Sie sind auf Seite 1von 84


A Study on Retail Banking in IDBI Bank

A report submitted in partial fulfilment of the requirements of

Masters Degree in Management


Vitthal Chaudhari
Roll No. 16106B1044
Batch : - 2016-18

VIT marg,SangamNagar,Wadala,Mumbai-400079

Industry Guide Faculty Guide

Mr. Vikas Pandit Ms.Varsha Maheshwari

Designation: DGM, Branch Head Designation: Associate Professor,

Organisation: IDBI Bank VIT-MMS

E Mail id: E-Mail Id:


This project bears the imprint of many people who have assisted me in the successful completion of this report.I

gratefully acknowledge the contribution of all the people who took active part and provided valuable support to me

during the course of this project.

To begin with, I would like to offer my sincere thanks to IDBI Bank for giving me an opportunity to do my summer

internship with the esteemed organization.

With due reverence, I acknowledge the valuable support of Shri VikasPandit, DGM & Branch Head, for giving me

the opportunity to do my Summer Internship under his guidance. Without his guidance, support and valuable

suggestions during the research, the project would not have been accomplished.

My heartfelt gratitude also goes to the entire Retail Banking team for their co-operation and willingness to answer all

my queries, and provide valuable assistance.

I also sincerely thank Ms. Varsha Maheshwari , my faculty mentor at VIT-MMS, who provided valuable suggestions,

shared her rich corporate experience, and helped me script the exact requisites.

Last, but not least, I would like to thank all Customers for sharing their experience and giving their valuable time to me

during the course of my project.

Vitthal Chaudhari
MMS 2016-18
Roll No. 16106B1044


This is to declare that the study presented by me to Vidyalankar Institute of Technology, in completion of the
Master in Management Studies (MMS) under the RETAIL BANKING in IDBI BANK has been
accomplished under the guidance of Prof. Varsha Maheshwari.



Banking Industry which is basically my concern industry around which my project has to be
revolved is really a very complex industry. The project titled RETAIL BANKING AT
IDBI BANK was basically a research based project. The main motive behind doing this project is to

know the Banking industry,

have an overview of retail banking,
know the different products available for retail banking by the bank,
current situation and problems and their solutions.

My project was totally based on primary data. The project started with studying the various
products of IDBI Bank. This was done throughly in order to understand about retail banking
and which products do it covers.

My next step was to come out of the bank and do a comparative analysis of the bank with its
peer banks.My basic objective was to find out what is the scope of retail banking business in
IDBI bank. The comparative analysis between the banks helped me to understand their perceptions
about current standing of IDBI bank with respect to other banks

Then with questionnaire i got the Statistical data from the customers which help to know the
customers response their views and the areas where IDBI bank needs to improve.
My main findings through this project was that there is a huge market which still need to be
captured by IDBI Bank. There are some suggestions which will help the IDBI bank to
improve their standing and become more profitable

Table of Contents

S.No Chapter Particulars Page no.

1 i) Acknowlegement 1
2 ii) Declaration 2
3 iii) Executive Summary 3
4 1) Introduction 7
1.1 A Brief Introduction 8
1.2 Obejective Of The Study
1.3 Relevance of The Study 8
1.4 Scope Of The study
1.5 Limitations
5 2) A Journey Through Banking 10
2.1 Origin Of Banking 10
6 3) IDBI Profile 20
3.1 Journey From IDBI To IDBI Ltd. 21
3.2 IDBI Bank Ltd.- A Profile 22
3.3 IDBI Groups 27
3.4 IDBI- Its Products And Services 29
7 4) Retail Banking 33
4.1 What Is Retail Banking 33
4.2 SWOT Ananlysis Of Retail Bnaking 33
4.3 Need For Retail Banking (The Ultimate 38
Service Provider)
4.4 Retail Banking in India 39
4.5 Advantages Of Retail Banking 41
4.6 Disadvantages 41
4.7 Scope For Retail Banking In India 42
4.8 Present Snario 43
4.9 What Are Various Retail Banking Services 43
4.10 Retail Lending 45
4.11 Role Of IT In Retail Banking 46
8 5) Retail Banking Of IDBI Bank 48
5.1 An Overview Of the product 48
5.2 The IDBI Bank Advantage 67
9 6) Methodology 68
6.1 Research Type 68
6.2 Data type 68
6.3 Sample Selection 68

6.4 Data Collection Method 68
6.5 Tools Used For Data Analysis 68
10 7) The Study 70
7.1 What The Stats Say 70
11 8) Findings,Colclusions And Suggestions 80

12 Bibliography And References 82

13 Appendix 83

Chapter 1

1) Introduction

We dont want satisfied customerswe want delighted customers. It is the new

marketing mantra today. The same applies to banking as well. Retail banking and rural
banking were once considered as taboos by the leading foreign and domestic banks. But cut-
throat competition, innovation and advanced technology have altogether changed the face of
banking sector. Now all banks have recognized the importance of retail banking.

Retail banking is that part of a bank that offers products and services primarily to individual
customers, professional, self-employed individuals or small businesses. The focus is on
creating products and services that meet the needs of the target customers and are profitable
for the bank as well.

The approach to retail banking products is more is more on a mass production basis
wherein all risk and operations are based on and geared to cater to a large number of
customers. This is therefore, significantly different from corporate banking or wholesale
banking where focus is on large sized customer accounts rather than large numbers of

Understanding retail banking will help in servicing your customer better as it would give
you a perspective and insight into how such products are structured and specific requirements
for each set of products. This would help you advice your customer in a more informed manner
besides making you a more informed consumer.

With the advent of ATMs, Anytime banking has come into picture. Satellites and
telecom networks across the world have made Anywhere banking possible. Now it is the turn
of Anyhow banking, and the leading bank of the next century will be the one which has all
these three As.

1.1 A Brief Overview:

IDBI Bank Ltd. A New Generation Govt. Owned Bank. The Industrial Development Bank of
India Limited, now more popularly known as IDBI Bank, was established as a wholly-owned
subsidiary of Reserve Bank of India. The foundation of the bank was laid down under an Act of
Parliament, in July 1964. The main aim behind the setting up of IDBI was to provide credit and
other facilities for the Indian industry, which was still in the initial stages of growth and
development. Since, 2005 IDBI expanded its wings in the retail section. Hence, it became
necessary to study the various scope of retail banking and the future prospects of IDBI in the
retail business. The project thus undertaken is for the purpose to know the scope of retail
banking business.

1.2 Objective Of The Study:

My project entitled Retail Banking Business with Special Reference To IDBI Bank
aims at studying the scope of retail banking business in India. The objective of doing this
project is defined as under.

1) To study the retail banking business in of IDBI

2) To study the retail banking business of IDBI in many region in India.
3) To study how can IDBI improve on its retail banking business
4) To compare the position of retail banking business in IDBI Bank with its peer banks
(Bank of Baroda,State bank of India).

1.3 Relevance Of The Study:

Banks are in the business of giving several services to its customers. Retail Banking and
Corporate Banking are its two main sections. Retail banking is the section where banks cater
the individual customers. It accepts deposits, give out loans and provide several other value
added benefits such as phone banking, internet banking, sms banking and many more.

Through retail banking banks get personally connected to the customers and deal them

individually. Hence, it is essential to evaluate different factors impacting the retail business of
the bank. Relevance of this project lies in the fact that it attempts to study the scope that retail
banking has in Mumbai with special reference to IDBI Bank. The study also attempts to find the
outcome of retail business of peer banks which will give the bank understudy an idea of its
position to its peer banks in the area.


To achieve the above objective I have not restricted my study to just one branch. In order to
study about the retail banking business in Mumbai, and to understand the scope that IDBI has in
this business, I have visited many other branches and headquator of IDBI Bank. Through the
questionaaire the stastical data recived which helps to understand the customer requirement
and improvment need in retail banking for IDBI bank

1.5 Limitations:

To make mistake is human nature and Im no exception. I have tried to make this project
approachable and helpful for the bank, but at the same time I accept the occurrence of
intermittent mistakes and do accept them sincerely.

Chapter 2

2) A Journey Through Banking

2.1 Origin Of Banking

Banks are among the main participants of the financial system in India. Banking offers
several facilities and opportunities.

Banks in India were started on the British pattern in the beginning of the 19 century. The first

half of the 19 century, The East India Company established 3 banks The Bank of Bengal, The

Bank of Bombay and The Bank of Madras. These three banks were known as Presidency
Banks. In 1920 these three banks were amalgamated and The Imperial Bank of India was
formed. In those days, all the banks were joint stock banks and a large number of them were

small and weak. At the time of the 2 world war about 1500 joint stock banks were operating

in India out of which 1400 were non- scheduled banks. Bad and dishonest management
managed quiet a few of them and there were a number of bank failures.
Hence the government had to step in and the Banking Companys Act (subsequently named as the
Banking Regulation Act) was enacted which led to the elimination of the weak banks that were
not in a position to fulfill the various requirements of the Act. In order to strengthen their weak
units and review public confidence in the banking system, a new section 45 was enacted in the
Banking Regulation Act in the year 1960, empowering the Government of India to compulsory
amalgamate weak units with the stronger ones on the recommendation of the RBI. Today
banks are broadly classified into 2 groups namely
(a) Scheduled banks.
(b) Non-Scheduled banks.

There are three different phases in the history of banking in India:
Pre-Nationalization Era.
Nationalization Stage.
Post Liberalization Era.

1. Pre-Nationalization Era:
In India the business of banking and credit was practiced even in very early times. The
remittance of money through Hundies, an indigenous credit instrument, was very popular. The
hundies were issued by bankers known as Shroffs, Sahukars, Shahus or Mahajans in different
parts of the country.
The modern type of banking, however, was developed by the Agency Houses of Calcutta and
th th
Bombay after the establishment of Rule by the East India Company in 18 and 19 centuries.
During the early part of the 19 Century, the volume of foreign trade was relatively small.
Later on as the trade expanded, the need for banks of the European type was felt and the
government of the East India Company took interest in having its own bank. The government
of Bengal took the initiative and the first presidency bank, the Bank of Calcutta (Bank
of Bengal) was established in 1806. In 1840, the Bank of Bombay and in 1843, the Bank of
Madras was also set up.
These three banks were known as Presidency Bank. The Presidency Banks had their branches
in important trading centers but mostly lacked in uniformity in their operational policies. In
1899, the Government proposed to amalgamate these three banks in to one so that it could
also function as a Central Bank, but the Presidency Banks did not favor the idea. However, the
conditions obtaining during world war period (1914-1918) emphasized the need for a unified
banking institution, as a result of which the Imperial Bank was set up in1921. The Imperial Bank
of India acted like a Central bank and as a banker for other banks.
The RBI (Reserve Bank of India) was established in 1935 as the Central Bank of the Country. In
1949, the Banking Regulation act was passed and the RBI was nationalized and acquired
extensive regulatory powers over the commercial banks.
In 1950, the Indian Banking system comprised of the RBI, the Imperial Bank of India,
Cooperative banks, Exchange banks and Indian Joint Stock banks.

2. Nationalization Stages:
After Independence, in 1951, the All India Rural Credit survey, committee of Direction with

Shri. A. D. Gorwala as Chairman recommended amalgamation of the Imperial Bank of India
and ten others banks into a newly established bank called the State Bank of India (SBI). The
Government of India accepted the recommendations of the committee and introduced the

State Bank of India bill in the Lok Sabha on 16 April 1955 and it was passed by Parliament and

got the presidents assent on 8 May 1955. The Act came into force on 1st July 1955, and the

Imperial Bank of India was nationalized in 1955 as the State Bank of India.
The main objective of establishing SBI by nationalizing the Imperial Bank of India was to
extend banking facilities on a large scale more particularly in the rural and semi-urban areas
and to diverse other public purposes.
In 1959, the SBI (Subsidiary Bank) act was proposed and the following eight state-associated
banks were taken over by the SBI as its subsidiaries.
Name of the Bank Subsidiary with effect from
1. State Bank of Hyderabad 1 October 1959

2. State Bank of Bikaner 1 January 1960

3. State Bank of Jaipur 1 January 1960

4. State Bank of Saurashtra 1 May 1960

5. State Bank of Patiala 1 April 1960

6. State Bank of Mysore 1 March 1960

7. State Bank of Indore 1 January 1968

. st
8 State Bank of Travancore 1 January 1960

With effect from 1st January 1963, the State Bank of Bikaner and State Bank of Jaipur with
head office located at Jaipur. Thus, seven subsidiary banks State Bank of India formed the SBI
The SBI Group under statutory obligations was required to open new offices in rural and semi-
urban areas and modern banking was taken to these unbanked remote areas.

On 19 July 1969, then the Prime Minister, Mrs. Indira Gandhi announced the nationalization

of 14 major scheduled Commercial Banks each having deposits worth Rs. 50 crore and above.

This was a turning point in the history of commercial banking in India.
Later the Government Nationalized six more commercial private sector banks with deposit

liability of not less than Rs. 200 crores on 15 April 1980, viz.

Andhra Bank
Corporation Bank.
Oriental Bank of Commerce.
Punjab and Sind Bank.
Vijaya Bank.
In 1969, the Lead Bank Scheme was introduced to extend banking facilities to every corner of
the country. Later in 1975, Regional Rural Banks were set up to supplement the activities of the
commercial banks and to especially meet the credit needs of the weaker sections of the rural
Nationalization of banks paved way for retail banking and as a result there has been an all
round growth in the branch network, the deposit mobilization, credit disposals and of course
The first year after nationalization witnessed the total growth in the agricultural loans and the
loans made to SSI by 87% and 48% respectively. The overall growth in the deposits and the
advances indicates the improvement that has taken place in the banking habits of the people
in the rural and semi-urban areas where the branch network has spread. Such credit expansion
enabled the banks to achieve the goals of nationalization, it was however, achieved at the
coast of profitability of the banks.
Consequences of Nationalization:
The quality of credit assets fell because of liberal credit extension policy.
Political interference has been as additional malady.
Poor appraisal involved during the loan meals conducted for credit disbursals.
The credit facilities extended to the priority sector at concessional rates.
The high level of low yielding SLR investments adversely affected the profitability of the
The rapid branch expansion has been the squeeze on profitability of banks emanating
primarily due to the increase in the fixed costs.
There was downward trend in the quality of services and efficiency of the banks.
3. Post-Liberalization EraThrust on Quality and Profitability:
By the beginning of 1990, the social banking goals set for the banking industry made most of
the public sector resulted in the presumption that there was no need to look at the
fundamental financial strength of this bank. Consequently they remained undercapitalized.
revamping this structure of the banking industry was of extreme importance, as the health of
the financial sector in particular and the economy was a whole would be reflected by its
The need for restructuring the banking industry was felt greater with the initiation of the real
sector reform process in 1992. The reforms have enhanced the opportunities and challenges
for the real sector making them operate in a borderless global market place. However, to
harness the benefits of globalization, there should be an efficient financial sector to support
the structural reforms taking place in the real economy. Hence, along with the reforms of the
real sector, the banking sector reformation was also addressed.
The root causes for the lackluster performance of banks, formed the elements of the banking
sector reforms. Some of the factors that led to the dismal performance of banks were.
Regulated interest rate structure.
Lack of focus on profitability.
Lack of transparency in the banks balance sheet.
Lack of competition.
Excessive regulation on organization structure and managerial resource.
Excessive support from government.

Against this background, the financial sector reforms were initiated to bring about a paradigm
shift in the banking industry, by addressing the factors for its dismal performance.
In this context, the recommendations made by a high level committee on financial sector,
chaired by M. Narasimham, laid the foundation for the banking sector reforms. These reforms
tried to enhance the viability and efficiency of the banking sector. The Narasimham
Committee suggested that there should be functional autonomy, flexibility in operations,
dilution of banking strangulations, reduction in reserve requirements and adequate financial
infrastructure in terms of supervision, audit and technology. The committee further advocated
introduction of prudential forms, transparency in operations and improvement in productivity,
only aimed at liberalizing the regulatory framework, but also to keep them in time with
international standards. The emphasis shifted to efficient and prudential banking linked to
better customer care and customer services

Fig. 1 Banking Structure in india

Reserve Bank of India (RBI)

The country had no central bank prior to the establishment of the RBI. The RBI is the supreme monetary and
banking authority in the country and controls the banking system in India. It is called the Reserve Bank as it
keeps the reserves of all commercial banks.

Scheduled & Non scheduled Banks

A scheduled bank is a bank that is listed under the second schedule of the RBI Act, 1934. In order to be
included under this schedule of the RBI Act, banks have to fulfill certain conditions such as having a paid up
capital and reserves of at least 0.5 million and satisfying the Reserve Bank that its affairs are not being
conducted in a manner prejudicial to the interests of its depositors. Scheduled banks are further classified into

commercial and cooperative banks. Non- scheduled banks are those which are not included in the second
schedule of the RBI Act, 1934. At present these are only three such banks in the country.

Commercial Banks

Commercial banks may be defined as, any banking organization that deals with the deposits and loans of
business organizations.Commercial banks issue bank checks and drafts, as well as accept money on term
deposits. Commercial banks also act as moneylenders, by way of installment loans and overdrafts.Commercial
banks also allow for a variety of deposit accounts, such as checking, savings, and time deposit. These
institutions are run to make a profit and owned by a group of individuals.

Scheduled Commercial Banks (SCBs):

Scheduled commercial banks (SCBs) account for a major proportion of the business of the scheduled banks.
SCBs in India are categorized into the five groups based on their ownership and/or their nature of operations.
State Bank of India and its six associates (excluding State Bank of Saurashtra, which has been merged with the
SBI with effect from August 13, 2008) are recognised as a separate category of SCBs, because of the distinct
statutes (SBI Act, 1955 and SBI Subsidiary Banks Act, 1959) that govern them. Nationalised banks and SBI
and associates together form the public sector banks group IDBI ltd. has been included in the nationalised
banks group since December 2004. Private sector banks include the old private sector banks and the new
generation private sector banks- which were incorporated according to the revised guidelines issued by the RBI
regarding the entry of private sector banks in 1993.

Foreign banks are present in the country either through complete branch/subsidiary route presence or through
their representative offices.

Types of Scheduled Commercial Banks

Public Sector Banks

These are banks where majority stake is held by the Government of India.
Examples of public sector banks are: SBI, Bank of India, Canara Bank, etc.

Private Sector Banks

These are banks majority of share capital of the bank is held by private individuals. These banks are registered
as companies with limited liability. Examples of private sector banks are: ICICI Bank, Axis bank, HDFC, etc.

Foreign Banks

These banks are registered and have their headquarters in a foreign country but operate their branches in our
country. Examples of foreign banks in India are: HSBC, Citibank, Standard Chartered Bank, etc

Regional Rural Banks

Regional Rural Banks were established under the provisions of an Ordinance promulgated on the 26th
September 1975 and the RRB Act, 1976 with an objective to ensure sufficient institutional credit for agriculture
and other rural sectors. The area of operation of RRBs is limited to the area as notified by GoI covering one or
more districts in the State.

RRBs are jointly owned by GoI, the concerned State Government and Sponsor Banks (27 scheduled
commercial banks and one State Cooperative Bank); the issued capital of a RRB is shared by the owners in the
proportion of 50%, 15% and 35% respectively.

Prathama bank is the first Regional Rural Bank in India located in the city Moradabad in Uttar Pradesh.

Table 1: Types Of Commercial Banks

Type of
Commercial Major Shareholders Major Players

Public Sector SBI, PNB, Canara Bank, Bank of

Government of India
Banks Baroda, Bank of India, etc

Private Sector ICICI Bank, HDFC Bank, Axis Bank,

Private Individuals
Banks Kotak Mahindra Bank, Yes Bank etc.

Standard Chartered Bank, Citi Bank,

Foreign Banks Foreign Entity HSBC, Deutsche Bank, BNP Paribas,

Central Govt,
Andhra Pradesh Grameena Vikas
Regional Rural Concerned State Govt and
Bank, Uttranchal Gramin Bank,
Banks Sponsor Bank in the ratio of 50 :
Prathama Bank, etc.
15 : 35

Cooperative Banks

A co-operative bank is a financial entity which belongs to its members, who are at the same time the owners
and the customers of their bank. Co-operative banks are often created by persons belonging to the same local or
professional community or sharing a common interest. Co-operative banks generally provide their members
with a wide range of banking and financial services (loans, deposits, banking accounts, etc).

They provide limited banking products and are specialists in agriculture-related products.

Cooperative banks are the primary financiers of agricultural activities, some small-scale industries and self-
employed workers.

Co-operative banks function on the basis of no-profit no-loss.

Anyonya Co-operative Bank Limited (ACBL) is the first co-operative bank in India located in the city of
Vadodara in Gujarat.

The co-operative banking structure in India is divided into following main 5 categories:

Primary Urban Co-op Banks

Primary Agricultural Credit Societies

District Central Co-op Banks

State Co-operative Banks

Land Development Banks

The Bank was constituted for the need of following:

To regulate the issue of banknotes

To maintain reserves with a view to securing monetary stability and
To operate the credit and currency system of the country to its advantage.

The Reserve Bank of India declared that IDBI Bank Limited, a public sector bank, is
clubbed along with nationalized banks. RBI acknowledged this in the F.No. 7/95/2005-BOA

with effect from 31 December, 2007 stating that IDBI Ltd. Will now be treated on par with

nationalized banks.

Chapter 3

3)IDBI Profile
Fig 2 : Main Events in the History of IDBI Bank

Change Name of IDBI Ltd to IDBI Bank Ltd.

become effective from may 7, 2007

Merger with United Western bank on Oct

3 2006

Merger of IDBI Bank Ltd with IDBI Ltd

become effective from April 02, 2005

A new company under the name of Industrial

Development bank of India (IDBI Ltd.) was
incorporated as a Govt. company under the
Companies Act 1956 ,September 27,2004

Industrial development Bank of India (IDBI)

was Constituted under the Industrial
development bank of India act 1964

Fig 3: History Of IDBI Bank

3.1 Journey From IDBI To IDBI Bank Ltd.

Industrial Development Bank of India Industrial Development bank of India (IDBI) was
constituted under Industrial Development bank of India Act, 1964 as a Development Financial
Institution and came into being as on July 01, 1964 vide GoI notification dated June 22, 1964. It
was regarded as a Public Financial Institution in terms of the provisions of Section 4A of the
Companies Act, 1956. It continued to serve as a DFI for 40 years till the year 2004 when it was
transformed into a Bank.

Industrial Development Bank of India Limited In response to the felt need and on
commercial prudence, it was decided to transform IDBI into a Bank. For the purpose, Industrial
Development bank (transfer of undertaking and Repeal) Act, 2003 [Repeal Act] was passed
repealing the Industrial Development Bank of India Act, 1964. In terms of the provisions of the
Repeal Act, a new company under the name of Industrial Development Bank of India Limited
(IDBI Ltd.) was incorporated as a Govt. Company under the Companies Act, 1956 on

September 27, 2004. Thereafter, the undertaking of IDBI was transferred to and vested in IDBI
Ltd. with effect from the effective date of October 01, 2004. In terms of the provisions of the
Repeal Act, IDBI Ltd. has been functioning as a Bank in addition to its earlier role of a Financial

Merger of IDBI bank Ltd. with IDBI Ltd. Towards achieving the faster inorganic growth of the
Bank, IDBI Bank Ltd., a wholly owned subsidiary of IDBI Ltd. was amalgamated with IDBI Ltd.
in terms of the provisions of Section 44A of the Banking Regulation Act, 1949 providing for
voluntary amalgamation of two banking companies. The merger became effective from April
02, 2005.

Merger of United Western bank with IDBI Ltd. The United Western bank Ltd. (UWB), a
Satara based private sector bank was placed under moratorium by RBI. Upon IDBI Ltd.
showing interest to take over the said bank towards its further inorganic growth, RBI and Govt.
of India amalgamated UWB with IDBI Ltd. in terms of the provisions of Section 45 of the
Banking Regulation Act, 1949. The merger came into effect on October 03, 2006.

Change of name of IDBI Ltd. to IDBI Bank Ltd. In order that the name of the Bank truly
reflects the functions it is carrying on, the name of the Bank was changed to IDBI Bank Limited
and the new name became effective from May 07, 2008 upon issue of the Fresh Certificate of
Incorporation by Registrar of Companies, Maharashtra. The Bank has been accordingly
functioning in its present name of IDBI Bank Limited.

3.2 IDBI Bank Ltd. A Profile

IDBI Bank Ltd. is today one of India's largest commercial Banks. For over 40 years, IDBI Bank
has essayed a key nation-building role, first as the apex Development Financial Institution (DFI)
(July 1, 1964 to September 30, 2004) in the realm of industry and thereafter as a full-service
commercial Bank (October 1, 2004 onwards). As a DFI, the erstwhile IDBI stretched its canvas
beyond mere project financing to cover an array of services that contributed towards balanced
geographical spread of industries, development of identified backward areas, emergence of a
new spirit of enterprise and evolution of a deep and vibrant capital market. On October 1,
2004, the erstwhile IDBI converted into a Banking company (as Industrial Development Bank of
India Limited) to undertake the entire gamut of Banking activities while continuing to play its
secular DFI role. Post the mergers of the erstwhile IDBI Bank with its parent company (IDBI
Ltd.) on April 2, 2005 (appointed date: October 1, 2004) and the subsequent merger of the
erstwhile The United Western Bank Ltd. with IDBI Bank on October 3, 2006, the tech-savvy,
new generation Bank with majority Government shareholding today touches the lives of
millions of Indians through an array of corporate, retail, SME and Agri products and services.
Headquartered in Mumbai, IDBI Bank today rides on the back of a robust business strategy, a
highly competent and dedicated workforce and a state-of-the-art information technology
platform, to structure and deliver personalized and innovative Banking services and
customized financial solutions to its clients across delivery channels. As an Universal Bank, IDBI
Bank, besides its core Banking and project finance domain, has an established presence in
associated financial sector businesses like Capital Market and Investment Banking, Home
Finance, Primary Dealership area and more recently, the Life Insurance Business. Recently,
IDBI Bank reorganized its business and structure commensurate with its aspiration to become
a 'Top 5' Bank by asset size & market capitalization by the year 2012. As a first step, to give the
organization the focus necessary for accelerated growth, the Bank has reorganized its
businesses around nine verticals, six customer verticals, each focusing on distinct customer
segments and three business verticals. Going forward, IDBI Bank is strongly committed to
work towards emerging as the 'Bank of choice' and 'the most valued financial conglomerate',
besides generating wealth and value to all its stakeholders.

Vision & Mission


To be the most preferred and trusted bank enhancing value for all stakeholders.


Delighting customers with our excellent service and comprehensive suite of best-in-class
financial solutions;

Bullet Touching more people's lives with our expanding retail footprint while maintaining our
excellence on corporate and infrastructure financing;

Bullet Continuing to act in an ethical, transparent and responsible manner, becoming the role
model for corporate governance;

Bullet Deploying world class technology, systems and processes to improve business efficiency
and exceed customers expectations;

Bullet Encouraging a positive, dynamic and performance-driven work culture to nurture

employees grow them and build a passionate and committed work force;

Bullet Expanding our global presence;

Bullet Relentlessly striving to become a greener bank.

Management and Organization

IDBI Bank is a Board-managed organization. The responsibility for the day-to-day

management of operations of the Bank is vested with the Chairman & Managing Director and
two Deputy Managing Directors, who draw upon the support and expertise of a cross-
disciplinary Top Management Team. IDBI Bank Ltd employee base includes professionals from
the fields of accountancy, management, engineering, law,
computer technology, banking and economics.

Mr. Mahesh Kumar Jain (Managing Director & CEO)

Mr. K P Nair - Deputy Managing Director
Mr. G M Yadwadkar - Deputy Managing Director
Mr. Pankaj Jain- Director
Mr. Praveen Garg-Director
Mr. S Ravi - Director
Mr. Ninad Karpe - Director
Mr. Gyan Prakash Joshi- Director
Ms. Neeru Abrol -Director
Dr. Ashima Goyal - Director

Fig. No. 4 - Number of Branches And ATMs

Fig 5: Mobile Banking,Internet,ATM banking customers Of IDBI in Pan India

3.3 IDBI Groups

IDBI is a pioneer Institute in Nation building. To cater to its ever-expanding needs, IDBI formed
subsidiaries & joint ventures across diverse areas of Banking & Financial System.

IDBI Capital Market Services

A wholly owned subsidiary, offers a full suite of financial products. Its business includes stock
broking, distribution of financial products, Portfolio management of Pension / PF funds &
Research services, etc.

IDBI Asset Management Limited (IAML)

IAML was incorporated on January 25, 2010 and is a subsidiary of IDBI Bank Ltd. IAML is the investment
manager of schemes launched by IDBI Mutual Fund (The Fund). The Fund offers a bouquet of products in
equity, debt and gold to suit the diverse and varying needs and risk profile of investors

IDBI MF Trustee Company Limited (IMTCL)

IMTCL, a wholly owned subsidiary of IDBI Bank, was incorporated on January 25, 2010. The
company acts as the Trustee of IDBI Mutual Fund. As per SEBI Mutual Fund Regulation 1996, the

Trustees ensure that all the activities of the Mutual Fund are carried out within the regulatory frame

IDBI Intech Ltd

A wholly owned subsidiary, deals in the Information Technology Services, Information Security
Practice, Knowledge Management Services, national contact centre and outbound contact

IDBI Trusteeship Pvt Ltd

ITSL was incorporated on March 8, 2001 for carrying out trusteeship and other related business.
Consequent to acquisition of additional 14.92% shares of ITSL on October 01, 2011, IDBI Banks
shareholding in ITSL increased from 39.78% to 54.70% and it has became a subsidiary of IDBI
Bank. The companys present operations include, acting as trustees to securitization transactions,
acting as Bond/Debenture trustee, Security trusteeship assignments, Share pledge Trustee, Venture
Capital Fund, Safe Keeping, Escrow Agency and other trusteeship services

IDBI Federal Life Insurance Pvt Ltd.

IDBI Federal is a Joint Venture Life Insurance Company of IDBI Bank Ltd., The Federal Bank Ltd.
and Ageas Insurance International (Ageas). IDBI Federal commenced operations in March 2008.
IDBI Bank holds 48% equity shares in IDBI Federal whereas Federal Bank Ltd. and Ageas hold
26% equity shares each. The Companys life insurance business comprises individual life and
pension and group life, including non-participating, health and linked segments.

IDBI Federal has Bancassurance partnership with IDBI Bank and the Federal Bank and also
distributes its products through its own network. To further diversify its distribution base, it has set
up an Alternate & Direct Distribution channel.

Fig 6 : IDBI Groups

3.4 IDBI- Its Products And Services

IDBI Bank offers a wide array of products and services to its customers. For different customer
groups and needs, there are different types of products and services including Personal
Banking, Corporate Banking, SME Finance and Agriculture Business etc.

Personal Banking

Following products and services are offered under Personal Banking:

o Savings Account
o Current Account
o Fixed Deposits
o Suvidha Tax Saving Fixed Deposit
o Pension Accounts
o Sabka Account
o Super Shakti Account for Women
o Jubilee Plus Account
o Home Loans
o Loans Against Property
o Education Loans
o Personal Loan
o Loan Against Securities
o Reverse Mortgage Loan
o Auto Loan
Tax Payments
Stamp Duty payments
Easy Fill
Bill Payment
Card to Card Money Transfer
Online Payments
Pay Mate

Investments Advisory
o Smart Financial Planning
o Mutual Fund
o Insurance
o Fixed Income Securities
o Gold Debit Card
o International Debit cum ATM Card
o Gift Card
o World Currency Card
o Cash Card
o KIDS Debit Card
o Foundation Day Cash Back Scheme 2009
o Platinum Card
Institutional Banking
o Institutional Savings Account
o Corporate Payroll Account
24 Hours Banking
o Phone Banking
o SMS Banking
o Account Alerts
o Internet Banking
Other products
o Lockers
o India Post
Preferred Banking
NRI Services
Capital Market
o Demat

Corporate Banking

Following products and services are offered by IDBI Bank for the corporates:

o Project Finance
o Infrastructure Finance
o Syndication, Underwriting & Advisory Services
o Carbon Credits Business
o Working Capital
o Cash Management Services
o Trade Finance
o Tax Payments
o Derivatives
o Technology Upgradation Fund Scheme (TUFS)
o Film Financing Scheme
o Direct Discounting Bills
o Rehabilitation Finance

SME Finance

Following SME Finance products are offered by the IDBI Bank:

o Sulabh Vyapar Loan

o Dealer Finance
o Funding under CGFMSE
o Direct Credit Scheme - SIDBI
o Preferred customer scheme - IDBI Bank / SIDBI
o Vendor financing (Pre - Sale)
o Vendor financing (Post - Sale)
o Lending Against the Security of Future Credit Card Receivables
o Finance to Medical Practitioners
o Loan to SRWTO
o SME Hosiery Special Current Account

Fig 7 : IDBI Bank Business Chart






Chapter 4

4) Retail Banking


Retail banking is however; quite broad in nature it refers to the dealing of commercial banks
with individual customers, both on liabilities and assets sides of the balance sheet. Fixed
current/savings accounts on the liabilities side; and mortgages, loans (e.g. personal, housing,
auto and educational) on the assets side are the more important of the products offered by
banks. Related ancillary services include credit cards, or depository services.

Todays retail banking sector is characterized by three basic characteristics.

Multiple products (deposits, credit card, insurance, investments and securities).
Multiple channels of distribution (call center, branch, internet and kiosk); and
Multiple customer groups (consumer, small business, and corporate)


Retail Banking Services:-

Banking services provided to individual members of the public as opposed to those

provided to businesses and institutions.

4.2 SWOT Analysis Of Retail Banking


1) Emerging as a new growth driver:

For several years banks viewed consumer loan with skepticism. Commercial loans
denominated the loan portfolio as they generated high net yield with low credit risk.
Consumer loans on the other hand involved smaller amount, large staff to handle

account and high default rates. Even regulators across the globe have not encouraged
retail banking until now till very recently. However, over past few years, fierce
competition among the banks lowered the spread and profitability a commercial loan
with deregulation and increase in consumer loan rate, the risk adjusted return in retail
sector have exceed the return on consumer loan.

2) Provides diversified asset portfolio:

Retail banking includes comprehensive range of financial product and services i.e.
deposit product, auto loan, car loan, home loan, loan against equity shares, mortgage
loan, payment of bills, debit card, credit card, etc. These products provide an
opportunity for banks to diversify the asset portfolio with higher profit and relatively
lower NPA.

3) Improves standard of living:

Due to major economic reforms in Indian economy there has been an increase in per
capita income which has led to change in life style and growing urbanization have made
the Indian population rise from oblivion and resurge in modern era on this front role of
retail banking arises. Retail banking provide all such product and services(home loan,
car loan, personal loan, etc) to its customer which are required by them to maintain
change in their life style in short it helps in fulfilling aspiration of people through
affordable credit.

4) CRM tool: The individual customer is deity of bank in retail banking segment. All
product and services are designed to satisfy need and wants of its customer. As

customer in retail banking belong to different economic, cultural, educational, and

social background there demand is also varied. It is acceptance of the banking product
and satisfaction of customer that yield profit in this segment. Hence customer Service
and Quality implementation through use of CRM tools will help banks Success in this
competitive world of retail banking.
5) Innovative product development :
The scope for development in financial services is unlimited. In retail banking ball is in
the court of bankers where they approach the customer finds out there financial need
and problem, designs the product and services, market them and finally sells them to
satisfy its customer.

6) Economies of scale:
Retail banking enables banks to utilize existing capacities and reaching wider
population of customer. Banks can get the benefits of information and transaction. In
process of extending variety of services, banks are acquiring enormous amount of
customer information .if this information is systematically recorded , banks can
efficiently utilize this information in order to explore new segment and to cross sell new


1) Avoids corporate sector :

Retail banking avoids corporate sector totally which is the backbone of Indian
economy. Main reason put forth or this is decline in corporate borrowing. However
bank can take certain step to manage there corporate clients such as lower arte credit,
higher amount of loan etc. Managing corporate client is more easier as they have well
defined financial policy and project and they concentrate on product and services
offered rather than on CRM of bank unlike individual clients.

2) Marketing (Internal and External):

Retail banking requires strong marketing strategies to be adopted by bank both internal
and external. under retail banking segment top level management need employees to
introduce product properly to its employees because if the employees are not aware
regarding the product they are offering that product will fail however effective the product
is also bank require to spend lot on its marketing of product to general public because if
public is not aware regarding the product and service how will they opt for it. All this
increases the cost and time required to introduce the product in the market which can
reduce or make the product out dated immediately on its arrival.

3) Changes in technology:
Future of retail banking lies in the hand of IT. Various It solution used by banks such as
E-banking, phone banking, ATM leverage the retail banking product and service offered
by banks. But this has weekend the segment some how. If banks are not able to adopt
the latest technology it may pull back the growth of bank also this technology requires
lot of capital investment and if at all the technology fails then it may shake the
customers confidence on bank and bank may land up in loosing its customer.

4) Reduces the profitability:
It is claimed that retail banking increases overall profitability of the bank but in reality
this is not the case because managing wide range of product and service requires high
quality technology , large number of staff and all this requires high capital investment
which reduces banks profitability.

5) Co-ordination among various department:

Success of retail banking is not the result of one department but is result of various
departments together. If there is lack of co-ordination among various department of
the bank then however strong and effective the may be the product it will fail. Suppose
if the front office is successful in attracting the customer but back office is not able to
execute the delivery of product or service on time then bank may land up loosing the
customer although its CRM was effective.


1) Scope for innovation:

Under retail banking as banks try to provide all those product and services which are
desired by its customer this segment has more scope for innovation banks can keep
on modifying its products as per the market demand which helps them from not
being out dated .

2) Rise in per capita income:

The rise of the Indian middle class is an important contributory factor in this segment.
The percentage of middle to high-income Indian households is expected to continue
rising. The younger population not only wields increasing purchasing power, but as far
as acquiring personal debt is concerned, they are perhaps more comfortable than
previous generations. Improving consumer purchasing power, coupled with more
liberal attitudes toward personal debt, is contributing to India's retail banking segment.

3) Economic growth:
Retail banking has immense opportunities in a growing economy like India. In the BRIC

Report India is stated as an economic superpower. According to A. T. Kearney, a global
management-consulting firm, recently identified India as the 'second most attractive
retail destination' of 30 emergent markets. Hence retail banking has high opportunities
in India.


1) Large disbursement of loans:

The boom in the field of retail banking and the intense composition among the to
increases the customer base has resulted in the large disbursement of customer
loans, loans on credit cards, auto loans, educational loans etc. on easy terms without
much scrutiny this has brought with in an increase in the number of cases of default in
loan repayment thus increasing the banks NPAs.
2) Issue of customers dignity:
Banks have been adopting carrot and stick policy by renegotiating loan terms where
the default is genuine and handing over recovery to third parties where default is
willful. Most of the time, the third parties or external agents are not trained to handle
the loan repayment process. Hence, they restore to strong arms tactics with
defaulting customers. Many cases of harassment and invasion of privacy have been
reported by the affected parties. Such instances may hamper the image and
corporate vision of the bank in near future.

3) Issue of customer privacy:

Customer privacy is also affected in another way wherein customer service

representatives of the banks ring up customers at any times at their places of work,
informing them about new products and services. This may cause inconvenience to
busy customers. It is also obligation on part of the banks not to share the private
information from the records of the customers with outside agencies like market
research groups and other advertisers.

4) IT:

The growth of IT has brought with it a number of frauds perpetrated with the help of
technology and which come under the domain of cyber crimes. Banks are the victims
of unscrupulous elements who have in many instance hacked banks website and
stolen credit card number, pass word and other confidential information relating to

4.3 Need For Retail Banking- (The Ultimate Service Provider)

Until now banks were relying on financing, production based activities. Retail finance
was not favored by Indian banks, But they have to tune to it now with the demand for loans
from industrial sector is coming downing the past because of the economic slowdown. As a
result banks have become selective in their lending activities. Further changing demographics,
a rapidly growing ,middle-class, rise in disposable income changing life style and increasing
ability of people to take credit risk are providing banks with an opportunity to shift their
lending operation to retail finance. Hence bankers have been increasingly shifting to retail to
increase profitability and reduce delinquency rates. Customer shifting, cost pressure and
increasing competition are some of the other reasons.

Retailing is now favored because of the better returns lesser asset quality problem and
low NPA. Further it provides many opportunities for credit expansion. It helps banks in risk
diversification and is important for low-cost resources mobilization by banks.

For Banks, retail segment is the principal growth driver as they are slowly gaining
market share in the retail space. Foreign banks are securitizing vehicle loans to raise off-
balance sheet resources and to reduce overall cost of funding. For example, Bank of Muscat is
taking over auto loans and personal loans from other banks signaling a softer interest rate
regime for consumer finance and giving indication to the intensifying competition in business.

The objective of the Retail Bank is to provide its target market customers a full range of
financial products and banking services, giving the customer a one-stop window for all his/her
banking requirements. The products are backed by world-class service and delivered to the

customers through the growing branch network, as well as through alternative delivery
channels like ATMs, Phone Banking, Net Banking and Mobile Banking.

4.4 Retail Banking In India

The Indian players are bullish on the Retail business and this is not totally unfounded.
There are two main reasons behind this. Firstly, it is now undeniable that the face of the Indian
consumer is changing. This is reflected in a change in the urban household income pattern. The
direct fallout of such a change will be the consumption patterns and hence the banking habits
of Indians, which will now be skewed towards Retail products. At the same time, India
compares pretty poorly with the other economies of the world that are now becoming
comparable in terms of spending patterns with the opening up of our economy. For instance,
while the total outstanding Retail loans in Taiwan is around 41% of GDP, the figure in India
stands at less than 5%. The comparison with the West is even more staggering. Another
comparison that is natural when comparing Retail sectors is the use of credit cards. Here also,
the potential lies in the fact that of all the consumer expenditure in India in 2001, less than 1%
was through plastic, the corresponding US figure standing at 18%.

Retail banking in India is not a new phenomenon. It has always been prevalent in India
in various forms. For the last few years it has become synonymous with mainstream banking
for many banks.

The typical products offered in the Indian retail banking segment are housing loans,
consumption loans for purchase of durables, auto loans, credit cards and educational loans.
The loans are marketed under attractive brand names to differentiate the products offered by
different banks. As shown that the loan values of these retail lending typically range between
Rs.20, 000 to Rs.100 lakh. The loans are generally for duration of five to seven years with
housing loans granted for a longer duration of 15 years. Credit card is another rapidly growing
sub-segment of this product group.

In recent past retail lending has turned out to be a key profit driver for banks with retail
portfolio constituting 21.5 per cent of total outstanding advances as on March 2004. The
overall impairment of the retail loan portfolio worked out much less then the Gross NPA ratio
for the entire loan portfolio. Within the retail segment, the housing loans had the least gross
asset impairment. In fact, retailing make ample business sense in the banking sector.

While new generation private sector banks have been able to create a niche in this
regard, the public sector banks have not lagged behind. Leveraging their vast branch network
and outreach, public sector banks have aggressively forayed to garner a larger slice of the retail
pie. By international standards, however, there is still much scope for retail banking in India.
After all, retail loans constitute less than seven per cent of GDP in India vis--vis about 35 per
cent for other Asian economies South Korea (55 per cent), Taiwan (52 per cent), Malaysia (33
per cent) and Thailand (18 per cent). As retail banking in India is still growing from modest
base, there is a likelihood that the growth numbers seem to get somewhat exaggerated. One,
thus, has to exercise caution is interpreting the growth of retail banking in India.

The HDFC Bank Preferred program for high net worth individuals, the HDFC Bank Plus
and the Investment Advisory Services programs have been designed keeping in mind needs of
customers who seek distinct financial solutions, information and advice on various investment
avenues. The Bank also has a wide array of retail loan products including Auto Loans, Loans
against marketable securities, Personal Loans and Loans for Two-wheelers. It is also a leading
provider of Depository Participant (DP) services for retail customers, providing customers the
facility to hold their investments in electronic form.

HDFC Bank was the first bank in India to launch an International Debit Card in
association with VISA (VISA Electron) and issues the Master debit card as well. The Bank
launched its credit card business in late 2001. By March 2005, the bank had a total card base
(debit and credit cards) of 4.2 million cards. The Bank is also one of the leading players in the
merchant acquiring business with over 42,000 Point-of-sale (POS) terminals for debit / credit
cards acceptance at merchant establishments. The Bank is well positioned as a leader in
various net based B2C opportunities including a wide range of internet banking services for
Fixed Deposits, Loans, Bill Payments, etc.

4.5 Advantages Of Retail Banking

Retail Banking has inherent advantages outweighing certain disadvantages.


Retail deposit are stable and constitute core deposit

They are interest insensitive and less bargaining for additional interest
They constitute the low cost for banks
Effective CRM with the retail customer builds a strong customer base.
Retail banking increases the subsidiary business of a bank.


Retail banking results in better yield and improve bottom line of a bank.
Retail segment is a good avenue for funds deployment.
The consumer loan is presumed to be of lower risk and NPA perception.
Help economic revival of the nation through increased production activities.
Improves lifestyle and fulfills aspiration of people through affordable credit.
Innovative product development.
Retail segment involves minimum marketing efforts in a demand driven economy.


Designing own and new financial products is very costly and time
Consuming for the bank.

Customers now-a-days prefer net banking to branch banking. The banks that are slow
in introducing technology-based products, are finding it difficult to retain the
customers who wish to opt for net banking.

Customers are attracted towards other financial products like

Mutual funds etc.

Though banks are investing heavily in technology, they are not able to exploit the same

to the full extent.
A major disadvantage is monitoring and follows up of huge volume of loan accounts
inducing banks to spend heavily in human resource department.
Long term loans like housing loan due to its long repayment term in the absence
of proper follow-up, can become NPAs.

The volume of amount borrowed by a single customer is very low as compared

to wholesale banking. This does not allow banks to exploit the advantage of earning huge
profits from single customer as in case of wholesale banking.

4.7 Scope For Retail Banking In India

All round increase in economic activity.

Increase in the purchasing power. The rural areas have the large purchasing power at
their disposal and this is an opportunity to market Retail Banking.

India has 200 million households and 400 million middleclass population more
than 90% of the savings come from the house hold sector. Falling interest rates have
resulted in a shift.

Now People Want To Save Less And Spend More.

Nuclear family concept is gaining much importance which may lead to large savings,
large number of banking services to be provided are day-by-day increasing.

Tax benefits are available for example in case of housing loans the borrower can avail
tax benefits for the loan repayment and the interest charged for the loan.

4.8 Present Senario

There has been a considerable growth in the retail-banking sector in India, which makes
up for about 1/5th of the overall bank credit. Typically, the retail banking industry encompasses
the services such as credit cards, Housing loans, Education loans, Auto loan, etc

Retail banking has brought in a drastic makeover in the overall banking scenario in India.
The exceptional improvement in the banking system in India is a result of strong initiatives
taken up by both the government and private companies. A recent market research report
named, Indian Retail Banking Sector Analysis (2006) published by RNCOS provides an
exclusive tour to the entire retail-banking industry of India. As per the report, Mainstream
banking and retail banking has become one and the same thing for the past several years now.
Approximately, 22% of the total outstanding advances were derived from the retail portfolios
of the banks in India till March 2004.

The contribution of retail banking to the overall banking sector has been outstanding.
Growing at a rate of 122%, the retail-banking sector of India managed to reach a worth of $67
billion in the year 2005, as per experts at RNCOS. The retail banking sector in India should
reach a worth of $310 billion by the year 2010, anticipate the experts. Profiles of key players
along with the strategies and plans adopted by them for the growth of the industry are also
talked about in it. Besides discussing the present scenario of the financial system in India the
report offers a reliable prediction of the market in the years to come.

The ratio of retail credit to net credit at the global level is around 5%. In India, it is
interesting to note that this ratio is over 10% as on March31, 2002 (Source: RBI, Annual
Report). With the economy reforms set in motion, the country is already rated as a major hub
for economic development. Increase in per capita income, change in life style and growing
urbanization has made the Indian population rise from oblivion and resurge in modern era. The
po licy of and spent is gradually giving way to spend and save concept.

4.9 What Are Various Retail Banking Services?

Retail banking includes comprehensive range of financial product and services i.e. deposit
product, auto loan, car loan, home loan, loan against equity shares, mortgage loan, payment
of bills, debit card, credit card, etc. These products provide an opportunity for banks to

diversify the asset portfolio with higher profit and relatively lower NPA. Today the most
proactive banks have entered the retail banking segment and have identified it as a principal
growth driver.
Table - : Categorization of Retail Bank Services
Core Services Facilitating Services Supporting Services
Payment services Cash Making payments at door step
Foreign currency Internet banking
requirements Telephone banking
Traveler cheque
Demand Draft / Bankers
Telegraphic Transfer
Electronic Funds Transfer
Current account and Automatic Teller Machine Credit cards
account card Debit cards
Standing instructions from Services to senior citizens
customers Telephone banking
for making payments Internet banking
Inter branch / Inter bank tr Conversion of excess balance t
ansfer o Time
of funds deposit (Auto Sweep Flexi Deposit)
Safety vault
Loan products : Current account Delivery of loan at promised tim
Consumer loans,
Personal loans, Savings account e period
Housing loans,
Educational loans Time deposit account Interest rate option : Fixed /
Flexibility in pre-
payment of loan
Counseling on Real-
estate markets
Legal services for
Electronic Clearing System
for payment

of loan installments /
periodical interest
Life insurance, Current account Additional insurance facility
Pension schemes
Investment banking Savings account For family members
Time deposit Counseling on post
Safety deposit lockers retirement savings.
Demat account Investment Management

4.10 Retail Lending

Everyone dreams of living a comfortable life and does all one can to make this dream
come true. Today this has become much easier, as with higher levels of income and multiple
earning members in the family, it is easy to avail loans to fulfill aspirations. Buying a home, car
or any small household item such as TV or a refrigerator using money borrowed from a bank or
a finance company has become the way of life today. This has created a big business
opportunity for finance companies.

They are offering loans to all types of customers for all types of assets. Retail lending has
thus become one of the key business verticals for finance companies. This necessitates banks
to follow processes for conducting business profitably. There are two main areas in lending.
Loan Origination and Loan Servicing. The process of validating customers, convincing them
that the finance company is the right source for their loan requirement and finally offering the
loan with terms and conditions that make business sense to the finance company is Loan
Origination and once the loan is disbursed, the process of managing the repayments from
customers and responding to the customer requests for pre payments, early settlement,
rescheduling, etc. is Loan Servicing.

Lending has become very competitive as customers are in the mode of shopping for
loans. Finance companies have to continuously offer new financial products to customers and
thus two of the important aspects of the business are time-to-market and flexibility. But as
number of customers increase, the risk of increase in the number of defaulters prevails. Thus
finance companies have to do the balancing act. On one hand they have to acquire more
business by lending to more customers and on the other hand they have to lend to select
customers so that the rate of delinquency is under control.

4.11 Role Of It In Retail Banking

The growth in retail banking has been facilities by the growth in banking technology and
automation in banking process that enables in extension of reach and rationalization of cost.
ATM has emerged as an alternative channel which has facilitated low cost transaction. It also
has the advantage of reducing the branch traffic and enable bank with small network to offset
traditional disadvantage by increasing their reach and spread.

Indian retail banks have been extensively using Information and Communication
technologies for their operations like central accounting, customer information management,
transaction-processing and importantly, for numerous customer-facing solutions. Besides
there are supporting or ancillary solutions such as security and compliance in addition to the
"middleware" that banks uses to link their customer-facing applications to their core systems.
The major business focus of the IT savvy retail banks is in providing products and services to
the customers through a diversified base of channels - bank branches, ATMs, e-banking, e-
branch, mobile-banking, SMS-banking, etc. In India, the business growth is driving technology
spending in the retail banking segment. Indian retail banks are looking to move beyond their
branch-centric distribution models. Extending ATMs networks, advancing online and phone
banking, and rationalizing branch infrastructure are all on the cards.

Technology provides Retail Banks with various delivery channels:-

1) Automated Teller Machines(ATM):

The trend in banking has evolved from a cash economy to cheque economy and
thereon to the plastic card economy. One of the channels of banking services delivery is
vide the ATM or the Automated Teller Machines, whose traditional and primary use is to
dispense cash upon insertion of a plastic card and its unique PIN or Personal Identification

Current and savings account holders of a bank who hold a certain minimum balance in
their accounts (determined by each bank as per their policy) are issued an ATM card. The
card is a plastic card with a magnetic strip with the account number of the individual. When
the card is inserted into the ATM, the machines sensing equipment identifies the account

holder and asks for his/her identification code number. This is referred to, usually, as the
PIN and is issued by the banks computers. This number is unknown to the banks staff and is
secret and unique to that individual. When the person uses the ATM and it asks for the PIN,
the cardholder identifies himself/herself by pressing the relevant number buttons on the
machine. The machine then verifies the account number on the ATM card along with the
secret code number stored in the ATM. When the matches found, the ATM pops a menu
screen, which allows the user to transact almost all types of bank transactions.

1)Tele banking: -
Tele banking or phone banking service offered by banks to enable customers to
access their accounts for information or transactions. Similar to the ATM PIN, a telephone
PIN (T-PIN) is provided to each account holder. The customer can call the exclusive tele-
banking numbers and provide the details to identify himself/herself to the automated
voice. Typically, the bank account number and the T-PIN are asked for. Upon the
respective numbers matching the computerized systems the customer is given access to
his account to query or transact on his account. Though cash withdrawal and deposit are
not enabled through this service many banks offer cash delivery or collection service to
certain classes of customers.

2)Internet Banking:
One of the channels of service delivery to a banking customer is through the Internet.
The access to account information as well as transaction is offered through the worldwide
network of computers on the Internet. Every bank has special firewalls & its own security
measures to protect the accounts from non-authentic use from unauthorized users. Data are
encoded using algorithms with a 128-bit key or, in some cases, with a 1,024-bit encryption.

Each account holder is provided a PIN similar to that of the ATM or Phone banking PIN.
The access to the account is allowed upon a match of the account details & PIN entered on the
computer system. A higher level of security may be reached by an electronic finger-print. The
finger print is taken before & after the transaction. Then both versions are compared. In case of
any difference, the transaction is aborted.
Account querying as well as transaction is possible on the Internet banking platform.
The accounting is instantaneous & funds transfers can be affected immediately.
Though cash transactions are not possible at present, the next phase of evolution in Internet
banking will allow those as well.

Chapter 5


5.1 An Overview Of The Product

1. Preferred Banking

PowerPlus Account

We bring to you a product that reflects and matches your financial needs and requirements at
every step. Power Plus account allows you to access a complete suite of product and services
and enjoy world class banking experience, complimenting your professional and personal
goals. This account helps you take complete charge of your banking by providing multiple
channel and products and a wide range of benefits to help your time and money.


25% discount on locker rates.

Higher ATM Cash withdrawal and Point-of-sale limit on International debit cum ATM
Free Demat AMC for first year.
Free Personalized PAP Cheque Book.
Free Demand Draft and Pay order

Preferred banking program is designed to offer services to a select group of discerning and
deserving individual like you. Preferred banking special features help you to save your time,
and help you build wealth through efficient deployment of assets.
Your Lifestyle reflects your personality. Every element of the preferred banking attempts to
complement your status and style. Preferred banking investment advisory, offers you a one
stop solution with all products range from fixed deposits to Govt.of2 India Bonds and Mutual
funds to Unit Linked Insurance Plans.

Royale Account

The IDBI Bank Royale Account has been designed to make banking services more convenient
for esteemed customers. This new service guarantees you as our privileged customer elaborate
and personalized service of the highest order. For all the banking requirements a dedicated
relationship manager would be attached to the account.

Benifits of Royal Account

International Platinum Debit Card

Enhanced Access at ATMs and Merchant Establishments

International Validity: The Platinum Debit Card can be used both in India and abroad to make
purchases at Merchant locations and withdraw local currency at ATMs.


Petrol Surcharge Waiver*

Petrol surcharge will be waived off for transactions carried out on the Platinum Card. Surcharge
will be waived only for transactions with a value between Rs. 400 and Rs. 5,000.

Insurance Cover* In addition to insurance cover for lost and counterfeit cards up to Rs.
5,00,000/-, customers will also be covered for:

Personal Accident cover: Rs. 5 lakhs

Loss of checked baggage: Rs. 50,000
Purchase Protection: Rs. 20,000
Fire and Burglary for House Hold Contents: Rs. 50,000

Daily limits*: Customers can withdraw cash up to Rs. 1,50,000 and make purchases worth Rs.
3,00,000 in a day.

Online transactions: Platinum Debit Card can be used online, for shopping, booking
air/rail/movie tickets & utility bill payments.

Loyalty Redemptions*: Customers will gain two loyalty point for every Rs. 100 spent on the
Platinum Card. Customers can redeem each point for a cash credit of Rs. 1 to their account.

Discounts at merchant establishments*: We have tied up with different merchants to offer

discounts to our Platinum Card holders. Platinum Card customers can avail of this discount by making
purchases through the Platinum Cards at these merchant locations.


Doorstep banking: Free 2 cash pick up and 2 cash delivery per month
Anywhere banking: Complimentary any where banking service free for those upgrading to Royale

Access to banking through Internet, ATM, Mobile, Phone
Higher limit on NEFT and RTGS

Personalized Services

Dedicated Relationship Manager who can assist you on Investment advisory, Portfolio
management and personalized services
Preferred recognition across branches


Free Locker (Size: 5 x 6 x 19) or 50% discount in other locker rentals

Discount on Demat transaction charges
All these facilities and more brought to you for an Average Quarterly balance of Rs. 3 lakhs in
Royale and Rs. 5 lakhs in Royale plus Savings account

Preferred Account:
Benefits of Preferred Account

A state of art welcome kit carrying all your deliverables

Free Passbook facility available at home branch for account holders (individuals)

Personalized cheque book with at par facility

International Gold Debit Card

Higher limit of cash withdrawal and point of sale

Petrol Surcharge Waiver: Petrol surcharge will be waived off for transactions carried out on
the Gold Card. Surcharge will be waived only for transactions with a value between Rs. 400 and Rs.

Attractive Insurance Cover

Daily limits: Cash withdrawal limit of Rs. 1,00,000/- at ATMs and POS usage limit of Rs.
1,00,000/- per day.

Online transactions: Gold Debit Card can be used online, for shopping, booking
air/rail/movie tickets & utility bill payments.

Discounts at merchant establishments: Gold Card customers can avail of discounts available
at various merchant outlets by making purchases through the Gold Cards at these merchant locations.

Access ATMs across globe and enjoy higher free limits on transactions.


Doorstep banking 2 Cash pickup and delivery free per month

Anywhere banking

Access to banking through Internet, ATM, Mobile, Phone

Higher limit on NEFT and RTGS

Personalized Services

Dedicated Relationship Manager who can assist you on Investment advisory, Portfolio
management and personalized services

Preferred recognition across branches

Preferred Discounts

Discount on Demat transaction charges

50% discount on Locker

All the above facilities are made available to you at maintenance of Rs. 1 lakhs as Average .
Quarterly balance in your Savings Account or Rs. 5 lakhs in your Fixed Deposit Account


Savings Bank accounts commonly referred to as Savings accounts, have huge potential for
mobilizing low cost deposit and stable deposits. In our Bank, savings accounts are offered to
prospective customers as value added retail liability product.

Regular Savings Account

At IDBI Bank, we believe that different people have different needs. Thus, we offer various
different types of Savings Account to cater to our diverse customer base. Be it individuals, kids,
women, corporate, senior citizens, we have an account tailor-made for each one of them. The
various types of Savings Account offered By IDBI Bank are as follows:

Features & Benefits of IDBI Savings Account

Quicker fund transactions with online facilities to pay your bills and tax.
It is a great means to accrue money as you can earn more interest by opting for a suitable IDBI
Saving Account when compared to other instant banking options.
You get a global debit card and passbook as you open an account.
You can easily deposit DDs, cheque or cash.
Along with saving a great deal, you also get rebates and gifts on travel.

Types of Savings Account with IDBI

SuperSavings Account
SuperShakti Account (For Women)
Jubilee Plus Account (For Senior Citizens)
Being Me Account
Power Kidz Account
Small Account (Relaxed KYC)
Sabka Basic Savings Account (Complete KYC)
Pension Savings Account (Central Government. Emp)
Capital Gain Account Scheme

IDBI Bank Minimum Balance for Saving Account

SuperSavings Account INR 5000

SuperShakti Account (For Women) INR 5000
Jubilee Plus Account (For Senior Citizens) 0
Being Me Account INR 2500
Power Kidz Account INR 1500
Small Account (Relaxed KYC) 0
Sabka Basic Savings Account (Complete KYC) 0
Pension Savings Account (Central Govt. Emp) 0
Capital Gain Account Scheme INR 10,000

IDBI Bank Saving Account interest rate

Savings Bank Rate 4 percent

Base Rate 9.50 percent
Current BPLR 14 percent

Table 2: Interest Rate offered by Other Banks

Account Interest Rate Offered
RBL 7.1% p.a = Daily balance above Rs.10 lakhs 6.1% p.a = Daily balance above
Bank Rs.1 lakh 5.1% p.a = Daily balance upto Rs.1 lakh
Bank 6% p.a. (On Savings Account balances below Rs.1 crore.)
Bank 6% p.a
Bank 5% p.a = Daily Balance Upto Rs.5 lakh 6% p.a = Above Rs.5 lakh
4% p.a = Daily balance upto Rs.1 lakh 5% p.a = Daily balance above Rs.1 lakh
IndusInd but less than Rs.10 lakhs 6% p.a = Daily balance above Rs.10 lakhs 4% p.a =
Bank Non-resident NRO and NRE accounts
Bandhan 4.25% p.a = Daily balance upto Rs.1 lakh. Interest paid half yearly. 5% p.a =
Bank Daily balance above Rs.1 lakh. Interest paid half yearly.
Bank 4% p.a = Effective from December 1, 2015
Bank 4% p.a (applies for all amounts)

Current Accounts

Current accounts are meant for customers who have to carry out business and/ or large
number of transactions in the account every day. There are no restrictions on the number of
transactions in current accounts.

Core Current Account

No two businesses are the same, which is why at IDBI Bank; we offer different types of Current
Accounts to choose from, to our customers. The types of Current Accounts that we offer are as

Our Core Current Account is a straightforward and easy to use Current Account designed to
make even the smallest of business experience hassle free. The Core Current Account comes
loaded with a number of features, which include:

o Free PAP (payable at par) chequebook
o Free PAP utilisation
o Free Electronic Funds Transfer
o Free Pay Orders and Demand Drafts
o Free Demand Drafts on non-branch locations
o Free home / non-home branch cash deposit
o Free any branch cash withdrawal
o Free Internet/ mobile/ Phone Banking and ATM services
o Free other bank ATM transactions

Fixed Deposits
Fixed Deposits, also known as Term Deposits or Time Deposits, are deposits accepted by the
bank for fixed period and are repayable on expiry of the fixed period. Interest is paid at
quarterly rests to the depositor. At the specific request of the depositor, interest could be paid
at monthly rests also, but at a discounted rate. The Bank decides the rates of interest on fixed
deposits of various maturities from time to time by taking into account the market conditions
and directives of the Reserve Bank of India in this regard.

Interest Rate on Fixed Deposits are as follows

Table 3: Term Deposit Interest Rate

Interest Rate on Term Deposits (w.e.f. . Jun 16, 2017)

Resident Term Deposit / NRO for deposit upto less than Rs. 1 Crore #
Maturity Slab Interest Rate (% p.a.)
15-30days 4.25
31-45 days 4.50
46-60 days 5.00
61-90 days 5.25
91-6 months 6.00
6 months 1 day to 270 days 6.00
271 days to < 1year 6.50
1 year 6.65
>1yrs to 2yrs 6.50
>2 yrs to < 3 yrs 6.00
3 yrs to < 5 yrs 6.00
5 years 6.00
> 5yrs - 7yrs 6.00
>7 yrs - 10 yrs 6.00
>10 yrs - 20 yrs* 6.00

Note :-The Senior Citizen Interest rates are 0.50% higher for deposits from 1 year and above

Recurring deposit

Ideal for those who want to save a fixed sum every month
This type of deposit helps you add to your savings at your complete convenience. You can

start saving any amount from Rs. 100 to Rs. 1 lakh every month. The amount as decided by
you, will be deducted every month from your savings account. Further, there is no Tax
deducted at source on these deposits and also no charges for executing your standing


We, at IDBI Bank offer a wide range of loan products to suit all your needs ranging from home
to education, a holiday to buying a laptop. Select from our loan offerings and we shall be glad
to service you on the same. The various loan offerings by IDBI Bank are as follows:

Choose from various range of Personal Banking services like:

Home Loans
Loan Against Property
Education Loan
Personal Loan
Loans Against Securities
Reverse Mortgage Loan
Auto loans

Retail Loans (w.e.f. 1st February 2017 )

Floating Rate Loans (with quarterly reset clause)

Home Loan (HL)

(3 months MCLR) for PSL

All Loan Amounts
(3 months MCLR+0.05%) for Non PSL
Home Loan Interest Saver (HLIS)

All loan Amounts (3 months MCLR+0.15%)

Sanction Amount RoI
Upto Rs.25 lakh (3 months MCLR+0.25%)
> Rs.25 lakh to Rs.75
(3 months MCLR + 0.50%)
> Rs.75 lakh (3 months MCLR + 0.75%)
Turnover based Home Loan

All loan Amounts (3 months MCLR + 3%)

Scheme for Financing Rural/Semi Urban Housing

All loan Amounts (3 months MCLR )


For top-up amount upto 100% of the original sanction

For home loan customers Prevailing Home Loan Rate +10 Bps for PSL
Prevailing Home Loan Rate + 20 Bps for Non PSL

Loan Against Property (LAP)/ Loan Against (3 months MCLR+1.40%) for PSL
Rent Receivable (LARR) (Floating)/ Loan
Against Rent Receivable (LARR) to landlords (3 months MCLR +1.90%) for Non PSL
of IDBI Bank
If interest serviced If interest not serviced
Loan to the landlords of IDBI Bank Ltd for during Pre-EMI/ during Pre-EMI/
Setting up of Currency Chests against future Moratorium Period Moratorium Period
rent receivables (3 months MCLR
(3 months MCLR +1.90%)
Loan Against Property- Overdraft(LAP- (3 months MCLR+1.65%) for PSL
OD)/Loan against Property-Interest Saver
(3 months MCLR+2.15%) for Non PSL
Loan for Commercial Property Purchase (3 months MCLR+1.90%) for PSL
(LCPP) (3 months MCLR+2.15%) for Non PSL
Turnover Based (3 months MCLR+2.65%) for PSL
Loan Against Property and its variants ( 3 months MCLR+2.90%) for Non PSL

Non-Vocational Courses
Sanction amount up to Rs.10 lakhs (3 months MCLR+1.15%)
Sanction amount above Rs. 10 lakhs (3 months MCLR+2.15%)
Vocational/ Skill Development Courses
All Amounts (3 months MCLR+1.15%)
Loans for students studying in Premier Education Institutes (including ISB)
All Amounts (3 months MCLR+0.15%)
Education Loan for Other students who have secured admission under Management Quota
All Amounts (3 months MCLR+3.05%)
Pension Account with overdraft facility (For
(3 months MCLR+1.15%)
retired IDBI Staff)
Salary / Pension Account with overdraft
(3 months MCLR+3.90%)
facility (For others)
Fixed Rate Loans
1. Home Loan

For 3 Year Tenor For > 3 Year Tenor

All loan Amounts
10.10% 10.35%
1. IDBI NEEV Sanction Amount RoI
Below Rs. 30 lakh 10.10%

Rs. 30 lakh & above 10.35%
1. Scheme for Financing Rural/Semi Urban Housing

All loan Amounts 10.10%

1. Reverse Mortgage Loan (RML)

All loan Amounts 10.85%

1. The RoI shall be reset every five years with prevailing Fixed Rate for Five Years.

1. Loan for Commercial Property Purchase (LCPP)

11.85% for PSL

Fixed for 5 years
12.00% for Non PSL
1. Education Loan to Physically Challenged
4% p.a. (Fixed) for boy students
Persons under NHFDC Guidelines
3.5% p.a. (Fixed) for girl students
(refinance scheme)
(subject to conditions)

Primary Auto Loan for All Loan Amounts 9.95%

Combo Auto Loan for All Loan Amounts
(Available only if sanction tenor is > 3 years)
1. The RoI shall be fixed for the tenor of the loan.


Salaried customers / Pensioners maintaining salary /

pension accounts with IDBI Bank
Salaried customers not maintaining salary accounts
with IDBI Bank & Self Employed Professionals 13.49%
having liability relationship with IDBI Bank
Salaried individuals & Self Employed Professionals
who have availed Home Loan/ Loan Against 12.49%
Property from us (only full disbursed cases)@

Debit cards:

Enjoy the convenience of cashless shopping in India and abroad

Widely accepted at over 30 million merchant locations worldwide
Earn reward points on every spend
Enhanced Insurance Cover against a variety of perils

Overview of IDBI Bank Debit Cards

Established in 1964, IDBI Bank is the commercial banking arm of IDBI (formerly known as the
Industrial Development Bank of India). As the 10th largest government owned development bank in
the world, IDBI boasts a widespread network of 1746 branches in India and overseas, 1285 centers and
3000 ATMs. Headquartered in Mumbai, IDBI has been awarded for being the Best Overall Bank and
the Best Public Sector Bank in the Dun & Bradstreet Awards, 2011. In 2013, the bank was placed
#1197 in the Forbes Global 2000 list.

As one of the most prominent commercial banks in India, IDBI offers a host of financial products and
services, among which are debit cards. Choose from a range of well-appointed debit cards, each of
which has been designed specially to provide cashless convenience, along with a host of features like
enhanced transaction limits, transaction alerts, insurance cover and more

Types Of Cards Offered By IDBI Bank

International Debit-cum-ATM Card

1. Get instant access to cash, anytime, at over 1630 IDBI ATMs and over 1 lakh shared network
ATMs in India and over 18 lakh ATMs abroad.
2. This debit card is internationally valid, which means that it can be used not only within India
but also on your trips abroad to withdraw cash from shared network ATMs and also for
shopping at over 29 million merchant locations.
3. As an IDBI International Debit Card holder, you are entitled to thrilling discounts and offers
while shopping with merchant outlets associated with IDBI bank.
4. Enjoy high daily transaction limits on your International Debit Card Rs 25,000 for ATM
withdrawals and Rs 25,000 at point of sale terminals.
5. Keep track of your account activity with instant SMS alerts for every debit card transaction.
6. Shop online, book tickets, make bill payments, all using your International Debit Card.
7. As an IDBI International Debit Card Holder, you are entitled to insurance cover for loss or
counterfeit of card up to Rs 1 lakh.
8. Earn loyalty points for every Rs 100 spent on your IDBI debit card.

Gold Debit Card

1. As a Gold Debit Card holder, you get to enjoy high daily transaction limits of Rs 75,000, for
ATM cash withdrawals and POS transactions respectively.
2. This is an internationally valid card which can be used to make purchases not only within India
but abroad as well.
3. Avail exciting discounts and special offers at select merchant outlets associated with IDBI
4. Track your account activity easily with instant SMS alerts for every debit card transaction.
5. Earn Loyalty Points for every Rs 100 spent on your Gold Debit Card and redeem the same for
cash credit to your account.
6. As a Gold Debit Card holder, you are entitled to insurance cover against loss or counterfeit of
card for an amount up to Rs 1 lakh; Personal Accident cover up to Rs 5 lakh; Loss of Checked
Baggage Cover up to Rs 50,000; Purchase Protection up to Rs 20,000 and cover against Fire
and Burglary for Household Contents for up to Rs 50,000.
7. Save more on fuel with Petrol Surcharge Waiver for fuel purchase between Rs 400 to Rs 2000
done with your Gold Debit Card.

Platinum Debit Card

1. To meet your lifestyle demands, the Platinum Debit Card features enhanced daily transaction
limits of Rs 2 lakh for shopping and Rs 1 lakh for ATM cash withdrawals.
2. Enjoy quick access to cash whether you are in India or abroad. IDBI boasts of a nationwide
network of over 1600 ATMs and over a lakh shared network ATMs.

3. This debit card comes is accepted worldwide and comes with an international validity of 5
4. Earn 2 Loyalty Points for every Rs 100 charged to your Platinum Debit Card and redeem the
same for cash credits.
5. As a Platinum Card holder, you are exempted from fuel surcharge at the rate of 2.5% for fuel
purchases between Rs 400 to Rs 5000, each month.
6. Benefit from enhanced insurance cover offered along with this card. You get insurance cover
for lost or counterfeit cards; Purchase Protection up to Rs 20,000; Personal Accident Cover up
to Rs 5 lakh, Loss of Checked Baggage up to Rs 50,000 and cover against Fire or Burglary for
Household Contents up to Rs 50,000.
7. Avail exciting discounts and special offers while shopping at merchant outlets associated with
IDBI bank.

Womens Debit Card

1. For every purchase of Rs 100 done with your card,, you earn one Loyalty Point. Accumulated
Loyalty Points can be redeemed for cash rewards.
2. Womens Debit Card holders are entitled to Insurance cover of up to Rs 1 lakh for lost or
counterfeit cards.
3. For your convenience, this debit card offers a daily cash withdrawal limit of Rs 40,000 and
purchase limit of Rs 40,000 as well.
4. Shop online with ease using your Womens debit card which can be used for online
transactions, booking tickets and paying utility bills.
5. Get access to cash when you most need it. IDBI boasts of a nationwide network of over 1600
ATMs and over a lakh shared network ATMs.
6. This debit card, like other IDBI debit cards, features a 5 year international validity.
7. Womens Debit Card holders can avail special offers and discounts which are part of IDBIs
association with select merchant outlets.
8. To facilitate easier tracking of account transactions, the Womens Debit Card comes with a
special feature of Itemized Billing. Under this feature, you will get the details of your purchase
like your card number, transaction date, merchant name, etc. in your bank statement itself.
9. Emergencies strike without warning. As a Womens Debit Card holder, you are entitled to avail
the Global Customer Assistance Service, offered by VISA for any card related emergency like
reporting the loss of theft of a card, for emergency card replacement or cash disbursement,
emergency enquiries or any other card related miscellaneous enquiries.

Kids Debit Card

1. A debit card specially designed for children, to instill and encourage the habit of saving.
2. Kids Debit Card holders are covered for an amount of up to Rs 8,000 for loss or counterfeit of
3. This card features a daily transaction limit of Rs 200, for cash withdrawals and purchases
4. Card holders stand to earn 2 Loyalty Points for every Rs 100 spent using their Kids Debit card.
5. Kid can avail some fantastic discounts and special offers from time to time at various merchant
establishments associated with IDBI bank.
6. The Kids Debit Card is valid across India for a period of 5 years.
7. Use this card not only to withdraw cash from over 1600 IDBI ATMs but also for purchases at
over a lakh merchant outlets across India.

Being Me Debit Card

1. This card has been specially designed for young professionals and students between the ages
18-25 years.
2. Experience the ease of shopping online with your Being Me Debit Card which can be used for
booking tickets and making bill payments.
3. This debit card is valid for a duration of 5 years.
4. Save more on fuel with waiver of the standard 2.5% surcharge at all petrol stations.
5. Enjoy zero lost card liability cover with this debit card. Cardholders are protected against any
fraudulent misuse of the card from the moment the loss is reported.
6. Earn 2 Loyalty Points for every Rs 100 charged to your card.
7. Avail some exciting discounts at select merchant outlets associated with IDBI Bank.

Signature Debit Card

One of the most sought after commercial banks in the country, the IDBI (Industrial Development Bank
of India) offers a variety of debit cards for their dedicated customers. One of them is the Signature
debit card. Just by owning the the Signature debit card, customers can avail privileges and discounts in
areas such as Travel, Fine Dining, Health and Fitness, etc.

Features and Benefits of the Signature Debit Card

For those customers having a Signature debit card, they can enjoy the privilege of having free
access to airport lounges across the country. This is limited to two lounge visits a year.
The withdrawal limit is Rs.3 lakh per day, and for Point of Sale transactions is Rs.5 lakh.
Those having the Signature debit card can book travel and movie tickets online with attractive
discounts. The online transaction limit is Rs.3 lakh per day.
For a customer shopping at merchant locations, a customer will get 3 points for every Rs.100
that is spent. For Signature debit card holders, they can redeem a cash credit if they have
accumulated more than 3,000 points in a calendar year.
For purchase of fuel between Rs.400 to Rs.5,000, Signature card holders are exempt of the 2.5
% surcharge added on fuel bills.
Apart from the Rs.5 lakh insurance cover offered to every customer having a Signature debit
card, there are many other insurance covers associated with the debit card:
o Rs.1 crore air accident insurance cover is granted.
o Rs.5 lakh is granted in case of a personal accident.
o For those who have lost their check-in luggage, they can avail an insurance cover up to
o For those who have made a purchase using the Signature debit card, they can avail a
Purchase Protection cover worth Rs.20,000 which is valid for a period of three months.
o Rs.50,000 insurance cover is granted in case of a fire or a burglary.

To be eligible for the insurance covers, a customer should have made at least two purchases
using their Signature debit card in the last 90 days.

Every card holder can make use of the Global Customer assistance service, in any part of the
world. A service offered by Visa, customers can avail the services if:
o They have to report a lost or stolen card.
o Emergency cash disbursement or card replacement.
o Emergency or miscellaneous inquiries.
As already mentioned below, all Signature debit card holders are eligible to avail a number of
services at a privileged or discounted rate. Some of the privileges are:

o Discount for Visa Signature Club
o Excellent rate at Visa Signatures Golf Club
o Fine Dining discounts using the Visa Signature debit card
o Privileged rates for travel assistance, car rentals, sports and entertainment across the
globe, pre-trip assistance service and business services.

When opening a IDBI Bank account, a customer can choose to have a Signature debit and inevitably
have access to all the privileges that the card comes with.

Classic Debit Card

With over 30 million merchant establishments in India and across the globe, owning a Classic debit
card makes the whole process of cashless transactions a lot better. Apart from the privileged discounts
every customer having the Classic debit card has, a customer can make ATM withdrawals anywhere in
the world in the local currency.

Benefits of the Classic Debit Card

A customer having a Classic debit card has access to more than a 100,000 ATMs (domestic and
shared network ATMs) and over 5 lakh merchant establishments in India and over 29 million
across the globe.
A customer can make withdrawals in the local currency abroad as well.
Since IDBI is tied up with millions of merchant establishments, shopping at these
establishments comes with luring discounts.
The daily withdrawal limit is Rs.25,000 per day and transactions at POS (Point of Service) is
also at Rs.25,000 per day.
Using the Classic debit card, a customer can make online transactions, pay bills and so on.
Every customer receives an instant transaction SMS to alert him/her of the transaction amount
that has just been made and their available balance.
Customers holding a Classic debit card are offered a insurance cover for lost or counterfeit
cards up to Rs.1 lakh. For a customer to be eligible for the insurance cover, he/she should have
made at least two transaction purchases in the last 90 days.
For every Rs.100 spent using the Classic debit card, one loyalty point is granted.

Customers can opt for a Classic debit card when opening their account. They can even contact the toll-
free numbers 1800-22-1070 or 1800-200-1947, if they want to shift to a Classic Debit card.

Contactless Debit Cards

With technology focused on enhancing the convenience of the customer, IDBI has rolled out their very
own contactless debit cards. Now, customers do not have to stand in long queues to make a
transaction, all that they have to do is to wave their card in front of a Near Field Communication
(NFC) terminal and the purchase is paid for even without entering their PIN.

Functioning of a contactless debit card:

Every contactless debit card comes with a contactless Visa PayWave logo, which has a sensor
embedded in it. Customers can swipe a maximum of Rs.2,000 a day using the contactless debit card.
To make a payment, one just needs to wave at the POS terminal which functions on Near Field
Communication (NFC) technology which facilitates the use of radio transmissions. The bill amount
will be displayed on the POS terminal when one is exiting the shop, and just by waving your card

parallel to POS terminal, the amount is paid for without the customer even entering his/her PIN code.
The green light emitted from the POS terminal indicates that your bill has been paid.

Rupay Platinum Chip Debit Card

The Rupay Platinum Chip Debit Card has been customized and designed by IDBI in association with
the National Payments Corporation of India (NPCI). Customers owning this Rupay Platinum Chip
Debit Card are eligible to a number of benefits, including a higher withdrawal limit, enhanced
insurance schemes and so on, with the focus of the bank to make their customer feel truly privileged.

Benefits and features of the Rupay Platinum Chip Debit Card

Absolutely free access to airport lounges across the country and globe. The number of visits is
limited to two per year.
Customers holding a Rupay Platinum Chip debit card are eligible for a number of privileged
benefits such as referrals or reservations at hotels across the globe, golf clubs, fine dining
hotels, gift deliveries, card rentals and so on.
The withdrawal limit for this debit card is limited to Rs.1 lakh and for POS transactions the
limit is Rs.1 lakh as well.
By registering with the Rupay Paysecure, one can enjoy attractive discounts on travel and
movie tickets.
For every Rs.100 that is spent using the Rupay Platinum Chip debit card, 2 loyalty points are
Exemption of fuel surcharge for purchase of fuel between Rs.400 to Rs.4,000.
Rupay Platinum Chip debit card holders are granted an insurance cover of Rs.1 lakh for lost or
counterfeit cards. Apart from this, holding a Rupay Platinum Chip debit card comes with a
variety of other insurance covers:
o In case of an accidental death, the customer is liable for an insurance cover of Rs.5
o Permanent disability cover of Rs.2 lakh.
o In case one has lost their baggage, an insurance cover of Rs.50,000 may come in handy.
o A card holder is even granted a purchase protection of Rs.20,000, valid for a period of
three months.
o Fire and burglary insurance cover of Rs.50,000.

To avail the accidental death cover, a customer should have made at least two purchases using the
debit card in the last 45 days. For the other insurance covers, he/she should have made a purchase in
the last 30 days to be eligible.

24Hrs Banking

Phone Banking
IDBI Bank Phone Banking service enables you to access authentic, instantaneous
information on your account balances and transactions. The service is available totally free of
cost round the clock, 365 days a year.

Mobile Banking
Our SMS banking initiatives permit you to access your Bank account and carry out various
banking transactions and inquires. No need of visiting the bank time and again!

Account Alerts
IDBI Bank's new Account Alert service gives you all this and more. With Account Alert, your
bank account transaction information will be delivered to you automatically, wherever you are.
No more visiting the bank branch or ATM to check routine things like account balances,
cheque clearance, verification of ATM transactions, bill payment verifications, etc. Account
Alerts allows you to monitor finely any type of activity on your accounts, and be notified by e-
mail or cell phone SMS as and when they are executed.

Internet Banking
With IDBI's Internet Banking, your Bank travels with you around the world and you have on-
line, real-time access to your accounts.

Admittedly, such a service requires security of the highest nature and complete privacy
protection. We provide a completely secure environment, using 128-bit encryption SSL
(Secure Sockets Layer), digitally certified by Verisign. 128-bit SSL guarantees world-class
security for Internet and e-commerce applications.

Pay Mate
IDBI Bank Pay Mate Service presenting a simple, convenient and secure way to make
The Pay Mate service has a tie up with various merchants across India (click here for the list of
merchants). You can now shop with any of these merchants and can pay simply through your
Mobile Phone. IDBI Bank offers this service to its customers absolutely free of charge. .

Money Transfer
Sending money within India has never been this simple, convenient, fast and safe. IDBIs Card
to Card Money Transfer facility; a first of its kind money transfer service in India is the absolute

way to send money anywhere, anytime to any Visa Debit or Credit cardholder in India. Banks
customers can now transfer money from their Bank account or Visa card to any other Visa

debit or Credit card across the country through this service.

Transfer Funds
We can use Internet Banking; ATMs or branches for transferring money across the country.
The only information we need to know is the 16-digit card number of the transferee. To carry
out a transfer, simply log on to IDBIs Internet Banking at, or visit the
nearest IDBI ATM or branch and transfer the required amount. The money is directly credited
into the recipients card, no matter where he is.

We believe that all the investors share a common goal, regardless of their objectives: superior
and sustained returns with a tight control over risk. Meeting your long-term investment goal is
dependent on a number of factors: your investment capital, your expected rate of return,
inflation, taxes and your investment time horizon. To meet your requirements, we offer you
investment options based on your risk tolerance and return expectations. Relationship
Managers are equipped to advise you on various investment profiles. They then help you with
your investments and subsequently support you by tracking your investments on a regular

Mutual Funds
Mutual funds offer a simple and effective way to diversify your investment without the hassles
of tracking individual stocks on a daily basis. Click here for more details on the options we offer
GoI 8.0% Savings (Taxable) Bonds. 8% GoI Savings Bonds is a good option for investors
looking for high yielding risk free instruments.

Capital Gain Bonds

Invest your long-term capital gains on sale of your asset in the specified assets.

Insurance Services
IDBI brings to you Birla Sun Life Insurance, one of the leading providers of life insurance

NRI a/c
Being an NRI (non-resident Indian) and privy to special benefits and privileges in India, its only
but natural to expect world class levels- be it banking or any other service. Welcome to IDBI,

where you are treated as special and your needs exclusive. While we offer basic NRI banking
products like Non Resident Rupee Checking Account, Non Resident Rupee Term Deposits and
Foreign Currency Non Resident Deposit, we realize that the requirements of the customers are

Non-Resident External (NRE)

Repatriable account for your investment needs your account anytime, anywhere with Internet
Banking, shop at more than 8.3 million locations and withdraw funds in 140 countries.

Non-Resident Ordinary (NRO)

An account for your income and expenses, access your account at more than 250 ATMs across
the country, pay your bills in India from anywhere in the world.

Retain your funds in foreign currency, no exchange risk; earn attractive returns on your fund.

Automated Teller Machine (ATM) is a sophisticated computer terminal which makes it possible
for a customer holding Debit cum ATM Card to avail specified banking services through ATMs
at any time (24 hours) without any personal interaction with the bank personnel. Our Bank has
ATMs with On-Line connectivity across all its branches. The Bankhas also installed many off-
site ATMs. IDBI Bank is a member of VISA, MASTERCARD, CASHNET, NFS, BANCS &
AMERICAN EXPRESS ATM networks. With this, Debit cum ATM Card holder of any of the net
worked banks / institutions can transact specified banking transaction at any ATM of the
networked banks / institutions.
At present, Debit cum ATM Card customers can undertake following transactions on our Banks

i) Withdraw cash up to the daily cash withdrawal limits stipulated for the type of the card.
These limits can be enhanced on request of customer.

ii) Deposit cash / cheque (not more than 20 notes / cheques at a time). This facility is not
available on cash dispenser.

iii) Carry out certain functions like balance enquiry, print mini statement recording last 10

transactions and/or inform balance in the account.

iv) Register request for cheque book and statement of account.

v) Change Personal Identification Number (PIN).

vi) Avail other value added services like Bill Payments, mobile recharge, VISA money transfer

Debit card customers can also withdraw cash and make balance inquiry from ATMs of other
Banks which are members of CASHNET, NFS, BANCS, VISA & MasterCard networks. The
amount of cash withdrawals through these ATMs is maximum of Rs.10,000/- per transaction.

IDBI Bank fund transfer charges and timings


Table 4:NEFT Charges

Charges (exclusive of taxes) for Indus comfort regular, Indus Comfort and Indus
Transfer Amount
Comfort Premium users

Up to Rs.10,000 Rs.2.5 per transaction

Rs.10,001 - Rs.1
Rs.5 per transaction

Rs.1 lakh - Rs.2

Rs.15 per transaction

Above Rs.2 lakh Rs.25 per transaction


Table 5: RTGS Charges and timings

Transfer Amount Charges (exclusive of taxes)

Rs. 2 lakh to Rs. 5 lakh Rs.30 per transaction

Above Rs. 5 lakhs Rs.55 per transaction

Cut-off timing for processing on the same day

Monday to Friday 9 AM to 5 PM

Saturday(excluding 2nd and 4th) 9 AM to 5 PM

IDBI Bank Customer Care Numbers

IDBI Customer care number

Toll-free numbers 1800-200-1947/1800-22-1070

Chargeable numbers 022- 66937000/0091-22-66937000

5.2 The IDBI Bank Advantage

o Maximum Funding
o Services at doorstep
o Simple documentation
o Personalized services
o Free legal and technical assistance
o Attractive rate of interest

Applying for a Reverse Mortgage Loan against Home is absolutely simple. Just call our Phone
Banking numbers and our representative will contact you at the earliest

Chapter 6

6) Methodology

6.1 Research Type

My research is based on the primary data. Primary data has been used to understand the
scope of retail banking business in Mumbai and then to make suggestions useful for the bank
under study i.e. IDBI Bank ltd.

6.2 Data Type

Primary data has been used for the purpose of study of ' Retail banking business in Mumbai
at IDBI Bank '.

6.3 Sample Selection:

To collect primary data regarding the scope of retail banking business of IDBI Bank , I
have visited to the various branches of IDBI bank and also Visited other Banks to get data for
comparative study with IDBI bank The list of peer banks
was selected on the basis of their visibility in Mumbai,scale of operation in Mumbai .

6.4 Data Collection Method

In order to collect the primary data, the method used was personal
A questionnaire was prepared in order to collect the data from customers to get their view and
suggestions and the information they have with retail banking products
Then the Secondary data is collected from E-database sources like journals,reports and electronice

6.5 Tools Used for Data Analysis

As no study could be successfully completed without proper tools and techniques, same with
my project. For the better presentation and right explanation I used tools of statistics and
computer very frequently. And I am very thankful to all those tools for helping me a lot. Basic

tools which I used for project from statistics are-

Bar Charts

Bar charts proved really useful tools to show the result in a well clear, ease and simple way.
Because I used bar charts in project for showing data in a systematic way, so it need not
necessary for any observer to read all the theoretical detail, simple on seeing the charts any
body could know that what is being said.

Chapter 7

7) The Study

For this I have created the questionnaire and the survey has done with bank customers
For the purpose of project data is very much required which works as a food for process which will

ultimately give output in the form of information. So before mentioning the source of data for the

project I would like to mention that what type of data I have collected for the purpose of project and

what it is exactly.

1. Primary Data:

Primary data is basically the live data which I collected on field while doing cold calls with the

customers and I shown them list of question for which I had required their responses. In some

cases I got no response form their side and than on the basis of my previous experiences I filled

those fields.

Source: Main source for the primary data for the project was questionnaires which I got filled by

the customers or some times filled myself on the basis of discussion with the customers.

2. Secondary Data:

Secondary data for the base of the project I collected from intranet of the Bank and from internet,

RBI Bulletin, Journal by ICFAI University and electronic database on internet

Statistical Analysis

In this segment I will show my findings in the form of graphs and charts. All the data which I got form

the bank customers will not be disclosed over here but extract of that in the form of information will

definitely be here.
Details of Data Collection:

Size of Data : 50

Area : Mumbai-Prabhadevi

Type of Data : 1. Primary 2. Secondary

Industry : Banking

Respondent : Customers

Table 6 : How long you have been associated with IDBI bank Ltd ?

Years No of Response
0-1 Years 15
1-5 Years 20
5-10 Years 10
Above 10 years 5




No of Response

0-1 Years 1-5 Years 5-10 Years Above 10


Table 7: As per Your Knowledge IDBI BANK IS

Bank Type No of Responses

Private Bank 18
Public Bank 25
Co-oprative Bank 0
Don't Know 5

No of Responses
Private Bank Public Bank Co-oprative Bank Don't Know




Table 8 : Which Services have you availed from the bank ?

Services Responses
Saving Account 22
Current Account 9
Fixed Deposit 12
Loans 4
Investments 5





Saving Current Fixed Loans Investments
Account Account Deposit


Table 9 : are you Currently

Customer Type Response

Student 6
Service 15
Self-Employed 4
Retired 6
House-wife 5
Businessman 14


2 Response

Customer Type
Table 10: How do you rate Services of IDBI Bank ?

Service Rating Response

Excellent 10
Very Good 15
Good 12
Sastisfactory 6
Needs Improvement 7

Needs Improvement

Service Rating

Very Good


0 5 10 15 20

Table 11 : Do you think Idbi is safe place for your Money

Answer Response
Yes 48
No 2

IDBI safe place for Money



Table 12 : Do you use Idbi Credit Card ?

Answer Response
Yes 5
No 45



Yes No

Table 13: are You aware of 3-in-1 Demat offers from IDBI Bank

Answer Response
Yes 14
No 36

IDBI 3-in-1 Demat account




Table 14: Do you use Swiping Machine at your outlet

Answer Response

yes 6

NO 44

Swiping Machine At Outlet

Response, 44



Table 15: if yes with which bank ?

Swiping Machine Response

Axis Bank 3
ICICI Bank 2
State bank of India 1

Table 16: Do you think IDBI need more Advertisement ?

Answer Response

yes 38

NO 12

IDBI need more Advertisement



20 Response


yes NO

Table 17: When did you last See the Advertisement of IDBI Bank ?

Days Response
0-10days back 2
10-20 days back 3
20-30 days back 5
more than 1 month back 40

Last seen of IDBI advertisement


10 Response
0-10days 10-20 days 20-30 days more than
back back back 1 month

Table 18: IDBI bank is good Bank for ?

Options Response
Service People 5
Business Persons 12
General Public 20
Politicians 3
All of Above 10

IDBI bank is good bank for


0 Response


Table 19: Would you like to refer IDBI bank to your friends or relatives

Answer Response

Yes 45

No 5

Will you refer IDBI bank to friends &




Chapter 8

8) Findings , Conclusions and Recommendations


The credibility of IDBI bank is good in comparison to its competitors as GOI (Government
Of India) is a major share holder in the company.

IDBI bank has potential a tapped market in Mumbai in region and hence has an opportunities
for growth.

The products of IDBI bank has good credibility in the region compare to its competitors.

The advertisement of the bank was very effective from the first day of its airing till the fifth day
and there after it starts declining.

The initial balance for A/C opening is Rs, 5000/- and thats why people are reluctant in
opening the same.


1. Consumers of Mumbai have good awareness level about IDBI bank as well as about its

services and products.

2. The advertising campaign has successfully been able to increase the market share of IDBI in


3. The modern days technology like internet banking, phone banking, used by IDBI bank for

providing banking services has sent positive signals in the mind of consumes.

4. The network of IDBI in Mumbai is lagging behind a little than its competitors like ICICI bank

and HDFC bank.

5. It can be distilled from data that IDBI bank has good market share as compared to its

competitors considering the amount of resources deployed by them in the market.


1. Since there is only two branch of IDBI bank and only three atms in Mumbai, so it is necessary

for IDBI bank to open more branches and install more atms to serve the vast market of Mumbai


2. More resources should be allocated in the market of Mumbai as there is big untapped market

in Mumbai, so it becomes necessary for IDBI bank for taking an edge over the competitors.

3. A short advertising campaign in Mumbai has produced good results in a short span of times, so

to gain long term benefits is very necessary for IDBI bank to carry on this campaign with more


4. As Government is the majority share holder in the shares of IDBI bank, which makes this bank

more reliable than other private banks, this thing can be used in the favour of IDBI bank by

making people aware about this fact and winning their faith.

5. As there are more crowd for passbook printing the IDBI bank has to open the E-passbook

printing which should be available at every Atm's

6. more BNA (Bank note Acceptor)Machines so the queues which are generated for deposit will

get decreased

Reference & Bibliography

Reference & Bibliography :

R.S. Sharma, Business statistics, First India Print, India, 2004,

Aaker Kumar and Day, Marketing research, 6th Ed.,john willy & sons,1997.

ICFAI Journal of Banking

The Economics times

The Times of India







1. How long have you been associated with IDBI Bank Ltd?

0-1 Years 1-5 Years 5-10 Years Above 10 Years

2. As per Your Knowledge IDBI is

Private Bank Co-Operative

Public Bank Don't Know

3.Which services have you availed from the Bank?

Savings Current Fixed Deposits Loans Investment

4. Are you currently

A Student Service Self Employed Retired HouseWife Businessman

5.How do you rate the services of the Bank?

Excellent Very Good Good Satisfactory Needs Improvement

Suggestion ( if any)
6.Do you think IDBI is safe place for your money?.

Yes No

7.Do you use IDBI credit cards?

Yes No

8..Are you aware of 3-in-1 Demat offers from IDBI Bank?

Yes No

9.Do you use swiping machine at your outlet?

If yes, with which bank?_________________________________________

10.Do you think IDBI bank Need More Advertisement

Yes No

11.When did you last see the advertisement of IDBI bank?

0-10 days back 10-20 days back

20-30 days back more than 1 month back

12. IDBI bank ltd. is a good bank for-

Service people Business persons

Politicians General public

All of above

13.Would you like to refer any of your friends or relatives?