PESTEL ANALYSIS OF DENA BANK:

Political Factors:

1.Focus on regulation of government

Government affects the performance of banking sector mostly by

legislature and framing policies
Indian banking sector is least affected as compared to other developed
countries because of robust policy framework of RBI
Stricter prudential regulations with respect to capital & liquidity gives India
an advantage in terms of credibility aver other countries

2.Budget & Budget Measures

Increased farm credit

Subvention of 1% to be paid as incentive to farmers
Debt waiver for farmers
Setting up separate task force for those not covered under the debt waiver
scheme

3.FDI Limits

The move to increase foreign direct investment limits to 49% from 20%
came as a welcome announcement for foreign players wanting to get a
foothold in the Indian market by investing in willing India partners who are
starved of networth to meet CAR norms

Economic Factors:

Every year RBI declares its 6 monthly policies and accordingly the various
measures and rates are implemented which has an impact on the banking
sector
The economic measures affects the banking sector to boost the economy
by giving certain concessions or facilities. If the savings are encouraged
then more deposits would be attracted towards the banks & in turn they
can lend more money to the agricultural and industrial sector, therefore
booming the economy.
If the FDI limits are relaxed, then more FDI are brought in India through
banking channels.

Socio-Cultural Factors:

Changing lifestyle
Increasing population
Low literacy rate as compared to developed countries.

Technological Factors:

Some of the Technological changes that have brought radical change in banking
industry are:
 Automated Teller Machine(ATM)
Automatic Voice Recorder
Credit Card Facility
IT services & Mobile Banking

Environmental Factors:

Banking industry is directly related to the growth of the economy.Indian

economy has registered a good growth in recent years
Today service sector is contributing more than half of the Indian GDP. It
takes India one step closer to the developed economies of the world.
In regards with the service sector as the income of the people will increase
lendings and savings will increase leading to increased business for the
banks.

Legal factors:

Banking Regulation Act- It was enacted in 1949, which empowered the

RBI to control regulate & inspect the banks in India. This act also provided
that no new bank or branch of an existing bank could be opened without a
license from RBI.
Intervention by RBI- RBI will intervene to smooth movements in the rupee
& prevent a downward spiral in its value, but will balance this with the
need to retain reserves in the event of prolonged turbulence.