VSRD International Journal of Business and Management Research, Vol.

III Issue XI November 2013 / 475

e-ISSN : 2231-248X, p-ISSN : 2319-2194 VSRD International Journals : www.vsrdjournals.com
RESEARCH ARTICLE
A STUDY ON PRIORITY BANKING WITH REFERENCE
TO ICICI BANK VIS--VIS HDFC BANK
Shephali Mathur
Research Scholar, Department of Management Studies,
Mewar University, Chittorgarh, Rajasthan, INDIA.
Corresponding Mail : shephalimathurscm@gmail.com
ABSTRACT
Priority banking is a new term in the Indian banking. In this form of banking the customers with the deposits of above 1 Lakh are
treated as priority customers and are given special benefits by the bank. The basic purpose of this form of banking is to make the
experience of banking hassle free and less time consuming. This paper is based on the study of Priority banking with reference to
ICICI Bank vis-a-vis HDFC Bank i.e. the facilities provided by the ICICI Bank to its priority customers as compared with HDFC Bank
and the factors which lead customers to invest through a bank and customer satisfaction through bank services and investment. ICICI
Bank provides convenience to its customers. and make their banking hassle free and comfortable. They have an exclusive Privilege
Banking area at over 700 ICICI Bank branches across India where customers will be serviced by their Privilege Bankers. Be it for
credit cards, loans, deposits, investments or regular banking transactions, their Privilege Bankers are trained to offer single point
service for a variety of requests. So one have to just walk into the Privilege Banking area at an ICICI Bank branch and do all banking
conveniently.
Keywords : Priority Banking, ICICI Bank, HDFC Bank, Financial Products And Services, Customer Satisfaction.

1. INTRODUCTION
Priority banking is relatively new in the Indian context. In
this form of banking, the bank identifies its priority
customers (often customers with deposits above 1 lakh
however this is different for each individual bank) and
some special benefits are provided to these first class
customers by the bank. Example-They do not have to
wait in the queue for transactions. They are assigned
client relationship managers to take care of all their
banking needs. These customers can use banks premises
for holding meetings, can access the Internet free of cost
and several other benefits are also provided. The basic
purpose of this form of banking is to make the experience
of banking hassle free and less time consuming. This is
not to be confused with wealth management where the
thrust is on providing first-class customers, customised
services and expert advice on various financial needs.
This is generally carried out by the wealth managers of
the bank. However priority banking as part of its service
offerings may include wealth management.
Priority Banking emerged in India with the advent of
foreign banks. Foreign banks usually have the habit of
serving their prized/high value customers with priority
service. Seeing them woo their high value customers like
this, the banks in India, especially the private banks
started similar service options for their valued customers.
Slowly the government banks started this service as well
and nowadays almost all banks in India provide priority
banking services to their customers.
ICICI Bank was originally promoted in 1994 by ICICI
Limited, an Indian financial institution, and was its
wholly owned subsidiary. ICICI's shareholding in Bank
was reduced to 46% through a public offering of shares in
India in fiscal 1998. ICICI Bank is India's second-largest
bank with total assets of Rs. 3,997.95 billion at March 31,
2008. The Bank has a network of about 1,308 branches
and 3,950 ATMs in India and presence in 18 countries.
ICICI Bank offers a wide range of banking products and
financial services to corporate and retail customers
through a variety of delivery channels and through its
specialized subsidiaries and affiliates in the areas of
investment banking, life and non-life insurance, venture
capital and asset management. The Bank currently has
subsidiaries in the United Kingdom, Russia and Canada,
branches in Unites States, Singapore, Bahrain, Hong
Kong, Sri Lanka, Qatar and Dubai International Finance
Centre and representative offices in United Arab
Emirates, China, South Africa, Bangladesh, Thailand,
Malaysia and Indonesia. Our UK subsidiary has
established branches in Belgium and Germany. ICICI
Bank's equity shares are listed in India on Bombay Stock
Exchange and the National Stock Exchange of India
Limited and its American Depositary Receipts (ADRs)
are listed on the New York Stock Exchange (NYSE).
2. OBJECTIVE OF THE STUDY
The objective of the study is to study the term Priority
banking i.e. what it deals with and basically to study the
term Priority banking with reference to ICICI Bank. The
facilities provided by ICICI Bank to its priority customers
vis--vis HDFC Bank. The objective is also to know the
customers views on priority banking and what are the
facilities they are getting from ICICI Bank as their
priority banking customer.
3. PRIORITY SERVICES OF ICICI BANK
ICICI Bank provides Priority recognition as a Privilege
Banking customer at the branches with faster access to
Privilege Bankers and priority access to phone banking
Shephali Mathur VSRDIJBMR, Vol. III (XI) November 2013 / 476

officers will make your banking effortless.
As a Privilege Banking customer, all requests made by
the customers will be processed on priority. Direct access
to the Privilege Bankers at branches and priority access to
phone banking officers will make banking effortless.
Some of the priority services of ICICI Bank are :
Preferential Access Customers can get reduction in the
waiting timed they can enjoy priority service at the
branches and easy access to a customer care officer
through phone banking.
Over the Counter Servicing (OTC) Quicker
resolutions can be made and a range of service requests
will be processed over the counter.
Priority Processing Priority customers get faster
service during processing of their transaction and all other
requests such as loan/credit card applications will be
processed on priority.
Priority Updates Customers keep themselves updated
even while on the move. Updates are provided through
SMS on the status of customers service requests.
Special Privileges : As a Privilege Banking customer of
ICICI Bank customers can enjoy relationship privileges
on home loans, auto loans, credit card, gold, forex and
locker facility and can also enjoy a range of lifestyle
privileges designed especially for them.
Relationship Privileges : ICICI Bank provides
preferential interest rates and processing fees (which will
be announced from time to time) on Auto Loan and
Home Loan. Preferential pricing on purchase of gold,
sale/purchase of forex and rental rates on the locker
facility.
Privilege Delights : ICICI Bank provides an array of
offers on travel, shopping, dining and entertainment with
their alliance partners. Invitations to auto events, property
exhibitions.
Special invites to auto events and property exhibitions
organised or sponsored by ICICI Bank product teams.
Products and Services of ICICI Bank :
Deposits and Accounts : ICICI Bank Privilege Banking
has a range of accounts and deposits to cater to your
unique banking needs.
They have extensive branch & ATM network along with
mobile, phone, internet and doorstep banking, make your
banking experience the best.
ICICI Banks Offerings :
Titanium Privilege Savings Account
Gold Privilege Savings Account
Fixed Deposit
Recurring Deposits
Current Accounts
Credit and Debit Cards : Customers can enjoy
rewards and privileges along with unmatched
convenience when you sign up for any ICICI Bank
Credit or Debit Card.
ICICI Banks Offerings :
Titanium Debit Card
Gold Debit Card
Rubyx Credit Card
Loans : At ICICI Bank Privilege Banking, we offer you a
wide range of loan products to help you achieve your
dreams. Quick, convenient and hassle-free access to car,
home and personal loans mean you can get financing
when you need it.
ICICI Banks Offerings :
Home Loan
Car Loan
Personal Loan
Investments : To secure the financial future for your
family and you, an appropriate range of investments is
critical. At ICICI Bank Privilege Banking, various
investment options are available for the customers to help
them build their wealth for self and for future generation.
Insurance : At ICICI Bank Privilege Banking, they
protect customers what is important to them. Their range
of third party insurance products covers everything from
customers health and life, to their home and travels.
Customers can enjoy peace of mind and unmatched
convenience with insurance products facilitated by ICICI
Bank.
ICICI Banks Offerings :
Life Insurance
Health Insurance
Health Advantage Plus Insurance Policy
Critical Care
Personal Protect Insurance Policy
4. ADVANTAGES OF PRIORITY BANKING
OF ICICI BANK
ICICI Bank understands that customers like you deserve
special attention. Privilege Banking products and services
are designed to meet all banking and financial needs of
select customers like you.
As their valued Privilege Banking customer, you enjoy
Dedicated Service Area, Priority Service and Special
Privileges making your banking experience truly special.
For a faster and differentiated banking experience, ICICI
Bank have Privilege Banking Dedicated Service Areas at
ICICI Bank branches across India. Preferred recognition
at Enquiry desks and at DQM machines ensure you enjoy
faster access to our expert Privilege Bankers for all your
banking needs from deposits, loans, cards to investments
and insurance
All Privilege Banking customers are now entitled for an
upgrade to Privilege Banking Gold Debit Card at no
additional cost. You may apply online using ICICI Net
Shephali Mathur VSRDIJBMR, Vol. III (XI) November 2013 / 477

Banking or contact Customer Care. At ICICI Bank
Privilege Banking, they offer the services of Privilege
Bankers to take care of all banking and investing needs
of their customers. Privilege Banking customers can also
walk into one of their 700 plus select branches across
India and enjoy a Dedicated Service Area to cater to their
needs.
5. HDFC BANK
HDFC Bank Limited is an Indian financial services
company based in Mumbai, Maharashtra that was
incorporated in August 1994. HDFC Bank is the fifth or
sixth largest bank in India by assets and the first largest
bank by market capitalization as of November 1, 2012.
The bank was promoted by the Housing Development
Finance Corporation, a premier housing finance company
(set up in 1977) of India. As on December 2012, HDFC
Bank has 2,776 branches and 10,490 ATMs, in 1,399
cities in India, and all branches of the bank are linked on
an online real-time basis. As of December 2012 the bank
had balance sheet size of Rs. 3837 billion. For the fiscal
year 2011-12, the bank has reported net profit of 5167.07
crore (US$950 million), up 31.6% from the previous
fiscal.
On March 14, 2013 an online magazine named
Cobrapost.com released video footage from Operation
Red Spider showing high ranking officials and some
employees of HDFC bank willing to turn black money
into white which is violation of Money Laundering
Control Act. After this The government of India and
Reserve Bank of India have ordered an inquiry.
History : HDFC Bank was incorporated in 1994 by
Housing Development Finance Corporation Limited
(HDFC), India's largest housing finance company. It was
among the first companies to receive an 'in principle'
approval from the Reserve Bank of India (RBI) to set up
a bank in the private sector. The Bank started operations
as a scheduled commercial bank in January 1995 under
the RBI's liberalisation policies.
Times Bank Limited (owned by Bennett, Coleman &
Co./The Times Group) was merged with HDFC Bank
Ltd., in 2000. This was the first merger of two private
banks in India. Shareholders of Times Bank received 1
share of HDFC Bank for every 5.75 shares of Times
Bank.
In 2008 HDFC Bank acquired Centurion Bank of Punjab
taking its total branches to more than 1,000. The
amalgamated bank emerged with a base of about Rs.
1,22,000 crore and net advances of about Rs.89,000
crore. The balance sheet size of the combined entity is
more than Rs. 1,63,000 crore.
Business Focus : HDFC Bank deals with three key
business segments. - Wholesale Banking Services, Retail
Banking Services, Treasury. It has entered the banking
consortia of over 50 corporates for providing working
capital finance, trade services, corporate finance, and
merchant banking. It is also providing sophisticated
product structures in areas of foreign exchange and
derivatives, money markets and debt trading And Equity
research.
Wholesale Banking Services : For customers from
ongole Blue-chip manufacturing companies in the Indian
corp to small & mid-sized corporates and agri-based
businesses the Bank provides a wide range of commercial
and transactional banking services, including working
capital finance, trade services, transactional services, cash
management, etc. The bank is also a leading provider of
the above services to its corporate customers, mutual
funds, stock exchange members and banks.
Retail Banking Services : HDFC Bank was the first
bank in India to launch an International Debit Card in
association with VISA (Visa Electron) and issues the
Master Card Maestro debit card as well. The Bank
launched its credit card business in late 2001. By March
2009, the bank had a total card base (debit and credit
cards) of over 13 million. The Bank is also one of the
leading players in the merchant acquiring business with
over 70,000 Point-of-sale (POS) terminals for debit /
credit cards acceptance at merchant establishments. The
Bank is positioned in various net based B2C opportunities
including a wide range of Internet banking services for
Fixed Deposits, Loans, Bill Payments, etc. With Finest of
Technology and Best of Man power in Banking Industry
HDFC Bank's retail services have become by and large
the best in India and since the contribution to CASA i.e.
total number of current and savings account of more than
50%, HDFC BANK has full potential to become India's
No.1 Private Sector Bank.
Treasury : Within this business, the bank has three main
product areas - Foreign Exchange and Derivatives, Local
Currency Money Market & Debt Securities, and Equities.
These services are provided through the bank's Treasury
team. To comply with statutory reserve requirements, the
bank is required to hold 25% of its deposits in
government securities. The Treasury business is
responsible for managing the returns and market risk on
this investment portfolio.
Distribution Network : HDFC Bank is headquartered in
Mumbai and as of March 31, 2012, the Banks
distribution network was at 2,544 branches and 8,913
ATMs in 1,399 cities as against 1,986 branches and
10000 ATMs in 996 cities as of October, 2012.
Priority Services of HDFC Bank:
Dedicated Relationship Manager : HDFC Bank
provides a relationship manager who is experienced and
professionally trained, and will cater to all banking and
financial services needs of their customers. So, whether
you want expert advice on mutual funds or a demand
draft issued, you can trust your Relationship Manager to
get the job done.
Customised Investment Solutions : Comprehensive
Investment solutions include tax efficient investment
avenues, buying and selling of shares, convenient tax
payment options; all under one roof. Customers can also
benefit from extensive research across Equities,
Shephali Mathur VSRDIJBMR, Vol. III (XI) November 2013 / 478

Derivatives, Debt and Mutual Funds, in addition to the
expertise of a dedicated advisor to take care of your
financial needs. Keeping your risk profile in mind they
will customise an investment strategy for you, restructure
your portfolio and allocate your assets optimally in order
to realise your long term investment goals.
e-Broking : HDFC Bank offers a gateway for e-Broking,
via HDFC Securities Trading account, to facilitate easy
T+2 settlements at a special price. Enjoy the convenience
and flexibility of buying and selling shares over the
phone or the Internet.
Expedite Tax Payments : Customers can step into the
nearest authorised branch and pay your taxes through
HDFC Bank cheques and can collect challan immediately
over the counter.
Relationship Pricing : HDFC Bank provides preferential
pricing across a wide range of financial products like
Credit Card, Loans, Demat accounts, HDFC Securities
Trading accounts, Forex, Gold Bars etc.
Business Solutions : HDFC Bank along with the family's
banking needs of the customer also cater to the financial
needs of their business with Business Loans like Working
Capital Overdrafts, Trade Finance, Commercial Vehicle
Loans, Loan Against Property or Forex Services.
As a Preferred customer also receive-On-demand
exclusive privileges including :
No charges on NEFT & RTGS transactions through
Net banking.
Free alerts on your mobile phone or in your mailbox
by registering for our Insta Alert facility.
Free registration for e-Age Banking - Avail of
Mobile Banking, Net Banking, or Phone Banking.
Waiver of AQB non-maintenance charges.
Free Preferred Easy shop Platinum Debit card with
limit of Rs. 1,00,000 at ATMs and Rs. 1,25,000 at
merchant establishments per day .
No charges for balance enquiries and cash
withdrawals if you transact on non HDFC Bank
ATMs (VISA/ MasterCard / Euronet/ SBI/ Andhra
Bank) in India.
An HDFC Bank Credit Card which offers you
exclusive and preferential benefits.
Free "At Par" cheque book payable at any HDFC
Bank branch across the country, so you do away with
the need to ask for demand drafts.
Locker facility at just 50% of the annual fee. (Subject
to availability)
Demat Folio Maintenance Charges waived off for the
first year. Differential Transaction Based Folio
Maintenance charges from second year onwards.
Preferential Forex rates.
Combined monthly statement for your Savings,
Current and Fixed Deposit accounts for which you
are the principal holder. This facility is also available
for email statements.
Free Standing Instructions facility.
Cheque pick-up facility.
BillPay to pay all your utility bills and LIC premiums
through Phone Banking and Net Banking.
Annual Service Charge Waiver
You are entitled to a waiver of up to Rs. 2,000 per
annum on a host of service charges:
Demand Draft / Manager's Cheque charges
Inter-branch funds transfer charges
Stop Payment charges
Cheque return / collection charges
DD cancellation charges
Hold Mail charges
Duplicate statement charges
Certificate of balance charges
FIRC charges
Recovery of old records charges
6. FUTURE SCOPE
This paper discusses on priority banking with reference to
ICICI Bank vis--vis HDFC Bank. In todays scenario
priority banking is an important aspect for banks. The
importance could be understood with the fact that priority
banking not only increases satisfaction of the customers
who are served but also push other customers to upgrade
to priority banking. Priority banking with the term carries
huge load of expectation and if Bank is able to deliver the
same it creates positive wave in the market which makes
similar customer segments to move towards the said
bank. Best thing about a priority banking If the bank is
able to deliver the customer satisfaction, this set of
customers will be able to invest money in huge amounts
with less second thoughts in other products and services
like FD/RD/DEMAT/Platinum Credit Cards/Loans etc.
The scope of priority banking is huge with almost double
digit growth in the economy. Huge set of people have
Salaries, Profits and Bonus increasing over time. In
Future the bank with best priority services will have its all
other products sold easily. Priority banking is now under
focus of many banks and ahead we will see fierce
competition in between banks to retain and attract priority
customers. Because it is easy to ask for investment with a
already satisfied existing customer in place of hunting for
new customers in tough competitive market like India.
7. RESEARCH METHODOLOGY
In this paper Exploratory research and Descriptive
research design are used in this type of research.
Exploratory research is a type of research conducted for a
problem that has not been clearly defined. Exploratory
research helps determine the best research design, data
collection method and selection of subjects. It should
draw definitive conclusions only with extreme caution.
Given its fundamental nature, exploratory research often
concludes that a perceived problem does not actually
exist.
Descriptive research includes surveys and fact-finding
enquiries of different kinds. The major purpose of
descriptive research is description of the state of affairs as
it exists at present.
Shephali Mathur VSRDIJBMR, Vol. III (XI) November 2013 / 479

8. COLLECTION OF DATA
Primary Source : It includes data collected through
survey and Questionnaire. To discover the Priority
banking of ICICI Bank vis--vis HDFC Bank, the
following factors are taken into consideration from the
side of customers :
What the customers think about Priority Banking.
For how long the customers are associated with their
respective banks.
Whether the customers are satisfied with their
respective banks.
The time horizon of investments by respondents.
Whether the customers collect some information
before making any investments and the level of
information they collect before investing.
The services they like the most and suggestions to
improve the services.
The information related with Age, Education level,
residence location, Occupation, Level of income.
Secondary Source : It includes published data and the
data collected in the past or other parties. Information has
been sourced from books, research papers, journals,
magazines and websites.
9. ANALYSIS
ICICI Bank is growing at a very fast rate with a total asset
of Rs. 3,744.10 billion. In the area of human relations, it
is taking divergent paths. ICICI Bank, on the other hand,
is setting up regional hubs where its workforce would be
concentrated and plans to add 20,000 to its headcount
every year. The group plans to add between 75,000
and 1, 00,000 employees in the next few years.
Graph 1 : For how long is the respondents relationship with ICICI Bank

Interpretation : 65% of the respondents have their relationship with ICICI Bank for 5-10 years.
Graph 2 : For how long is the respondents relationship with HDFC Bank

Interpretation : 55% of the respondents have their relationship with HDFC Bank for 5-10 years.
10%
25%
55%
10%
0-2years
2-5years
5-10years
10 &Above
10%
25%
55%
10%
0-2years
2-5years
5-10years
10 &Above
Shephali Mathur VSRDIJBMR, Vol. III (XI) November 2013 / 480

Graph 3 : Customers satisfaction in terms of priority banking services

Interpretation : 95% of the respondents are satisfied with the priority banking services of ICICI Bank and 75% with
HDFC Bank.
10. CONCLUSION
Priority banking is a new term in the banking sector and
the priority customers are given special privileges by the
bank. As I have discussed in this paper the views of the
customers regarding the priority services they are getting
from their respective banks basically we have taken ICICI
Bank vis--vis HDFC Bank. After the survey from the
customers we came to the conclusion that customers more
prefer the services of ICICI Bank as compared to HDFC
Bank. But besides this comparison both the banks are
providing valuable services to the customers and
customers should take all the benefits out of it and the
customers who are still unaware about the priority
banking services should be made aware by the banks.
11. REFERENCES
Websites
[1] www.icicibank.com
[2] www.hdfcbank.com
[3] www.scribd.com
[4] http://en.wikipedia.org/wiki/special:search/priority_bankin
g
Books
[5] Beri - Marketing Research (Tata McGraw Hill, 4th Ed.)
[6] Kotler Philip Marketing Management (Pearson
Education, 11
th
Ed.)

95%
75%
ICICI
HDFC