CHAPTER 1

EXECUTIVE SUMMARY

Relationship banking may be defined as the provision of financial

services by a financial intermediary on the basis of long-term
investment in obtaining firm or customer specific information through
multiple interactions with diverse financial services (Boot, 2000).
Banks have advantages in gathering/producing information about their
clients, thanks mainly to the nature of information production. First,
there are economies of scale: the cost of information
gathering/production is reduced by learning through repeated
transactions. Second, there may also be economies of scope: banks
can utilize the information obtained on a type of service for other
services (Petersen and Rajan, 1994). Third, financial contracts are
typically incomplete: banks and customers can build commitment and
reputation through repeated transactions across services, often
allowing the low-cost renegotiation of debt contracts (Lehmann and
Neuberger, 2001). This characteristic of information production makes
it natural for banks to be interested in relationship-based banking

Indian banking industry is today at a crossroads. It is trying to make

the transition from era of socialist rhetoric to the era of marketing
mantra. At present under the Indian banking industry their are total of
289 banks which includes all private sector banks, public sector banks
and the regional rural banks. There is a paradigm shift in a
banking industry. In the current scenario when profits from
traditional banking operations are reducing due to intense competition,
banks are laying more and more emphasis on the income generated by
the sale of third party products. Revenues generated through these

1
businesses are increasing day by day. Third party products are Mutual
funds, Insurance products, Govt. of India Bonds and Infrastructure
Bonds. Every big private sector banks are having separate company
who works as a financial service provider.

After the achievement of independence, banking industry gained a

good deal of momentum. Several smaller banks were merged with the
bigger ones. At present, there are only two commercial banks
operating with their head offices in the entire South Kanara district. Of
the total five which were started here, two were nationalized on July
19th, 1969. The five local banks are Canara Bank, Syndicate Bank,
Corporation Bank, Karnataka Bank and Vijaya Bank. The State Bank of
India and its subsidiaries have a total of 5 branches located at various
important places of Udupi district.

The present banks had their origin from indigenous bankers and
moneylenders. Let us see how it used to operate in earlier days. The
credit facilities were available with co operative societies, chit funds,
financial corporations, moneylenders and so on. The merchants had to
borrow money at very high rates of interest from individuals and no
indigenous bank existed to give facilities for saving or for financing
business. Later, the growth of commerce and wide circulation of money
must have resulted in the increase of lending between individuals also.

India is poised to become the world's fourth largest economy in the

span of two decades [1].Economic prosperity is providing many in this
populous nation with real purchasing power; it simply is an opportunity
that cannot be overlooked by global banks. Despite its appeal, India
remains a developing economy. Thus, global banks seeking a presence
or expansion in India must craft a business strategy that considers the

2
country's attendant challenges: long-established competitors;
rudimentary infrastructure; dynamic political environment; restrictive
regulations; and developing country operational risks

Banking system is an orderly mechanism and structure available in an

economy to mobilize the monetary resources/capital from various
surplus sectors and allocate & distribute the same to various needy
sectors. They transform the savings into Investments and
consumption. But this function/role of the financial system did not
emerge overnight. It has evolved over the years from the concept of
‘Barter’ prevalent in ancient times to the present system of Universal
banking. Banking earlier was purely restricted to borrowing money as
deposits, with a view to lending them as advances. Thus the main
facets were confined to the acceptance of deposits and lending of
loans. With the growth of the Indian economy and also an off-shoot of
reform measures, banks have come to take upon themselves various
other activities which may not measure up to this old definition of
banking.

Global banks in India: Gaining a foothold

The competitive environment in India presents both challenges and

opportunities to global banks seeking market entry. Entrenched
domestic competitors and restrictive equity ownership ceilings imposed
by the government create obstacles for banks establishing a foothold
in India. Primary challenges include tough competition and
government ceilings on foreign equity ownership. Opportunities exist
because global banks often have technological advantages, well honed,
efficient processes and appealing products and services.

3
For the most part, global banks must execute on an organic growth
strategy to expand their footprint in India. Merger and acquisition
activity in the banking sector remains limited by government
regulation. This is difficult news for global banks that have relied on
acquisitions as a market entry or expansion strategy. Unless the
government shifts its posture on foreign equity ownership, global
banks will have to rely on organic growth to expand their presence in
India.

As we can see most of the banks either private or PSU banks are into
the insurance as well as mutual funds, so it more of compulsion for
them to integrate the three functions under one roof. There are some
differences like cultural, business interest etc, but they have to give it
up to exploit the customer base a bank provides and the income these
services generate.

4
CHAPTER 2
Introduction

There has been a paradigm shift in the Indian Banking landscape since
the last two decades. LPG (Liberalization, Privatisation and
Globalisation) of Indian economy has opened the banking sector to
foreign and private players intensifying competition. Different
alternative solutions have been made available for both short-term and
long-term requirement and investment of funds at comparatively
attractive terms. People forget the monopolistic scenario of the public
sector banks for financial needs, now they have a wide choice, greater
expectation and lesser sacrifice in terms of cost, time and efforts.
Customers have come into the main focus and bank managements are
gradually recognizing that their ultimate success depends on the
customers’ satisfaction—a buzz word of Customers Relationship
Management (CRM).

No business enterprise can sustain itself for long without customers’

support and loyalty. So every organization always attempts to maintain
a cordial relationship with its customers to effect sales and thereby to
generate income. Enterprises adopt different strategies to accomplish
their goals. One such strategy practiced by banks is CRM. Its aim is to
gain and retain customer’s loyalty in lieu of goods and services for
their optimum satisfaction. With in-creasing competition and pres-sure
on margin, banks need to practice CRM to enhance customer base for
increasing capabilities for targeting market programs along with
greater flexibilities to adopt processes and working methods to meet
customer’s expectations.

5
CRM focuses on two major issues:
(i) Increase in knowledge base and communication
management;
(ii) Understanding of customer’s micro environment. Being a
customer centric approach CRM advocates responding to
customers’ choices and preferences and exploiting the
opportunities arising in the process. It is characterized by a
more integrated and forward looking approach that utilizes a
common language in align-ing strategy, process, people,
technology and knowledge to the evaluation of customer
relationship and its management in banks. With the
development of banking technology and openness of Indian
banking sector, of late, CRM has assumed a crucial role in
marketing banking products and services.

Due to globalization a new generation of private sector banks and

many foreign banks have also entered the market and they have
brought with them several useful and innovative products. Due to
forced competition, public sector banks are also becoming more
technology savvy and customer oriented.

Thus, Non-traditional competition, market consolidation, new

technology, and the proliferation of the Internet are changing the
competitive landscape of the retail banking industry. Today retail
banking sector is characterized by following:

 Multiple products (deposits, credit cards, insurance,

investments and securities)
 Multiple channels of distribution (call center, branch, Internet
and kiosk)

6
  Multiple customer groups (consumer, small business, and
corporate)

Today, the customers have many expectations from bank such as

(i) Service at reduced cost

(ii) Service Anytime Anywhere

(iii) Personalized Service

With increased number of banks, products and services and practically

nil switching costs, customers are easily switching banks whenever
they find better services and products. Banks are finding it tough to
get new customers and more importantly retain existing customers.

According to a research by Reichheld and Sasser in the Harvard

Business Review, 5% increase in customer retention can increase
profitability by 35% in banking business, 50% in insurance and
brokerage, and 125% in the consumer credit card market. Therefore
banks are now stressing on retaining customers and increasing market
share.

PRIVATE BANKING is emerging as an important segment of business

for some banks and non-banking financial companies (NBFCs) in India.

Banks and NBFCs say there has been an increase in the number of
private banking or wealth management clients they are dealing with
today.

Foreign banks, which mostly cater to high net worth individuals, with
financial surplus or investible incomes of over Rs 2 crore per year, say

7
that this segment is expected to grow by almost 20 per cent over the
next couple of years.

The recently released study, 2005 World Wealth Report, by Capgemini

and Merrill Lynch, indicating that the number of High Net Worth
Individuals (HNWI) in India grew at 14.6 per cent, twice that of the
world's growth of 7.3 per cent in 2004, augurs well for some of these
banks.

The last decade has seen many changes taking place in the
structure of banking and also in the way the Banking sector has
opened up. Deregulation and entry of new players are changing the
Banking scene.

To say that the future belongs to a particular group, Private Banks

or Foreign Banks or Public sector Banks is not correct. The future
belongs to the player who keeps in touch with the time, who moves
along with the time and is able to respond to the emerging needs of
the customers.

Today Banking is changing we are seeing technology being

introduced in the sector. A greater amount of dis-intermediation is
taking place in the higher segment of the corporate sector and there
is a need for providing better quality customer service. The market
is becoming more&more buyer dominated. In Banking, the final
result as to who will actually be able to woo customers will depend
on their ability to react and respond to the customer requirement.
The customer is going to be the real decider of fate of Banks.

8
The Banks want to be a major retail consumer Banks in India. The
part of retail Banking goes not only with Credit Card but Debit Cards
and Smart Cards as well.

The Customer can get a bunch of additional services with co-

branded cards, which have tie-ups with petroleum COs, airlines, and
hospital chains.

Banks have introduced Debit Cards self-explanatory card that caters

very well to the tastes of credit averse Indians. The banks are
providing all products under one roof and that includes the retail
staff as well.

HDFC Bank, ICICI, UTI Bank and HSBC, Citi are wooing corporate to
open salary accounts. The minimum balance required for these
accounts is zero and hence customer base of these Banks is
exponentially increasing.

ATM network, which provides visibility and convenience and hence

helps in increase customer acquisition, is set near railway station,
petrol pump, shopping complexes etc.

Internet Banking is available to the customer at his desktop, while

the branches may be 2 to 3 kms. Away.

Some banks have already ventured to maintain relationship with

online banking through Internet. The latest trend in banking
strategy is clicks bricks in which customer can debit or credit
accounts, check balances and even trade on it. A car loan is other
area in which banks are developing relationship with the customer.
The ideal model of maintaining relationship with the customer
focuses on the customer service issues. Banks are providing

9
customers with the highest quality services with special emphasis on
recognizing customer needs and cross selling (expanding
relationship with existing clients to increase range of services
delivered to the clients) appropriate bank services.

In a nutshell the customer has become the fulcrum of all Banking

activities.

10
CHAPTER 3

Literature Review

Source:
http://www.iimcal.ac.in/imz/article.asp?code=jan_05_04

CRM in banking: 1/26/05 - by Shipra Surendra

Before Internet era, consumers largely selected their banks based on

how convenient the location of banks branches was to their homes or
offices. With the Advent of new technologies in the business of bank,
such as Internet banking and ATMs, now customers can freely chose
any bank for their transactions. Thus the customer base of banks has
increased, and so has the choices of customers for selecting the banks.

This is just the beginning of the story. Due to globalization a new

generation of private sector banks and many foreign banks have also
entered the market and they have brought with them several useful
and innovative products. Due to forced competition, public sector
banks are also becoming more technology savvy and customer
oriented.

Thus, Non-traditional competition, market consolidation, new

technology, and the proliferation of the Internet are changing the
competitive landscape of the retail banking industry. Today retail
banking sector is characterized by following:

Multiple
 products (deposits, credit cards, insurance, investments
and securities)

11
 Multiple
 channels of distribution (call center, branch, Internet and
kiosk)

Multiple
 customer groups (consumer, small business, and
corporate)

Today, the customers have many expectations from bank such as

(i) Service at reduced cost

(ii) Service Anytime Anywhere

(iii) Personalized Service

With increased number of banks, products and services and practically

nil switching costs, customers are easily switching banks whenever
they find better services and products. Banks are finding it tough to
get new customers and more importantly retain existing customers.

According to a research by Reichheld and Sasser in the Harvard

Business Review, 5% increase in customer retention can increase
profitability by 35% in banking business, 50% in insurance and
brokerage, and 125% in the consumer credit card market. Therefore
banks are now stressing on retaining customers and increasing market
share.

Source:- http://www.indiainfoline.com/pefi/news/bnk2.html

Privy To Wealth Management - II

It would be worthwhile to make a check-list of the broad needs that

your Private Banker should satisfy. To mention the more significant
ones,

12
 • Customised, professional, unbiased investment advice
• Single point service
• Trust and confidentiality
• Empowerment to take the final decision
• Prompt, efficient service with minimal paperwork
• Reliable, speedy, low-cost execution of transactions
• After-sales service which includes regular performance reports
and pro-active follow-up of post-transaction delivery and
corporate actions, and of course,
• A reasonable return

What your Private Banker will typically charge for service is a

transaction fee of 1-1.5% per transaction, a custodial fee of 0.1%-
0.2% of the average assets under custody and may also charge an
annual fee which could be Rs.10, 000-Rs.15, 000. The charges which
may seem steep to begin with must be seen in conjunction with the
level of service offered and if your Private Banker meets most of the
above-mentioned criteria, the fees charged are well worth it!

Source:-
http://www.themoneyvibe.com/wealth_management.html

Money may be considered the root of all evil but it will forever be a
necessity in your life. Possessing money brings on an abundance of
responsibility. Wealth management is the only way to coordinate and
structuralize the destination of your money and the abundance of your
funds. Wealth management includes not only managing the funds you
carry at the present time but also planning how your funds can work
for you in the future. There is a whole world of investment
opportunities just waiting for some funding so they can thrive and

13
profit. Some of these opportunities include stocks, bonds, mutual
funds and annuities. By educating yourself on wealth management,
this world can work for you and increase your profit. If you can obtain
the knowledge of where to move your money at the right time, wealth
management will become an easy task.

The best way to educate yourself on wealth management is through

professional help. There are services offered through banks and
financial companies that can give you personal advice on your financial
situation and the wealth management of your future. These
professionals can guide you in the management of your assets,
banking accounts, credit and savings. Most companies can also offer
services and counseling in areas like estate planning, insurance,
financial planning and trust services. Wealth management is as
important as the money itself. Making your money work for you
through wealth management can increase or even double your overall
funding. It’s amazing how much profit you can make with a little
education and guidance.

http://www.icai.org/members/CRM_banking.pdf

CRM-IN THE BANKING SECTOR AN EXPERIENCE

While one hears international giants successfully implementing CRM,

by and large the Indian business or the Indian arm of such giants give
only a lip service to CRM and also there was an element of double
speak in the context of customer relationship mgmt by Indian firms. A
survey reveals that only 36% of the CEOs have CRM as one of the top
activities in there agenda. We decided to check this out in the Udaipur

14
region and also to gain first hand experience in the field by talking to
officials especially in the banking sector.

For the purpose we met different officials from ICICI bank, IDBI bank,
Bank of Rajasthan, HDFC finance. Although in the Udaipur region they
do not have an established customer relationship mgmt solutions in
place.

But unanimously agree to the dramatic change in the approach that

has swept not only their banks but also other state owned and private
banks. At both ICICI and IDBI there is a mad rush to reach out to the
customer through multiple channels like ATMs, cell phones, branch
phones, or the Internet etc.

15
16
CHAPTER 4

Research Objective

Objective

To Study Relationship management for financial advisory

services in banking sector

Sub-Objectives

1) To study the role of relationship management across

various public and private banks

2) To study the various factors that constrains the growth

of relationship management across banks

3) To measure the customer satisfaction with financial

advisory services

17
 CHAPTER 5

RESEARCH METHODOLOGY

Research Design

Descriptive research: - Descriptive research provides data about the

population or universe being studied. Descriptive Research is used
when we are interested in knowing the characteristics of certain
groups such as age, sex, educational level, occupation etc. But it can
only describe the "who, what, when, where and how" of a situation,
not what caused it. Descriptive research is used when the objective is
to provide a systematic description that is as factual and accurate as
possible.

Sample Size : 34 Branches

Target Area : West Delhi

Sampling Technique: Convenient Sampling

In convenience sampling, the selection of units from the population is

based on easy availability and/or accessibility.
I am using this sampling method because sample will be selected on
the basis of availability of the respondents who met the desired
criteria.

18
Data Collection Primary & Secondary

Primary Data Source Questionnaires and Personal Interview

Dichotomous Questions This has only two answers “Yes” or “No”.

Multiple Choice Questions Where respondent is offered more than

two choices

Data Collection Tool: - Structured Questionnaire

A structured Questionnaire is a formal list of questions framed so as to

get the facts. For Collecting Primary Data I used a Structured
Questionnaire.
I prepared two questionnaire one to be filled by Relationship Managers
and the other to be filled by priority customers of the banks.
I visited 34 branches of different banks in west Delhi where I got 34
questionnaire filled by relationship managers and 45 questionnaire by
priority customers.

SECONDARY DATA COLLECTION:

MAGZINES AND WEBSITE

19
CHAPTER 6

DATA ANALYSIS I

Table 1: Distribution of Relationship Manager as respondent by

work Experience
This question was asked to Relationship Manager of various banks
across industry to know the average experience age of RMs across
industry. It was found that almost 64% of the RMs have minimum
three year experience in working with the bank.

Frequency Percent
Valid One Year 3 8.8
Two year 6 17.6
Three Year 22 64.7
Four Year 3 8.8
Total 34 100.0

Table 2: Distribution by Any prior work experience in working

in same or any related industry.

Frequency Percent
Valid Yes 15 44.1
No 19 55.9
Total 34 100.0

It was found that 44% of all the relationship managers questioned had
prior experience

20
Table 3: Distribution By Internet banking as the service
provided to priority customer

Frequency Percent
Valid Yes 30 88.2
No 4 11.8
Total 34 100.0

It was found that 88% of the banks in sample space were providing
Internet banking to the customer. It was also noticed that the banks
that were not providing the Internet banking to the customer did not
have Internet banking facility.
Table 4: Distribution by high cash withdrawal limit as service to
priority customer

Frequency Percent
Valid Yes 31 91.2
No 3 8.8
Total 34 100.0

It was found that 91% of the banks in sample space were providing
high cash withdrawal limit facility for priority customer

Table 5: Distribution by free pick up and delivery of cheques

21
 Frequency Percent
Valid Yes 10 29.4
No 24 70.6
Total 34 100.0

Table 6: Distribution by International Debit Cards

Frequenc
y Percent
Valid Yes 34 100.0

22
Table 7: Distribution by Relationship Management helps secure
lucrative banking business.

Frequency Percent
Valid Strongly Agree 26 76.5
Agree 8 23.5
Total 34 100.0

RM_Help_Cus
tmer_Base
Strongly
Agree
Agree

23
When relationship managers across banks were asked whether they
think that relationship management help secure lucrative banking
business, 76% of all the respondents were strongly agreed. And not a
single manager was in disagreeing to it.

Table 8-11: A question was asked to the relationship managers

to know there views on what may be the most likely factors
that can make hinder the banks to develop such a relation with
priority customer.

Table 8: It was found that higher turnover of bank officer in

charge of managing the relation was important by 55% of the
respondent. While meager 8.8% believed it was the least important
factor.

Frequency Percent
Valid Important 19 55.9
Not so
12 35.3
Important
Least Important 3 8.8
Total 34 100.0

Table 9: It was that the 70% of all the respondents agreed that
reluctance the priority customer to reveal his financial status
was the most important factor in developing a good relationship with
them. While 11% think that it was the least important factor.

24
 Frequency Percent
Valid Most
24 70.5
Important
Not so
6 17.6
Important
Least
4 11.7
Important
Total 34 100.0

Table 10: It was that 47% of all the relationship managers believed
that the inadequate expertise offered by the banks to meet the
demand for diverse financial services is not so important factor to
develop a good relation with clients.

Frequency Percent
Valid Important 15 44.1
Not so
16 47.1
Important
Least
3 8.8
Important
Total 34 100.0

25
Table 11: It was found that out of the entire respondent a significant
97% believed that declining dependence on financial advice was the
least important factor in developing the relationship with clients. It
shows that the dependence on financial advisory services is increasing.

Frequen
cy Percent
Valid Least
33 97.1
Important
Not so
1 2.9
Important
Total 34 100.0

Table 12-15: A question was asked to the relationship

managers across various banks that what specific actions they
think are the important that will help banks build strong
relations with the priority customers.

Table 12: It was found that 47% of the Relationship Managers think it
important that the banks should avoid the frequent changes in the
bank officers (Relationship Managers) in handling a particular
client. The reason behind that which I found while informally
discussing with bank people was that in most of the cases priority
customers develop trust and relations with the them and the
customers feel uncomfortable.

Frequency Percent
Valid Most Important 1 2.9
Important 16 47.1
Not so
13 38.2
Important
Least 4 11.8

26
 Important
Total 34 100.0

Table 13: It was noticed that a significant percentage i.e.79% of

Relationship Managers believed that it was most important to
proactively identify, locate and advise the clients on new investment
avenues.

Frequency Percent
Valid Most Important 27 79.4
Important 2 5.9
Not so
4 11.8
Important
Least Important 1 2.9
Total 34 100.0

Table 14: It was found that 41% of Relationship Managers believed

that it is important to organize customer meet time to time to
flourish the relationship and develop confidence with the
clients.

Frequency Percent
Valid Most
3 8.8
Important
Important 14 41.2
Not so
17 50.0
Important

27
 Total 34 100.0

Table 15: It was found that 85% of the relationship managers believe
that it is the most important to have highly trustworthy research to
back the bank officers in making decisions in advising the clients.

Frequency Percent
Valid Most
29 85.3
Important
Important 3 8.8
Least
2 5.9
Important
Total 34 100.0

Table 16-19: A question was asked to Relationship Managers

about what they think behind the weak discipline in bank
management.

Table 16: It was found that 61% of the respondents believe

government ownership of the banks is least important factor behind
weak discipline in bank management.

Frequency Percent
Valid Most Important 6 17.6
Not so
7 20.6
Important
Least 21 61.8

28
Important
Total 34 100.0

29
Table 17: It was found that 41% of the respondents believe that the
expectation from the government to bail out the troubled bank was not
so important factor behind the weak discipline in bank management.

Frequency Percent
Valid Most Important 7 20.6
Important 21 41.8
Not so
3 28.8
Important
Least
3 8.8
Important
Total 34 100.0

Table 18: It was found that that 55% of the relationship managers
believed dereliction of duty was the most important factor
behind the weak discipline in bank management.

Frequency Percent
Valid Most
19 55.9
Important
Important 7 20.6
Not so
7 20.6
Important
Least
1 2.9
Important
Total 34 100.0

Table 19: It was found that 50% of the relationship managers believe
oligopolistic banking market structure is not so important

30
behind weak discipline in bank management.

Frequency Percent
Valid Most Important 2 5.9
Important 6 17.6
Not so
17 50.0
Important
Least
9 26.5
Important
Total 34 100.0

Table 20-23: A question; does the government ownership of

banks constrain the efficiency of banks, and the respondent
was required to rank the reasons.

31
Table 20: It was found that 23% of the respondent believed that
outside interference in bank management was the most important
reason that constrains the efficiency of banks.

Frequency Percent
Valid Most
8 23.5
Important
Important 6 17.6
Not so
8 23.5
Important
Least
12 35.3
Important
Total 34 100.0

Table 21: Thirty five percent of the Relationship Managers believed

that appointment or dismissal of senior management not based
on their capability or performance was the most important reason
that constrains the efficiency of banks.

Frequency Percent
Valid Most Important 12 35.3
Important 3 8.8
Not so
6 17.6
Important
Least Important 13 38.2
Total 34 100.0

Table 22: Forty one percent of the Relationship Managers believed

that lack of professionalism in government employees was an
important reason that constrains the efficiency of banks.

32
 Frequency Percent
Valid Most
5 14.7
Important
Important 14 41.2
Not so
8 23.5
Important
Least
7 20.6
Important
Total 34 100.0

33
Table 23: Thirty two percent of the respondent believed that weak
incentive for monitoring bank management was an important
reason that constrains the efficiency of banks while similar percent of
people believed it as not so important reason.

Frequency Percent
Valid Most
9 26.5
Important
Important 11 32.4
Not so
12 35.3
Important
Least
2 5.9
Important
Total 34 100.0

CHAPTER 7

34
Data Analysis II

Before I get into detailed analysis it is necessary to give in brief that

from where I get raw data and what has been the objective of this
data collection. A questionnaire was got filled by the priority customers
of different private and public banks to study the satisfaction level and
their perception towards financial advisory services.

Table 1: This table shows that 44% of the respondent priority

customers have their monthly income between 5-10 Lacs.

Monthly Income

Frequency Percent
Valid Less Than Five
12 26.7
Lacs
5-10 Lacs 20 44.4
Above 10 Lacs 13 28.9
Total 45 100.0

Table 2: This table shows the frequency distribution of priority

customers on the basis of number of years of availing financial
advisory services. Maximum percentage 55 was of the customers who
were availing financial advisory services since last 1-2 years.

Frequenc
y Percent

35
 Valid Less Than one
16 35.6
Year
1-2 Year 25 55.6
More Than One
4 8.9
Year
Total 45 100.0

Table 3: This table shows that 57% of the priority customers across
banks were satisfied by the advisory services.

Frequency Percent
Valid completely
6 13.3
satisfied
satisfied 26 57.8
cant say 13 28.9
Total 45 100.0

Table 4: When customers were asked that how they perceive the
services of their banks with respect to other banks. Sixty two percent
of all the respondent feels that the services of their bank were slightly
better than other banks.

Frequency Percent
Valid Much Better 16 35.6
Slightly Better 28 62.2
Slightly Worse 1 2.2
Total 45 100.0

Table 5-8: A question was asked to rate the different functions

36
of financial advisory services to measure the satisfaction level
of the priority customers.

Table 5: It was found that 55% percent of the priority customers are
completely satisfied by the investment guidance provided across
banks.

Frequenc
y Percent
Valid satisfied 20 44.4
completely
25 55.6
satisfied
Total 45 100.0

Table 6: It was found that 71% of the customers were satisfied by

regular market information given to them by the banks.

Frequenc
y Percent
Valid Dissatisfied 10 22.2
satisfied 32 71.1
completely
3 6.7
satisfied
Total 45 100.0

Table 7: It was found that a significant percentage of customers i.e.

82% were satisfied by the query handling of the banks.

Frequenc Percent

37
 y
Valid Dissatisfied 1 2.2
satisfied 37 82.2
completely
7 15.6
satisfied
Total 45 100.0

Table 8: When respondents were asked to rate their satisfaction level

in terms of overall quality of service of banks, it was found that 73%
were satisfied.

Frequenc
y Percent
Valid Dissatisfied 6 13.3
satisfied 33 73.3
completely
6 13.3
satisfied
Total 45 100.0

Table 9: When respondents were asked whether they will continue

with bank as priority customer it was found that a significant
number of customers said that they will continue. It is intimated from
this fact that once a person becomes the priority customer of a bank
he/she is reluctant to change the bank because they develop relations
with the banker.

Frequency Percent
Valid Certainly Yes 10 22.2
Yes 33 73.3
No 2 4.4
Total 45 100.0

38
Table 10: It was found that 37% of the customers were priority
customers of some other bank also.

Frequency Percent
Valid yes 17 37.8
No 28 62.2
Total 45 100.0

Table 11-15: A question was asked in which the priority

customers were asked to rate the various relationship efforts of
bank.

Table 11: It was found that 57% of the respondent said that query
handling of their banks Relationship Managers was good.

Frequency Percent
Valid poor 1 2.2
Good 26 57.8
very
18 40.0
good
Total 45 100.0

Table 12: It was found that 55% of the priority customers agreed that
the relationship managers’ effort in giving greeting on selected
occasion was good.

Frequency Percent

39
 Valid poor 17 37.8
Good 25 55.6
very
3 6.7
good
Total 45 100.0

Table 13: It was also found that Relationship Managers efforts in

providing information about new service were also good by 57% of
all the respondents.

Frequency Percent
Valid poor 6 13.3
Good 26 57.8
very
13 28.9
good
Total 45 100.0

Table 14: Eighty percent of the respondent believed that Relationship

Managers efforts in providing promptness in service were good.

Frequency Percent
Valid Good 36 80.0
very
9 20.0
good
Total 45 100.0

Table 15: It was found that 66% of the respondents felt that the
Relationship Managers efforts in providing priority in service are
good.

40
 Frequency Percent
Valid poor 6 13.3
Good 30 66.7
very
9 20.0
good
Total 45 100.0

Table 16: A question was asked to the priority customers whether

Relationship Manager of their bank take efforts to monitor your
investment portfolio. It was that 75% of all the respondent agreed
that the Relationship Manager take effort to monitor investment
portfolio.

Frequency Percent
Valid Yes 34 75.6
No 11 24.4
Total 45 100.0

Table 17: A question was asked to the customers that whether the
Relationship Manager of their bank is skilled or knowledgeable
enough to give them investment advice. It was found that 91% of
all the respondent agreed that their RM is skilled.

Frequency Percent
Valid Yes 41 91.1
No 4 8.9
Total 45 100.0

41
Table 18: A question was asked to the priority customers about what
are the important motivations or expected benefits for having
such a relationship. It was found that 44% percent of the priority
customers agreed that advice from bankers on their business and
future financial planning is an important motivation for carrying
relation with bank.

Frequency Percent
Valid Advice from bankers
on your business
20 44.4
and future financial
plans
Easy access to other
15 33.3
Financial markets
Better Credit
7 15.6
availability
Behavior of the
3 6.7
banker
Total 45 100.0

42
 Imp_Motivations_
for_RM
Advice from
bankers on
your business
and future
financial pl
Easy access to
other Financial
markets
Better Credit
availability
Behavior of the
banker

Table 19: A question was asked to the customers whether relationship

management lowers their investment risk. Hundred percent of the
customers believed that relationship management lowers their
investment risk.

Frequenc
y Percent
Valid Yes 45 100.0

43
 CROSSTABS:

Cross tabulation between Work Experience of the Relationship

Manager and the Satisfaction level of the customers

Satisfaction Level
completely Total
satisfied satisfied cant say
Work One Year 1 0 2 3
Two year 1 1 4 6
Experience
Three Year 4 15 3 22
of RM Four Year

0 3 0 3

Total 6 19 9 34

Bar Chart

15 Satisfaction_Lev
el
completely
12 satisfied
satisfied
cant say
9
C
n
u
o
t

0
One Year Two year Three Year Four Year
Work_Time_Bank

44
It is quite clear from the table and the graph that higher the
experience of the relationship manager higher the satisfaction level of
the priority customers.

45
Cross tabulation between satisfaction level and the
continuation of the priority customers with bank

Continuation with bank as

customer
Certainly Total
Yes Yes No
Satisfaction completely
5 1 0 6
Level satisfied
satisfied 2 19 0 21
cant say
1 6 2 9
Total 8 26 2 36

Bar Chart

Continuation_Bank
20
Certainly Yes
Yes
No

15

10
C
n
u
o
t

0
completely satisfied satisfied cant say
Satisfaction_Level

46
It is evident higher the satisfaction level of the customer higher is the
customer retention.

Cross tabulation between Relationship Managers effort to

monitor the portfolio and the satisfaction level of the priority
customers

RM’s effort to
monitor the
portfolio Total
Yes No
Satisfaction completely
4 2 6
Level satisfied
satisfied 17 4 21
cant say 6 3 9
Total 27 9 36

47
 Bar Chart

RM_Effort_Monitor_
20
Portfolio
Yes
No

15

10
C
n
u
o
t

0
completely satisfied satisfied cant say
Satisfaction_Level

It was found that higher is the Relationship Managers efforts to

monitor the investment portfolio of the customers higher is the
satisfaction level of the customers.

Cross tabulation Relationship Managers skill and the

satisfaction level of the customers

48
 RMs Skilled for
giving Advice Total
Yes No
Satisfaction completely
6 0 6
Level satisfied
satisfied 19 2 21
cant say
8 1 9
Total 33 3 36

Bar Chart

RM_Skilled_for_Adv
20
ice
Yes
No

15

10
C
n
u
o
t

0
completely satisfied satisfied cant say
Satisfaction_Level

It was found that higher the skills of the relationship manager higher
are satisfaction level of the customers.

49
 CHAPTER 8

RESULTS AND FINDINGS

1. All the private and public banks are recognizing importance of

the relationship management in their growth and customer
retention.
2. It was found that there is high correlation between the
experience of the relationship manager and customer
satisfaction.
3. A large number of relationship managers believed that higher
turnover of bank officers in charge of managing the relation was
an important factor that was making priority customers reluctant
to develop such a relation.
4. Priority Customers reluctant to reveal his/her financial status
was constraining the quality of financial advisory services.
5. Very high percentage 85% of all the relationship managers
believed that they should be backed by highly trustworthy
research on different financial avenues available in the market.
6. All the priority customers were found to be agreed that the
relationship management lowers the risk of their investment

50
 CHAPTER 9
SUGGESTIONS

1. As there is high co-relation between experience of relationship

manager and customer satisfaction so the banks should keep an
experienced person as a relationship manager.
2. Banks should try to minimize the turnover rate of relationship
managers as it was found that customers develop relations with
the manager with the course of time and they feel
uncomfortable.
3. Every bank should have its own research house that provides
quality research on different investment avenues available in the
market according to the risk appetite of the priority customer.

51
 CHAPTER 10
LIMITATIONS

1. The sample was taken from 34 branches of west Delhi which

may not be the true representative of entire banking industry.
2. Since inferences have been drawn on the basis of information
provided by the respondent, chances of response error might
have crept in.
3. I have completed this project while I was working with
SHAREKHAN Securities .Ltd. , so the time constraint was also
a limitation.

52
 CHAPTER 11

BIBLIOGRAPHY

Books:-
Rubin, R.S., Marketing Research, New Delhi: PHI, 2004

Internet:-

http://www.iimcal.ac.in/imz/article.asp?code=jan_05_04

http://www.indiainfoline.com/pefi/news/bnk2.html

http://www.themoneyvibe.com/wealth_management.html

http://www.icai.org/members/CRM_banking.pdf

53
CHAPTER 12
APPENDIX

Questionnaire For Relationship Manager

Name:-……………………………………………………………………
Bank:-……………………………………………………………………
Branch:-…………………………………………………………………

Q. (1)Since how long have you been working with this bank?

1 year[ ] 2 year [ ] 3Year [ ] 4 year [ ] 5 Year or more

Q.2. Had you any prior experience of working in banking industry or

any related industry before joining this bank?

Yes [ ] No [ ]

Q.(3) your qualification ………………………………………………….

Q.(4) No of priority customer at your branch…………………………….

54
Q.(5) Mark the services that your bank is providing to the priority
customer
a. Internet Banking
b. Higher Cash Withdrawal limit
c. Free pickup and delivery of cheques and cash
d. International Debit Cards

Q.(6).How many customer availed the financial advisory services?

……………………………………………………………………………………..

Q.(7). Relationship management is helping banks to secure customer

base for lucrative banking business.

(i) Strongly agree [ ]

(ii) Agree [ ]
(iii) Neither agree nor disagree [ ]
(iv) Disagree [ ]
(v) Strongly disagree [ ]

Q.(8). What factors may make priority customer reluctant to develop

such a relationship?
(Rank them on scale of 4 – 1 from Most Important to Least Important)

1. Higher turnover of bank officers in charge of managing the

relationship
2. Reluctance of the priority customer to reveal his/her financial status
3. Inadequate expertise offered by banks to meet the demand for
diverse financial services
4. Declining dependence on financial advice and needs.

55
Q.(9) What specific actions of a bank will help build strong relationship
banking with its clients?
( Rank them on scale of 4 – 1 from Most Important to Least
Important )
1. Avoid frequent changes in banks officers in charge of managing the
relationship with particular clients.
2. Proactively identifying ,locating and advising the clients on new
investment avenues
3. Time to time organizing customer meets to flourish the relationship
and develop confidence with the clients.
4. Highly trustworthy research to back the bank officer in making
decisions

Q.10. What are the most important factors behind the weak discipline
in bank management?
(Rank them on scale of 4 – 1 from Most Important to Least
Important)
1. Government ownership of banks and political or bureaucratic
interference in banking operations.
2. Expectations from the government to bail out the troubled bank.
3. Dereliction of duty by the financial advisory services officials of
banks
4. Oligopolistic banking market structure
Q.11. does the government ownership of banks constrain the efficiency
of banks because of the following reasons.

Rank 4 to 1 from Most important to least important

1. Outside interference in bank management

56
2. Appointment or dismissal of senior management not based on
their capability or performance.
3. Lack of professionalism in employees.
4. Weak incentives for monitoring bank management

57
Questionnaire For Priority Customer

Name:………………………………………………………………..

Age :……………………………….

Gender: Male [ ] Female [

]

Occupation:………………………………………………………….

Monthly Income:

Less than 5 Lacs [ ] 5-10 Lacs [ ] Above 10

Lacs [ ]

Q.1 Name of the bank from which you are availing financial
advisory services?
…………………………………………………………………………………….

Q.2 Since how long have you been priority customer of the bank?
Less than one year [ ] 1-2 Year [ ] More than
two year [ ]

Q.3 Mark your satisfaction level with the priority services of your
bank?

Completely Satisfied [ ]

58
Satisfied [ ]
Cant say [ ]
Dissatisfied [ ]
Completely Dissatisfied [ ]

Q.4 How do you perceive the priority services of your bank in relation
with the other banks.

Much Better [ ]
Slightly Better [ ]
Slightly Worse [ ]
Much Worse [ ]

Q.5 Rate the financial advisory services of your bank on the following
parameters.

4- Completely satisfied 3- Satisfied 2- Dissatisfied

1- Completely Dissatisfied

Investment Guidance [ ]
Regular Market Information [ ]
Query Handling [ ]
Quality of services [ ]

Q.6 Would you like to continue as a priority customer with the bank?

Certainly Yes [ ] Yes [ ] No [ ] Certainly No

[ ]

59
Q.7 Are You priority customer of any other bank?

Yes [ ] No [ ]
If yes specify the bank’s name
………………………………………………………………………………………

Q.8 Please rate the following relationship efforts of your bank

4-Very good 3-Good 2- Poor 1- Very Poor

(i) Query handling by officials.

(ii) Greeting on selected occasions
(iii) Information about new service
(iv)Promptness in service
(v)Priority in service

Q.9 Is relationship manager of your bank take efforts to monitor your

investment portfolio?

Yes [ ] No [ ]

Q.10 Is relationship manager skilled /knowledgeable to give you

investment advice?

Yes [ ] No [ ]

Q.11 What are the most important motivations or expected benefits for
having such a relationship?

60
(i) Advice from bankers on your business and future financial planning
(ii) Easy access to other financial markets
(iii) Better credit availability
(iv)Behavior of the banker

Q.12 Does relationship banking lowers your investment risk?

Yes [ ] No [ ]

61