Having Internal Reporting Not at all in Credit Risk, Market
Risk and Operational Risk
Page 55
9. Will you develop an IT solution for Risk Management?
YES 50 50 50
NO 40 40 40
70%
60%
60%
50% 50% 50%

50%
40% 40%
40% CREDIT RISK
MARKET RISK
30%
OPERATIONAL RISK
20%
10%
0%
YES NO
Explanation:-
From the above graph we analyze 50% of Respondent are in Solution In Risk Management
Department for Credit Risk, Market Risk and Operational Risk. While 50% of Respondent
are not in IT Solution in Credit Risk, Market Risk and Operational Risk.
Page 56
10. What difficulties do you foresee?
CREDIT RISK MARKET RISK OPERATIONAL
RISK
INTEGRATION 60 60 60
CAPABILITIES
DATABASE DESIGN 40 40 40
MODELS 30 30 30
BUDGET 20 20 20
DATA GATHERING 10 10 10
HUMAN RESOURCE 10 10 10
OTHER (SPECIFY) 10 10 10
70%
60%
60%
60%
60%
50%
40%
40%
40%
40%
30%
30%
30%
30% CREDIT RISK
20%
20%
20%
20% MARKET RISK
10%
10%
10% OPERATIONAL RISK
10% 5%5%5%
0%
Explanation:-
From the above graph we analyze 50% of Respondent Facing Difficulties in Integreation
Capabilites in Credit Risk, Market Risk and Operational Risk. While 50% Respondent
Facing Database in Credit Risk, Market Risk and Operational Risk There is also 60%
Respondent Facing Difficulties in Budget in Credit Risk, Market Risk and Operational Risk
Page 57
CHAPTER V
Conclusion
In my report I have tried to show the basic different between the Personal
Loan of BOB & SBI Banks. Both the Banks are good in terms of
customer satisfactions has an edge because it is the leading Government
regulated bank in India. BOB is new to this segment (when compared to
SBI) .SBI is preferred because its a government bank. Procedure of loan
financing is easy in BOB Bank. Family members & increasing standard
of living plays an important role in influencing the decision of taking
home loan.
1. SBI Bank is Leading Bank in the country, it provides a variety of products
and services to different segments of customers.
2. The Bank aims to serve customers from teenagers to senior citizens, hence
different products designed to suit specific requirements of the above.
3. Aims to serve all classes of the society from the salaried middle class to the
high income business class. Customers are categorized and segmented
according to their requirements and needs. For Example , the Saving Regular
and Plus Account aims to serve middle class customers so minimum balance
required to be maintained is RS.5,000/- or RS. 10000. While the Saving Max
Account is targeted at high income customers, the minimum balance
requirement is RS.25,000.
4. SBI Bank provides personal loan at low interest rate which good for
customers.
5. The Bank prides itself with the ability to provide differentiate products in the
crowed market of saving accounts. Bank offers free insurance, special co-
branded debit cards which makes its product unique.
Page 58
Bibliography
1. Website of Reserve Bank of India
2. Website of Bank of Baroda
3. BSE/NSE websites
4. Indian institute of Banking and Finance
5. Website of SBI, BOI, CANARA bank.
6. Companies Act.
7. Indian Banks Association website
8. Ministry of Finance website
Page 59
Annexure
ANNEXURE
1. Name of your bank:
2.Please indicate the name of the contact Name:

Person for this questionnaire and his/her position Qualification:
in the Bank. Position:
3.To which of the following types of o Public sector
Banks o Private sector
Does your bank belong? o Foreign Bank
4.Where is your parent/head office located?
8. What is your assessment of your readiness for the new Basel proposals with respect to capital
requirements?
FULLY
PREPARED
PARTIALLY
PREPARED
NOT YET
PREPARED
2. Have you done a gap analysis between current risk management practice and new capital
requirements?
YES
NO
3. Do you have assigned Credit risk, Market risk and Operational risk manager in your bank?
Page 60
YES
NO
4. What is the assigned managers time dedicated to this activity?

0-20%
20-50%
>50%
5. How many people work in these department?

1-3
3-5
5-10
>10
6. Do you have a Risk Committee?

YES
NO
7. Are you produce reporting for

REGULATORY
PURPOSE
MONITORING
DECISION
MAKING
PURPOSE
8. Does external reporting drive your internal reporting?

VERY
SIGNIFICANTLY
SIGNIFICANTLY
Page 61
NOT AT ALL
SIGNIFICANTLY
9. Will you develop an IT solution for Risk Management?
YES
NO
10. What difficulties do you foresee?

CREDIT RISK MARKET RISK OPERATIONAL
RISK
INTEGRATION
CAPABILITIES
DATABASE DESIGN
MODELS
BUDGET
DATA GATHERING
HUMAN RESOURCE
OTHER (SPECIFY)
PLACE:
_____________________
DATE: SIGNATURE
Page 62

Indian Banking System

Caricato da

Informazioni sul documento

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

Indian Banking System

Caricato da

Copyright:

Formati disponibili

Indian Banking System

A bank has been described as an institution engaged in accepting deposits and

The banking system in India is based on British banking company which is

1.4 BANKING PRODUCTS

1.7 IMPORTANCE OF FINANCIAL SERVICES

1.8 SOURCES OF REVENUE

1.10 CAUSES OF FINANCIAL INNOVATION

CHARTS: VARIOUS CHANNELS OF SERVICES

AUTOMATED TELLER MACHINE (ATM)

Current account is primarily meant for businessmen, firms, companies and

Under recurring deposit account, a specific amount is invested in bank on

Safe deposit locker is a facility provided by banks to their customers to keep

OLD CREDIT CARDS NEW CREDIT CARDS

Charge Card Business Card

In-store Card Smart Card

Old types of Credit Cards:

It is a normal card whereby a holder is able to purchase without having to pay

A charge card is intended to serve as a convenient means of payment for goods

A business card is similar to a corporate card.it is meant for the use of

An ATM (Automated Teller Machine) card is useful to a card holder as it helps

Mortgage loan is a financing arrangement in which a lender extends finance for

Public Gold &

1) Public Provident Fund (PPF):

A merchant banker is a financial intermediary who helps to transfer capital from

A lease is an agreement which a company or a firm acquires a right to make use

Factoring refers to the process of managing the sales ledger of a client by a

Forfeiting is a technique by which a forfeitor (financing agency) discounts an

A venture capital is another method of financing in the form of equity

State Bank of Bikaner and Jaipur (SBBJ)

Products And Services

SBI Term Deposits SBI Loan For Pensioners

EQUITY ALL TYPES

1 Samsung Life Ins Korea 2,486

2 New York Life USA 2,167

3 SBI Life Insurance India 1,662

4 Northwestern Mutual USA 1,411

5 AIA-Hong Kong Hong Kong 1,159

11 LIC of India India 595

14 BOB Standard Life India 536

22 Max New York Life India 343

68 BOB Pru India 125

69 Birla Sunlife India 124

3.1 CRM IN INDIAN BANKS

3.2 IMPORTANCE OF CRM IN INDIAN BANK

According to a RBI road-map, India will have a competitive banking market

CRM is variously misunderstood as a fancy sales strategy, an expensive software

3.3 IMPLEMENTATION OF CRM IN INDIAN BANKS

3.4 Customers Relationship Management A new mantra in

Persuasion, judgment and decision-making abilities are the main attributes of

6. Mutually beneficial customer relationship

CREDIT RISK MARKET RISK OPERATIONAL RISK

50% 50% 50%

30% 30% 30% Credit Risk

CREDIT RISK MARKET RISK OPERATIONAL RISK

CREDIT RISK MARKET RISK OPERATIONAL RISK

50% 50% 50% 50% 50% 50%

CREDIT RISK MARKET RISK OPERATIONAL RISK

CREDIT RISK MARKET RISK OPERATIONAL RISK

50%50%50% 50%50%50% 50%

CREDIT RISK MARKET RISK OPERATIONAL RISK

60% 60% 60%

50% 50% 50%

40% CREDIT RISK

CREDIT RISK MARKET RISK OPERATIONAL RISK