CHAPTER 1

INTRODUCTION

Knowledge Management is one of the Hottest topics today in both the industry world and
information research world. In our daily life, we deal with huge amount of data and
information. Data and information is not knowledge until we know how to dig the value out of
it. This is the reason we need knowledge management.

WHAT IS KNOWLEDGE MANAGEMENT ?

“Knowledge management is the process of capturing, distributing and effectively using

knowledge.”

“Knowledge management is a discipline that promotes an integrated approach to identifying,

capturing, evaluating, retrieving, and sharing all of an enterprise’s information assets. These
assets may include databases, document, policies, procedures, and previously un- captured
expertise and experience in individual workers.”

Both definitions share a very organization, a very corporate orientation. KM, historically at
least, is primarily about managing the knowledge of and in organizations.

The operational origin of KM, as a term is understood today, arose within the consulting
community and from there the principles of KM were rather rapidly spread by the consulting
firms quickly realized the potential of the intranet flavour of the internet for linking together
their own geographically dispersed and knowledge – base organizations. Once having gained
expertise in how to take advantage of internet to connect across their organization and to share
and manage information and knowledge, they then understood that the expertise they had
gained was a product of course needed a name, and the name chosen, or at least arrived at, was
knowledge enthusiasm for intellectual capital in the 1980s, had primed the pump for the
recognition of information and knowledge as essential assets for any organization.

Perhaps the most central thrust in KM is to capture and make available, so it can be used by
others in the organization, the information and knowledge that is in people’s heads as it were,
and that has never explicitly set down.

pg. 1
KNOWLEDGE MANAGEMENT IN BANKING SYSTEM

Every nation, every state, every corporate, every society, and every individual seem to be on
the run. They are either pursing stiff targets or are being chased by their bosses to achieve stiff
targets. They are required to be constantly on the fast track. They are running against time.
Everyone is up to achieving something extraordinary. Whether the mad rush at the end of the
day is good for the individual, corporate, or nation is question of survival of the fittest and,
therefore, knowledge management will also have to address the various issues and also find
solution in energizing the work force, while ensuring that no biological – clock disorder takes
place especially in the younger generation.

Bankers are also finding themselves on the hot seat. They are also under pressure to deliver.
While they are aware of the enormous amount of responsibility cast upon them, they appear to
be under the grip of fear in taking decision having larger financial implication knowledge
management must be able to address such issues in finding solution to encourage decisions and
redefine staff lapses and accountability, to be more objective without being to much subjective.

Knowledge management is becoming very important in almost all banks since it simplifies the
delivery of timely and effective information that are used in all the organization’s processes
from planning, controlling, decision making and evaluation. It helps managers in formulating
strategic, technical and operational activities in a best ways in order to achieve the
organizations desired.

Nowadays modern banks investigate the importance of the value of knowledge management
in the banks business practices. The knowledge covers the range from the bank organizations
own internal intellectual capital, to the wealth of data heel on any customer’s transaction.

The banking sector is always targeted to improve their customer satisfaction that will result in
revenue increasing. The process of knowledge creation, storage and dispersion become
essential and banks assign specialized personnel to watch over and manage these critical
processes.

The most common fields of knowledge management applications in a bank are risk
management, marketing management, customer relationship management and performance
measurement especially for the benefit of its stakeholders. Usually, in major banks investments
in knowledge management systems such as decision support systems, data warehouses and
data mining are rapidly growing.

pg. 2
Nowadays bank managers use computerized support system as a personal support in decisions
making.

Knowledge management system in banks ensures better and more efficient result in decision
making.

pg. 3
THE CONCEPT OF KNOWLEDGE MANAGEMENT

The Concept of Knowledge Management Knowledge is increasingly seen as a primary business

asset while knowledge management is viewed as the key differentiator to distinguish firms
since the 1990s (Drucker, 1995). The concept of knowledge management is now anchored in
strategic and management processes of a growing number of organizations (Malhotra, 2005).
Knowledge management is about delivering sustained business value, by enhancing the use of
organizational knowledge through sound information management practices and
organizational learning. It is founded on utilizing and exploiting the organization’s information
as well as on the application of peoples’ competencies, skills, talents, thoughts, ideas,
intuitions, commitments, motivations, and imaginations (Harari, 1994). The knowledge-based
perspective of the firm builds upon and extends the resource-based theory of the firm. This
perspective postulates that the services rendered by tangible resources depend on how they are
combined and applied, which is in turn a function of the firm’s knowledge. This knowledge is
embedded in and carried through multiple entities including organizational culture and identity,
policies, systems and documents as well as individual employees (Grant 1996a, 1996b; Nelson
& Winter 1982; Spender 1996). Since knowledge-based resources are usually difficult to
imitate and socially complex, the knowledgebase view of the firm. Knowledge assets may
produce long-term sustainable competitive advantage. However, it is not so much the
knowledge existing at any given time per se but rather the firm’s ability to effectively apply
the existing knowledge to create new knowledge and to take action that forms the basis for
achieving competitive advantage (Beasley& Cooper, 2008).

Effective knowledge management can help an organization to achieve competitive advantage

by improving internal processes, customer services and products, and by creating a good
working environment for employees. Knowledge management is indispensable in the financial
industry because banks compete on the basis of knowledge, as most of their work is knowledge-
based. The rate of product and service innovation is ever rising in response to sophistication of
customers. Moreover, while the size of the work force has been declining due to competitive
pressures, staff mobility and early retirement has been on the rise. The time available to gain
experience and acquire knowledge has also diminished. As a consequence of these factors,
valuable business knowledge is lost. The forces of globalization have also increased the
complexity and dynamism of the business environment and with the liberalization of most
economies around the world; the financial markets are equally open to both big and small
players.

pg. 4
The Banking Industry in India

According to the Reserve Bank of India (RBI), the banking sector in India is sound, adequately
capitalized and well regulated. Indian financial and economic conditions are much better than
in many other countries of the world. Credit, market and liquidity risk studies show that Indian
banks are generally resilient and have withstood the global downturn well with a sense of
optimism slowly creeping in the banking industry expects that 2015 will bring better growth
prospects. This optimism stems from factors such as the Government working hard to revitalize
the industrial growth in the country and the RBI initiating a number of measures that would go
a long way in helping the banks to restructure. The recent announcements of RBI, it is felt, are
a clear pointer to the future of the restructured domestic banking industry.

pg. 5
COMPANY PROFILE OF ICICI BANK

ICICI Bank Limited is an Indian diversified financial services company headquartered in

Mumbai, Maharashtra. It is the second largest bank in India by assets and third largest by
market capitalization. It offers a wide range of banking products and financial services to
corporate and retail customers through a variety of delivery channels and through its
specialized subsidiaries in the areas of investment banking, life and non-life insurance, venture
capital and asset management. The Bank has a network of 2,630 branches and 8,003 ATM's in
India, and has a presence in 19 countries, including India.

The bank has subsidiaries in the United Kingdom, Russia, and Canada; branches in United
States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance
Centre; and representative offices in United Arab Emirates, China, South Africa, Bangladesh,
Thailand, Malaysia and Indonesia. The company's UK subsidiary has established branches in
Belgium and Germany.

ICICI Bank is India’s largest private sector bank in market capitalization and second largest
overall in terms of assets. The bank has a network of 1,626 branches and about 4,883 ATMs in
India and presence in 18 countries.

The industrial credit and investment corporation of India limited (ICICI) was incorporated in
1955 at the initiative of World Bank, the government of India and representatives of Indian
industry, with the objective of creating a development financial institution for providing
medium– term and long- term project financing to Indian businesses. A.Ramaswami Mudaliar
is elected as the first chairman of ICICI Limited. CHANDA KOCHHAR is currently managing
director and CEO of ICICI Bank. Kochhar has also consistently figured in fortune’s list of
“Most Powerful Women in Business” since 2005. KV Kamathwho has was awarded Padma
Bhushan award from the Indian government in 2008 is the Non-Executive Chairman of the
Bank.

pg. 6
ICICI MILESTONES

 1988: Promoted TDICI – India’s first venture capital company.

 1996: ICICI Ltd became the first company in the Indian financial sector to raise GDR.
 1999: ICICI becomes the first Indian company to get listed on the NYSE through an
issue of American depository shares.
 2000: ICICI BANK became the first commercial bank from India to get its stock listed
on the NYSE.

pg. 7
 ORGANIZATION STRUCTURE OF ICICI BANK
.
 Retail banking.
 Wholesale banking
 Project finance and special assets management
 International business
 Corporate bank

Retail banking is banking in which banking institutions execute transactions directly with
consumers, rather than corporations or other banks. Services offered include savings and
transactional accounts, mortgages, personal loans, debit cards, and credit cards.

Wholesale banking is the provision of services by banks to the likes of Mortgage Brokers,
large corporate clients, mid-sized companies, real estate developers and investors, international
trade finance businesses, institutional customers (such as pension funds and government
entities/agencies), and services offered to other banks or other financial institutions.

Project finance is the medium- to long-term financing of infrastructure and industrial projects
based upon the projected cash flows of the project rather than the balance sheets of the project
sponsors.

Special assets management

1. The management of a client's investments by a financial services company, usually an

investment bank. The company will invest on behalf of its clients and give them access
to a wide range of traditional and alternative product offerings that would not be to the
average investors.
2. An account at a financial institution that includes checking services, credit cards, debit
cards, margin loans, the automatic sweep of cash balances into a money market fund,
as well as brokerage services.

An International Banking Facility (IBF) is a separate account established by a U.S.

bank, or a US branch/subsidiary of a foreign bank, or an Edge Act Corporation in the
United States to offer services to only non-US residents and institutions. The services
offered include deposit and loan services. (Note, an IBF is not necessarily a separate
legal entity.)

One Corporate Centre is an office skyscraper in Pasig City, Metro Manila, Philippines. It is
the 13th-tallest building in the country and Metro Manila as well with a height of 202 meters
(662.73 feet) [3] from ground to tip of architectural antenna. The building has 45 floors above
ground including 7 floors for commercial purposes, and 9 basement levels for parking

pg. 8
VISION AND MISSION OF ICICI BANK

VISION

 To ensure most cost effective power for sustained growth of India.

 To provide clean and green power for secured future of countrymen
 Constituent associates & stakeholders.
 To continuously upgrade & update knowledge & skill set of its human resources.
 To achieve excellence in every activity we undertake

MISSION

We will leverage our people, technology, speed and financial capital to:

 Expand the frontiers of our business globally.

 Play a proactive role in the full realization of India’s potential.
 Maintain high standards of governance and ethics.
 Create value for our stakeholders.
 To ensure most cost effective power for sustained growth of India.
 To provide clean and green power for secured future of countrymen.
 To achieve excellence in every activity we undertake

pg. 9
PRODUCTS AND SERVICES BANKING ACCOUNTS

ACCOUNT

ICICI Bank offers a wide range of banking accounts such as Current, Saving, Life Plus
Senior, Recurring Deposit, Young Stars, Salary Account etc. tailor-made for every customer
segments, from children to senior citizens. Convenience and ease to access are the benefits of ICICI
Bank accounts.

 YOUNG STARS ACCOUNT

A special portal for children to learn banking basics, manage personal finances and have a lot of fun.

 BANK@CAMPUS

This student banking services gives students access to their account details at the click of a
mouse. Plus, the student gets a cheque book, debit card and annual statements.

 SAVINGS ACCOUNT

Convenience is the name of the game with ICICI bank’s savings acc ount.
Whether it is an ATM/debit card, easy withdrawal, easy loan options or internet
banking, ICICI bank’s saving account always keep you in touch of money.

 FIXED DEPOSITES

ICICI Bank offers a range of deposit solutions to meet varying needs at every
stage of life. It offers a range of tenures and other features to suit all requirements.

pg. 10
INSURANCE

The ICICI group offers a range of insurance products to cover varying needs
ranging from life, pensions and health, to home, motor and travel insurance. The Products are made
accessible to customers through a wide network of advisors, banking partners,
corporate agents and brokers with the added convenience of being able to buy online.

 LIFE INSURANCE
The ICICI group provides the many life insurance products through ICICI Prudential Life
Insurance Company.

 GENERAL INSURANCE

The ICICI group provides the many general insurance products like motor, t r a v e l a n d
h o m e i n s u r a n c e t h r o u g h I C I C I L o m b a r d G e n e r a l I n s u r a n c e Company.

LOANS

ICICI bank offers a range of deposits solutions to meet varying needs at every stage of life. It
offers a range of tenures and other features to suit all requirements.

 HOME LOANS

The No. 1 Home Loans Provider in the country, ICICI Bank Home Loans offers some unbeatable
benefits to its customers - Doorstep Service, Simplified Documentation and Guidance
throughout the Process. It’s really easy!

 PERSONAL LOANS

ICICI Bank Personal Loans are easy to get an d absolutely hassle free. With
minimum documentation you can now secure a loan for an amount up to Rs. 15 lakhs.

pg. 11
  VEHICLE LOANS

The No. 1 financier for:-

1. Car loans

Network of more than 2500 channel partners in over 1000 locations. Tie -ups with
all leading automobile manufacturers to ensure the best deals. Flexible schemes &
Quick processing is the main advantages are here.

Avail attractive schemes at competitive interest rates from the No 1 Financier for:-

2. Two wheelers loans

Finance facility up to 90% of the On Road Cost of the vehicle, repayable in convenient
repayment options and comfortable tenors from 6 months to 36 months.

CARDS

ICICI Bank offers a variety of cards to suit different transactional needs. Its
range includes Credit Cards, Debit Cards and Prepaid cards. These cards offer you
convenience for financial transactions like cash, withdrawal, shopping and travel. These cards
are widely accepted both in India and abroad.
 CREDIT CARD
ICICI Bank Credit Cards give you the facility of cash, convenience and arrange of benefits,
anywhere in the world. These benefits range from lifetime free cards, Insurance benefits,
global emergency assistance service, discounts, utility payments, travel discounts and much more.

 DEBIT CARD
The ICICI Bank Debit Card is a revolutionary form of cash that allowscustomers
to access their bank account around the clock, around the world. The ICICI Bank Debit
Card can be used for shopping at more than3.5 Lakh merchants in India and 24 million merchants worldwide.

pg. 12
  TRAVEL CARD
ICICI Bank Travel Card. the Hassel free way to travel the world. Traveling with US Dollar,
Euro, Pound Sterling or Swiss Francs; Looking for security and convenience; take
ICICI Bank Travel Card. Issued in duplicate. Offers the Pin based security. Has the convenience of
usage of Credit or Debit card.

INVESTMENT PRODUCTS
Along with Deposit products and Loan offerings, ICICI Bank assists you to manage yits
finances by providing various i n v e s t m e n t o p t i o n s r a n g i n g f r o m I C I C I B a n k
T a x S a v i n g B o n d s t o E q u i t y Investments through Initial Public Offers and
Investment in Pure Gold. ICIC IBank facilitates following investment products:

•Government of India Bonds

•Investment in Mutual Funds
•Initial Public Offers by Corporate
•Investment in "Pure Gold"
•Foreign Exchange Services
•Senior Citizens Savings Scheme

TRADE SERVICES: ICICI Bank offers online remittances as w e l l a s online processing of

letters of credit and bank guarantees.
ASSET MANAGEMENT: Prudential ICICI Asset Management Company offers a wide
range of retail mutual fund products tailored to suit varied risk and maturity profiles.

CASH MANAGEMENT: ICICI Bank offers a complete Range Of highly customized solutions
for managing both the collections and payments requirements of clients by leveraging
technology. Daily customized transactions reports and real time web-enabled downloads,
provide on-tap information facilitating effective working capital management.

CORPORATE BANKING: ICICI Bank offers comprehensive and customized financial

solutions for its corporate clients, including rupee and foreign currency debts, working capital
credit, structured financing syndication and transaction banking products and services.

pg. 13
INTERNET BANKING: Internet banking is available to all ICICI Bank savings and deposit
account holders, credit card, demat and loan customers. Internet banking service offers
customers a world of convenience with services such as balance enquiry, transaction history,
account statement, bill payments, and fund transfers and accounts related service requests.

ATMS: With more than 2500 ATMs across the country, ICICI Bank has one of the largest ATM networks in
India.

PHONE BANKING: Phone banking offers 24*7 services across Liability, asset and investment
products to both retail and corporate customers.

NRI-BANKING: A gamut of services to take care of all NRI banking needs including deposits,
money transfers and private banking.

MONEY 2 INDIA: A complete range of online and offline money transfer solutions to send money
to India.

PROPERTY: For millions of home buyers across the country, ICICI Bank offers not
just great deals on home loans but also a wealth of expert advice. ICICI Bank offers
home search service which can help a customer identify the property of his choice based on his budget
and other requirements.

DEMAT ACCOUNTS: ICICI Bank’s demat services after unique features like e-constructions,
consolidation, digitally signed statements, mobile requests and corporate benefit tracking.

RURAL BANKING: Bank offers technology-based solutions, financial innovations and

multiple delivery channels to meet the financial needs of rural areas.

pg. 14
KNOWLEDGE MANAGEMENT IN ICICI

ICICI bank has initiated knowledge management strategy in the year 2000. Since
then it became an important operational initiative for gaining success in its development and
expansion. The knowledge management strategy also became robust in the bank through its
flexibility, innovative methods and effective scientific tools, which are well accepted by the
employees of the bank. When the knowledge management strategy was initiated the bank was
having only just 1200 staff. Because of the key important role adopted by knowledge
management group, the bank has become the second largest bank in India today.

The knowledge management initiative was started when the bank’s growth was
ignited with professional management methodologies. The bank adopted a strategy of linking
technology with infrastructure through corporate intranet, ICICI universe which provide a
platform for employee to habituate towards technological utilizations. Employees were
provided computer training and access to the personal files in HR through intranet. These
activities have encouraged the employees and to get acquainted with web based applications
and to overcome any fear towards technology. It also created interest in employees of the bank
to visit the portal more frequently.

The first initiative of the bank towards the knowledge management is floating the
idea of knowledge management as a simple routine activity but not as a project. This is created
by providing the staff facility of intranet through which they can participate in collaborative
activities and shares their knowledge with discussions and contributing towards knowledge
repository. In 2002 the ICICI bank had a reverse merger with its parent organization with
ICICI. Then the knowledge management team has restructured its strategy to suit for the new
corporate. The initial issues for the knowledge management team in ICICI bank were: bring
interaction and collaboration among the vast pool of employees, sharing of business
information related to clients deals and ideas among the employees, change management
through effective communication channels, addressing the problem of knowledge pool
iteration and training and skill development of employees towards knowledge management.
These issues were well tackled by creating zeal among staff towards acquiring, sharing and
disseminating knowledge. The creation of the knowledge management culture has educated
and made the employees to think positively and professionally towards external competitive
challenges of the business and to stimulate for getting new thoughts, ideas and ways of
working.

pg. 15
 The bank has developed the wise guy in the knowledge management intranet portal
which was easily accessible from the main staff portal for capturing and disseminating
knowledge of its employees. To develop the wise guy a group of people from different
departments such as HR, technology research and knowledge management were put together
and given the responsibility. Eventually it became a part of bank’s intranet. All interested
people were given login ids, passwords by the system administrator. To generate the awareness
of wise guy mails were sent to all the employees and banners were put on the intranet site. It
was introduced to create the culture of knowledge sharing and provided a frame work to bring
together the virtual team.

The both explicit and tacit knowledge in ICICI bank was captured and compiled.
The facet knowledge in the organization was procured by motivating the employees to share
and record their experiences, thinking competitive, commitment and deed. To sustain interest
of employees towards knowledge management the employee contribution in the wise guy were
acknowledged. The confidential sections in the wise guy are maintained by the administrator.
The privacy and security of confidential information for all sections were well protected. The
contents of the wise guy portal are discussions, queries, edited contributions, books, training
calendar, vendor, internal and external reports events, captured of line lectures and
presentations. In the wise guy portal the knowledge events were organized from time to time
and employees will interact with top management are experts. The web portal with a treasure
of knowledge is providing answers, standard templates, formats, agreements and guidelines.

The importance of scalability of the knowledge management portal cannot be under

estimated. It recorded one million logins in 2004, just in 2 years after the site was redesigned.
The number of staff using the knowledge management portal has increased abnormally on an
average about 10,000 users visit the site daily. More than 50 divisions in ICICI bank contribute
and publish their knowledge in the knowledge management portal. There are more than 25,000
individual items and about 1,500 daily searches for information. There are about 10,000
interacts to posting in the portal. These interactive sections include discussion forums, book
reviews and query boards, the rewards and recognition schemes, single point lessons, etc.

The document management system of provides a structural view of its content. It

provides the personalized content access to the specified users. The collaboration was improved
through theme specific interfaces. It contains centralized and distributed publishing

pg. 16
capabilities. The business groups can create their own mini domain through data driven
approaches. The sub modules contain a variety of sections.

The major contributions of knowledge management in ICICI bank are: It helped the
bank to create a culture of knowledge through creation of a common knowledge store in the
bank. The staff are identified in house expertise and sources of knowledge through trouble
shooting. It developed a sense of belonging and ownership among staff and improved
commitment. It provided good decision making ability to the employees. It created a means
and ways for up gradation of employee skills. It provided an opportunity for all employees to
interact with other departmental staff and improve other departmental cooperation. It provided
a platform for employee recognition for contribution of knowledge to the bank repository. In
addition to these benefits the company enjoyed a lot of intangible benefits through the
knowledge management.

The knowledge management program in the ICICI bank was not taken up as a top
management directive but it is a culture of employees working with the knowledge
management program. The employees associated with the knowledge management program
realized the value and benefits they get and proud to become a knowledge management
associate in the bank. The personnel associated with knowledge management are thinking that
their work place is not mere physical location, but it is a place for knowledge improvement and
professional development. The satisfied users of knowledge management support the system
through system handling behaviour such as knowledge sharing, self help, and collaboration.

In addition to the knowledge portal the ICICI bank had initiated several other
knowledge management practices. They are wise Wednesday, brown bag, daily dose, learning
matrices and the corporate information bank. As some of the senior people were hesitant to
share their knowledge through the web portal, the knowledge management team has invited
those people to share their facet knowledge through an informed manner. These people were
given importance and made them to share their experiences and ideas through informal
gatherings. The initiative is known as wise Wednesday and the bank has conducted more than
400 knowledge leader series in various topics covering finance internal business leadership and
strategy during the last 10 years. This initiative has helped the bank to popularize knowledge
management.

Another initiative of knowledge management in the bank is creation of zeal towards

learning across the groups. The employees in the corporate offices are invited to bring a

pg. 17
presentation on a particular subject along with their lunch to the web conferences and live web
casts. The users of knowledge management can participate from any location and share their
ideas, with these notable individuals. This has encouraged the staff to get self motivation
towards knowledge creation and sharing. Another important initiative of knowledge
management introduced in the bank is corporate learning. In this strategy the ability of the
employee to learn from teammates across the groups is encouraged. This has created a learning
environment in the bank through push mechanism and collaboration. This initiative is known
as the daily does which present the summary of items which are new in the banking business
and the portal. This daily does includes opinions, feature headlines, poles, customer
appreciations, happenings, newsletters and other updates of the events. By delivering this
information directly to the mail box the knowledge management team is able to disseminate
and distribute knowledge to the bank employees in the morning itself. This became an
important part of their work for all the employees associated with the knowledge management.
This daily does lend high profile to the knowledge management initiatives.

Another important initiative of knowledge management in the bank is news room,

in which the daily news headlines are published on the internal space of the bank. All
employees are able to refresh their knowledge through the news letter published by business
group media releases which provide the information on their computers. The one page reviews
on several topics, various expert opinions, on banking problem articles, training modules and
online research tools are provided through knowledge mailers. The knowledge management
team has created a query board which includes a repository of questions which were
frequentlyasked by their employees. This also includes the queries and answers related to the
banking operations. Through this query board the knowledge management team established an
online general discussions forum in which the employees can share their knowledge on
different domains through intranet. The query board serves as the fastest and reliable sources
for doubt clarification or work rule procedures, policies, technical know – how and many more
related to the working problems. In addition to these the knowledge management team offers
a general discussion forum on the intranet. So that the employees can share their ideas and
suggestions regarding business finance economy related topics and highly related operations
of the bank.

With all these knowledge management initiatives the employees are able to create
organizations intellectual capital. In ICICI bank knowledge management is adopted not just
like a technique or practice for the organization development and growth, but it is implemented

pg. 18
through its philosophy of change management in the people, processes for quality and continual
improvement. Every employee associated with the knowledge management in the bank felt
that it is an opportunity for them to develop themselves to excel in their day to day activity.
The culture in the bank has changed and it became a key to encourage the employee
participation for knowledge capital. The employees are well rewarded and recognized in the
bank and are provided with K- points for their contribution in knowledge through writing the
articles, uploading the documents, posting the queries, responding the queries, initiating the
discussions, rating the discussions etc.,. The people who spoke in the knowledge leader series
are given certificates signed by the CEO of their bank. The bank is having a well structured
knowledge management strategy and it is reviewed and monitored by top management
periodically (Deepu Prabhu (2006)).

pg. 19
COMPANY PROFILR OF STATE BANK OF INDIA

State Bank of India is the premier, largest commercial bank in the country, is well positioned
to capture growth in India’s dynamic banking market and is seen as a macro economic proxy
for the Indian economy. With a 17.00% market share for advances and a 17.78% market share
for deposits (2011) SBI has a very strong presence. SBI today is going through a momentous
phase of its knowledge management through technology and HRM. The 75 year old public
sector behemoth has been stirring out of its public sector legacy and moving with agility to
give the private and foreign banks a run for their money. The SBI is forging a head with cutting
edge technology and innovative practices and striving for achieving total customer experience.
The bank is looking at opportunities to grow nationally and internationally. The SBI has gone
beyond the usual domains of technology in a very aggressive manner. The Bank is involved
not only in the business development but also with care for the community and supports a range
of socio-economic, educational and health initiatives. Information Technology (IT) has
immense untapped potential in banking and strengthening of IT in banks could improve asset
liability management building up a related database on a real time basis to enhance the
forecasting of liquidity even at the branch level to enhance the risk management capabilities of
banks.

The Bank of Bengal, which later became the State Bank of India. State Bank of India with its
seven associate banks commands the largest banking resources in India.

pg. 20
Nationalization

The next significant milestone in Indian Banking happened in late 1960s when the then Indira
Gandhi government nationalizedon 19th July 1949, 14 major commercial Indian banks followed
by nationalisation of 6 more commercial Indian banks in 1980.

The stated reason for the nationalisation was more control of credit delivery. After this, until
1990s, the nationalized banks grew at a leisurely pace of around 4% also called as the Hindu
growth of the Indian economy.

After the amalgamation of New Bank of India with Punjab National Bank, currently there are
19 nationalized banks in India.

Liberalization-

In the early 1990’s the then Narasimha rao government embarked a policy of liberalization
and gave licences to a small number of private banks, which came to be known as New
generation tech-savvy banks, which included banks like ICICI and HDFC. This move along
with the rapid growth of the economy of India, kick started the banking sector in India, which
has seen rapid growth with strong contribution from all the sectors of banks, namely
Government banks, Private Banks and Foreign banks. However there had been a few hiccups
for these new banks with many either being taken over like Global Trust Bank while others
like Centurion Bank have found the going tough.

The next stage for the Indian Banking has been set up with the proposed relaxation in the
norms for Foreign Direct Investment, where all Foreign Investors in Banks may be given voting
rights which could exceed the present cap of 10%, at present it has gone up to 49% with some
restrictions.

The new policy shook the Banking sector in India completely. Bankers, till this time,
were used to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4) of functioning. The
new wave ushered in a modern outlook and tech-savvy methods of working for traditional
banks. All this led to the retail boom in India. People not just demanded more from their banks
but also received more.

pg. 21
CURRENT SCENARIO

Currently (2007), overall, banking in India is considered as fairly mature in terms of

supply, product range and reach-even though reach in rural India still remains a challenge for
the private sector and foreign banks. Even in terms of quality of assets and capital adequacy,
Indian banks are considered to have clean, strong and transparent balance sheets-as compared
to other banks in comparable economies in its region. The Reserve Bank of India is an
autonomous body, with minimal pressure from the government. The stated policy of the Bank
on the Indian Rupee is to manage volatility-without any stated exchange rate-and this has
mostly been true.

With the growth in the Indian economy expected to be strong for quite some time-
especially in its services sector, the demand for banking services-especially retail banking,
mortgages and investment services are expected to be strong. M&As, takeovers, asset sales and
much more action (as it is unraveling in China) will happen on this front in India.

In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in
Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been
allowed to hold more than 5% in a private sector bank since the RBI announced norms in 2005
that any stake exceeding 5% in the private sector banks would need to be vetted by them.

Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector banks (that
is with the Government of India holding a stake), 29 private banks (these do not have
government stake; they may be publicly listed and traded on stock exchanges) and 31 foreign
banks. They have a combined network of over 53,000 branches and 17,000 ATMs. According
to a report by ICRA Limited, a rating agency, the public sector banks hold over 75 percent of
total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5%
respectively.

pg. 22
KNOWLEDGE MANAGEMENT IN SBI

State Bank of India is the largest private bank in the country. Banks provides better service to
the customers. By using technology the banking services can easier than the previous system.
Customers can easily assess the facility 24x7. Banks provide the online banking, ATM, RTGS,
NEFT, EFT, EDI and any other more services provides for the customer satisfactions. In
today’s era SBI manage he knowledge management through the technology. The SBI with
cutting edge technology and innovative practices and striving for achieving total customer
experience. The bank is looking to grow nationally and internationally. The SBI has gone
beyond the usual domains of technology. The Bank is involved not only in the business
development but also with care for the community and supports a range of socio-economic,
educational and health initiatives. Enhance the risk management capabilities of banks. The
State Bank of India has adapted Information and Communication Technology (ICT) for
achieving the growth of the banks. The bank services had become more useful after
introduction of technology for knowledge management in banks. The most common fields of
knowledge management applications in banks are risk management, customer relationship
management, marketing management, performance measurement etc. Knowledge management
helps create, acquire, share and utilization of knowledge in banks. Knowledge management
motivates the employees for more contribution to the organization. By using the technology
not only the banks benefits but also the customers are benefited.

Statement of the Problem

Knowledge management has been recognized as a critical element in the management of any
organization. However, most decisions in the banking sector are knowledge-based.
Consequently, various studies have been conducted on knowledge management in the banking
sector as well as in other industries. But Most of these studies have been carried out in
developed nations or different industries and as such the findings may not be applicable to the
context of this study. However, Asava (2009) studied Knowledge Management for competitive
advantage with in private banks in India. The later study was based on a sample of 2 banks and
focused on the application of knowledge management as a tool to gain competitive advantage.
None of these studies looked into knowledge management practices in Public sector and Private
sector banks. This study sought to determine the knowledge management practices in SBI and
ICICI bank.

pg. 23
OJECTIVES OF THE STUDY
 To assess the role of Knowledge Management in banking sector.
 To know about Knowledge Management and its application.
 To know about the banking scenario in various regions before and after implementation
of Knowledge Management
 To know about the impact of knowledge Management in reducing the cost as customer
satisfaction.
 To know the advantages of Knowledge Management for banks as well as their
customers.
 To know how the banks can achieve good Knowledge Management practices.
 To analysis the role of information technology and its relevancy in Indian banks in the
recent era.
 To measure the performance of the each bank group towards the elements of IT.

SCOPE OF THE STUDY

The present study focuses on “knowledge management practices in Indian banking industry
“The study is conducted in ICICI and SBI banks at Rayalaseema region in Andhrapradesh. The
present scope of the study is limited to the ICICI and SBI banks at rayalaseema region only but
the future scope of the study can be expanded to the other region of Andhrapradesh or other
state also. Other banks can also be included for further research. A comparison between other
banks in different regions can also be studied.

pg. 24
NEED FOR THE STUDY

The information technology plays a vital role in the banking sector. Now a day’s banking sector
emphasis the satisfaction of customers’ needs. Knowledge management is necessary for
banking sector for the improvement in the performance. In India both private and public sector
banks can used the application of knowledge management. The ultimate objectives of
knowledge management in banks should increasing the satisfaction of customers through
provide the quality services.

LIMITATIONS OF THE STUDY

Research studies of this nature could not be carried out without any limitation . The researcher
had a restricted access to the records of SBI and ICICI banks. The present study needs some
confidential information regarding knowledge management practices implemented in two
selected banks. Another important limitation with research is that the cities from which data is
collected have been selected as per the convenience and therefore some of the major cities were
not included in the sample space due to time and resource constraints. The sample selection
was done very carefully to make the sample representative of the whole population.

pg. 25
 CHAPTER 2

RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the problem. It may be understood has
a science of studying how research is done scientifically. In it we study the various steps that
all generally adopted by a researcher in studying his research problem along with the logic
behind them.

Research Design

Sampling Procedure

The sampling method choosed for this study is stratified random sampling technique and
convenience sampling method. The size of sample is 40 of total employees in two selected
banks.

Data Collection

Primary Data

In this research the Primary data will be collected by distributing questionnaire to the
employees of two selected banks. Data source is primary, which include employees of the two
banks.

Secondary Data

In this research the secondary data will be collected from the company records, Books,
journals, research papers, and websites should be used to collect the information about
knowledge management practices in SBI and ICICI banks.

Data Collection Instrument

Questionnaire method should adopt to get the responses from the respondents. Well structured
Questionnaires were personally should be distributed among the sample.

pg. 26
 CHAPTER 3

LITERATURE REVIEW

Cader et al(2013) in their article “ Knowledge Management in and Conventional banks in the
United Arab Emirates” stated that “the recent global financial crisis has presented new
challenges to banks: some banks will thrive and some will barely survive ,while other will
under. The banks that survive will be those that have full and accurate knowledge of their
customer‟s profile”.

Ali and Ahmad(2006) articulated “Knowledge is the main element that inspired the knowledge
management initiatives in any sector. The knowledge-based era forced the banking institutions,
to put knowledge as one of the main competitive advantages. The application of knowledge
management in the banking industry does not really differ from other industries but the
increasing complexity of bank‟s environment makes its implementation more difficult. Banks
have realized the crucial role of knowledge management in gaining an edge in this competitive
field, but there have been laggards in the adoption of knowledge management usually due to
wait and see attitude of what will be the true benefits and pitfalls from early adopters”.

Alton Chua (2010)studied Knowledge management of Singapore in Art education and pointed
out that Knowledge types in Art education in Singapore were a blend of different knowledge
domains. Alton Chua (2010)studied Knowledge management of Singapore in Art education
and pointed out that Knowledge types in Art education in Singapore were a blend of different
knowledge domains.

Chawla and Saxena (2012) pointed that Knowledge management is essential to manage the
knowledge flow of the institution. Kidwell et al (2000) said that An institutionwide approach
to knowledge management can lead to exponential improvements in sharing Knowledge.

Cranfield &Taylor (2008) identified that Knowledge Management (KM) has increased in
popularity and credibility as a management tool, as well as a research discipline, over the past
decade. There have been concerns about whether KM is simply a fad, and researchers and
academics have debated its faddish like characteristics.

Santoro and Gopalakrishnan (2000) indicated, a KM program operating in a bureaucratic

organization will be more successful if it seeks to institutionalize knowledge through formal

pg. 27
organizational processes. On the other hand, a KM program serving a learning organization
may find more success with informal knowledge transfer methods.

Kennedy (1998)University knowledge needs differ from corporate needs in that Banks seek to
share scholarly knowledge for the good of society whereas corporations seek a profit. However,
it also is important to note that Banks have begun to manage knowledge as intellectual property
to be sold or bartered, as well as given away.

Alavi and Leidner (2001) explored that IS researchers have begun promoting a class of
information systems, referred to as knowledge management systems and they also viewed that
the objectives of their study were, KMS was to support creation, transfer, and application
knowledge in organizations.

Shanhong (2000) viewed that in this knowledge era, the library would be a treasurehouse of
knowledge, participate in knowledge innovation, and become an important link in the
knowledge innovation chain and she also added that in the 21st century, the library would
inevitably face the new subject of knowledge management.

Srivastava and Saxena (2002) attempted to access the role of KM in the role of KM in the field
of library and information science.

Gupta and McDaniel, (2002) argue that knowledge is referred to as an expensive commodity,
which, if managed properly, is a major asset to the company. Knowledge is a complex and fluid
concept. It can be either explicit or tacit in nature. Explicit knowledge can be easily articulated
and transferred to others. In contrast, tacit knowledge, which is personal knowledge residing
in individuals' heads, is very difficult to articulate, codify and communicate.

Drucker (2004) indicates that nowadays society is knowledge based society and argues that the
knowledge society has to be highly specialized to be productive and need to apply two new
requirements: 1. Knowledge workers work in teams; and 2. Knowledge workers have to have
access to an organization which, in most cases, means that knowledge workers have to be
employees of an organization. The conclusion of this study is that, there are social problems,
the rise of knowledge workers and the emergence of the knowledge society will pose any
number of new social problems and new social challenges which will occupy us for decades to
come.

(Adams & Lamont, 2003) argue that, the role of knowledge management systems to create
competitive advantage by making it difficult to develop and maintain, because of rapid

pg. 28
technological developments, and the ability of competitors to watch and tradition of the
organization quickly and therefore, the organization must blending resources, competencies
and capabilities that they possess, and continually learns how to use this combination to
develop and maintain competitive advantage. According to the study, knowledge management
systems alone can not find and maintain competitive advantage and the role of knowledge
management systems highlights through coming with the rest of the resources and skills that
belong to the organization and study suggested model shows how the Organization can obtain
a competitive advantage and maintain, this model consists of the following elements: *
Knowledge management systems that assist in the acquisition, storage, deployment, retrieval,
and knowledge management. * Information and knowledge are collected and disposed of
through knowledge management systems, which are available to members of the organization
to facilitate the development and the invention of goods and services and operations. * Material
and financial resources, human and organizational owned by the organization, affecting the
organization's ability to benefit from the knowledge. * Internal processes such as: strategic
planning, knowledge management; by which transfer information, knowledge and resources
owned by the Organization to undesirable results. * Career system through which to improve
the level of goods, services, processes and the development of new goods and services. *
Permanent competitive advantage, which is the outcome of interaction between the above
elements, and represent the organization's ability to achieve the level of performance is higher
than the average obtained by competitors in the same industry.

Kalling, (2003) study aims to deal with the issue of converting knowledge into improved
performance, to improve the understanding of knowledge management. A model linking
knowledge with performance is presented. Managing knowledge so as to improve performance
is less well discussed. In many of the discussed approaches, there is, evidently, an assumption
that there are few obstacles to the use or capitalization of knowledge.

pg. 29
(Feng et al., 2004) investigated to clarify the effect of the development of a knowledge
management system for the organization's performance by comparing the performance of
organizations that have adopted knowledge management systems with those that had not
developed systems for knowledge management. Results showed that organizations that adopt
knowledge management systems achieved a reduction in administrative costs and an increase
in productivity during the second year of adopting knowledge management systems, and using
the profit and cost ratios indicate the presence of important differences, because the financial
performance of organizations that do not embrace the knowledge management systems fall
with the passage of time, while it remains steadfast to organizations that adopt knowledge
management systems.

pg. 30
 CHAPTER 4

DATA ALALYSIS

1) What do you think of Knowledge Management?

a) Something they are already doing but not under the same name.
b) It is just a management fad.
c) It is the strategic part of their business.
d) Something that could be beneficial for the organization.

something they
are already doing
but not under the
something that same name
could be beneficial 12%
for the
organization
38% it is just a
management fad
20%

it is the strategic
part of their
business
30%

INTERPRETATION

The above Figure indicates that 38% of the people says that it is something that could be
beneficial for the organization and 30 % says that it is the strategic part of their business.

pg. 31
2) What is the current stage of Knowledge management in your bank?

a) Not in existence at all

b) Nascent stage
c) Introduction stage
d) Growth stage

not in existencenascent
at stage
all 8%
0%

introduction stage
26%

growth stage
66%

INTERPRETATION

The above figure indicates that 66% of the banks are on growth stage and 26% of the banks are
on introduction stage.

pg. 32
3) How much time it takes for an employee to get the relevant Knowledge Management in
your bank?

a) A few minutes
b) A few days
c) A few hours
d) Week or more

week or more a few minutes

13% 12%

a few days
25%

a few hours
50%

INTERPRETATION

The above Figure Indicates that 50% of the bank employee take few hours and 25% of the
employee take few days to get the relevant knowledge document in their bank.

pg. 33
4) Which is the biggest cultural barrier in Knowledge Management in your bank?

a) Lack of participation
b) Not willing to share knowledge
c) Lack of trust
d) Lack of reward / recognition for knowledge sharing

lack of reward/
recognition for lack of
knowledge sharing participation
20% 25%

lack of trust
18%

not willing to share

knowledge
37%

INTERPRETATION

The above Figure Indicates that 37% of the bank face not willing to share knowledge and and
25% of the bank face lack of participation.

pg. 34
5) Which technologies have you implemented in your bank?

a) Internet
b) Data warehousing
c) Intranet
d) Knowledge management software

knowledgemanage
ment sofware internet
25% 25%

data warehousing
12%

intranet
38%

INTERPRETATION

The above Figure indicates that 38% bank have implemented intranet 25% of the bank have
implemented internet and 25% of the bank have implemented knowledge management
software in their banks.

pg. 35
6) What are the problem face by you in using IT Knowledge Management?

a) Lack of training
b) System too much complicated
c) Lack of identifying the proper IT tool
d) Lack of time to learn

COLUMN1
lack of time to
learn
23% lack of training
29%

lack of identifying
the proper IT tool
4%

system too
much
complicated
44%

INETRPRETATION

The above figure indicates that 44% of the problem of system too much complicated and 29%
face the problem of lack of training while using IT for Knowledg

pg. 36
7) There is a special unit or department accountable for knowledge Management

Selected Banks Yes NO Total

SBI 12 8 20
ICICI 15 5 20
Total 27 13 40

25

20

15

10

0
SBI ICICI

YES NO

INTERPRETATION

from the above figure: 1 67% of the employees are accepted that there is a special unit or
department accountable for knowledge management and 33 % are not accepted in the two
selected banks.

pg. 37
8) Is implementation of KM practices like special budget, KM Strategies for retention benefited
to employees?

Selected banks Satisfied unsatisfied uncertain Total

SBI 10 8 2 20
ICICI 13 4 3 20
Total 23 12 5 40

uncertain
13%

unsatisfied
30% satisfied
57%

INTERPRETATION

From the above figure 57% of the employees are satisfied that there is a implementation of
KM practices like special . KM strategies fro retention benefited to employee and 38% are not
satisfied and 5% are uncertain in the two selected bank.

pg. 38
9) Is implementation of Information technology relevant on the knowledge management
practices?

Selected bank Relevant Non Relevant Neutral Total

SBI 12 5 3 20
ICICI 13 5 2 20
TOTAL 25 10 5 40

neutral
4%

non relevant
27%

Relevant
69%

INTERPRETATION

From the above figure 69% of the employee are relevant that there are is a implementation of
information technology relevant on the knowledge management practices 27% of the employee
and are not relevant and 4% are neutral in two selected bank.

pg. 39
10) Modes of Sharing and Distributing Knowledge in two selected banks

Modes Relevant Non Relevant Neutral Total

On the job Training 10 6 4 20
Job rotation 8 11 1 20
One – one meeting 11 7 2 20
Video conference 12 5 3 20

14

12

10

0
on the job training job rotaion one- one meeting video conference

relevent non relevant neutral

INTERPRETATION

From the above Figure 50% of the employee are relevant that there are mode of sharing
distributing knowledge management practices 30% of the employee are not relevant and 20 5
of the employee are neutral in the two selected bank.

pg. 40
 CHAPTER 5

CONCLUSIONS

This paper deals with the knowledge management initiatives adopted during the last decade in
a private sector bank namely, ICICI bank and its performance and growth. The knowledge
management is basically meant for utilizing the knowledge within the organization through
acquiring, storing, and sharing for problem solving strategic planning and integrating with
effective decision making. Realizing the importance of Knowledge Management the ICICI
bank has started implementing it since 2002. The various strategies of integrating IT and ICT
with knowledge acquisition and sharing made the bank to provide a successful story for other
commercial banks to follow. They have adopted various, management tools such as developing
a KM Portal (Wise Guy) and implementing the other initiatives such as brown bag, wise
Wednesdays, corporate learning, dairy dose, developing query boards, organizing seminars,
encouraging employees etc,. The Knowledge management initiatives in ICICI bank made a
tremendous impact on the performance of the bank in various operational parameters such as
deposits, current deposits, savings bank deposits, CASA deposits, share of CASA percentage,
advances, investments, working funds, total expenses, interest expenses, staff expenses, other
expenses, total income, interest income, other income, gross profit, provisions and
contingences, net profit, gross NPA, net NPA, staff strength, number of branches, the ratio of
non – interest of income to total income, the ratio of spread to average working fund, the ratio
of establishment expenses to average working fund, the ratio of other expenses to average
working fund, the ratio of gross profit to average working fund, return on assets, return on
average assets, total business, business per employee, business per branch, net profit per
employee, gross profit per employee, gross profit per branch, net profit per branch. The
information on these parameters is analysed through computing annualized compound growth
rates and plating the trend curves for the period 2002-2012. These 32 parameters are grouped
into seven factors namely, Deposits, Funds, Expenses, Income and Profits, Assets, Business
Parameters and Performance Ratios. From the analysis it is observed that the performance
parameters have recorded an increasing trend over the period 20022012 in spite of several
challenges the bank has been encountered due to various factors like global recession, employ
iteration. The ICICI bank is one of the few private sector banks which are having sound
financial stability during the world economic crisis period 2008-2010. The implementation of

pg. 41
Knowledge management strategy at ICICI bank is providing lot of insights for other
commercial banks to deviate from their traditional methods of face to face knowledge sharing
and documentation systems. It is a prominent consideration now for all commercial banks to
adapt effective and efficient Knowledge management in order to improve a customer
satisfaction and to sustain in the present day competitive banking environment.

pg. 42
FINDINGS

As regards knowledge management practices, the most relevant knowledge

creation/conversion process was socialization (conversion of tacit knowledge to new tacit
knowledge through social interaction and shared experience among organizational members
e.g. apprenticeship) and internalization (creation of new tacit knowledge from explicit
knowledge e.g. through learning and understanding resulting from reading or discussion). On-
the –job training and teamwork were the leading modes of knowledge development. The most
relevant mode of knowledge retention was through best practices and also the use of document
management systems and employee retention strategies. On-the-job training was also was the
most relevant 40 mode of sharing and distributing knowledge as well as the use of e-mails,
telephones, intranet, job rotation and one-to-one meeting. The study found that the majority of
the respondents were conversant with the term knowledge management and that most of the
banks did not have a knowledge management strategy in place. Besides, most of the banks did
not have a special unit or department a management accountable for knowledge management.

pg. 43
RECOMMENDATIONS

This study found that the state of knowledge management is still at the infancy level and is yet
to be formally entrenched as part of corporate strategy. The researcher therefore recommends
that future research study may be conducted to assess the general state of knowledge
management in another economic sector, industry or across various industries India. Further
research could be done to determine the factors influencing the adoption of knowledge
management in the banking sector

pg. 44
SUGGESTIONS

• Banks must be able to aware the benefits of reducing the costs from technology based services
to their customers as the entire institution of banking has been based on customers trust.

• Proper arrangement of IT and banking operations, IR and HRM, IT and organization structure
is important for the benefits of KM implementation in banking.

• The successfully implement of KM measures in SBI, the knowledge must be recognized by

top management by improving internal process, customer services and products and by creating
a better environment for employees.

• KM should be on adopting and understanding the knowledge about customers and their needs.

• The problems in effective KM process are mostly related to human behavior aspects. Hence
to activate KM process bank has to focus knowledge wealth, effective communication,
participative management, innovative

attitude and professionalism.

• Available service to the users on software related problems bank may consider establishing
many help centers for

providing necessary guidance to branches.

• The majority of employees that technology and KM helps in increased productivity whereas
certain factors like

lack of coordination for work, delays in up-gradation etc. The management may consider these
factors and made appropriate strategies.

• Feedback from the customers on regular basis on various services may help bank to make
feasible modification.

pg. 45
BIBLOGRAPHY

Scribe

http:// www.researchgate.net.../301476759 a comparative study of knowledge management in

banking sector

pg. 46