Industry Internship Project Report On

INDUSIND BANK LTD.

Submitted to:

Shanti Business School, Ahmedabad

PGDM Trimester V & VI (Batch 2010-12)

Continuous Evaluation in PGDM

Submitted By: PARTH MALHOTRA 1011012039

PREFACE
This report is written in accordance to the internship program for the fulfillment of the academic requirements of PGDM. The report is based on the work of 3 months in IndusInd Bank Limited. This report is designed to provide a comprehensive introduction to the bank and its work at different levels as well as the responsibilities held by me during the internship program. This is a final internship report which consists of the information of IndusInd Bank Ltd. and the experiences and the learning gained during the internship program. All the parts in the report have been written in English as it is the most understandable formal language. The report consists of details regarding the industry, the organization, its products and services, PEST analysis, Porters 5 forces relating to the industry, personal experiences, organizational structure and the functions. The report has been made by an experience of 3 months in the organization. I was working as the Customer Service Executive at the Gandhinagar branch of the bank.

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ACKNOWLEDGEMENT
It is not enough that we lay the super structure of the building, but the most important part is the base of the building. Similarly, this project would be incomplete without mentioning the real people who have guided, supported, and helped me realize the corporate culture through which the long cherished dream of implementing a quality program in this esteemed organization could be realized. First of all, I would like to express my gratitude to Mr. Bhavin Gadhavi, Manager Customer Service and Operations, IndusInd Bank Ltd. (Gandhinagar Branch), who supported and guided me throughout the project and gave me all necessary facilities and inputs to make this project a successful one and also made me as energetic and enthusiastic as him. I would also like to thank Mr, Ranjan Parmar, Customer Service Manager, IndusInd Bank Ltd. (Gandhinagar Branch), who provided me enough training and skills to understand the role of an individual in the organization. I would laos like to thank the Placement Team of Shanti Business School, Ahmedabad for giving me an opportunity of learning and a good experience in the internship program, Prof. Manish Parihar, Asst Professor, SBS and of course my faculty guide Mr. Amit Saraswat, the guiding source of light in this vast journey of learning experience while doing the project that really made me learn the real application and management principles of the project. His continuous advice has really transformed me into a much mature personality. And last but not the least; I would like to thank all the staffs of IndusInd Bank Ltd. (Gandhinagar Branch), for helping me to complete this project successfully.

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TABLE OF CONTENTS
I. II. III. IV. V. VI. VII. VIII. IX. X. XI. XII. XIII. XIV. XV. Preface Acknowledgement Executive summary Genesis!!! Macro economic data Industry overview PEST analysis/Porters 5 forces About the organization Organizations structure Departments and their functions Job description Conclusion Recommendations Appendix References

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EXECUTIVE SUMMARY
This report is about my internship program with IndusInd Bank Ltd. In this comprehensive report, I have discussed about every major aspect of the bank, which I observed and perceived during my internship program. In this report you will find the details about the bank right from its incorporation to the current position. Along with it, the processes, policies and procedures of the bank are also discussed in detail. As the main purpose of internship is to learn by working in practical environment and to apply the knowledge acquired during the studies in a real world scenario in order to tackle the problems using the knowledge and skill learned during the academic process. In this report the detailed analysis of the organization has been done and the financial, technical, managerial and strategic aspects have been evaluated to analyze the current position of the organization. As I have a good experience of my own in the organization, this report also contains my perceptions about the employees satisfaction, motivation level and the working environment of the organization.

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GENESIS!!!
The word bank was borrowed in Middle English from Middle French banque, from Old Italian banca, from Old High German banc, bank "bench, counter". Benches were used as desks or exchange counters during the Renaissance by Florentine bankers, who used to make their transactions atop desks covered by green tablecloths. Another possible origin of the word is from the Sanskrit words ( ) Baya (Expense) and Onka (Calculation) =BayaOnka. This word still survives in Bangla, which is one of the Sanskrit's child languages. + = . Such expense calculations were the biggest part of mathematical treaties written by Indian mathematicians as early as 500 B.C. A bank is a financial institution and a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly or through capital markets. A bank connects customers that have capital deficits to customers with capital surpluses. IndusInd Bank derives its name and inspiration from the Indus Valley civilization - a culture described by National Geographic as 'one of the greatest of the ancient world' combining a spirit of innovation with sound business and trade practices. Mr. Srichand P. Hinduja, a leading Non-Resident Indian businessman and head of the Hinduja Group, conceived the vision of IndusInd Bank - the first of the new-generation private banks in India - and through collections and contributions from the NRI community towards India's economic and social development, brought our Bank into being. The Bank, formally inaugurated in April 1994 by Dr. Manmohan Singh, Honorable Prime Minister of India who was then the countrys Finance Minister, started with a capital base of Rs.1,000 million (USD 32 million, at the prevailing exchange rate), of which Rs.600 million was raised through private placement from Indian Residents while the balance Rs.400 million (USD 13 million) was contributed by Non-Resident Indians. Banking in India originated in the last decades of the 18th century. The first banks were The General Bank of India, which started in 1786, and Bank of Hindustan, which started in 1790; both are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras, all three of which were established under charters from the British East India Company. For many years the Presidency banks acted as quasi-central banks, as did their successors. The three banks merged in 1921 to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India in 1955. The oldest bank still in existence is Monte dei Paschi di Siena, headquartered in Siena, Italy, which has been operating continuously since 1472.

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MACRO-ECONOMIC DATA
Assets of the largest 1,000 banks in the world grew by 6.8% in the 2008/2009 financial year to a record $96.4 trillion while profits declined by 85% to $115bn. Growth in assets in adverse market conditions was largely a result of recapitalization. EU banks held the largest share of the total, 56% in 2008/2009, down from 61% in the previous year. Asian banks' share increased from 12% to 14% during the year, while the share of US banks increased from 11% to 13%. Fee revenue generated by global investment banking totaled $66.3bn in 2009, up 12% on the previous year. The United States has the most banks in the world in terms of institutions (7,085 at the end of 2008) and possibly branches (82,000). This is an indicator of the geography and regulatory structure of the USA, resulting in a large number of small to medium-sized institutions in its banking system. As of Nov 2009, China's top 4 banks have in excess of 67,000 branches (ICBC: 18000+, BOC: 12000+, CCB: 13000+, ABC: 24000+) with an additional 140 smaller banks with an undetermined number of branches. Japan had 129 banks and 12,000 branches. In 2004, Germany, France, and Italy each had more than 30,000 branchesmore than double the 15,000 branches in the UK. Below is a list of the largest banks in the world as of December 31, 2011. The top 10 banks have about $24.7 trillion in combined assets. Two of the Top 5 largest banks are Japanese institutions. Deutsche Bank is currently the largest bank in the world in terms of total assets. The Bank employs over 100,000 people and serves over 20 million customers through a network of about 3,100 branches worldwide. With a market share of 21%, Deutsche Bank is the largest foreign exchange dealer in the world. Mitsubishi UFJ Financial Group (MUFG) is the second largest bank in the world by assets. The company's main subsidiaries include: Bank of Tokyo-Mitsubishi UFJ, Mitsubishi UFJ Trust and Banking, Mitsubishi UFJ Securities and UnionBanCal Corporation. Rank 1 2 3 4 5 6 7 8 Deutsche Bank Mitsubishi UFJ Financial Group HSBC Holdings BNP Paribas Japan Post Bank Crdit Agricole Group Barclays PLC Industrial & Commercial Bank of China
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Bank

Country Germany Japan UK France Japan France UK China

Assets ($b) 2,802.71 2,741.52 2,555.58 2,545.34 2,542.77 2,448.61 2,430.74 2,400.08

9 10 11 12 13 14 15 16 17 18 19 20

Royal Bank of Scotland Group JPMorgan Chase & Co. Bank of America Mizuho Financial Group Citigroup Inc China Construction Bank Agricultural Bank of China Bank of China Sumitomo Mitsui Financial Group ING Group Banco Santander Societe Generale

UK USA USA Japan USA China China China Japan Netherlands Spain France

2,342.66 2,265.79 2,129.05 2,096.89 1,874.91 1,867.82 1,838.74 1,829.36 1,805.09 1,656.74 1,620.92 1,530.09

Note: The foreign exchange rate on December 30, 2011, has been used for translation. Top Banks in the World as of June 2011 The following list shows the largest and best banks in the World as of June 30, 2011. The top 10 banks have over $24.4 trillion in combined assets and top 50 banks about $67 trillion. Three of the Top 7 largest banks are UK institutions. For the third year in a row, BNP Paribas is the largest bank in the world. In 2008, it was the fourth after Royal Bank of Scotland, Barclays and Deutsche Bank. BNP Paribas was created through the merger of Banque Nationale de Paris (BNP) and Paribas in 2000. Rank 1 2 3 BNP Paribas HSBC Holdings Deutsche Bank Bank Country France UK Germany Total Assets ($b) 2,792.10 2,690.90 2,681.30

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4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

Mitsubishi UFJ Financial Group Barclays PLC Japan Post Bank Royal Bank of Scotland Group Industrial & Commercial Bank of China Bank of America JPMorgan Chase & Co. Credit Agricole SA Citigroup Mizuho Financial Group China Construction Bank ING Group Banco Santander Bank of China Agricultural Bank of China Sumitomo Mitsui Financial Group Societe Generale Lloyds Banking Group Groupe BPCE UBS

Japan UK Japan UK China US US France US Japan China Netherlands Spain China China Japan France UK France Switzerland

2,479.50 2,395.30 2,325.77 2,319.90 2,304.40 2,264.40 2,246.80 2,236.80 1,956.60 1,942.60 1,818.40 1,798.60 1,785.80 1,776.47 1,773.11 1,652.82 1,590.72 1,570.59 1,532.53 1,469.46

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24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43

UniCredit S.p.A. Wells Fargo Credit Suisse Group Commerzbank Rabobank Group Intesa Sanpaolo Nordea Bank Norinchukin Bank Morgan Stanley BBVA (Banco Bilbao Vizcaya Argentaria) China Development Bank Royal Bank of Canada Dexia National Australia Bank Toronto-Dominion Bank (TD Bank Group) Natixis CM10-CIC Group Bank of Communications Westpac KfW Bankengruppe

Italy US Switzerland Germany Netherlands Italy Sweden Japan US Spain China Canada Belgium Australia Canada France France China Australia Germany

1,331.88 1,259.73 1,160.72 991.085 963.910 934.576 859.851 839.80 830.747 824.389 775.20 765.396 750.521 708.360 696.503 656.665 688.158 672.583 647.538 646.807

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44 45 46 47 48 49 50 51 52 53 54 55 56 57

Commonwealth Bank of Australia Danske Bank Bank of Nova Scotia ANZ Banking Group Banque Federative du Credit Mutuel (BCFM) DZ Bank Group Standard Chartered Landesbank Baden-Wuerttemberg (LBBW) Bank of Montreal KBC Group Nomura Holdings Banco Bradesco Bayerische Landesbank China Merchants Bank

Australia Denmark Canada Australia France Germany UK Germany Canada Belgium Japan Brazil Germany China

645.288 607.573 594.750 574.362 566.252 555.695 516.540 514.315 477.471 453.575 443.366 437.892 431.107 408.898

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INDUSTRY OVERVIEW
In recent years, the banking industry around the world has been undergoing a rapid transformation. In India also, the wave of deregulation of early 1990s has created heightened competition and greater risk for banks and other financial intermediaries. The cross-border flows and entry of new players and products have forced banks to adjust the product-mix and undertake rapid changes in their processes and operations to remain competitive. The deepening of technology has facilitated better tracking and fulfillment of commitments, multiple delivery channels for customers and faster resolution of miscoordinations. Unlike in the past, the banks today are market driven and market responsive. The top concern in the mind of every bank's CEO is increasing or at least maintaining the market share in every line of business against the backdrop of heightened competition. With the entry of new players and multiple channels, customers (both corporate and retail) have become more discerning and less "loyal" to banks. This makes it imperative that banks provide best possible products and services to ensure customer satisfaction. To address the challenge of retention of customers, there have been active efforts in the banking circles to switch over to customer-centric business model. The success of such a model depends upon the approach adopted by banks with respect to customer data management and customer relationship management. Over the years, Indian banks have expanded to cover a large geographic & functional area to meet the developmental needs. They have been managing a world of information about customers - their profiles, location, etc. They have a close relationship with their customers and a good knowledge of their needs, requirements and cash positions. Though this offers them a unique advantage, they face a fundamental problem. During the period of planned economic development, the bank products were bought in India and not sold. What our banks, especially those in the public sector lack are the marketing attitude. Marketing is a customer-oriented operation. What is needed is the effort on their part to improve their service image and exploit their large customer information base effectively to communicate product availability. Achieving customer focus requires leveraging existing customer information to gain a deeper insight into the relationship a customer has with the institution, and improving customer service-related processes so that the services are quick, error free and convenient for the customers.

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Furthermore, banks need to have very strong in-house research and market intelligence units in order to face the future challenges of competition, especially customer retention. Marketing is a question of demand (customers) and supply (financial products & services, customer services through various delivery channels). Both demand and supply have to be understood in the context of geographic locations and competitor analysis to undertake focused marketing (advertising) efforts. Focusing on region-specific campaigns rather than national media campaigns would be a better strategy for a diverse country like India. Customer-centricity also implies increasing investment in technology. Throughout much of the last decade, banks world-over have re-engineered their organizations to improve efficiency and move customers to lower cost, automated channels, such as ATMs and online banking. As is proved by the experience, banks are now realizing that one of their best assets for building profitable customer relationships especially in a developing country like India is the branch-branches are in fact a key channel for customer retention and profit growth in rural and semi-urban set up. However, to maximize the value of this resource, our banks need to transform their branches from transaction processing centers into customer-centric service centers. This transformation would help them achieve bottom line business benefits by retaining the most profitable customers. Branches could also be used to inform and educate customers about other, more efficient channels, to advise on and sell new financial instruments like consumer loans, insurance products, mutual fund products, etc. There is a growing realization among Indian banks that it no longer pays to have a "transaction-based" operating model. There are active efforts to develop a relationshiporiented model of operations focusing on customer-centric services. The biggest challenge our banks face today is to establish customer intimacy without which all other efforts towards operational excellence are meaningless. The banks need to ensure through their services that the customers come back to them. This is because a major chunk of income for most of the banks comes from existing customers, rather than from new customers.

Customer relationship management (CRM) solutions, if implemented and integrated correctly, can help significantly in improving customer satisfaction levels. Data warehousing can help in providing better transaction experiences for customers over different transaction channels. This is because data warehousing helps bring all the transactions coming from different channels under the same roof. Data mining helps banks analyse and measure customer transaction patterns and behavior. This can help a lot in improving service levels.

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It must be noted, however, that customer-centric banking also involves many risks. The banking industry world over is being thrust into a wild new world of privacy controversy. The banks need to set up serious governance systems for privacy risk management. It must be remembered that customer privacy issues threaten to compromise the use of information technology which is at the very center of e-commerce and customer relationship management - two areas which are crucial for banks' future. The critical issue for banks is that they will not be able to safeguard customer privacy completely without undermining the most exciting innovations in banking. These innovations promise huge benefits, both for customers and providers. But to capture them, financial services companies and their customers will have to make some critical tradeoffs. When the stakes are so high, nothing can be left to chance, which is why banks must immediately begin developing comprehensive approaches to the privacy issue. The customer centric business models based on the applications of information technology are sustainable only if the banks protect client confidentiality in the process - which is the basic foundation of banking business.

EVOLUTION OF BANKING IN INDIA

Banking in India has its origin as early as the Vedic period. It is believed that the transition from money lending to banking must have occurred even before Manu, the great Hindu Jurist, who has devoted a section of his work to deposits and advances and laid down rules relating to rates of interest. During the Mogul period, the indigenous bankers played a very important role in lending money and financing foreign trade and commerce. During the days of the East India Company, it was the turn of the agency houses to carry on the banking business. The General Bank of India was the first Joint Stock Bank to be established in the year 1786. The others which followed were the Bank of Hindustan and the Bengal Bank. The Bank of Hindustan is reported to have continued till 1906 while the other two failed in the meantime. In the first half of the 19th century the East India Company established three banks; the Bank of Bengal in 1809, the Bank of Bombay in 1840 and the Bank of Madras in 1843. These three banks also known as Presidency Banks were independent units and functioned well. These three banks were amalgamated in 1920 and a new bank, the Imperial Bank of India was established on 27th January 1921. With the passing of the State Bank of India Act in 1955 the
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undertaking of the Imperial Bank of India was taken over by the newly constituted State Bank of India. The Reserve Bank which is the Central Bank was created in 1935 by passing Reserve Bank of India Act 1934. In the wake of the Swadeshi Movement, a number of banks with Indian management were established in the country namely, Punjab National Bank Ltd, Bank of India Ltd, Canara Bank Ltd, Indian Bank Ltd, the Bank of Baroda Ltd, the Central Bank of India Ltd. On July 19, 1969, 14 major banks of the country were nationalized and in 15th April 1980 six more commercial private sector banks were also taken over by the government. The Indian banking can be broadly categorized into nationalized (government owned), private banks and specialized banking institutions. The Reserve Bank of India acts a centralized body monitoring any discrepancies and shortcoming in the system. Since the nationalization of banks in 1969, the public sector banks or the nationalized banks have acquired a place of prominence and has since then seen tremendous progress. The need to become highly customer focused has forced the slow-moving public sector banks to adopt a fast track approach. The unleashing of products and services through the net has galvanized players at all levels of the banking and financial institutions market grid to look anew at their existing portfolio offering. Conservative banking practices allowed Indian banks to be insulated partially from the Asian currency crisis. Indian banks are now quoting a higher valuation when compared to banks in other Asian countries (viz. Hong Kong, Singapore, Philippines etc.) that have major problems linked to huge Non Performing Assets (NPAs) and payment defaults. Co-operative banks are nimble footed in approach and armed with efficient branch networks focus primarily on the high revenue niche retail segments. The Indian banking has finally worked up to the competitive dynamics of the new Indian market and is addressing the relevant issues to take on the multifarious challenges of globalization. It has come a long way from being a sleepy business institution to a highly proactive and dynamic entity. Banks that employ IT solutions are perceived to be futuristic and proactive players capable of meeting the multifarious requirements of the large customers base. Private Banks have been fast on the uptake and are reorienting their strategies using the internet as a medium The Internet has emerged as the new and challenging frontier of marketing with the conventional physical world tenets being just as applicable like in any other marketing medium.
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This transformation has been largely brought about by the large dose of liberalization and economic reforms that allowed banks to explore new business opportunities rather than generating revenues from conventional streams (i.e. borrowing and lending). The banking in India is highly fragmented with 30 banking units contributing to almost 50% of deposits and 60% of advances. Indian nationalized banks (banks owned by the government) continue to be the major lenders in the economy due to their sheer size and penetrative networks which assures them high deposit mobilization. The Indian banking can be broadly categorized into nationalized, private banks and specialized banking institutions. The Reserve Bank of India acts as a centralized body monitoring any discrepancies and shortcoming in the system. It is the foremost monitoring body in the Indian financial sector. The nationalized banks (i.e. government-owned banks) continue to dominate the Indian banking arena. Industry estimates indicate that out of 274 commercial banks operating in India, 223 banks are in the public sector and 51 are in the private sector. The private sector bank grid also includes 24 foreign banks that have started their operations here. Under the ambit of the nationalized banks come the specialized banking institutions. These co-

operatives, rural banks focus on areas of agriculture, rural development etc., unlike commercial banks these co-operative banks do not lend on the basis of a prime lending rate. They also have various tax sops because of their holding pattern and lending structure and hence have lower overheads. This enables them to give a marginally higher percentage on savings deposits. Many of these cooperative banks diversified into specialized areas

(catering to the vast retail audience) like car finance, housing loans, truck finance etc. in order to keep pace with their public sector and private counterparts, the co-operative banks too have invested heavily in information technology to offer high-end computerized banking services to its clients. Complementing the roles of the nationalized and private banks are the specialized financial institutions or Non Banking Financial Institutions (NBFCs). With their focused portfolio of products and services, these Non Banking Financial Institutions act as an important catalyst in contributing to the overall growth of the financial services sector. NBFCs offer loans for working capital requirements, facilitate mergers and acquisitions, IPO finance, etc. apart from financial consultancy services. Trends are now changing as banks (both public and private) have now started focusing on NBFC domains like long and medium-term finance, working cap requirements, IPO financing etc. to meet the multifarious needs of the business community.
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STRUCTURE OF BANKING INDUSTRY: Banking system plays an important role in a countrys economy. It promotes growth and development of the country. Indian money market comprises organized and the unorganized institutions. The organized and unorganized institutions in the Indian banking system serve a source of short term credit to agriculture, industry, trade and commerce. In the Indian banking structure the Reserve Bank of India is the central bank. It regulates, direct and controls the banking and financial institutions in the country. There are three high banking institutions, namely, RBI, NABARD and EXIM Bank. There are separate financial institutions catering to the needs of different sectors of the economy. Development Banks, Investment Banks, Co-operative Banks, Land Development Banks, Commercial Banks in public and private sectors, NABARD, RRBs, EXIM Bank, etc. The indigenous bankers and moneylenders dominate unorganized sector.

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The chart reveals that there are several apex banking institutions working at the national level. RBI is the highest banking authority regulating, directing and controlling all the banking and financial institutions in the country. There are development banks, namely IDBI, SIDBI, ICICI at the national level and State Financial Corporations and State Industrial Development Corporations which have been set-up. Co-operative banks have three tier systems. At the village level there is Primary Agriculture Co-operative Society (PACs), at the district level there is Central Co-operative Bank and at the state level there is State Co-operative Bank. Co-operative banks provide short term and medium loans to the agriculture sector. Land Development Banks provide long term agriculture credit. It comprises Primary Land Development Bank (PLDB) at ht district level and State Land Development Bank (SLDB) at the state level. RRBs provide loans and advances to the rural poor and NABARD is an apex body regulating, directing and controlling the financial and banking institutions providing finance for the agriculture and rural development.
TYPES OF BANKS

Modern age is the age of specialization with the changing situation worldwide, bank functions have also undergone a major change. Economic conditions and financial needs of a country are different than those of other countries throughout the world. Some financial institutions deal in accepting deposits and making loans and advances to different sectors of the economy. Some institution makes loans and advances for medium and short term, while others are meant for long term advances. Some are financing industrial sector and foreign trade while others are advancing loans to agriculture sector. In broader sense of the term banks may be classified into following categories: Central Bank Commercial Banks Development Banks Investment Banks Co-operative Banks Foreign Exchange Banks Savings Banks Export-Import Bank Specialized National Banks Indigenous Bankers International Financial Institutions

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STRATEGIC ANALYSIS OF BANKING INDUSTRY

PORTERS FIVE FORCE ANALYSIS
Prof. Michael Porters competitive forces Model applies to each and every company as well as industry. This model with regards to the Banking Industry is presented below:
(2) Potential Entrants is high as Development Financial Institutions as well as Private and foreign banks have entered in a big way. (5) Organizing Power of the Supplier is high. With new financial instruments they are asking higher return on investment. (1) Rivalry among Existing Firms has increased with liberalization. New products and improved customer services is the focus. (3) Threat from Substitute is high due to competition from NBFCs & Insurance companies as they offer a higher rate of interest than banks. (4) Bargaining Power of Buyers is high as corporate can raise funds easily due to high competition.

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Rivalry among existing firms

With the process of liberalization, competition among the existing banks has increased. Each bank is coming up with new products to attract the customers and tailor made loans are provided. The quality of services provided by banks has improved drastically. Potential Entrants

Previously the Development Financial Institutions mainly provided project finance and development activities. But they have now entered into retail banking which has resulted into stiff competition among the existing players Threats from Substitutes

Banks face threats from Non-Banking Financial Companies. NBFCs offer a higher rate of interest. Bargaining Power of Buyers

Corporates can raise their funds through primary market or by issue of GDRs, FCCBs. As a result they have a higher bargaining power. Even in the case of personal finance, the buyers have a higher bargaining power. This is mainly because of competition. Bargaining power of Suppliers

With the advent of new financial instruments providing a higher rate of returns to the investors, the investments in deposits is not growing in a phased manner. The suppliers demand a higher return for the investments. Overall Analysis

The key issue is that how can banks leverage their strengths to have a better future. Since the availability of funds is more and deployment of funds is less, banks should evolve new products and services to the customers. There should be rational thinking in sanctioning loans, which will bring down the NPAs. As there is expected revival in the Indian economy banks have a major role to play. Funding corporate at a low cost of capital is a major requisite.

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SWOT ANALYSIS
The banking sector is often taken as a proxy for the economy as a whole. The performance of bank should therefore, reflect Trends in the Indian Economy. Due to the reforms in the financial sector, banking industry has changed drastically with the opportunities to the work with, new accounting standards new entrants and information technology. The deregulation of the interest rate, participation of banks in project financing has changed in the environment of banks. The performance of banking industry is done through SWOT Analysis. It mainly helps to know the Strengths and Weakness of the industry and to improve will be known through converting the opportunities into strengths. It also helps for the competitive environment among the banks. STRENGTHS 1. Greater securities of Funds Compared to other investment options, banks, since their inception have been better avenues in terms of securities. Due to satisfactory implementation of RBIs prudential norms banks have won public confidence over several years. 2. Banking network After nationalization, banks have expanded their branches in the country, which has helped banks build large networks in the rural and urban areas. 3. Large Customer Base This is mainly attributed to the large network of the banking system. Depositors in rural areas prefer banks because of the failure of the NBFCs 4. Low Cost of Capital Corporate prefers borrowing money from banks because of low cost of capital. Middle income people who want money for personal financing can look to banks as they offer at very low rates of interests. Consumer credit forms the major source of financing by banks.

WEAKNESSES 1. Basel Committee The banks need to comply with the norms of Basel committee but before that it is challenge for banks to implement the Basel committee standard, which are of international standard.

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2. Powerful Unions Nationalization of Banks had a positive outcome in helping the Indian Economy as a whole. But this has also proved detrimental in the form of strong unions, which have a major influence in decision making. They are against automation. 3. Priority Sector Lending To uplift the society, priority sector lending was brought in during nationalization. This is good for the economy but banks have failed to manage the asset quality and their intensions were more towards fulfilling government norms. As a result lending was done for nonproductive purposes. 4. High Non-Performing Assets Non-Performing Assets (NPAs) have become a matter of concern in the banking industry. This is because of change in the Accounting Standards (Prudential Norms). Net NPAs increased to large extent of the total advances, which has to be reduced to meet the international standards.

OPPORTUNITIES 1. Universal Banking Banks have moved along the value chain to provide their customers more products and services. For example: - SBI is into SBI home finance, SBI Capital Markets, SBI Bonds etc. 2. Differential Interest Rates As RBI control over bank reduces, they will have greater flexibility to fix their own interest rates which depends on the profitability of the banks. 3. High Household Savings Household savings have been increasing drastically. Investment in financial assets has also increased. Banks should use this opportunity for raising funds. 4. Overseas Markets Banks should tap the overseas market, as the cost of capital is very low. 5. Internet Banking The advances in information technology have made banking easier. Business transactions can be effectively carried out through internet banking.

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THREATS 1. NBFCs, Capital Markets and Mutual funds

There is a huge investment of household savings. The investments in NBFCs deposits, Capital Market Instruments and Mutual Funds are increasing. Normally these instruments offer better returns to investors. 2. Change in the Government Policy

The change in the government policy has proved to be a threat to the banking sector. 3. Inflation

The interest rates go down with a fall in inflation. Thus, the investors will shift his investments to other profitable sectors. 4. Recession

Due to the recession in the business cycle the economy functions poorly and this has proved to be a threat to the banking sector. The market oriented economy and globalization has resulted into competition for market share. The spread in the banking sector is very narrow. To meet the competition the banks have to grow at a faster rate and reduce the overheads. They can introduce new products and develop the existing services.

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PEST ANALYSIS
POLITICAL/ LEGAL ENVIROMENT Government and RBI policies affect the banking sector. Sometimes looking into the political advantage of a particular party, the Government declares some measures to their benefits like waiver of short-term agricultural loans, to attract the farmers votes. By doing so the profits of the bank gets affected. Various banks in the cooperative sector are open and run by the politicians. They exploit these banks for their benefits. Sometimes the government appoints various chairmen of the banks. Various policies are framed by the RBI looking at the present situation of the country for better control over the banks ECONOMICAL ENVIROMENT Banking is as old as authentic history and the modern commercial banking are traceable to ancient times. In India, banking has existed in one form or the other from time to time. The present era in banking may be taken to have commenced with establishment of bank of Bengal in 1809 under the government charter and with government participation in share capital. Allahabad bank was started in the year 1865 and Punjab national bank in 1895, and thus, others followed Every year RBI declares its 6 monthly policy and accordingly the various measures and rates are implemented which has an impact on the banking sector. Also the Union budget affects the banking sector to boost the economy by giving certain concessions or facilities. If in the Budget savings are encouraged, then more deposits will be attracted towards the banks and in turn they can lend more money to the agricultural sector and industrial sector, therefore, booming the economy. If the FDI limits are relaxed, then more FDI are brought in India through banking channels. SOCIAL ENVIROMENT Before nationalization of the banks, their control was in the hands of the private parties and only big business houses and the effluent sections of the society were getting benefits of banking in India. In 1969 government nationalized 14 banks. To adopt the social development in the banking sector it was necessary for speedy economic progress, consistent with social justice, in democratic political system, which is free from domination of law, and
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in which opportunities are open to all. Accordingly, keeping in mind both the national and social objectives, bankers were given direction to help economically weaker section of the society and also provide need-based finance to all the sectors of the economy with flexible and liberal attitude. Now the banks provide various types of loans to farmers, working women, professionals, and traders. They also provide education loan to the students and housing loans, consumer loans, etc. Banks having big clients or big companies have to provide services like personalized banking to their clients because these customers do not believe in running about and waiting in queues for getting their work done. The bankers also have to provide these customers with special provisions and at times with benefits like food and parties. But the banks do not mind incurring these costs because of the kind of business these clients bring for the bank. Banks have changed the culture of human life in India and have made life much easier for the people. TECHNOLOGICAL ENVIROMENT Technology plays a very important role in banks internal control mechanisms as well as services offered by them. It has in fact given new dimensions to the banks as well as services that they cater to and the banks are enthusiastically adopting new technological innovations for devising new products and services. The latest developments in terms of technology in computer and telecommunication have encouraged the bankers to change the concept of branch banking to anywhere banking. The use of ATM and Internet banking has allowed anytime, anywhere banking facilities. Automatic voice recorders now answer simple queries, currency accounting machines makes the job easier and self-service counters are now encouraged. Credit card facility has encouraged an era of cashless society. Today MasterCard and Visa card are the two most popular cards used world over. The banks have now started issuing smartcards or debit cards to be used for making payments. These are also called as electronic purse. Some of the banks have also started home banking through telecommunication facilities and computer technology by using terminals installed at customers home and they can make the balance inquiry, get the statement of accounts, give instructions for fund transfers, etc. Through ECS we can receive the dividends and interest directly to our account avoiding the delay or chance of losing the post.
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Today banks are also using SMS and Internet as major tool of promotions and giving great utility to its customers. For example SMS functions through simple text messages sent from your mobile. The messages are then recognized by the bank to provide you with the required information. All these technological changes have forced the bankers to adopt customerbased approach instead of product-based approach.

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ORGANIZATION OVERVIEW
IndusInd Bank Ltd. is one of the new-generation private-sector banks in India which commenced its operations in 1994. The Bank enjoys a patronage of 2 million customers and has a network of 180 branches, 4 ATMs spread across 147 geographical locations in 28 states and union territories as on September 30, 2009. The Bank also has a Representative Office each in Dubai and London. The Bank's total business (deposits plus advances) as on September 30, 2009 crossed Rs. 40,000 crores. It has multi-lateral tie-ups with other banks providing access to more than 21000 ATMs for its customers. It enjoys clearing and settlement bank status with leading capital, commodity and currency exchanges within India e.g. - BSE / NSE and commodity exchanges like- MCX, NCDEX, and NMCE. While continuing its drive for efficiency and profitability, IndusInd Bank has a keen participant in the Corporate Social Responsibility space. It is actively engaged in helping mentally-challenged and underprivileged children and on other hand, helps in sensitizing /upholding environment and ecologically appropriate behavior. The Bank actively supports Green Practices within the Bank and under its campaign Hum aur Hariyali, it has successfully launched a slew of green initiatives. It is also an active supporter of the arts especially in the field of music and dance. IndusInd Bank also grabbed the opportunity of becoming first Indian Commercial Bank to be certified ISO 9001:2000 for its 'Entire Network of Branches'. Its first International Representative Office was opened in Dubai. It also was crowned as one of the first banks to go live on RTGS platform - Real Time Gross Settlement. CRISIL has assigned Highest P1+ rating to IndusInd Banks Fixed Deposits and Certificates of Deposit. Recently, CRISIL has reaffirmed it P1+ rating of IndusInd Banks Fixed Deposits and Certificates of Deposit programme. ICRA has also assigned the highest A1+ rating to IndusInd Banks Certificates of Deposit. MILESTONES With over 17 years of Operating History 2011 - 2012

Awarded as the Best Bank Mid-sized in BusinessworldPwC Best Banks Survey 2011 Awarded as the Best Mid-Sized Bank Bank in Business Today KPMG Best Banks Survey 2011 Awarded M.IT.R- 50 Marketing & IT Recognition Program amongst top 50 brands organised by Paul Writer in association with IBM Awarded the CII Environment Best Practice Award 2012 for the Most Innovative Environmental Project Awarded in the Business Enterprise Services category for running ATMs on solar power Organised by Panasonic Green Globe Foundation Awarded the status of Star Brand 2011 ICMR Star Brands of India Survey Awarded the Best Bank in New Generation Category by the STATE FORUM OF BANKERS CLUB KERALA
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2010 - 2011

Most Improved Bank Performance of the Year awarded by Bloomberg UTV Financial Leadership Awards 2011 Winner of Best Use of technology in training and e-Learning Initiatives awarded by IBA Banking Technology Awards 2010 Runners up of Best Risk Management Initiatives awarded by IBA Banking Technology Awards 2010 Silver winner of Excellence in Business Process Management and Work flow in Australia and Asia Region Global awards by Workflow Management Coalition and BPM.com, USA Talisma User awards for Enterprise Adoption of CRM 2010 Ranked 2nd in the fastest growing Bank (mid-size) category published in Indias Best Banks report by Business World and PWC Excellence Award as the 2nd best New Generation Bank in Kerala for the second consecutive year awarded by the State Forum of Bankers Clubs, Kerala

2009 - 2010

Awarded the "Best Priority Sector Bank" amongst the private sector banks by Duns & Bradstreet Tier II Issue raised Rs. 4200 million in March 2010 Awarded the Technology Bank of the Year-2009 from IBA Excellence Award, the 2nd best new generation bank in Kerala by the State Forum of Bankers Clubs, Kerala Recognised for 'Best Performance in Credit Quality' by inancial Express Received the prestigious ISO 27001 certification for IT operations QIP Issue raised Rs. 4803 million in August 2009 Regulatory clearance for 113 new branches are in place (as of June 30,2010) Appointed as Clearing & Settlement Bank at 6 major Tea Auction centres (includes 2 which were added in 2010) Tied up with BONY Mellon for on line remittances from United States to India

2008 - 2009

2007 - 2008

GDR Issue - raised Rs 2,222 million; Ratings: ICRA Highest A1+ - CDs, Crisil P1+: CDs, FDs New Launch/Rollout: Mid market Investment Bank, 3rd Party Distribution Platform, Warehouse Receipt Finance Awards/Recognition: The Smart Workplace - Economic Times, Best CSR Practice Company BSE/NASSCOM Extended microfinance to 300,000+ women by partnering leading MFIs like SKS Mircofinance Extensive IT initiatives Became clearing/settlement bank for NSE currency futures exchange New management team headed by Romesh Sobti inducted from ABN AMRO Bank NV
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2006 - 2007

GDR - raised Rs 1,460 million, tied up with Cholamandalam MS for bancassurance Signed an agreement with National Multi Commodity Exchange Ltd as clearing banker

2005 - 2006

Tied-up with Religare Securities for offering 3-in-1 account covering banking, depository & securities trading Tied up with Aviva Life Insurance for bancassurance

2004 - 2005

Signed an agreement with NCDEX as clearing banker Opened its second representative office in London

2003 - 2004

Ashok Leyland Finance Ltd, a leading NBFC merged with the Bank (total 115 branches), opened representative office in Dubai

2002 - 2003

IndusInd Enterprises & Finance Ltd, a NBFC & one of the promoters of the Bank amalgamated with the Bank Increased branch network to 53

2001 - 2002 Tie ups with exchange houses in Middle East and banks in the United States

1994 2000

IPO - raised Rs 1,800 million, became clearing bank to First Commodities Clearing Corporation of India 2000 Became clearing/settlement bank for BSE/NSE Raised Rs 1,000 million through preferential issue of shares Incorporated in 1994; Promoted by a group of Non Resident Indians. Started operations with Rs 1000 Mn Capital Pioneer in launching Internet Banking

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MISSION & VISION

Mission We will consistently add value to all our stakeholders and emerge as the Best in class in the chosen parameters amongst the comity of banks, by doubling our profits, clients and branches within the next three years. Vision IndusInd Bank will be: A relevant business and banking partner to its clients Customer Responsive, striving at all times to collaborate with clients in providing solutions for their Banking needs A forerunner in the market place in terms of profitability, productivity and efficiency Engaged with all our stakeholders and will deliver sustainable and compliant returns

BRAND IndusInd Bank has been aggressive in its brand building program since last year. As a part of the brand building exercise, the bank has taken many initiatives which have helped the brand connect up with the customers & enhance the visibility quotient. IndusInd Bank had launched its first ever mass media campaign in May-June 2009 along with its punchline Makes you feel richer and since then, the bank has been consistent in communication through Television, Radio, and Outdoor & print advertising. IndusInd Bank understands its customers money is not just money. It is the vehicle to realise their dreams! Hence, the bank aims to ensure that the customers experience with the bank is pleasant and enriching. That they get value for their money, enabling them to lead a richer, fuller, content life... For this, the bank:

Offers a new level of banking better services, better understanding of unique needs and better management of finances Demystifies the banking process and makes it more accessible Apart from fulfilling traditional banking responsibilities, advises customers on how and where to use their money to get the best out of it Projects an image of being a young, energetic, modern bank with values of dynamism, confidence and progression

Further, as a banking partner, the bank also aims to help its customers discover how they can do more things with their money. In the recent advertising campaign, the Bank reinforces its focus on Innovative banking based on the philosophy of Responsive Innovation. The bank is taking responsiveness theme to customers and reinforces its commitment to give best-ofclass services in the industry.

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INDUSIND WELL POSITIONED TO GROW THROUGH NETWORK

EXPANSION

NATIONWIDE PRESENCE THROUGH THE BRANCH NETWORK IndusInd bank today has established a very strong platform for longer term growth. It has a nationwide network, diversified advances portfolio, broad fee based product capabilities, and branch productivity and CASA ratio that are now in line with peers with a similar sized branch networks. As of march 2010, IndusInd bank had 210 branches covering 168 locations in the city. The bank will open over 90 branches in FY11, taking the total to cover 300. Thus, the bank already has a broad national footprint. The penetration will be deepened by opening 350-400 additional branches over the next three years (by March 2014).

STP Segment Target Group Positioning People who are wish to put their money in the banking sector Earning individuals, Corporates, HNIs Delivering what the customer needs

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PRODUCTS & SERVICES IndusInd Bank Ltd offers a wide array of transactional, commercial and electronic banking products and services. As some of the products and services are of IndusInd Bank itself, for others like life insurance and general insurance, the bank has tied up with other firms like Aviva and Cholamandalam. Personal Banking:

o o o o o o o o o o

Accounts: Indus classic Savings Account Indus Privilege Savings Account Indus Maxima Savings Account Demat Account 3 in 1 Account No Frills Account Current Accounts (Gold Plus, Gold, Silver, Blue) Indus Privilege Plus Savings Account Indus Young Saver Salary Accounts

Deposits: o Flexi Term Deposit o Sweep -In / Seep-Out Deposit o Young Saver Deposit o Senior Citizen Scheme o Regular Recurring Deposit o Flexi Recurring Deposit Insurances: Aviva Life Shield Advantage Aviva Dhan Varsha Aviva Dhan Vrudhhi Aviva Term Return on Investment Aviva Pension Builder Cholamandalam General Insurance Cholamandalam Motor Insurance Home Insurance Travel Insurance Bancaasurance

o o o o o o o o o o

Loans : o Home Loans o Small Business Loan o Commercial Vehicle Loan o Car Loan o Two-wheeler Loan o Loan Against Property
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o o o o o o o

Cards: Regular Debit Card Gold Debit Card Platinum Debit Card Indus Money Summer Swipe Special Signature Credit Card Platinum Credit Card Wealth Management Services: Portfolio Management Investments Insurance Survana Mudra

o o o o

Corporate Banking:
o o o

Large Indian Companies Small & Medium Enterprises Supply Chain Management

International Banking:
o o o o o o o

Correspondent Banking SWIFT Advisory Services Facilities to Exporters Trade Finance RFC Account for Residents Gold Banking

Investment Banking:

o o o

Treasury: Foreign Exchange Desk Money Market Desk Derivatives Desk Capital & Commodities Markets: Stock Exchange Cell Commodities Exchange Cell Banker to Public / Rights Debenture Trustee IPO Funding Loan Against Demat Shares Depository Services

o o o o o o o

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o o o o o o

NRI Services: Deposit Schemes Value Added Services Returning NRIs Remittances Investments Taxation

Online Banking: o IndusNet - Internet Banking o Indus Pay - e-wallet o VISA Money Transfer o ATMs o Indus Billpay o Mobile Top-Ups o Mobile Banking RTGS / NEFT

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ORGANIZATIONAL STRUCTURE IN DETAIL

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DEPARTMENTS The following are the departments present in IndusInd Bank. Head Office Departments HEAD OFFICE ACCOUNTS DEPARTMENT BANK ASSURANCE CENTRE BANKING OPERATIONS DEPARTMENT BOARD DEPARTMENT BRANCH EXPANSION CELL CELL FOR GOVT TRANSACTIONS CMD SECRETARIAT COMPLIANCE DEPARTMENT CORPORATE COMMUNICATIONS DEPT CREDIT CARD CENTRE CREDIT MONITORING CELL CUSTOMER SERVICE CELL DEVELOPMENT DEPARTMENT EXPENDITURE DEPARTMENT HRM DEPARTMENT INFORMATION SYSTEMS SECURITY CELL (ISSC) INSPECTION DEPARTMENT INTERNATIONAL DIVISION INVESTORS SERVICE CELL MARKETING DEPARTMENT LEGAL DEPARTMENT MIS DEPARTMENT NEW INITIATIVES DEPARTMENT
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O & M DEPARTMENT OFFICIAL LANGUAGE CELL PERSONAL BANKING DEPT PLANNING DEPARTMENT RECOVERY DEPARTMENT RISK MANAGEMENT DEPT RTGS CELL SECURITY DEPARTMENT SMALL & MEDIUM ENTERPRISES DEV DEPT TECHNOLOGY MANAGEMENT DEPARTMENT (TMD) TMD - ATM CARD HOT LISTING TMD - NETWORK TEAM VIGILANCE DEPARTMENT TREASURY BRANCH

Role of CSE (60% operations + 40% sales) Provide professional customer service, Build and deepen relationships with existing Wealth Customers to achieve increase in share of wallet and revenues, Generate new business to achieve defined sales targets, ensure complete customer satisfaction etc. Conclusion Recommendations Appendix References

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