1.

OVERVIEW OF THE BANKING SECTOR

INTRODUCTION
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 1770; both are now defunct.

BANKS IN INDIA
In India the banking sector is segregated as public or private sector banks, cooperative banks and regional rural banks. Foreign banks have been given a different head followed by upcoming foreign banks in this section.

BANKING SERVICES IN INDIA

Bouquets of services are at customers demand in todays banking system. Different types of accounts and loans, facilitating with plastic money and money transfer across the globe.

RESERVE BANK OF INDIA (RBI)

The Reserve Bank of India (RBI) is India's central banking institution, which regulates, controls credit, issue licenses and functions as banker of all banks and the government. It was established on 1 April 1935 during the British Raj in accordance with the provisions of the Reserve Bank of India Act, 1934. Following India's independence in 1947, the RBI was nationalized in the year 1949.

EASY BANKING
With the advancement of technology, banking sector has become more easy, fast, accurate and also time saving. ATMs, Mobile Banking, SMS Banking and Net Banking are only the tip of an ice-berg.

 INDIAN BANKS ASSOCIATION (IBA)

Indian Banks Association (IBA), formed on 26 September, 1946 as a representative body of management of banking operating in India based in Mumbai. With an initial membership representing 22 banks in India in 1946, IBA currently represents 173 banking companies operating in India. IBA was formed for development, coordination and strengthening of Indian banking.

Structure of Banking Sector In India

 RESERVE BANK OF INDIA

The RBI is the central banking and monetary authority in India. The RBI manages the countrys money supply and foreign exchange and also serves as a bank for the GOI and for the countrys commercial banks. In addition to these traditional central-banking roles, the RBI undertakes certain developmental and promotional activities. RBI issues guidelines, notifications, and circulars on various areas including exposure standards, income recognition, asset classification, provisioning for non- performing assets, investment valuation and capital adequacy standards for commercial banks, long-term lending institute. And nonbanking finance companies. The RBI requires these institutes to furnish information relating to their businesses to the RBI on a regular basis.

COMMERCIAL BANKS
Commercial Banks in India have traditionally focused on meeting the short-term financial needs of the industry, trade and agriculture. At the end of Sept. 2007, there were 291 scheduled commercial banks in the country, with a network of 67221 branches. Scheduled commercial banks are banks that are listed in the II Scheduled to the RBI Act, 1934, & may further be classified as PSU, Private sector banks & foreign banks. IDBI was converted into a banking company by the name of INDUSTRIAL DEVELOPMENT BANK OF INDIA LTD. with effect from Oct. 2007 & is a scheduled commercial bank. Scheduled Commercial bank has a presence throughout India, with nearly 70.1% of bank branches located in rural or Semi- urban areas of the country. A large no. of these branches belongs to the Public Sector Banks.

 CO-OPERATIVE BANKS
Cooperative banks cater to the financing needs of agriculture; small industry and self-employed businessmen in urban and semi urban areas of India. The State land development banks and the primary land development banks provide long-term credit for agriculture. In light of the liquidity and insolvency problems experienced by some cooperative banks in fiscal 2001, the RBI undertook several interim measures to address the issues, pending formal legislative changes, including measures related to lending against shares, borrowings in the call market and term deposits placed with other urban cooperative banks. The RBI is currently responsible for supervision and regulation of urban co-operative societies, the National Bank for agriculture and Rural Development, state cooperative banks and district central co-operative banks. The banking Regulation (Amendment) and Miscellaneous Provision Bill, 2003, which was introduced in the parliament in 2003, proposed the regulation of all co-operative banks by the RBI. The Bill has not ye been ratified by the Indian parliament and is not in force.

FOREIGN BANKS
At the end of June 2007, there were 32 foreign banks with 217 branches operating in India, accounting for 4.6% of aggregate deposits and 7.0% of outstanding gross banks credit of scheduled commercial banks. The Govt. of India permits foreign banks to operate through (i) branches (ii) a wholly owned subsidiary (iii) a subsidiary with aggregate foreign investment of up to 74% in a private bank. The primary activity of most foreign banks in India has been in the corporate segment. However, some of the larger foreign banks have made consumer financing a significant part of their portfolios. These banks offer products such as automobile finance, home loans, credit cards and household consumer finance. The GOI in

2006 announced that wholly owned subsidiaries of foreign banks would be permitted to incorporate wholly owned subsidiaries in India. Subsidiaries of foreign banks will have to adhere to all banking regulations, including priority sector lending norms, applicable to domestic banks .In March 2007, the Ministry of Commerce and industry, GOI announced that the foreign direct investment limit in private sector banks has been raised to 74% from the existing 49% under the automatic route including investment by FII .The announcement also stated that the aggregate of foreign investment in a private bank from all sources would be allowed up to a maximum of 74% of the paid up capital of the bank .The RBI notification increasing the limit to 74% is however still awaited.

REGIONAL RURAL BANKS

Regional Rural banks were established from 1976 to 1987 jointly by the central Govt. , State Govt. and sponsoring public sector commercial banks with a view to develop the rural economy. Regional rural banks provide credit to small farmers, artisans, small entrepreneurs & agricultural laborers. There were 196 regional rural banks at the end of Sept. 2007 with 144430 branches, accounting for 3.6% of aggregate deposits and 3.0% of gross bank credit outstanding of scheduled commercial banks.

URBAN CO-OPERATIVE
The term Urban Co-operative Banks (UCBs), though not formally defined, refers to primary cooperative banks located in urban and semi-urban areas. These banks, till 1996, were allowed to lend money only for non-agricultural purposes. This distinction does not hold today. These banks were traditionally centred around communities, localities work place groups. They essentially lent to small borrowers and businesses. Today, their scope of operations has widened considerably.

 PUBLIC SECTOR BANKS

Public Sector banks make up the largest category of banks in the Indian Banking System. There are 27 public sector banks in India. They include the SBI & its associate banks & 19 nationalized banks. Nationalized banks are governed by the banking companies (Acquisition & transfer of U/T) Act, 1970 & 1980. The banks nationalized under the banking companies (Acquisition & transfer of U/T) Act, 1970 are referred to as Corresponding new banks. PNB is a public sector bank nationalized in 1969 and a corresponding new bank under the bank acquisition Act. At the end of Sept. 2007, public sector banks had 46782 branches & accounted for 74.9% of the aggregate deposits & 70.5% of the outstanding Gross bank credit of the scheduled commercial banks. After the first phase of bank nationalization was completed in 1969, the majority of Indian Banks were public sector banks. Some of the existing private sector banks, which showed signs of an eventual default, were merged with state- owned banks. In July 1993, as part of the banking reforms process and as a measure to induce competition in the banking sector, the RBI permitted entry by the private sector into the banking system. This resulted in the introduction of 9 private sector banks. These banks are collectively known as the new private sector banks. There are 9 new private sector banks operating at present.

CLASSIFICATION OF BANKS
The Indian Banking industry consisted of 97 commercial banks, 196 regional banks, 52 Scheduled urban Co-operative banks, and 16 Scheduled state Co-operative banks. At present, the banking system can be classified into the following categories: PUBLIC SECTOR BANKS Reserve Bank of India State Bank of India and its 7 associate banks Nationalized Banks Regional rural Banks Sponsored by Public Sector Banks

PRIVATE SECTOR BANKS Old Generation Private banks New Generation Private Bank Foreign banks in India Scheduled Co-operative Banks Non- Scheduled Banks

CO-OPERATIVE SECTOR BANKS IFCI IIBI SIDBI NABARD EXIM SCICI

DEVELOPMENT BANKS State Co-operative Banks Central Co-operative Banks Primary Agriculture Credit Societies Land development Banks Urban co-operative Banks State Land Development Banks 7

The RBI has a centralized control over all these banks. It performs a wide range of functions to: Issue Bank notes Supervise & administer exchange control and banking regulations and administer the Govt. policy Issue licenses to the foreign banks for operations in India Approve the licenses of operation for the private banks Grant licenses to new banks and new bank branches.

Globalization, financial deregulation and improvement in technology have had a profound effect on the financial landscape in recent years. These developments have intensified competition and resulted in financial engineering through product innovation and business strategies. While market participants have now greater scope to diversify risk and manage it efficiently, this has also posed new risks and challenges to the financial system. Growth of financial firms across different business lines and across national boundaries has made the task of designing appropriate policies more challenging. Regulatory and supervisory policies are, therefore, constantly assessed regarding their capabilities to meet the challenges of containing systemic risk in the financial system. The main challenge for the supervisory authorities has been to maintain financial stability without curtailing the incentive to innovate. Keeping in view the changing landscape in the financial sector, the Reserve Bank has been suitably focusing its regulatory and supervisory framework to promote a stable and efficient financial sector. The main focus of the Reserve Banks recent regulatory and supervisory initiatives has been on prudential regulation and financial infrastructure broadly in line with international best practices. However, while focusing on a globally competitive and the robust banking sector, the Reserve Bank has also emphasized financial inclusion, whereby banking services are accessed easily by the underprivileged sections of the society. The overall approach to reforms has been sequenced and arrived at through consultative process with all the stakeholders. Various reform measures initiated from time to time have imparted resilience to the financial system. The Reserve Bank had indicated on February 15, 2005 that banks in India would start implementing Basel II with effect from March 31, 2007. Several initiatives, therefore, were taken during the year to facilitate the smooth transition to Basel II. The Reserve Bank 8

permitted banks to raise capital through new instruments to enable them to meet capital requirements prescribed under Basel II. The Reserve Bank also issued a guidance note for operational risk management. Taking into account the state of preparedness of the banking system, however, it was announced in the Midterm Review of the Annual Policy for 200607 on October 31, 2008 that Indian banks with presence outside India and foreign banks operating in India would be required to migrate to Basel II framework with effect from March 31, 2008, while all other Indian banks would be encouraged to migrate to these norms by March 31, 2009. With a view to providing basic banking services to common man, the Reserve Bank took several measures to incentives banks. Improvement in customer service was another area of focus of the Reserve Banks regulatory Policy.

1.2 AXIS BANK

Axis Bank was the first of the new private banks to have begun operations in 1994, after the Government of India allowed new private banks to be established. The Bank's Registered Office is at Ahmedabad and its Central Office is located at Mumbai. The Bank has a very wide network of more than 1600 branches (including 169 Service Branches/CPCs as on 30th June, 2012). The Bank has a network of over 10000 ATMs (as on 30th June, 2012) providing 24 hrs a day banking convenience to its customers. This is one of the largest ATM networks in the country. The Bank as on 30th June, 2012 is capitalized to the extent of Rs. 414.29 crores with the public holding (other than promoters and GDRs) at 54.24%. The Bank has strengths in both retail and corporate banking and is committed to adopting the best industry practices internationally in order to achieve excellence.

10

1.2.1 COMPANY PROFILE

Axis Bank Ltd., the first bank to begin operations as new private banks in 1994 after the Government of India allowed new private banks to be established. Axis Bank was jointly promoted by the Administrator of the specified undertaking of the: Unit Trust of India (UTI-I) Life Insurance Corporation of India (LIC) General Insurance Corporation Ltd. Also with associates viz. National Insurance Company Ltd., The New India Assurance Company, The Oriental Insurance Corporation and United Insurance Company Ltd. Axis Bank in India today is capitalised with Rs. 414.29 Crores with 54.24% public holding other than promoters. It has more than 1600 branch offices and Extension Counters in the country with over 10000 Axis Bank ATM proving to be one of the largest ATM networks in the country. Axis Bank India commits to adopt the best industry practices internationally to achieve excellence. Axis Bank has strengths in retail as well as corporate banking. This is the first bank in India to offer the AT PAR Cheque facility, without any charges, to all its Savings Bank customers in all the places across the country where it has presence. With the AT PAR cheque facility, customers can make cheque payments to any beneficiary at any of its existence place. The ceiling per instrument is Rs. 50,000/. The latest offerings of the bank along with Dollar variant is the Euro and Pound Sterling variants of the International Travel Currency Card. The Travel Currency Card is a signature based pre-paid travel card which enables travelers global

11

access to their money in local currency of the visiting country in a safe and convenient way. The Bank has strengths in both retail and corporate banking and is committed to adopting the best industry practices internationally in order to achieve excellence.

BUSINESS DESCRIPTION:
The Bank's principal activities are to provide commercial banking services which include merchant banking, direct finance, infrastructure finance, venture capital fund, advisory, trusteeship, forex, treasury and other related financial services. The Bank has 463 branches and 263 extension counters throughout India. During April, 2006 the Bank opened 1 overseas branch in Singapore.

PROMOTERS:
UTI Bank Ltd. has been promoted by the largest and the best Financial Institution of the country, UTI. The Bank was set up with a capital of Rs. 115 crore, with UTI contributing Rs. 100 crore, LIC - Rs. 7.5 crore GIC and its four subsidiaries contributing Rs. 1.5 crore each.

SUUTI - Shareholding 23.47%

Erstwhile Unit Trust of India was set up as a body corporate under the UTI Act, 1963, with a view to encourage savings and investment. In December 2002, the UTI Act, 1963 was repealed with the passage of Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 by the Parliament, paving the way for the bifurcation of UTI into 2 entities, UTI-I and UTI-II with effect from 1st February 2003. In accordance with the Act, the Undertaking specified as UTI I has been transferred and vested in the Administrator of the Specified Undertaking of the 12

Unit Trust of India (SUUTI), who manages assured return schemes along with 6.75% US-64 Bonds, 6.60% ARS Bonds with a Unit Capital of over Rs. 14167.59 crores. The Government of India has appointed Shri K. N. Prithviraj as the Administrator of the Specified undertaking of UTI, to look after and administer the schemes under UTI - I, where Government has continuing obligations and commitments to the investors, which it will uphold.

PRODUCTS OFFERED

Savings Account Current Account Business Priority Business Wealth Salary Account Investment Products Gold and Silver Mohur Mutual Funds Life Insurance General Insurance

Loans Cards Titanium Rewards Card

13

Prepaid Cards MyMoney Card Agri Business Loans Kisan power Power Gold Arthia Power Foreign Exchange Travel Card Outward Remittances Inward Remittances Axis Remit Online Axis Remit Direct Money Transfer Operators Wire Transfers Axis Direct 3-IN-1 online Trading Account

Other Services
Priority Wealth NRI Services Business Banking Investment Banking

14

1.2.2

COMPETITIVE STATUS

The following are best banks which are currently operating in India under the guidelines of Reserve Bank of India (RBI) and hence are giving tough competition to Axis Bank

Allahabad Bank In India American Express Bank In India Andhra Bank In India Bank Of India Canara Bank Central Bank Of India CITI Bank Corporation Bank HDFC Bank HSBC Bank ICICI Bank IDBI Indian Overseas Bank Oriental Bank Of Commerce Punjab National Bank State Bank Of India (SBI) Standard Chartered Bank United Bank Of India

15

Further, Banks like HDFC Bank, Kotak mahindra bank, SBI are the close competitors of AXIS bank. Here is the detail of other banks-:

HDFC BANK

HDFC Bank is an Indian financial services company based in Mumbai, Maharashtra that was incorporated in August 1994. HDFC Bank is the fifth or sixth largest bank in India by assets and the second largest bank by market capitalization as of February 24, 2012. The bank was promoted by the Housing Development Finance Corporation, a premier housing finance company of India. HDFC Bank has 1,986 branches and over 5,471 ATMs, in 996 cities in India, and all branches of the bank are linked on an online real-time basis. For the fiscal year 2010-11, the bank has reported net profit of 3,926.30 crore up 33.1% from the previous fiscal. Total annual earnings of the bank increased by 20.37% reaching at 24,263.4 crore (US$4.59 billion) in 2010-11. HDFC Bank is one of the Big Four banks of India, along with: SBI, ICICI and PNB.It was among the first companies to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector.

KOTAK MAHINDRA BANK

Kotak Mahindra Bank is an Indian financial service firm established in 1985. It was previously known as Kotak Mahindra Finance Limited, a non-banking financial company. In February 2003, Kotak Mahindra Finance Ltd, the group's flagship company was given the license to carry on banking business by the Reserve Bank of India (RBI). Kotak Mahindra Finance Ltd. is the first company in the Indian banking history to convert to a bank. Today it has more than 20,000 employees and R. 10,000 crore in revenue. The Bank has its registered office at Nariman Bhavan, Nariman Point, and Mumbai.

16

COMPARISON OF AXIS WITH SBI

AXIS bank is the largest private sector bank in India and the second largest commercial bank in India. It has branches all over India and even in smaller towns in South India after the takeover of Bank of Madurai . The bank also has foreign subsidiaries like AXIS bank, Canada in Canada, Britain and Russia, representative offices in USA, China, UAE, Bangladesh, South Africa and branches in Bahrain, Singapore. It offers a platform for online share trading through AXIS Direct and insurance services - AXISPrudential. NRI services include money transfer through Money2India, which offer better foreign exchange rates for lower amounts compared to other services. Like most private sector banks, all bank branches in India are networked. You can access your account from any AXIS bank branch in India. Anyone can also deposit cash/local cheque in your account at any branch of AXIS bank. Also they have very convenient bank timings and are open for 12 hours from 8.00 a.m to 8 p.m from Monday to Saturday. Since AXIS bank was established after 1991 it offers online banking where you can check the balance in your account any time. The interface for savings accounts is much better and user friendly compared to that for their roaming current account However, unlike other banks like HDFC bank, their online bank statement does not indicate the branch at which the amount is deposited. The information is available in the email statement sent to you the next day. You have to contact phone banking , enter CRN and TPIN, during working hours to get this information.

17

They have discontinued the auto sweep-in facility (earlier called Quantum Optima ) , where the amount in savings account was automatically converted into a fixed deposit, if it exceeded Rs 15000. With the decline in interest rates for loans, providing this facility is no longer profitable for the bank

SBI
SBI has branches and ATMs all over India , details of which are available at their website. State Bank of Hyderabad, State Bank of Patiala, State Bank of Saurashtra, State Bank of Bikaner and Jaipur ,State Bank of Indore, State Bank of Mysore and State Bank of Travancore are the seven subsidary banks of SBI. As of March 2006, SBI holding in these banks varies from 74% to 100% , but is likely to decrease in future. SBI has one of the largest network of ATMs in the Asia Pacific region. Many branches of State Bank of India are computerised. In places where the Reserve Bank of India, (RBI) the central bank of India does have an office, SBI carries out many of its functions. SBI timings vary according to location, for example the Powai, Mumbai branch of State Bank of India is open between 10.15 am to 2pm (MondayFriday) You can open a public provident fund (PPF) account at any State Bank of India branch. PPF accounts are one of the few savings instruments which offer a high tax free interest rate of 8% per year If you know an agent who is registered with that particular branch of State Bank , he will pay you back, a part of the commission he receives from the bank. So you can get back 0.5% - 0.6% of the amount deposited immediately by cash. Usually larger the amount, the higher the commission paid back by the agent (it is negotiable) . The pay-in slip for PPF has 3 sections - depositors copy, agents copy and bank copy. The agents copy has to be given to the agent and he will give part of the commission. Earlier financial services firm like Bluechip in Mumbai, would also give a commission of 0.25%.

18

The minimum amount that can be invested in one year is Rs 500 and maximum amount is Rs 70000. This investment has a lock in period of 15 years. No withdrawals are allow till 6 years after account opening and one withdrawal is allowed per year there after

For cash withdrawals, you can either use a withdrawal slip or cheque. If an account is inactive for a long time, State Bank of India does not charge any fee for reactivation. However, they have a verification process, which may take a long time. Payment of income tax , advance tax , sales tax can be done at SBI branches.

State Bank of India has increase home loan interest rates by 25-75 basis points. Also no fixed rate loans will be available for periods more than 10 years.

SBI Railway Visa Card allows booking of railway tickets online at the Indian Railways website at zero transaction charges. Users of this credit card can get back up to 10% of ticket fare as railway points. These points can be redeemed later, like frequent flyer miles offered by airlines. State Bank of India is the largest issuer of debit cards (Maestro) in India

State Bank customers who have to wait a long time to process a bank transaction can register their complaint through a touch screen device for customer feedback service at the branch. The information is recorded and processed in the central server.

19

1.2.3 SWOT ANALYSIS OF AXIS BANK

STRENGTH
Good for new investor as the fund has to be managed by specialized fund manager. Only product which invests in money market, debt market and equity market at same time. Investment needed is comparatively less than other investments. During the stack market boom periods all AXIS bank funds have performed fairly well thereby increasing investors expectations.

WEAKNESS
Customers do not prefer it because of risk attached to it that is market risk. Fund manager if makes a wrong prediction then customer will bear the brunt therefore it depends on funds managers analysis. Sometimes the age factor affects the investment preference of the investors. People are afraid of investing in the equity market. OPPORTUNITIES Creating positive image about the fund and changing the nature of the market itself.

20

 Market of mutual fund is expanding as many foreign companies are coming in this. Great scope of new investment due to the budget announcement this year. The objective of investing in AXIS bank is Tax-saving apart form returns third main objective is growth. THREATS Now there are many other investment instruments which are more lucrative than AXIS bank. (real estate , gold) Unawareness among investors regarding AXIS bank. Also in India most of the people lack of awareness about AXIS bank. They dont know anything about what is AXIS bank, how it works. How fund managers invest peoples money in different portfolios and provide the better returns to the customers Lack of promotions, advertising by AXIS bank industry

21

1.3

CUSTOMER SATISFACTION

Customer satisfaction is equivalent to making sure that product and service performance meets customer expectations. It is the perception of the customer that the outcome of a business transaction is equal to or greater than his/her expectation. Customer satisfaction occurs when the acquisition of products and /or services provides a minimum negative departure from expectations when compared with other acquisitions and when the marginal utility of a transaction is equal to or greater than preceding acquisitions. Customer satisfaction occurs when the perception of the reward from the purchase of goods or services by the customer meets or exceeds his/her perceived sacrifice. The perception is a consequence of matching past purchase and consumption experience with the current purchase.

22

CUSTOMER SERVICE AND SATISFACTION

We must cultivate our garden. Voltaire When we talk about customer service and/or satisfaction, we talk about creativity. Creativity allows us to handle or diffuse problems at hand or later on rather in the process of conducting the everyday business. We talk about how, or what, does the organization have to do to gain not only the sale but also the loyalty of the customer. We want to know the payoff of the transaction both in the short and long term. We want to know what our customers Want? We want to know if our customers are satisfied. Satisfaction, Of course, means that what we delivered to a customer met the customers Approval. We want to know if customers are delighted and willing to come

Back, and so on. Fleiss 2 and Feldman 3 present examples of that delightfulness in their writings. Fleiss has written about Ben and Jerrys ice cream and Feldman has discussed excellence in a cab ride. As important as delightfulness is, some of us minimize it, or even totally disregard it. At this point, we fail. Some of the issues that will guarantee failure in sales, satisfaction, and loyalty are:

Employees must adhere to a rigid chain of command Employees are closely supervised Conflictin whatever formis not allowed Rewards are based on carrot-and-stick principles Wrong objectives are measure. We must understand customer expectation levels concerning quality. We must also understand the strategy for customer service quality, and next we must understand the measurement and feedback cycles of Customer satisfaction. The customer is the person or unit receiving the output of a process on the system. In fact, it is worth emphasizing that a customer can be the immediate, intermediate, or 23

ultimate customer. Also, a customer may be a person or persons, or a process or processes. Customer satisfaction, however, is when the customer is satisfied with a product/service that meets the customers needs, wants, and expectations.

There are at least three levels of customer expectations about quality: Level 1. Expectations are very simple and take the form of assumptions, must have, or take it for granted. For example, I expect the airline to be able to take off, fly to my destination, and land safely. I expect to get the correct blood for my blood transfusion and I expect the bank to deposit my money to my account and to keep a correct tally for me. Level 2. Expectations are a step higher than that of level 1 and they require some form of satisfaction through meeting the requirements and/or specifications. For example, I expect to be treated courteously by all airline personnel. I went to the hospital expecting to have my hernia repaired, to be in some pain after it was done, to be out on the same day, and to receive a correct bill. And I went to the bank expecting the bank teller to be friendly, informative, and helpful with my transactions. Level 3. Expectations are much higher than for levels 1 and 2. Level 3 requires some kind of delightfulness or a service that is so good that it attracts me to it. For example, an airline gives passengers traveling coach class the same superior food service that other airlines provide only for first-class passengers. In fact, I once took a flight where the flight attendants actually baked cookies for us right there on the plane. When I went to the hospital, I expected staff to treat me with respect and they carefully explained things to me. But I was surprised when they called me at home the next day to find out how I was doing. And at my house closing, the bank officer, representing the bank holding my mortgage, not only treated me with respect and answered all my questions about my new mortgage, but just before we shook hands to close the deal, he gave me a housewarming gift.

CUSTOMER SATISFACTION SURVEYS HELP TO:

24

1. Improve customer, client, or employee loyalty. 2. React quickly to changes in the market. 3. Identify and capitalize on opportunities. 4. Beat the competition. 5. Retain or gain market share. 6. Increase revenue. 7. Reduce costs.

2.1 RESEARCH OBJECTIVES

To study about AXIS as a company and a group. To study about the products and services offered by AXIS. To study the customer satisfaction in AXIS bank. To provide AXIS bank the suggestion and opinions given by its customers to improve the facilities for customers. The next objective is to analyze from which product/services the customers are getting more satisfaction and which product/service is not very significant from a customers point of view.

25

26

2.2 SCOPE OF STUDY

This project provides the knowledge about banking industry of India. It also gives a brief knowledge about the customer behavior about the bank. It also gives knowledge about the bank and its performance. This study will help us to understand customers, preference and their needs expected from the business owners. It enhances the satisfaction level of the customers. Helps in capturing more market and customers with better services.

27

2.3 MANAGERIAL USEFULNESS OF THE STUDY

The SWOT analysis done helps to know the strengths, weaknesses, opportunities and threats of the organization which would help in managerial work. The authentic data collected from the survey help the managers to judge their public image. The judgments could be easily made by the managers from the secondary data collected which clearly shows the progress and regress of the bank with the help of graphs, diagrams and tables etc. This project can be useful to bank to improve the satisfaction level of customers and motivating them by fulfilling some of their suggestion. In return the bank can get improved result.

28

2.4 METHODOLOGY

2.4.1 TYPE OF RESEARCH QUANTITATIVE RESEARCH

Quantitative research allows a firm to develop an understanding of the "big picture" of their customers' experiences based upon a relatively small number of interviews. This "sample" of the firm's customers must be carefully designed and drawn if the results of the study are to be considered representative of the customer population as a whole. In most cases, the results of quantitative studies are based upon the responses of a relatively "large" number of interviews. Depending upon the size of the population and the amount of segmentation desired, "large" can be as few as 50 responses or range from several hundred to thousands of interviews. Mail-based, telephone-based, and (more recently) Internet-based surveys and related data collection.

29

2.4.2 RESEARCH DESIGN DESCRIPTIVE RESEARCH

Descriptive research includes Surveys and fact-finding enquiries of different kinds. The major purpose of descriptive research is description of the state of affairs, as it exists as the present. The main characteristic of this method is that the researcher has no control over the variables; he can only report what has happened or what is happening, the research cannot describe what caused a situation. Thus, Descriptive research cannot be used to create a causal relationship, where one variable affects another. However, it does not answer questions about e.g.: how/when/why the characteristics occurred, which is done under analytic research

30

2.4.3 SOURCES OF DATA COLLECTION

This project consists of two partsThe first part is a study of the banking industry, AXIS Bank using secondary data sources. This secondary information has been sourced from the internet and from business related magazines and newspapers. The second part of the study has been done using an exploratory research process and a structured questionnaire was developed for this purpose. For the collection of primary data this was the only method used. The reason I used this method is because a need was felt for the free influx of information about the products. Also this method allowed the use of skills gained in class.

PRIMARY SOURCES
Primary sources are original sources from which the researcher directly collects data that have not been previously collected, e.g., collection of data directly by the researcher on brand awareness, brand preference, brand loyalty and other aspects of consumer behaviour from a sample of consumers by interviewing them. Primary data are first-hand information collected through various methods such as observation, interviewing, mailing etc Questionnaire - A sample questionnaire was provided to around 100 different people which was used to Derive Results and Analyze customer needs for Insurance and ho far they have been satisfied with the Services and Returns Provided by AXIS Bank as well as other companies . A sample of the questionnaire along with Results from Findings and Analysis are given later in the Project.

SECONDARY SOURCES
These are sources containing data that have been collected and compiled for another purpose. The secondary sources consist of readily available compendia and already compiled statistical statements and reports whose data may be used by researches for their studies, e.g., census reports, annual reports and financial statements of companies, Statistical statements, Reports of Government Departments, Commercial Banks. Journals Various Journals published by B-Schools as well as Business houses have provided vital statistical as well as Theoretical Data which have been very helpful.

Newspapers and Magazines Economic Times as Well as Magazines such as Business Today have provided useful Information on Developing Indian Insurance Sector as well as how the trend and demand of customers has changed over a period of time .

Internet and Other Media Sources WWW has the latest data and interviews which helped me in determining the scope pf my project as well as make it as up to date as possible.

32

2.4.4 SAMPLE DESIGN AND SAMPLE SIZE

Sampling Unit The marketing researcher must define the target population that will be sampled. Who is to be surveyed? The marketing researcher must define the target population that will be sampled. In this research, sample unit were the customers of AXIS bank as provided in the database by the bank.

Sample size/Population Size - How many people should be surveyed? My sample size is 100. I have questioned Banks Customers for the survey. Sample size of 100 was used for questionnaire out of them maximum responded.

Time Frame It is the period of time for which the survey or study is to be done When the survey should be conducted? I conducted my survey for 3 weeks from 1-3-2013 to 21-3-2013.

Sampling Method Random Sampling Since the information required was not of a very technical nature and also looking at the scope of the project and the extent of the target segment, the sampling technique employed was Random Sampling. A random sample gives every unit of the population a known and non-zero probability of being selected. Since random sampling implies equal probability to every unit in the population, it is necessary that the selection of the sample must be free from human judgment. 33

2.4.5 TOOLS OF PRIMARY DATA COLLECTION

QUESTIONNAIRE DESIGN/FORMULATION
Questionnaire: - A questionnaire is a research instrument consisting of a series of questions and other prompts for the purpose of gathering information from respondents. Although they are often designed for statistical analysis of the responses, this is not always the case. Questionnaires have advantages over some other types of surveys in that they are cheap, do not require as much effort from the questioner as verbal or telephone surveys, and often have standardized answers that make it simple to compile data. A questionnaire consists of a set of questions presented to respondent for their answers. It can be Closed Ended or Open Ended Open Ended: - Allows respondents to answer in their own words & are difficult to Interpret and Tabulate. Close Ended: - Pre-specify all the possible answers & are easy to Interpret and Tabulate.

TYPES OF QUESTION INCLUDED: DICHOTOMOUS QUESTIONS

Which has only two answers Yes or No?

MULTIPLE CHOICE QUESTION

Where respondent is offered more than two choices.

34

IMPORTANCE SCALE
A scale that rates the importance of some attribute.

RATING SCALE
A scale that rates some attribute from highly satisfied to highly unsatisfied and very inefficient to very efficient

SAMPLING UNIT: Who is to be surveyed? The marketing researcher must define the target population that will be sampled. The sample Unit taken by me was customers of AXIS bank of different age group, different gender and different profession.

35

3.1

DATA ANALYSIS AND INTERPRETATION

AGE GROUP-

AGE GROUP

D, 9% C, 19% A, 47%

A B C D

B, 25%

IMPLICATION: If we closely look at the pie-chart, we can say that the people between the age group of 25 to 55 are the main customer of the bank, which contributes almost 75% of the banks customers. But the old age and the young people have been less attractive on this leading product of AXIS Bank, which is a matter of concern. So more focus should be given to them as they are huge in number.

36

OCCUPATION
OTHERS 10% STUDENT 7% BUSINES S 32%
POTENTIAL OCCUPATION IMPLICATIONS: This pie chart clearly shows that service holder and the business people are the main customer of the bank. Reason for this could be as per interviewed was working hour and anywhere banking which suits them. 8 to 8 banking give them the freedom to do banking work after the office. Students contribution is less as student account is not available in Delhi and 5000 as minimum balance is not possible for them. Other section should be increased by creating awareness about the banking products.

SERVICE SERVICE 51% BUSINESS STUDENT OTHERS

37

ANNUAL INCOME-

ANNUAL INCOME
MORE THAN 4 LAKHS, 33% LESS THAN 1 LAKH, 8% 1-2 LAKH, 22% 3-4 LAKH, 37% LESS THAN 1 LAKH 1-2 LAKH 3-4 LAKH MORE THAN 4 LAKHS

IMPLICATIONS: Higher income or we can say that more than 34 LAKHS earning people are contributing 70% of the transactions. But it is advisable to penetrate more in the lower income group not only in terms of accounts but also in other banking products because they contribute a major part of the society. Target should be on that every section of the society should open saving account or other account in AXIS Bank.

38

WHAT DO YOU EXPECT FROM A BANK WHILE OPENING AN ACCOUNT?

FEATURES / ATTRIBUTES
VARIETY OF PRODUCTS, 6% LESS FORMALITIE S, 8% WORKING HOUR, 28% QUICK SERVICE , 44% QUICK SERVICE PROPER INFO WORKING HOUR LESS FORMALITIES VARIETY OF PRODUCTS

PROPER INFO, 14%

IMPLICATIONS: When a customer visits a bank the first and foremost

thing he looks, that how quickly he is served, how his problem is entertained by the bank employee and what is the working hour of the bank. Thats why these three things contribute the maximum of this pie chart. Less formalities and variety of products although contributes less but it has a major impact on the customer. So bank should follow on these things also. Service sector like banking, preference should be given to make.

39

WHICH OF THE FOLLOWING ATTRIBUTES COMPELLED YOU MOST TO OPEN SAVING ACCOUNT IN AXIS BANK?

SAVINGS A/C ATTRIBUTES

PHONE / INTERNET BANKING, 10% CHEQUE BOOK, 16% VALUE ADDED S. A/C, 48% ATM CUM DEBIT CARD ATM CUM DEBIT CARD, 26% VALUE ADDED S. A/C CHEQUE BOOK

PHONE / INTERNET BANKING

IMPLICATIONS: As we found in our finding that majority of the people like the saving account, this chart reveals that what are the factor and their contribution making their product really leading product of AXIS Bank. VALUE ADDED SAVING ACCOUNT is undoable a unique sub product of

AXIS Bank. Since it has the appeal catch maximum customer as it provides
the facility of FIXED deposit in saving account ATM cum debit card is also a major attributes as it made the banking easy. Personalized chequebook is also a major attraction in this section. As far as other factors are concern they are showing less appearance in this chart.

40

41

WHAT TYPE OF ACCOUNT DO YOU HAVE IN AXIS BANK?

ACCOUNT TYPE
OTHER 5% NRI 8% FIXED 15% CURRENT 18% SAVING 54% SAVING CURRENT FIXED NRI OTHER

IMPLICATIONS: Saving account is the leading and attractive product for the AXISBank as it has occupied a major chunk in this chart. This number and percentage clearly shows that this product has all the quality to give the customer best services and ability to satisfy them. On the second and third position current and fixed deposit has also been helpful to increase the customer base but still their performance needs to be improved. As far as NRI and other accounts are concerned they have less appearance. So majority of the business is moving around few leading products. Reason could be either people are not aware about the various products of the bank or bank has limited range of products. So bank must ascertain that where things are going wrong and for that what sort of necessary step could be taken.

42

WHICH FACTOR AMONG THE FOLLOWING INFLUENCED YOU MOST TO OPEN AN ACCOUNT IN AXIS BANK?

INFLUENCED FACTOR
PROSPECT US 11% BANK EMPLOYEE 12% ADVERTISE MENT 33% FRIENDS / RELATIVE 44% FRIENDS / RELATIVE ADVERTISEMENT BANK EMPLOYEE PROSPECTUS

IMPLICATIONS: It has been said a satisfied customer is the best medium for an advertisement since in this chart friend / relative have played a key role in opening the accounts of others. Which implies that banks real customers are satisfied enough with facilities available on the products and services enjoyed by them. On the other hand advertisement also plays a vital role in influencing the customer. As their behavior not only please the customer but also attract the customer. Well maintained prospectus is also a major attributes of attracting the customer. Main focus of the bank should be no satisfaction of customer.

43

IN COMPARISION TO OTHER BANKS HOW WOULD YOU RATE AXIS BANK?

COMPARISON
CAN'T SAY 7% POOR 5% AVERAGE 14% GOOD 47% EXCELLEN T 27% EXCELLENT GOOD AVERAGE POOR CAN'T SAY

IMPLICATIONS: Comparison with other banks depends on its overall performance in the eyes of the people. In this chart it is clearly showing that 74% of the people are satisfied with AXIS Bank. In a short span of time of its existence in this city with strong competition from major public sector bank like SBI and other private players bank has done well it has occupied a different position in the peoples mind.

44

WOULD YOU RECOMMEND AXIS BANK TO OTHERS?

RECOMMANDATION
NO 5% YES NO YES 95%
IMPLICATIONS: As per the chart we show that 5% of the people dont want to recommend AXIS Bank to others. Bank must find the reason of their dissatisfaction because in this competitive world we have to achieve this target.

45

Q.

Are you interested in products offered by the AXIS PRUDENTIAL ?

Yes No

61% 22%

Will think 17%

17%

22%

61%

Yes No Will think

INTERPRETATION The good thing is that atleast the corporates were quite eager to find out what AXIS PRU has to offer whereas the major 39 % of the corporates were not even interested in the products as they are quite satisfied by the LIC and they are not in breaking their long relationship with them. The private players will have to play a long battle in order to ensure that they are serious player in the market.

46

Q. Are you satisfied with your present insurer? YES No 95% 5%

95%

5% 5%

Yes No

INTERPRETATION Here is where the challenge is. Inevitably most of the players are very satisfied with their present insurer which makes it more tough for the private players to attract the corporates. The remaining 5 % are also not very dissatisfied by the services but they are just open to new avenues and are looking forward that private companies come with good offers so that they may shift to them. Thus private players will have to be very proactive and in this regard since LIC is the leader and AXIS PRU is lagging behind its competitors in terms of competition.

47

Q. Where would you like to insure if given chance? LIC ICICI BAJAJ ALLIANZ HDFC SBI KOTAK MAHINDRA 60 15 5 10 8 2

70 60 50 40 30 20 10 0

60

15 8 10 5 2

LIC

SBI

HDFC

ICICI

BAJAJ

KO TAK MAHINDRA

INTERPRETATION Thus we see that the companies are comfortable in having business with govt. owned companies as they feel its safe & secure to have business with them which is followed by SBI as it is the biggest bank. Q. What is peoples main concern while taking an insurance policy? A) Security 70%

48

B) Returns C) Tax rebate

10% 20%

SECURITY TAX REBATE 10% 20%

SAVINGS 70%

INTERPRETATION: People invest in insurance mainly because of security concern.

What is the level of satisfaction of customers from products of AXIS bank?

49

Very Low 9% Low 10% Very High 40% Moderate 11%

High 30%

INTERPRETATION: Here we found that 40%people are very highly satisfied, 30% of people are highly satisfied, 11% are moderate, 10% of people are low satisfied, 9% are very low satisfied.

50

6). Are you satisfied with the incentives associated with your policy?
40% 40% 35% 30% 30% 25% 20% 15% 15% 10% 10% 5% 5% 0% Highly satisfied Satisfied Moderate Unsatisfied Highly Unsatisfied Highly satisfied Satisfied Moderate Unsatisfied Highly Unsatisfied

INTERPRETATION: 30% people are highly satisfied, 40% satisfied, 15%are moderate, 5% are unsatisfied 10%are highly unsatisfied.

51

7). What other plans or flexibility you expect from Insurance companies?
More returns 30% Complementary gifts 50% 20% Investment Pattern

INTERPRETATION: 50%people are satisfied with investment pattern, 30% are satisfied with more returns and Only 20% people expect complimentary gifts.

52

LIMITATIONS OF THE RESEARCH

By working on this project I gained a lot of knowledge over the banking sector in India. But there are a certain no. of followed: Most of the contents collected were difficult to understand because it was new for me to work in this field. it was tricky and time consuming to understand the mysteries of marketing. Response of customers could be biased. Lack of interest shown by the respondents resulted in incomplete responses. Poor a n d a m b i g u o u s r e s p o n s e s w e r e t h e r e b e c a u s e o f s o m e respondents responded without clearly understanding the questions. But this was minimized as far as possible because the interviewer assisted the respondents. contacting the customers was a difficult job. problems which I faced while working on this project. These problems can be illustrated as limitations of study which are as

53

RECOMMENDATIONS
Since the customer and his needs remain in focus in banking, it would be appropriate to have a view of the customers banking needs which include financial security, convenience, quick service, personalized service, investment counseling, return of investment, support by way of credit prestige, wide range of service, etc. and to be the best on these aspects AXIS Bank has and is trying its best, and has been successful too, but still there is some scope for improvement, which I observed during my training in this bank.

Nowadays, customers are more service driven than product driven and are not homogeneous in their behavioral pattern, attitude, needs and expectations. Therefore, a through understanding of the customer is a pre requisite to offer him satisfaction through providing services.

AXIS Bank should also focus on to have the provision to make some changes in its core products on the basis of region, purchasing power of the people etc. because customers want that their special case must be considered, for that branches need to be empowered. In other word it can be said bank should alter its existing service to satisfy the customer needs, as and when it is needed in special cases. Bank should begin a clear understanding of the entire customer base in particular; of those customers are the most profitable.

Pricing is in fact a very critical and sensitive issue while launching any product or inducing more features in existing product in such a highly competitive market of banking before the management of any bank. Because, price driven competition is one of the significant emerging trend in bank marketing. AXIS Bank should also be very careful while reconsidering the price of any core and leading product by closing understanding the behaviour up to what extent customers are in the position to tolerate it, since customers price sensitivity is not same across product categories. As it has been seen in the case of increase in charges of QAB of savings account that resulted in many closures of the account. The reaction of this increment in the charges from the customer was aggressive. So bank must price any product by keeping

54

the view of region factor too-where people needs, attitude and purchasing power must be closely understood by the management of the bank. For this, branches also needs to be empowered to the some extent-where they can make necessary changes in the price of some selected core products, as they have better understanding of the behaviour of their customers than the policy makers of the bank. There should be effective publicity of new products of new products and relaunching of existing one too. Monitoring and customer feedback of all the new and old products should be one regular basis.Bank should provide effective publicity of new product launched and educate the customer to go in for these products by highlighting the advantages of the products. Because if banks aim is to provide service matching the best in the banking industry so that it can get the most effective publicity, especially through word of mouth for this at the same it is inevitable to educate the customer about banks product and facilities available on it. As the products and services of the AXIS Bank are almost technology oriented where most advanced softwares are used and most of the banking work are executed on computer through Internet. In such situation where more technicalities is involved in both products and services there is a need to educate the customers so that they can easily use and avail all the facilities available on all the product. During my training, I observed that many customers, not to ask about Internet banking, Phone Banking even dont know how to use ATM, which is really a area of concern. Customers do not know the complete rules and regulations and procedures of banks and bankers preserve them for themselves and do not take interest in educating the customers because if you are giving a product in the hands of the customers keeping the view to serve them better, it is equally important to aware not only about the facilities that are available on any product but also how to use them. Until and unless this thing is practices as a campaign, it would be difficult to retain existing customers as it is said retaining the existing customers is less expensive than creating new one. For this bank need to educate the customer from the grass root of banking.

55