CHAPTER : 1 INTRODUCTION

 Introduction Of Indian Banking System

 Need of the Banks

 History of Indian Banking System

 Nationalisation

 Government policy on banking industry

 Law of banking

 Acts Regarding Banking Industry

 Classification of Banking Industry in India

 Services provided by banking organizations

1
 Introduction of Indian banking system

A bank is a financial institution that provides banking and other financial

services to their customers. A bank is generally understood as an institution which
provides fundamental banking services such as accepting deposits and providing
loans. There are also non-banking institutions that provide certain banking services
without meeting the legal definition of a bank. Banks are a subset of the financial
services industry.

A banking system also referred as a system provided by the bank which offers
cash management services for customers, reporting the transactions of their
accounts and portfolios, throughout the day. The banking system in India, should
not only be hassle free but it should be able to meet the new challenges posed by
the technology and any other external and internal factors. For the past three
decades, India’s banking system has several outstanding achievements to its credit.
The Banks are the main participants of the financial system in India. The Banking
sector offers several facilities and opportunities to their customers. All the banks
safeguards the money and valuables and provide loans, credit, and payment
services, such as checking accounts, money orders, and cashier’s cheques. The
banks also offer investment and insurance products. As a variety of models for
cooperation and integration among finance industries have emerged, some of the
traditional distinctions between banks, insurance companies, and securities firms
have diminished. In spite of these changes, banks continue to maintain and perform
their primary role—accepting deposits and lending funds from these deposits

2
 Need of the Banks

Before the establishment of banks, the financial activities were handled by

money lenders and individuals. At that time the interest rates were very high. Again
there were no security of public savings and no uniformity regarding loans. So as to
overcome such problems the organized banking sector was established, which was
fully regulated by the government. The organized banking sector works within the
financial system to provide loans, accept deposits and provide other services to
their customers. The following functions of the bank explain the need of the bank
and its importance:

• To provide the security to the savings of customers.

• To control the supply of money and credit

• To encourage public confidence in the working of the financial system,

increase savings speedily and efficiently.

• To avoid focus of financial powers in the hands of a few individuals and

institutions.

• To set equal norms and conditions (i.e. rate of interest, period of lending
etc) to all types of customers

3
 History of Indian Banking System

The first bank in India, called The General Bank of India was established in the
year 1786. The East India Company established The Bank of Bengal/Calcutta
(1809), Bank of Bombay (1840) and Bank of Madras (1843). The next bank was
Bank of Hindustan which was established in 1870. These three individual units
(Bank of Calcutta, Bank of Bombay, and Bank of Madras) were called as
Presidency Banks. Allahabad Bank which was established in 1865, was for the first
time completely run by Indians. Punjab National Bank Ltd. was set up in 1894
with head quarters at Lahore. Between 1906 and 1913, Bank of India, Central Bank
of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set
up. In 1921, all presidency banks were amalgamated to

form the Imperial Bank of India which was run by European Shareholders.
After that the Reserve Bank of India was established in April 1935.

At the time of first phase the growth of banking sector was very slow. Between
1913 and 1948 there were approximately 1100 small banks in India. To streamline
the functioning and activities of commercial banks, the Government of India came
up with the Banking Companies Act, 1949 which was later changed to Banking
Regulation Act 1949 as per amending Act of 1965 (Act No.23 of 1965). Reserve
Bank of India was vested with extensive powers for the supervision of banking in
India as a Central Banking Authority. After independence, Government has taken
most important steps in regard of Indian Banking Sector reforms. In 1955, the
Imperial Bank of India was nationalized and was given the name "State Bank of
India", to act as the principal agent of RBI and to handle banking transactions all
over the country. It was established under State Bank of India Act, 1955. Seven
banks forming subsidiary of State Bank of India was nationalized in 1960. On 19 th
July, 1969, major process of nationalization was carried out. At the same time 14
major Indian commercial banks of the country were nationalized. In 1980, another
six banks were nationalized, and thus raising the number of nationalized banks to
20. Seven more banks were nationalized with deposits over 200 Crores. Till the
year 1980 approximately 80% of the banking segment in India was under
government’s ownership. On the suggestions of Narsimhan Committee, the
Banking Regulation Act was amended in 1993 and thus the gates for the new
private sector banks were opened. The following are the major steps taken by the
Government of India to Regulate Banking institutions in the country.

4
 Nationalisation

By the 1960s, the Indian banking industry has become an important tool to
facilitate the development of the Indian economy. At the same time, it has emerged
as a large employer, and a debate has ensured about the possibility to nationalise
the banking industry. Indira Gandhi, the-then Prime Minister of India expressed the
intention of the Government of India (GOI) in the annual conference of the All
India Congress Meeting in a paper entitled "Stray thoughts on Bank
Nationalisation". The paper was received with positive enthusiasm. Thereafter, her
move was swift and sudden, and the GOI issued an ordinance and nationalised the
14 largest commercial banks with effect from the midnight of July 19, 1969.
Jayaprakash Narayan, a national leader of India, described the step as a
"Masterstroke of political sagacity" Within two weeks of the issue of the
ordinance, the Parliament passed the Banking Companies (Acquisition and
Transfer of Undertaking) Bill, and it received the presidential approval on 9
August, 1969. A second step of nationalisation of 6 more commercial banks
followed in 1980. The stated reason for the nationalisation was to give the
government more control of credit delivery. With the second step of
nationalisation, the GOI controlled around 91% of the banking business in India.
Later on, in the year 1993, the government merged New Bank of India with Punjab
National Bank. It was the only merger between nationalised banks and resulted in
the reduction of the number of nationalised banks from 20 to 19. After this, until
the 1990s, the nationalised banks grew at a pace of around 4%, closer to the
average growth rate of the Indian economy. The nationalised banks were credited
by some; including Home minister P. Chidambaram, to have helped the Indian
economy withstand the global financial crisis of 2007-2009.

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 Liberalisation

In the early 1990s, the then NarsimhaRao government embarked on a policy of

liberalisation, licensing a small number of private banks. These came to be known as
New Generation tech-savvy banks, and included Global Trust Bank (the first of such new
generation banks to be set up), which later amalgamated with Oriental Bank of

Commerce, Axis Bank(earlier as UTI Bank), ICICI Bank and HDFC Bank. This move
along with the rapid growth in the economy of India revolutionized the banking sector in
India which has seen rapid growth with strong contribution from all the three sectors of
banks, namely, government banks, private banks and foreign banks. The next stage for
the Indian banking has been setup 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 the
traditional banks. All this led to the retail boom in India. People not just demanded more
from their banks but also received more. Currently (2007), banking in India is generally
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. 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
but without any fixed 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.

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 voted by them. In recent years critics have charged that the non-government
owned banks are too aggressive in their loan recovery efforts in connection with housing,
vehicle and personal loans. There are press reports that the banks' loan recovery efforts
have driven defaulting borrowers to suicide.

6
 Classification ofBanking Industry In India
Indian banking industry has been divided into two parts, organized and
unorganized sectors. The organized sector consists of Reserve Bank of India,
Commercial Banks and Co-operative Banks, and Specialized Financial Institutions
(HDFC, ICICI, IFC etc). The unorganized sector, which is not homogeneous, is
largely made up of money lenders and indigenous bankers.

An outline of the Indian Banking structure may be presented as follows:

1. Reserve banks of India.

2. Indian Scheduled Commercial Banks.

a) State Bank of India and its associate banks.
b) Twenty nationalized banks.
c) Regional rural banks.
d) Other scheduled commercial banks.

3. Foreign Banks

4. Non-scheduled banks.

5. Co-operative banks.

Classification of Banking Industry In

India

Reserve Indian Non- Co-

Scheduled Foreign
banks of scheduled operative
Commerc Banks
India. banks banks.
ial Banks.

State Bank Twenty Regional Other

of India and nationalied rural scheduled
its associate banks banks. commercial
banks. banks.

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 Functions Of Banking System In India

The functions of a commercial banks are divided into two categories:

i) Primary functions, and

ii) Secondary functions including agency functions.

i) Primary functions:

The primary functions of a commercial bank include:

a) accepting deposits; and
b) granting loans and advances;

a) Accepting deposits

The most important activity of a commercial bank is to mobilise deposits from

the public. People who have surplus income and savings find it convenient to
deposit the amounts with banks. Depending upon the nature of deposits, funds
deposited with
bank also earn interest. Thus, deposits with the bank grow along with the
interest earned. If the rate of interest is higher, public are motivated to deposit
more funds with the bank. There is also safety of funds deposited with the
bank.

b) Grant of loans and advances

The second important function of a commercial bank is to grant loans and

advances. Such loans and advances are given to members of the public and to
the business community at a higher rate of interest than allowed by banks on
various deposit accounts. The rate of interest charged on loans and advances
varies depending upon the purpose, period and the mode of repayment. The
difference between the rate of interest allowed on deposits and the rate charged
on the Loans is the main source of a bank’s income.

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i)Loans

A loan is granted for a specific time period. Generally, commercial banks grant
short-term loans. But term loans, Functions of Commercial Banks :: 23 that is,
loan for more than a year, may also be granted. The borrower may withdraw the
entire amount in lumpsum or in instalments. However, interest is charged on the
full amount of loan. Loans are generally granted against the security of certain
assets. A loan may be repaid either in lumpsum or in instalments.

ii)Advances

An advance is a credit facility provided by the bank to its customers. It differs

from loan in the sense that loans may be granted for longer period, but advances
are normally
granted for a short period of time. Further the purpose of granting advances is to
meet the day to day requirements of business. The rate of interest charged on
advances varies from bank to bank. Interest is charged only on the
amount withdrawn and not on the sanctioned amount.

ii) Secondaryfunctions

Besides the primary functions of accepting deposits and lending money,

banks perform a number of other functions which are called secondary
functions. These are as follows -
a) Issuing letters of credit, travelers cheques, circular notes etc.
b) Undertaking safe custody of valuables, important documents, and
securities by providing safe deposit vaults or lockers;
c) Providing customers with facilities of foreign exchange.
d) Transferring money from one place to another; and from one
branch to another branch of the bank.
e) Standing guarantee on behalf of its customers, for making
payments for purchase of goods, machinery, vehicles etc.
f) Collecting and supplying business information;
g) Issuing demand drafts and pay orders; and,
h) Providing reports on the credit worthiness of customers.

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 Types of bank
The banking industry can be divided into following sectors, based on the
clientele served and products and services offered:

1. Retail Banks
2. Commercial banks
3. Cooperative banks
4. Investment Banks
5. Specialized banks
6. Central banks- Learn more at www.technofunc.com. Your online source for free
professional tutorials.

1. Retail Banks:
Retail banks provide basic banking services to individual consumers. Examples
include savings banks, savings and loan associations, and recurring and fixed
deposits. Products and services include safe deposit boxes, checking and
savings accounting, certificates of deposit (CDs), mortgages, personal,
consumer and car loans.
2. Commercial Banks:
Banking means accepting deposits of money from the public for the purpose of
lending or investment. Commercial Banks provide financial services to
businesses, including credit and debit cards, bank accounts, deposits and loans,
and secured and unsecured loans. Due to deregulation, commercial banks are
also competing more with investment banks in money market operations, bond
underwriting, and financial advisory work. Commercial banks in modern
capitalist societies act as financial intermediaries, raising funds from depositors
and lending the same funds to borrowers. The depositors’ claims against the
bank, their deposits, are liquid, meaning banks are expected to redeem deposits
on demand, instantly.
Banks’ claims against their borrowers are much less liquid, giving borrowers a
much longer span of time to repay money owed banks. Because a bank cannot
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immediately reclaim money lent to borrowers, it may face bankruptcy if all its
depositors show up on a given day to withdraw all their money.
There are two types of commercial banks, public sector and private sector
banks.
Public Sector Banks:
Public sectors banks are those in which the government has a major stake and
they usually need to emphasize on social objectives than on profitability.
Private sector banks:
Private sector banks are owned, managed and controlled by private promoters
and they are free to operate as per market forces.
3. Investment Banks:
An investment bank is a financial institution that assists individuals,
corporations and governments in raising capital by underwriting and/or acting
as the client's agent in the issuance of securities. An investment bank may also
assist companies involved in mergers and acquisitions, and provide ancillary
services such as market making, trading of derivatives, fixed income
instruments, foreign exchange, commodities, and equity securities.
Investment banks aid companies in acquiring funds and they provide advice for
a wide range of transactions. These banks also offer financial consulting
services to companies and give advice on mergers and acquisitions and
management of public assets.
4. Cooperative Banks:
Cooperative Banks are governed by the provisions of State Cooperative
Societies Act and meant essentially for providing cheap credit to their members.
It is an important source of rural credit i.e., agricultural financing in India.
5. Specialized Banks:
Specialized banks are foreign exchange banks, industrial banks, development
banks, export-import banks catering to specific needs of these unique activities.
These banks provide financial aid to industries, heavy turnkey projects and
foreign trade.
6. Central Banks:
Central banks are bankers’ banks, and these banks trace their history from the
Bank of England. They guarantee stable monetary and financial policy from

11
country to country and play an important role in the economy of the country.
Typical functions include implementing monetary policy, managing foreign
exchange and gold reserves, making decisions regarding official interest rates,
acting as banker to the government and other banks, and regulating and
supervising the banking industry.

Acts Regarding Banking Industry

1949: Enactment of Banking Regulation Act.

1955: Nationalisation of State Bank of India.

1959: Nationalization of SBI subsidiaries.

1961: Insurance cover extended to deposits.

1969: Nationalisation of 14 major Banks.

1971: Creation of credit guarantee corporation.

1975: Creation of regional rural banks.

1980: Nationalisation of seven banks with deposits over 200 Crores.

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 CHAPTER: 2
REVIEW OF LITERATURE
 Sharma (1974) said, "The expansion of banking facilities was uneven and
lopsided and banks were concentrating their operations in metropolitan cities
and towns. A fairly large number of rural and semi urban centre with
reasonable potentialities of growth failed to attract the attention of commercial
banks. As far as the deposit mobilization in the rural areas is concerned, much
remains to be done."This gives emphasis on the rural and semi urban growth
of banks.

 Gopal Karkal(1977) said, "Some regions have done well in spreading the
banking facilities, while some regions have still very backward. Further, our
clients are larger merchants and big industrialists. They approach with their
demand for larger loans and advances, and in return give large business. If we
transfer our limited resources to small industry, agriculture etc., how can we
increase our deposits, advances etc., and how can we survive." As it give
emphasis on a policy of planned and systematic branch expansion laying stress
not only on opening branches in the underdeveloped and neglected areas but
also in the providing additional banking facilities to the growing metropolitan
and urban areas to cope with the ever-increasing requirements of trade,
industry and commerce is more desirous.

 Raghupathy (1977), gave his view on the system of banking sector that "if the
objectives are not fully achieved, the fault does not lie entirely with the
bankers. The fault lies in our, not being able to integrate all powerful
instruments of development into an effective system".

 Shah (1977) gave his view regarding bank profitability and productivity. He
has expressed concern about increased expenses and overheads. Slow growth
in productivity and efficiency is due to wasteful work of the banks. He
concludes that the higher profitability can be result from increased spread and
innovations have a limited role. He favored written job descriptions for
improvement of staff productivity. He also emphasized reduction of costs,
creation of a team spirit improvement in the management for improving bank
profitability and productivity

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 Uppal (2009) in his study found that in the post-LPG (Liberalization,
Privatization and Globalization) era and Information Technology (IT) era,
transformation in Indian banks is taking place with different parameters and the
contours of banking services are dynamically altering the face of banking, as
banks are stepping towards e-banking from traditional banking. On the basis of
five-point likert-type scale, this paper empirically analyzes the quality of e-
banking services in the changing environment. With different statistical tools
such as weighted average method and ranking, the paper concludes that most of
the customers of e-banks are satisfied with the different e-channels and their
services, but the lack of awareness is a major obstacle in the spread of e-
banking services. The paper also suggests some measures to make e-banking
services more effective in the future.
 Girdhar (2009) observed that by satisfying the internal customers and
buildinggood relationship with them, the relationship with the external
customers can also be retainedand satisfied by the banks. Kumar & Rajesh
(2009) reveals that any bank that wishes to eithergrow in size of its banking
operation or improve its profitability must consider the challengesaffecting its
customer relationship.The challenge before the banks is not only to obtain
updatedinformation for each customer, but also to use the information to
determine the best time to offerthe most relevant products (Lau et al., 2003). It
is also important to understand that if customersbring in profits for the bank, it
becomes imperative for the bank to provide excellent services tothose
customers, otherwise they switch to other banks (Ray, 2007). Service quality in
bankingimplies consistently anticipating and satisfying the needs and
expectations of customers.
 Curry and Kkolou (2004) refer to the major benefits and reasons for adoption
of CRM which include: customers from the competition will come prefer the
organization; a simplified, customer – focused internal organization will
simplify the infrastructure, shrinking the work flow and eliminating non-
productive information flow; and profits will increase from satisfied customers
which will lead to more compact & focused company.
 Suresh chander and Rajendran (2003)In their paper, focused on investigating
the important factors of customers’ perceived quality in banks of developing
economy like India. The researchers found that there seems to be a great
variation in respect of services offered by three groups of banks. They used core

14
 services such as human element, systemization of services, tangibility of
services and social responsibility as critical factors. They analyzed that three
groups of banks in India seem to vary significantly in terms of service quality
factors but from the customer perception of service quality, it could be
acceptable only if customers’ need could be satisfied at the right time in a right
manner

• Manoharan (2007)Highlighted the e-payment system in India and its

performance impact on Indian banking sector. The author described that
competition in banking industry had forced the banks to rethink the way they
operate their business. So, e-banking has made it possible to find alternate
banking practices. In the paper, the author divided the payment system in India
into three parts, i.e., large value payment system, retail payment system, and
retail electronic system. Each one includes different categories of e-payment.
The study focused that having a huge opportunity of e payment system in India
still 90 per cent of transactions were cash based. So, an effort should be made to
increase the use of e-payment, and RBI should make efforts to strengthen the
legal framework of electronic banking system.

15
 CHAPTER 3:RESEARCH METHODOLOGY
& OBJECTIVES

To study the advantages of CRM schemes introduced by HDFC Bank to its

customers

To study the various customers oriented schemes introduced by HDFC Bank

in the interest of its customers.

Majority of customers are satisfied with the services provided by HDFC

Bank.

HDFC is always taking initiative for providing maximum satisfaction to its

customers.

16
 METHODOLOGY

The study was conducted by the means of personal interview with respondents
and the information given by them were directly recorded on questionnaire.
For the purpose of analyzing the data it is necessary to collect the vital
information. There are two types of data, this are-
Primary Data
Secondary data

SECONDARY DATA:-
Secondary data is collected from magazines, newspaper, etc.
Eg; social networking sites, books, newspaper, etc.

17
 CHAPTER 4:ANALAYSIS AND
INTERPRETATION
Introduction to HDFC Bank

The Housing Development Finance Corporation Limited (HDFC) was

amongst the first to receive an 'in principle' approval from the Reserve Bank of
India (RBI) to set up a bank in the private sector, as part of the RBI's
liberalisation of the Indian Banking Industry in
1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank
Limited', with its registered office in Mumbai, India. HDFC Bank commenced
operations as a Scheduled Commercial Bank in January 1995. MD received the
Asian Banker Best Bank in India Award at a function on March 23, 2012 at

18
Singapore. Mr. Puri is flanked by Mr. Emmanuel Daniel, CEO, The Asian
Banker, on his right and Mr.Philippe Paillart, Chairman, Advisory Council.

Key Executives

Key Executives Director Ashim Samanta

Chairman (Non-Executive) C M Vasudev
Director Pandit Palande
Managing Director Aditya Puri

Banking Services HDFC Bank began operations in 1995 with a simple mission:
to be a "World-class Indian Bank". They realised that only a single-minded
focus on product quality and service excellence would help us get there. Today,
they are proud to say that they are well on the way towards that goal. It is
extremely gratifying that the efforts towards providing customer convenience
have been appreciated both nationally and internationally.6 Promoters HDFC is
India's premier housing finance company and enjoys an impeccable track record
in India as well as in international markets. Since its inception in 1977, the
Corporation has maintained a consistent and healthy growth in its operations to
remain the market leader in mortgages. Its outstanding loan portfolio covers
well over a million dwelling units. HDFC has developed significant expertise in
retail mortgage loans to different market segments and also has a large
corporate client base for its housing related credit facilities. With its experience
in the financial markets, a strong market reputation, large shareholder base and
unique consumer franchise, HDFC was ideally positioned to promote a bank in
the Indian environment. Business Focus HDFC Bank's mission is to be a World-
Class Indian Bank. The objective is to build sound customer franchises across
distinct businesses so as to be the preferred provider of banking services for
target retail and wholesale customer segments, and to achieve healthy growth in

19
profitability, consistent with the bank's risk appetite. The bank is committed to
maintain the highest level of ethical standards, professional integrity, corporate
governance and regulatory compliance. HDFC Bank's business philosophy is
based on four core values - Operational Excellence, Customer Focus, Product
Leadership and People.

Capital Structure As on 31st March, 2012 the authorized share capital of the
Bank is ` 550 crore. The paid-up capital as on the said date is ` 469,33,76,540
(234,66,88,270 equity shares of ` 2/- each). The HDFC Group holds 23.15% of
the Bank's equity and about 17.29 % of the equity is held by the ADS / GDR
Depositories (in respect of the bank's American Depository Shares (ADS) and
Global Depository Receipts (GDR) Issues). 30.68 % of the equity is held by
Foreign Institutional Investors (FIIs) and the Bank has 4,47,924 shareholders.
The shares are listed on the Bombay Stock Exchange Limited and the National
Stock Exchange of India Limited. The Bank's American Depository Shares
(ADS) are listed on the New York Stock Exchange (NYSE) under the symbol
'HDB' and the Bank's Global Depository Receipts (GDRs) are listed on
Luxembourg Stock Exchange under ISIN No US40415F2002.
Centurion Bank of Punjab amalgamation with HDFC On May 23, 2008, the
amalgamation of Centurion Bank of Punjab (CBoP) with HDFC Bank was
formally approved by Reserve Bank of India to complete the statutory and
regulatory approval process. As per the scheme of amalgamation, shareholders
of CBoP received 1 share of HDFC Bank for every 29 shares of CBoP. The
merged entity will have a strong deposit base of around ` 1, 22,000 crores and
net advances of around ` 89,000 crores. The balance sheet size of the combined
entity would be over ` 1, 63,000 crores. The amalgamation added significant
value to HDFC Bank in terms of increased branch network, geographic reach,
and customer base, and a bigger pool of skilled manpower. In a milestone
transaction in the Indian banking industry, Times Bank Limited (another new

20
private sector bank promoted by Bennett, Coleman & Co. / Times Group) was
merged with HDFC Bank Ltd., effective February 26, 2000. This was the first
merger of two private banks in the New Generation Private Sector Banks. As
per the scheme of amalgamation approved by the shareholders of both banks
and the Reserve Bank of India, shareholders of Times Bank received 1 share of
HDFC Bank for every 5.75 shares of Times Bank.
Distribution Network
HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable
network of 2,544 branches spread in 1,399 cities across India. All branches are
linked on an online real-time basis. Customers in over 500 locations are also
serviced through Telephone Banking. The Bank's expansion plans take into
account the need to have a presence in all major industrial and commercial
centres where its corporate customers are located as well as the need to build a
strong retail customer base for both deposits and loan products. Being a
clearing/settlement bank to various leading stock exchanges, the Bank has
branches in the centres where the NSE/BSE has a strong and active member
base. The Bank also has 8,913 networked ATMs across these cities. Moreover,
HDFC Bank's ATM network can be accessed by all domestic and international
Visa/MasterCard, Visa Electron/Maestro, Plus/Cirrus and American Express
Credit/Charge cardholders.
Business HDFC Bank offers a wide range of commercial and transactional
banking services and treasury products to wholesale and retail customers. The
bank has three key business segments:
Wholesale Banking Services The Bank's target market ranges from large,
blue-chip manufacturing companies in the Indian corporate to small & mid-
sized corporate and agri-based businesses. For these customers, the Bank
provides a wide range of commercial and transactional banking services,
including working capital finance, trade services, transactional services, cash
management, etc. The bank is also a leading provider of structured solutions,

21
which combine cash management services with vendor and distributor finance
for facilitating superior supply chain management for its corporate customers.
Based on its superior product delivery / service levels and strong customer
orientation, the Bank has made significant inroads into the banking consortia of
a number of leading Indian corporates including multinationals, companies from
the domestic business houses and prime public sector companies. It is
recognised as a leading provider of cash management and transactional banking
solutions to corporate customers, mutual funds, stock exchange members and
banks.
Retail Banking Services
The objective of the Retail Bank is to provide its target market customers a full
range of financial products and banking services, giving the customer a one-stop
window for all his/her banking requirements. The products are backed by
world-class service and delivered to customers through the growing branch
network, as well as through alternative delivery channels like ATMs, Phone
Banking, Net Banking and Mobile Banking. The HDFC Bank Preferred
program for high net worth individuals, the HDFC Bank Plus and the
Investment

Advisory Services programs have been designed keeping in mind needs of

customers who seek distinct financial solutions, information and advice on
various investment avenues. The Bank also has a wide array of retail loan
products including Auto Loans, Loans against marketable securities, Personal
Loans and Loans for Two-wheelers. It is also a leading provider of Depository
Participant (DP) services for retail customers, providing customers the facility
to hold their investments in electronic form. HDFC Bank was the first bank in
India to launch an International Debit Card in association with VISA (VISA
Electron) and issues the Master card Maestro debit card as well. The Bank
launched its credit card business in late 2001. By March 2010, the bank had a

22
total card base (debit and credit cards) of over 14 million. The Bank is also one
of the leading players in the “merchant acquiring” business with over 90,000
Point-of-sale (POS) terminals for debit / credit cards acceptance at merchant
establishments. The Bank is well positioned as a leader in various net based
B2C opportunities including a wide range of internet banking services for Fixed
Deposits, Loans, Bill Payments, etc.

Treasury Within this business, the bank has three main product areas -
Foreign Exchange and Derivatives, Local Currency Money Market & Debt
Securities, and Equities. With the liberalisation of the financial markets in India,
corporates need more sophisticated risk management information, advice and
product structures. These and fine pricing on various treasury products are
provided through the bank's Treasury team. To comply with statutory reserve
requirements, the bank is required to hold 25% of its deposits in government
securities. The Treasury business is responsible for managing the returns and
market risk on this investment portfolio.

23
CUSTOMER RELATIONSHIP MANAGEMENT

+
 Introduction

 Types of CRM

 CRM In Banking : Indian Scenario

 Needs of CRM

 Objectives

 Process For Delivering CRM

 CRM Implementation Of HDFCBank

24
25
 INTRODUCTION

Customer relationship management (CRM) is a system for managing a

company’s interactions with current and future customers. It involves using
technology to organize, automate and synchronize sales, marketing, customer
service, and technical support.In the modern times, the existence of the civilized
world cannot be imagined without banks. The banking activities have become
not only an integral part of the human civilization but also have directed the
flow of progress over the lifetime of human civilization so far. in today’s
competitive world, banks, like any other industry, are struggling hard to
maintain the old clientele while attracting new customers. it is in this scenario
that establishing a relationship with the customers and managing it well has
become the need of the hour. how successful a bank is at managing a good
relationship with its customers determines how well it does.

customer relationship management (CRM) is a widely implemented strategy for

managing a company’s interactions with customers, clients and sales prospects.
it involves using technology to organize, automate, and synchronize business
processesprincipally sales activities, but also those for marketing, customer
service, and technical support. the overall goals are to find, attract, and win new
clients, nurture and retain those the company already has, entice former clients
back into the fold, and reduce the costs of marketing and client service.

one of the largest challenges that customer relationship management systems

face in banks is poor usability. with a difficult interface for a user to navigate,

26
implementation can be fragmented or not entirely complete. CRM systems for
marketing departments in banks help the enterprise identify and target potential
clients and generate leads for the sales team. a key marketing capability is
tracking and measuring multichannel campaigns, including email,search, social
media, telephone and direct mail. metrics monitored include clicks, responses,
leads, deals, and revenue.

CRM can drive service revenue and profitability with support for service sales
and marketing.customer relationship management (CRM) in the banking system
is fundamental to building a customer-centric organization

Retail banks are facing greater challenges than ever before in executing their
customer management strategies. Intensifying competition, proliferating
customer contact channels, escalating attacks on customer information, rising
customer expectations and capitalizing on new market opportunities are at the
top of every bank executive’s agenda. In looking for ways to drive growth,
banks need to evaluate their customer management strategy.

27
Types of CRM

28
Broadly, three types of CRM are adopted by banks:

(1) Operation CRM – In this, CRM software packagesare used to track and
efficiently organise inboundand outbound interactions with customers
includingthe management of marketing campaigns and callcentres. Operational
CRM supports frontlineprocesses in sales, marketing and customer
service,automating communications and interactions withthe customers. They
record contact history and storevaluable customer information to ensure a
consistentpicture of customer’s relationship with the bank thatcan be retrieved
by staff as per requirement. Themajor benefits of operational CRM to banks are:

(a) Sales Force Automation

(b) Customer Service and Support

(c) Enterprise Marketing Automation

(2) Analytical CRM – It is about analysing customerinformation to better

address marketing andcustomer service objectives and deliver the right message
to the right customer at the right timethrough the right channel. It involves the
use of dataanalysis to extract knowledge for optimizing customer relationships.

The major benefits of Analytical CRM to banks are :

(a) Customer Retention

(b) Fraud Detection

(c) Optimising marketing efforts as per customer

life time value

(d) Credit Risk Analysis

(e) Segmentation and targeting

(f) Development of customised new productsmatching the specific preferences

and prioritiesof customers.

29
(3) Collaborative CRM - These involve systemsfacilitating customers to
perform services on theirown through a variety of communication and\
interactive channels. It brings people process anddata together and enables
channeling of data andinformation appropriately to bank staff for
proactivedecision making and enhanced informed customerservice and support
activities. It provides a means of information sharing to all concerned in
timelymanner and includes customer as a creator ofservice. The major benefits
of collaborative CRM tobanks are

(a) Providing efficient customer communicationacross a variety of channels

(b) Online services to reduce customer service costs

(c) Providing access to customer data whileinteracting with customers.

Thus, CRM can be understood as a catalyst enablingtransformation of Banking

from traditional

30
 CRM In Banking: Indian Scenario
Although significance of Relationship Marketingpractices and
optimising and maintaining customerrelationships across diverse customer
segments has beenrealised and practiced by all banks in India, thetechnology
enabled CRM is still at a developing stage.Different Banks are at different
levels of CRM adoptionand implementation and majority of them can
beconsidered to be at preliminary stages. Operational CRMis the most wide
spread, but collaborative CRM is mostevident in internet banking, mobile
banking, ATMfunctions, POS devices and initiatives like availability ofpass
book printing machines to enable customers toupdate their passbooks
themselves. Also SMS alerts atvarious significant customer service events
areproliferating. Analytical CRM is being utilized but not byall banks. Here also
a few illustrations of Indian banksusing CRM will define a clearer picture of
CRM in Indianbanking.

31
 Need of CRM in the Banking Industry

A Relationship-based Marketing approach has the following benefits: -

1. Over time, retail bank customers tend to increase their holding of the other
products from across the range of financial products / services available.

2. Long-term customers are more likely to become a referral source.

3. The longer a relationship continues; the better a bank can understand the
customer and his/her needs & preferences, and so greater the opportunity to
tailor products and

services and cross-sell the product / service range.

4. Customers in long-term relationships are more comfortable with the

service,the organization, methods and procedures. This helps reduce operating
cost and costs arising out of customer error. With increased number of banks,
products andservices and practically nil switching costs, customers are easily
switching bankswhenever they find better services and products. Banks are
finding it tough to get new customers, and more importantly, retain existing
customers.

32
The Processes for Delivering CRM

33
The tools and the processes are as follow –

Customer application form

Centralized software where the whole data is collected.

Wide range of offerings

Cross – selling

Feedback forms

1) Customer Application Forms:

Bank collects all the data from customer application form and gets
thepersonalized information to know which product to offer to which customer.
This process helps in collecting the data and knowing what the customer wants.

2) Centralized Software where the Whole Data is Collected:

The data collected through customer application forms is available at one

server and canbe accessed anytime, anywhere. So, this helps in the further
process of customized offerings and cross –selling.

3) Wide Range of Offerings:

After collecting the data from the customer, team decides what product to offer
to which customer. In case the bank recognizes you as a valuable customer then
is offers a more customized service.

4) Cross – Selling:

It refers to offering another product from the service offering of the bank to the
customer which he has not gone for. For example If customer has savings
account with the bank then they offer him a insurance, fixed deposits etc. This
depends on the value of the customer to the bank. Cross selling is not offered to

34
every customer. It depends on how loyal the customer is to the bank. The more
business he gives us, the more are his chances of being special services offered.

5) Feedback Forms:

The bank distributes feedback forms at all its branches. The customers
feedbacks on the service, technology used, employee behavior and promptness
in solving customer’s problems, are taken and they are analyzed. CRM helps to
know the needs and wants of the customer .So, on the basis of this company can
decide which product to offer to which customer. It has beenobserved that cross
– selling is the best weapon. It enhances the relationship value with the
customer. This satisfies the customer and that is the reason why the customer
keeps on coming again and again to the company. This helps in retaining the
market share. Now ,the satisfied customers help in the word- of – mouth
promotion of the bank, which eventually increases our market share.

35
 CRM Implementation Of HDFC Bank

HDFC has transformed itself into a technology intensive financial services

group in the last decade. To achieve its long term goal of being in a position to
practice One-to-One marketing. HDFC has taken a series of initiatives. As 0part
of the plans, it is implementing various projects to establish world-class CEM
practices which would provide0 an integrated view of its customers to everyone
in the organization. The paper discusses some of the lessons learnt while
implementing these projects.

1. Introduction:

The success of any organization, particularly of a service-oriented organization,

likea Bank depends on the quality of service offered to customers. Customers
seek aBank not for the catchy slogans and colourful brochures, but for the
efficient and
prompt service offered to them. Efficient service helps to retain the customers.
Today, Bank is essentially an institution engaged in meeting financial as well as
nonfinancialservice needs of the society. Given this, customer service takes the
centrestage in the Banking business.

2. Aims and Objectives:

2.1 Aims:
HDFC Bank Ltd offers various products and services to its customers (i.e.
Corporate
Banking, Retail Banking and Priority Sector Banking customers). It aims to
provide
easy access across different channels (Corporate and Retail Branches, Retail
Asset
Centres, etc.)

It is the vision of the Bank to be the most preferred and trusted Bank enhancing
value for all stakeholders. The mission of the Bank is

• Delighting customers with our excellent service and comprehensive suite of

best-in- class financial solutions;

36
• Touching more people’s lives with our expanding retail footprint while
maintaining our excellence in corporate and infrastructure financing;

• Continuing to act in an ethical, transparent and responsible manner, becoming

the role model for corporate governance;

• Deploying world class technology, systems and processes to improve

business efficiency and exceed customers' expectations;

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

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

• Expanding our global presence;

• Relentlessly striving to become a greener Bank.

In our endeavor to provide the best services to our customers the Bank has
formulated its Customer Care Policy. The policy guidelines will assist the staff
in
rendering high-quality customer services consistently and to continually
improve its

2.Objectivs:
Theobjectiveofthispolicy istohighlightthequality standardstobe adoptedby
HDFCBankLtd.andidentify principlesandpracticestorenderhighquality
customer services.

3.Customer Care Policy:

3.1 Well-designedcustomerservicemustbeaccompaniedbygooddelivery.The
CustomerCarePolicy ofHDFCBankstrivesto ensureCustomerDelightandisthus
based onthefollowing7 principles:-
a) Speed–Customer'sneedsshouldbetakencareofassoonaspossible.
Delayedhandlingofthecustomer'srequests isamajorblock inthe delivery
of goodcustomer service.
b) Timeliness–Commencementofbankingbusinessandopeningofcounter-
servicesintime andrendering uninterrupted serviceduring

37
 businesshoursis anintegral aspectofensuring goodcustomerservice.

c) Accuracy –TheinformationrenderedbytheBanktothecustomershouldbe
factual,accurateandunambiguous.Acronyms,ifused,shouldbeexplained to the
customer. Wherethereisany doubtabouttheaccuracyofany
information,thedetailswill becheckedandvalidated prior torelease.
d) Courtesy –Theleastthatanyvisitortoabranchexpectsiscourtesyfromthe
Bankstaff.Therefore, firstandforemost,everycustomershallbeextended
duecourtesies,whetherornot theBankisin apposition
tomeethis/herneeds.Courtesywillbeshowninallcircumstances,evenindifficultsitu
ationswhere the
customerdoesnotshowsimilarcourtesyinreturn.Staffwillalwaysbe politeintheir
spokenwords,bodylanguageanddemeanour.
e) Concern–Anticipatingthecustomer'sproblemsandguidingthemshowsthatBank
caresfor them andis equallyconcerned.
f) Communication–Animportantpartofcustomerservice iscommunicating
effectively withthecustomersand personal interactionplaysavery effective
roleindevelopingtherelationshipwithcustomers.HDFCBank welcomes
opinionandsuggestions fromcustomers andsuchopinions/suggestions are placed
beforespecially appointedCommitteetolookintocustomer suggestions.If foundto
befeasible,thesuggestionsare acceptedand subsequently implemented.
g) Transparency-Clearandpreciseinformationneedstobeprovidedtothe
customersinresponsetotheirqueriesandcomplaints,as per theextant policies
oftheBank.

3.2The aboveprinciples formthecornerstoneofgoodcustomerservice.Customer

serviceandcustomersatisfactionarenotstaticconcepts.Theconceptvarieswith
thechangingtimesandchanginglevelsofexpectationsofthecustomers. Whatwas
hithertoconsideredassatisfactory customerservicecould now be perceived as
unsatisfactory,inthecontextofglobally competitivemarket.Itis notthat oncea
customeris accorded duecourtesies,he /shecan beignoredthe nexttime.Good

38
customer serviceis acontinuousprocess.

4.CustomerServiceCommitmentfor Staff
HDFC Bank alsoemphasizes thatits staffstayfocused
andbecustomerfriendly.TheServiceCommitment ofthestaffshouldbeto:
a) Behonest,transparent, equitableandfair indealingwithcustomers.
b) Listentowhatcustomerhavetosayanddeterminetheexactnatureofthe
request.
c) Explainourproductsandservicesandkeepthecustomerinformedofany
changes.
d) Respondtocustomerenquiries promptlyand efficiently.

e) Seek theviews ofthecustomer,ifrequired.

f) Providerelevant and timelyfeedback.

g) Make decisionsusing processes that are consultative, impartial and

otherwise ethical.
h) Adoptfair,lawful and appropriate procedureswhen
arrivingatresolutions.
i) Betolerantand accommodative eveninthe eventofprovocation.
j) Sensitivetocustomerswithphysicaldisabilities,seniorcitizensandweaker
sectionsofsociety.
k) Seentobeactinginaccordancewith Banks’extantguidelines

5. CustomerServiceForSpecialCustomers
5.1PensionersandSeniorCitizens:-
a) TheBankwouldstrivetoprovideprioritizedservicetoseniorcitizensand
differently abledcustomersby effectivecrowd/peoplemanagementat
allits branches.
b) Incasethesenior citizen/ differentlyablecustomers has registered his /her

39
 mobile numberwiththeBankand has availedtheSMS facility,theBank
wouldprovidethebalanceintheaccountthroughSMSonaweekly basisas
well as providetransactiondetails,as is providedtoanormal customer.
c) Thepensioner will be allowedtosubmitthe annual life certificate
atanyofthe branches andnotnecessarilyatthehome branch.
d) TheBankcommitstocreateawarenessaboutReverseMortgageScheme
amongpensioners/senior citizens.
e) MostofHDFCBank'soffice buildings
areaccessibletopersonwithdisabilities andsenior citizens.Ramps have
been providedinthese buildings andatoilet
forwheelchairusershasbeenprovidedatourCorporateOffice,Mumbai.Allo
therofficesoftheBankhavebeensuitably sensitized toextendthefacilities
intheir respectiveoffice buildings.
5.2 VisuallyImpaired Persons:
TheBank withoutanydiscriminationprovidesbankingfacilitiessuchascheque
book facility /operationofATM /locker,etc. to the visuallychallengedcustomers
who arecapable of usingthosefacilities.

Inthisregard,allthe branchesare duly advisedtorenderallpossibleassistanceto

thevisuallychallengedcustomersfor availingthevariousbankingfacilities.

5.3Deceased Depositors:Settlement of Claims

InlinewiththeRBIguidelinesandtheBank'sOperationalProcedureforsettlement of
claimsofdeceased depositors,theBankwillensure thatthere isquickand hassle-
freesettlement ofamount/dues tothenominee/legalheir.

Asper Bank’s Policy onSettlementofDeceasedClaim, accountswithnomination

wouldbesettledwithinaperiodnotexceeding15daysand accountswithout
nominationwouldbesettledwithinaperiod notexceeding1monthfromthedateof
receipt ofthe claimapplication withcomplete documentation tothe satisfaction
ofthe Bank.
5.4Customersin Rural andSemi-urbanareas:
40
 a) Bankwillensurepropercurrencyexchangefacilitiesandalsothequalityof
notesincirculationinrural areas.
b) The Bank will ensure that the branches would be opened as per the
scheduledtimeandoperatedforfull hours.

6. Initiativestaken to providebettercustomerservice
Inorderthatthecustomersareprovidedwithexcellentserviceatallthebranches,
thefollowing guidelines have beenadopted:
a) Providing infrastructure facilities by ensuring adequate space,
proper furniture, drinking water facilities, with specific emphasis on
pensioners, senior citizens, disabled persons,etc.
b) EnsuringthatallbranchesofourBankareopenedasperthescheduled
timesandareoperatedfor thefull hours.
c) Providingseparateenquirycountersatourlargebranchesinadditiontoa
regular "MayIHelpYou"counter.
d) Displaying indicator boards at all the counters in English,Hindi as well
as in theconcernedregional language.Itshall also be our endevaour to
provide business postersatsemi-urban andrural
branchesintheconcernedregional languages.
e) UseofHindiandregionallanguagesintransactingbusinessbyBankswith
customers,includingcommunicationsenttocustomers.
f) MysteryShoppingexerciseisundertakenperiodicallyatthecustomertouch
pointstoensurethatemployeesareproperlyrespondingtothecustomers
andprovidingthemnecessary advice/guidanceforexecution oftheir
transactions.
g) Reviewingandimprovingupontheexistingsecuritysystemin branches soas
toinstill confidenceamongsttheemployeesandthepublic.
h) Wearing anidentificationbadgedisplayingphoto, name anddesignation
thereon bytheemployees.

41
 i) Periodic changeofdesk
toensurejobrotation.
j) Trainingofstaffinlinewithcustomerserviceorientation.
Trainingintechnical areas ofbanking
andproductknowledgetothestaffatdeliverypoints.
k) Visit bysenior officials fromcontrollingofficesandHeadOfficeto
branches at periodicalintervalsfor onthespotstudy ofthequality
ofservicerenderedby thebranches.
l) Conductingcustomer surveys atregular intervals.
m) Holdingcustomerrelationprogrammesandperiodicalmeetingstointeract
with differentcross-sectionsof customersfor identifyingaction pointsto
enhancecustomer service.
n) Havinga ProductandServices Approval Process.
o) Appointingofficerswhowillensurethattheintentofpolicyistranslatedinto
properprocedures.
p) Displayingtime normsfor various bankingtransactions/services.

TheBankalsohas acustomer friendly complaintformwhichhasbeenhostedonthe

Bank'swebsitetoenablecustomerstolodgetheir complaints/queries.Further,the
contactdetailsofthe ChiefGrievanceRedressalOfficer are also madeavailableon
theBank's websitewww.hdfc.com.
7.CustomerEducation
a) TheBankplacesutmostimportanceonsafetyoffundsofitscustomersand
alsomakes efforts toinculcatesafebanking practicesamongstitscustomersto
protectthem from losingtheir hardearnedmoney.
b) TheBankhasbeenusing various meansofcommunication suchasleaflets,
brochures, material printed on statements and account opening kits,Website,
Emails, SocialMedia etcinorderto educatethecustomerstousetechnology /
alternatechannelsin banking. Thecustomers arealsoinformedaboutthe
precautions tobetakenintheuse ofsuch alternatechannels.
c) To educatethecustomersonsafeguardsofBanking,theBankhas put upalist

42
 of"Do'sandDon’tsof Banking"onits website.
d) TheBankensuresfulltransparency tothecustomerinlevyingofvarious fees,
servicecharges and penalties. Communicationonchangesintheschedule of
chargesisinformedtotheaccountholders andisalso highlightedonourwebsite
www.hdfc.com.
e) ComprehensivePosterandCitizen'sCharterareavailableinallthebranches
inordertoeducatethecustomersaboutvariouspolicies,guidelinesandavenues
forcomplaintescalation.
f) CustomerMeets,titledas "Grahak SahyataAbhiyaan"areheld atvarious
locations wherein senior officials of the Bank directly interact with
customers, educatethemabouttheir rights andreceivetheir
suggestions/viewstoimproveour products/services.
g) Withaview toincreaseawareness amongthefarmersonmodernfarming
techniquesandemerging trends,theBankhasbeenundertaking variousprograms.
Thisincludes organizing offarmersmeetingwithexpertsintherelevantfield,
participation in Agriexhibitions,formationof Farmers’ Clubs in association
with NABARD etc.
h) TheBankhasintroducedKisanCreditCardinformofATMcumDebitCard for
thefarmers.Thefarmers can,therefore,withdrawcashfrom anyoftheATMs.

8.BankingOmbudsman Schemeof
ReserveBankof India.
Incasethecustomerisnotsatisfiedwiththereply receivedfromthe Bankorhasnot
receivedareply withinaperiodofonemonthoflodgingthecomplaintwiththeBank,
the customer can approach the Banking Ombudsman under the Banking
OmbudsmanSchem
e.
TheBankingOmbudsmanSchemehasbeenformulatedbythe ReserveBankof
Indiatoprovideanexpeditiousgrievance

43
9. Initiativestaken to providebettercustomerservice.
Inorderthatthecustomersareprovidedwithexcellentserviceatallthebranches,
thefollowing guidelines have beenadopted:
a) Providing infrastructure facilities by ensuring adequate space,
proper furniture, drinking water facilities, with specific emphasis on
pensioners, senior citizens, disabled persons,etc.
b) EnsuringthatallbranchesofourBankareopenedasperthescheduled
timesandareoperatedfor thefull hours.
c) Providingseparateenquirycountersatourlargebranchesinadditiontoa
regular "MayIHelpYou"counter.
d) Displayingindicator boards at all thecounters in English,Hindi as well
as in theconcernedregional language.Itshall also be our endevaour to
provide business postersatsemi-urban andrural
branchesintheconcernedregional languages.
e) UseofHindiandregionallanguagesintransactingbusinessbyBankswith
customers,includingcommunicationsenttocustomers.
f) MysteryShoppingexerciseisundertakenperiodicallyatthecustomertouch
pointstoensurethatemployeesareproperlyrespondingtothecustomers
andprovidingthemnecessary advice/guidanceforexecution oftheir
transactions.
g) Reviewingandimprovingupontheexistingsecuritysystemin branches soas
toinstill confidenceamongsttheemployeesandthepublic.
h) Wearing anidentificationbadgedisplayingphoto, name anddesignation
thereon bytheemployees.
i) Periodic changeofdesk
toensurejobrotation.

j) Trainingofstaffinlinewithcustomerserviceorientation. Trainingin
technical areas ofbanking andproductknowledgetothestaff atdelivery
points.
k) Visit bysenior officials fromcontrollingofficesandHeadOfficeto

44
 branches at periodicalintervalsfor onthespotstudy ofthequality
ofservicerenderedby thebranches.
l) Conductingcustomer surveys atregular intervals.
m) Holdingcustomerrelationprogrammesandperiodicalmeetingstointeract
with different crosssectionsof customersfor identifying action
pointsto enhancecustomer service.
n) Havinga ProductandServices Approval Process.
o) Appointingofficerswhowillensurethattheintentofpolicyistranslatedinto
properprocedures.
p) Displayingtime normsfor various bankingtransactions/services.

TheBankalsohas acustomer friendly complaintformwhichhasbeenhostedonthe

Bank'swebsitetoenablecustomerstolodgetheir complaints/queries.Further,the
contactdetailsofthe ChiefGrievanceRedressalOfficer are also madeavailableon
theBank's websitewww.hdfc.com.

10. CustomerServicefor SpecialCustomers.

10.1PensionersandSeniorCitizens:-
a) TheBankwouldstrivetoprovideprioritisedservicetoseniorcitizensand
differently abledcustomersby effectivecrowd/peoplemanagementat
allits branches.
b) Incasethesenior citizen/ differentlyabledcustomers has registered his /
her mobile numberwiththeBankand hasavailedtheSMS facility,theBank
wouldprovidethebalanceintheaccountthroughSMSonaweekly basisas
well as providetransactiondetails,as is providedtoanormal customer.
c) Thepensioner will be allowedtosubmitthe annual
lifecertificateatanyofthe branches andnotnecessarilyatthehome branch.
d) TheBankcommitstocreateawarenessaboutReverseMortgageScheme
amongpensioners/senior citizens.
e) MostofHDFCBank'soffice buildings areaccessibleto

45
 personwithdisabilities andsenior citizens.Ramps have been
providedinthese buildings andatoilet
forwheelchairusershasbeenprovidedatourCorporateOffice,Mumbai.All
otherofficesoftheBankhavebeensuitablysensitisedtoextendthefacilities
intheir respectiveoffice buildings.

10.2 VisuallyImpaired Persons:

TheBank withoutanydiscriminationprovidesbankingfacilitiessuchascheque
book facility /operationofATM /locker,etc.,tothevisuallychallengedcustomers
who arecapable of usingthosefacilities.

Inthisregard,allthe branchesare duly advisedtorenderallpossibleassistanceto

thevisuallychallengedcustomersfor availingthevariousbankingfacilities.

10.3Deceased Depositors:Settlement of Claims

InlinewiththeRBIguidelinesandtheBank'sOperationalProcedureforsettlement of
claimsofdeceased depositors,theBankwillensure thatthere isquickand hassle-
freesettlement ofamount/dues tothenominee/legalheir.

Asper Bank’s Policy onSettlementofDeceasedClaim, accountswithnomination

wouldbesettledwithinaperiodnotexceeding15daysand accountswithout
nominationwouldbesettledwithinaperiod notexceeding1monthfromthedateof
receipt ofthe claimapplication withcomplete documentation tothe satisfaction
ofthe Bank.

10.4Customersin Rural andSemi-urbanareas:

a) Bankwillensurepropercurrencyexchangefacilitiesandalsothequalityof
notesincirculationinrural areas.
b) The Bank will ensure that the branches would be opened as per the

46
 scheduledtimeandoperatedforfull hours.
11.Productsand Services
The Bank offers various products andservices tomeet the needs of customers.
The Bankalsoconstantly endeavorstointroduce new
productsaswellasimproveupon the existing products based on market
conditions and feedback from all stakeholders.Forthe
purpose,aseparatehighpoweredCommitteeheadedby the Deputy
ManagingDirector andconsistingofsenior executivesoftheBankhasbeen
setup.TheCommitteeapprovesnew productsoftheBankandalsoperiodically
reviews the products being offeredtothecustomers.
ThedetailsofalltheproductsandservicesofferedbytheBank andtheintended
targetsegments arementionedinthe Appendixtothis Policy.

47
 CRM Implementation Of ICICI Bank

ICICI has transformed itself into a technology intensive financial services group
in the last decade. To achieve its long term goal of being in a position to
practice One-to-One marketing. ICICI has taken a series of initiatives. As 0part
of the plans, it is implementing various projects to establish world-class CEM
practices which would provide0 an integrated view of its customers to everyone
in the organization. The paper discusses some of the lessons learnt while
implementing these projects.

Introduction
ICICI set up as a Development bank over four decades ago to provide products
and services for the corporate segment, diversified into retail segment of the
financial markets in the early 1990s. In the last decade it has transformed itself
to a technology intensive financial services group. The first such move came in
the mid-nineties when ICICI raised debt from the retail market. Since then,
ICICI has been increasing its reach to this segment in terms of resources
mobilization, and by offering quality investor services through ICICI Infotech
services, its subsidiary. In 1994, it established ICICI Bank as a commercial
bank that is flexible, in addition to the bank, the retail initiative include

(a) Prudential ICICI AMC- a tie up with the prudential Group of UK for its
foray into the mutual funds business.
(b) ICICI Personal finance services (PFS) – to offer retail assets products like
home finance, automobile finance, durables finance ets.
(c) ICICI Capital services – to services retail liability products like bonds
and deposits.
(d) ICICI web trade – to facilitate end to end integrated web based trading
services through the web site www.icicidirect .com

48
(e) Prudential ICICI life insurance – to offer the insurance services, and
(f) ICICI Lombard General Insurance – the latest venture to offer non-life
insurance services. This apart the retail initiatives of ICICI also inc;lude a
plethora of web-based businesses including cith portals and various other
utility sites such as billjunction.com, icicimoneymanager.com,
magiccart.com, among others. All these group companies are jointly
spearheading ICICI Group’s foray into th retail market.

49
 ICICI- Retail Strategy
ICICI’s retail strategy was centered around intensive deployment of
technology to help reduce cost of service, increase customer retention, help in
cross selling and up-selling while improving process efficiencies.

The bank looked towards allowing the customers use multiple electronic
channels including internet, ATMs, call centers, contact centers, desktops,
kiosks, mobiles and other hand held devices for conducting financial
transactions.

ICICI has ambitious plans for its retail business initiatives. The retail strategy
revolves around intensive deployment of technology. Information technology
will help reduce cost of service, increase customer retention, help in cross-
selling and up-selling while improving process of efficiencies. Electronic
channels including internet, ATMs, call centers, contact centers, desktops,
kiosks, mobiles and other hand held devices will perform financial activities
while ensuring that customer has multiple options for access and transaction.

The group has adopted a ‘click and brick’ strategy to leverage the power of
electronic channels and physical presence to ensure rapid product delivery,
fulfillment of financial deals and documentation.

As part of the plans, it is implementing various projects to establish world class

CRM practices, which would provide an integrated view of its customer to
everyone in the organization. CRM at ICICI involves increased communication
between the virtual universal banks and its customer and prospects, as well as
within the group itself. The underlying idea is to enhance every instance of
contact with the customer. ICICI believes that a true customer-centric
relationships can only be accomplished by considering the unique perspectives
of every single customer of the organization. Hence the pressing need to put in
place a technology enabled CRM solution.

50
 CRM Road Map Of ICICI

CRM is viewed as a discipline as well as a set of discrete software technologies,

which will focus on automating and improving the business processes
associated with managing customer relationships in the areas of sales,
marketing, customer service and support.

The organizations aims to achieve the end goal of one-to-one marketing.

The CRM Software applications will facilitate the coordination of multiple

business functions.

Coordinate multiple channels of communication with the customer to carry out

customer management more efficiently.

It should allow ICICI to engage in one-to-one marketing by tracking complete

customer life-cycle history.

To begin with, it will automate process-flow tracking in the product sales

process, and be able to generate customized reports and promote cross selling.

It will also enable efficient campaign management by providing a software

interface for definition, tracking, execution and analysis of campaigns.

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 Implementing CRM

A very detailed and comprehensive CRM actions plan was developed based
on the understanding that CRM will require an enterprises wide
transformation.

The CRM Business Transformation Map below shows the various aspects of
that change. There are five inter-related areas. These include:

1. Business Focus
2. Organizational structure
3. Business Metrics
4. Marketing Focus
5. Technology

The key to building the CRM action plan was in understanding where the
organization stood relative to each of the five aspects of change. Interviews with
key individuals throughout the organization helped identify different initiatives
that have been launched, al focused on CRM. While all of these initiatives may
have merit, failure to address the total business transformation requirements can
lead to very short - lived success.

The next step in the planning process was a Gap Analysis. This analysis
essentially and specifically describes the gaps. In addition to the more obvious
gaps, this analysis helped identify the CRM organizational holes:

1. Marketing Sales and services practices

2. Collections, capture, processing and development of customer
information.
3. Distribution and operations effectiveness at customer touch points

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Another key factor I n identifying gaps is to understand how the organization
functions relative to the CRM Business Cycle. There is a universal, underlying
cycle of activity that should drive all CRM initiatives and infrastructure
development. All initiatives and infrastructure development should somehow be
tied to this core cycle of activity. Careful evaluation of the organization’s ability
to execute this cycle will pinpoint and qualify additional organizational gaps.

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 Chapter:5 comparison of CRM between HDFC &
ICICI Bank.
Difference of crm in HDFC and ICICI bank.

HDFC ICICI

Outlook on marketing Customer retention Aggressive

Focus area in CRM Customer oriented Marketing and

approach competitive sales
approach.

Online popularity Reached the top position It is now ranked as 2nd

beating its competitors

Customer market Upper middle class, high Bank young stars, bank
segment. net worth individual. @campus, and women
account.

CRM technology and tool CRM next Revamp with CRM

used in bank.

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 CONCLUSION

Banking is also now being regarded as a versatile financial planning tool.

Research indicates that Indians have four basic financial needs during their life
asset accumulation (such as buying a house or car), protecting their family,
securing their children’s education, and provision for their retirement. India
being a country having a huge population of around one billion people with
only 32% of the banking population in India possessing banking the country has
a vast potential, which has been left untapped till now. For Banking company
Banking advisors are the lifeline and a very huge asset so each company try to
recruit and select a potential force of Banking advisors because this is the
advisors who generate maximum business for the Bank . Banking advisors
provide a very strong support to the Bank and do all possible efforts to generate
huge amount of profit to the company and for him.

HDFCBankvaluesevery interactionmadewithour
esteemedcustomersandpledges toinnovatein designanddelivery ofproducts
andservices,leveraging onthestate- of-the-arttechnologyatourcommand. The
Bankendeavourstoensuresimplicity, safety andsecurity
incustomertransactionandalsotrains theofficialstolessenthe
responsetime.TheBankalsorelentlesslystrivestofurtherenhancetheservice levels
laid downinthePolicyandsurpass theexpectations of our valuedcustomers.

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 BIBLOGRAPHY

Reference Books:
1. Customer Centricity: Focus On The Rights Of Customers.
2. Digital Marketing.
3. Successful Channel Distribution Sales And Management.
Websites:
1. www.rbi.org.in
2. www.wikipedia.Com
3. www.googal.com
4. www.hdfc.com
5. www.icici.com

Newspaper.
1. The Times Leader.
2. The Times Of India.
3. Economics Times.

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