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Banking Sector

Submitted By: Akash Kumar Rajput

The History of Banking begins around 2000 B.C. in Babylonia with the merchants of the ancient world, who made grain loans to farmers and traders who carried goods between cities. Modern banking can be traced back to early Renaissance Italy, to cities such as Florence, Venice and Genoa. The most famous Italian bank was the Medici bank, established by Giovanni Medici in 1397. The development of banking spread from Italy through Europe and a number of important innovations took place. During the 20th century, developments in telecommunications and computing caused major changes to banks operations and let banks dramatically increase in size and geographic spread.

Rank 1

Bank Deutsche Bank Mitsubishi UFJ Financial Group HSBC Holdings Industrial & Commercial Bank of China BNP Paribas

Country

Total Assets (US$b)

Germany Japan UK China France

2,805.50 2,641.22 2,637.22 2,607.75 2,545.34

2 3 4 5

In India, Banking started in the last decades of 18th century. The first two banks were Bank of Hindustan (1770) and The General Bank of India (1786). The State Bank of India is the oldest bank of India which is still in existence. The first entirely Indian joint stock bank that is still functioning is The Punjab National Bank. The Reserve Bank of India was established in April 1934 and was nationalized on January 1, 1949. In early 1990s government licensed some private banks which included Oriental Bank of Commerce, Axis Bank, ICICI Bank and HDFC Bank. At the present time Indian banks are considered to have clean, strong and transparent balance sheets in terms of quality of assets and capital adequacy.

Public Sector Banks :

Public Sector Banks (PSBs) are banks where a majority stake (i.e. more than 50%) is held by a government. There are a total of 26 PSBs in India. PSBs selected for the project are: A) State Bank of India B) Punjab National Bank

Private Sector Banks :

Private Sector Banks are banks where greater parts of stake or equity are held by the private shareholders and not by government . These are the major players in the banking sector as well as in expansion of the business activities in India. Private Sector Banks selected for the project are: A) ICICI Bank B) HDFC Bank

SBI is the largest banking and financial services company in India by revenue, assets and market capitalization. It is a state-owned corporation with its headquarters in Mumbai, Maharashtra. The Bank of Bombay, The Bank of Madras and The Bank of Bengal were three presidency banks of India. In 1921 the three banks merged to form the Imperial Bank of India. The Government of India nationalized the Imperial Bank of India in 1955, with the Reserve Bank of India taking a 60% stake, and renamed it the State Bank of India. In 2008, the government took over the stake held by the Reserve Bank of India.

SBI Term Deposits SBI Recurring Deposits SBI Housing Loan SBI Car Loan

SBI Loan For Pensioners Loan Against Mortgage of Property Loan Against Shares & Debentures Rent Plus Scheme

SBI Educational Loan


SBI Personal Loan

Medi-Plus Scheme
Rates Of Interest

e-Invest (ASBA) IPO

Agricultural/Rural Banking Micro Credit Regional/Rural Banks Agricultural Debt Waiver Financial Inclusion

NRI Services Opening of NRI account NRI Home Loan NRI Car Loan Remittances to India Specialized NRI Service Branches

International Banking Trade Finance Correspondent Banking Merchant Banking Project Export Finance Exporter Gold Card Offshore Banking Treasury

Corporate Banking Corporate Accounts Group Mid-Corporate Group Project Finance Cash Management product

Services

Government Business

SME

Internet Banking
Mobile Banking State Bank MobiCash ATM Services Demat Services

Govt. Accounts
Public Provident Fund SBI e-Tax

SME

Width : The width of the Product-Mix is 8. Length: The Length of the Product-mix is 38. Consistency: The lines are more consistent insofar as they are closely related.

Account
Name

Term

Update APY

Fixed Deposit Account Details

SBI 1 Year Fixed Deposit SBI 3 Month Fixed Deposit

1 year

Sep, 2012

Applicable for a term ranging from 1 year 9.00% to less than 2 years and for Deposit amounts Below Rupees One Crore

3 month

Sep, 2012

The FD interest rate is applicable for a term 7.00% ranging from 7 to 179 days and for balance Below Rupees One Crore

SBI 6 Month Fixed Deposit

6 month

Sep, 2012

The FD interest rate is applicable for a term 7.00% of 180 days and for Deposit amounts Below Rupees One Crore

These parameters will come under Place: Market Coverage Internet (i.e. e-banking facilities) SBI has a market share of about 20% among Indian commercial banks in deposits and loans. As of March 2012, SBI had 14,119 branches, including 173 foreign offices in 37 countries across the globe. Including the branches that belong to its associate banks, SBI has 21,500 branches. SBI has 14 local head offices situated in different states and 57 Zonal Offices located at important cities throughout the country. SBI has more than 27,000 ATMs in India.

19%

10%
62% 6%

SBI ICICI PNB

HDFC
Others 3%

SBI

HDFC 1%

ICICI

PNB

36% 55% 8%

The State Bank of India is the 29th most reputed company in the world according to Forbes. SBI is the only bank featured in the coveted Top 10 brands of India list in an annual survey conducted by Brand Finance and The Economic Times in 2010. The number of employees working in SBI bank are 292,215 . The most preferred bank & the most preferred home loan provider by CNBC. The Brand Trust Report- SBI was listed as the 11th most trusted brand in India.

These parameters will come under Process: 1. Complaints Handling 2. Response Time Survey by Rediff.com :

Customer Friendly
SBI ICICI HDFC PNB

12%

23%

31% 34%

SBI has been ranked 285th in the Fortune Global 500 rankings of the world's biggest corporations for the year 2012. SBI won Best Online Banking Award, Best Customer Initiative Award & Best Risk Management Award (Runner Up) by IBA Banking Technology Awards 2010. SBI had 14,119 branches, including 173 foreign offices in 37 countries across the globe. SBI has 14 local head offices situated at Chandigarh (Punjab & Haryana), Delhi, Lucknow (Uttar Pradesh), Patna (Bihar), Kolkata (West Bengal), Guwahati (North East Circle), Bhubaneswar (Orissa), Hyderabad (Andhra Pradesh), Chennai (Tamil Nadu), Trivandrum (Kerala), Bengaluru (Karnataka), Mumbai (Maharashtra), Bhopal (Madhya Pradesh) & Ahmedabad (Gujarat) and 57 Zonal Offices in India.

Revenue

US$ 36.950 billion (2012)

Profit Total assets

US$ 3.202 billion (2012)

US$ 359.237 billion (2012) Total equity US$ 20.854 billion (2012)

SBI entered into several alliances and tie-ups with automobile, insurance, mutual fund, project finance and medical equipment companies to boost its business. Unlike other competitors that relied on reduced interest rates to get business, SBI extended the tenure of car loans from five to seven years, thereby lowering the monthly debt repayment burden of the loan seeker. SBI entered into a tie-up with Maruti, the largest automobile manufacturer in India, to provide loans for purchase of Maruti cars at the rate of 10.05 per cent and 11.25 per cent for three years and above three years respectively. After the scheme was introduced, SBI emerged as the largest financier for Maruti cars in India.

Segregating and Targeting existing high value customers. Cross sales of other products. Setting up call centers and outbound sales force to secure new customers. Plans to utilize database marketing to pursue large and medium sized corporate, government and trade finance customers. Database marketing was expected to draw increased revenue from cross selling, lower costs and increased customer loyalty.

ICICI stands for INDUSTRIAL CREDIT AND INVESTMENT CORPORATION OF INDIA ICICI Bank Limited is an Indian diversified financial services company headquartered in Mumbai, Maharashtra. ICICI is the second largest bank in India by assets and third largest by market capitalization. ICICI Bank is one of the Big Four banks of India, along with State Bank of India, Punjab National Bank and HDFC Bank. The Bank has a network of 2,763 branches and 9,363 ATM's in India, and has a presence in 19 countries, including India.

Width : The width of the Product-Mix is 7. Length: The Length of the Product-mix is 40. Consistency: The lines are more consistent insofar as they are closely related.

Description of Charges Loan Processing Charges / Origination Charges (Non-Refundable)

Personal Loans Interest Rates Upto 2% of loan amount plus Service Tax

The lower of the two amounts given below: Prepayment Charges 1) 5% of principal outstanding or 2) 2) Interest outstanding for the unexpired period of the loan. Charges for late payment Cheque Swap Charges Cheque return charges Amortization schedule charges Statement of Account Charges 2% per month Rs. 500/- per transaction Rs. 400/- per return Rs. 200/- per schedule (inclusive of service tax) Rs. 200/- per statement (inclusive of service tax)

Prepayment/Foreclosure Statement Charges

Rs. 100/- per statement (inclusive of service tax)


Rs. 500/- per NOC (inclusive of service tax) Rs 200/- per NOC (inclusive of service tax) Rs. 200/- per schedule (inclusive of service tax)

Duplicate No Objection Certificate/ No Due Certificate Duplicate Repayment/Foreclosure statement

These parameters will come under Place:

Market Coverage Internet (i.e. e-banking facilities) ICICI Bank has a network of 2,772 branches and 9,363 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 and Dubai International Finance Centre; and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. ICICI Bank launched internet banking operations in 1998.

ICICI Bank is the only Indian brand to figure in the BrandZ Top 100 Most Valuable Global Brands Report, second year in a row. ICICI Bank ranked 5th in the list of "57 Indian Companies", and 288th in World Rankings in Forbes Global 2000 list. ICICI Bank has won the "Banking Technology Awards 2010" at The Indian Banks Association in the following categories. ICICI bank has 81,254 employees working for it. ICICI bank has been voted as the most customer friendly bank of India by customers.

ICICI Bank has a network of 2,772 branches and 9,363 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 and Dubai International Finance Centre; and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. ICICI Bank is one of the Big Four banks of India, along with State Bank of India, Punjab National Bank and HDFC Bank. ICICI Bank won the "Best Bond House (India) 2011", by IFR Asia.

Revenue

US$ 13.518 billion (2012)

Profit

US$ 1.550 billion (2012)

Total assets
US$ 122.53 billion (2012) Total equity

US$ 12.426 billion (2012)

Focus areas of Marketing Effort : Target marketing and customer acquisition Share of wallet Channel strategy and management Relationship management and database marketing Product development & innovation Credit approval Basis for segmentation : Occupation Different products for different occupational segment identified Income Minimum balance serves as an income segment barrier

Geographical Concentrated on Tier 1 & Tier 2 Cities trying to extend reach Age Different products like student account Targeting : Tailors its marketing campaigns to meet the needs of its target prospects Creates differentiated product offering for different segment Use of technology in tracking customer segment

Positioning: Core proposition Trust, credibility, total financial solution provider (brought about through its cross selling effort) Modernization process and physical evidence technology as the backbone and accelerator

1895 : PNB established in Lahore 1904 : PNB established branches in Karachi and Peshawar. 1939 : PNB acquired Bhagwan Das Bank Limited. 1947 : PNB lost its premises in Lahore but continued to operate in Pakistan. 1961 : PNB acquired Universal Bank of India. 1969 : The Government of India (GOI) nationalized PNB and 13 other major commercial banks, on 19 July 1969. 1978 : PNB opened a branch in London. 2003 : PNB took over Nedungadi Bank, the oldest private sector bank in Kerala. 2007 : PNB established PNBIL Punjab National Bank (International) in the UK, with two offices, one in London, and one in South Hall.

PNB is an Indian financial services company based in New Delhi, India. PNB is the third largest bank in India by assets. is currently the second largest state-owned commercial bank in India with about 5000 branches across 764 cities. It serves over 37 million customers. Punjab National Bank was ranked #26 in the Fortune India 500 ranking of 2011.

Revenue Net income

36,428 crore (US $6.88 billion) (2012) 4,884 crore (US $923.08 million) (2012)

Total Assets
Employees Branches Customer ATM

373,786 crore (US $70.65 billion) (2011) 56,928


50000 37 million 10000

Personal Banking

Savings Fund Account Current Account Fixed Deposit Scheme Credit Schemes Capital Gain Account Doorstep Banking Cards Nomination Schemes Deceased claim cases

Social Banking

CSR initiatives Financial Inclusion Priority Sector Schemes for Financing micro and small Enterprises Traders Finance Super Trade Financially professionally qualified medical practitioner

MSME Banking

Agricultural banking

Agri business cell Agricultural banking Farmers

Financial Banking

Insurance Business Mutual Funds Merchant Banking ASBA Wealth Management Services
Loan against future lease rentals EXIM finance Cash management service Gold card scheme

Corporate Banking

International Banking NRI

Scheme/product/services NRI services OBU PNB helpdesk PNB World travel card

Place : Branches : 5000 branches across 764 cities ATM : 10000 across the Country Price :

Floating Option
Upto Rs 30 Above 30 Lacs to < 75 lac Lacs 11.25% 11.50% 11.50% 11.75% 11.75% 12.00% 12.25% 12.25% 12.50% 12.50% Rs. 75 Lacs and Above 12.25% 12.50% 12.50% 12.75% 12.75% Upto Rs30 lac Above 30 Lacs to < 75 Lacs BR+1.25% BR+1.50% BR+1.50% BR+1.75% BR+1.75% Rs. 75 Lacs and Above BR+1.50% BR+1.75% BR+1.75% BR+2.00% BR+2.00%

Upto 5 years

BR+0.50% BR+0.75% BR+0.75% BR+1.00% BR+1.00%

Above 5 & upto 10 yrs

Above 10 & upto 15 yrs

Above 15 & upto 20 yrs

Above 20 yrs & upto 25 yrs.

c) Flexible Housing (OD Component)

BPLR

BR+3.00%

d) OD Facility to Existing Housing Loan Borrowers for Personal Needs

BPLR

BR+3.00%

Education loan tie-up


Life Insurance

PNB Manipal tie-up


Physical Representation Documentation

People : Employees : 56,928 Customer : 37 million Process : Standardization Customization No. of step Simplicity Customer involvement

The strategy involves centralization of the back-office, a hub-and-spoke set-up, where all data operations would be centralized at a single centre. The second step would be to do a detailed study of the profitability of all products on the shelves, which would be followed by corrective actions to align them with the market scenario.

The third strategy would be to undertake an integrated risk management system to followed by an organizational revamp. Organizational restructuring would involve a study of different tiers of the bank.

PNB has a four-tier system, which include branches, regional offices, zonal offices and head -office.

HDFC: Housing Development Finance Corporation Limited

Founded in 1977 by Hasmukh Bhai Patel.


HDFC Bank Limited is an Indian financial services company based in Mumbai, Maharashtra that was incorporated in August 1994. HDFC Bank is the fifth largest bank in India by assets and the second largest bank by market capitalization as of February 24, 2012.

Revenue

US $ 6.480 billion (2012)

Profit

US $ 977.2 million (2012)

Total Assets

US$ 70.098 billion (2012)

Total Equity

US$ 7.754 billion (2012)

Employees

66,076 (2012)

Branches

1,986

ATM

5,471 ATMs, in 996 cities

Product

Home Loan Mutual Fund Asset Loan Insurance Normal Interest Rate (per annum %) 7 14 days 3.0 30 - 45 days 3.75 61 90 days 4.50

Price

Promotion

Cross selling exercises Tie up Airtel DTH Advertising Print Media Publicity

Place

Employees : 66076 Branches : 1986 ATM : 5476, 996 cities

People

Customer: 18 million Employees : 66076

Communication system Process System to listening for customer and employees Training and Reward system

No longer can banks treat customers as a group and segment them into just some demographic and psychographic profiles. The Internet has enabled e-banking to each customer as an individual, with different needs and requirements. Now services have become the crucial differentiators. Now all the banks have to excel in all the fields. SBI is the biggest bank in all the banks taken for the project but ICICI is far more better than SBI in Marketing and Advertisement. Every passing moment customers are opting for Private banks because of their superior Customer treatment and marketing strategies. Now the time has gone where Public Sector Banks were synonyms for security. Now customers are looking for best services suitable for them. So the distinction in products & services for each and every individual is mandatory.

Thank You