“Satisfaction level for banking services a case study of hdfc bank customers”
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“Satisfaction Level for Banking Services: A Case Study of HDFC Bank Customers”
Prepared By:
Nawa Raj Karki
Under supervision of :
Dr. Renuka Sharma
In partial fulfilment of the requirements for the award of degree of Master of Business Administration
Submitted to :Chitkara Business School
Bank
Equation (Income = Consumption + Saving)
Bank is an institution to gather the household saving and channelize that saving to the deficit unit or section who requires capital or fund.
RBI the Watchdog
RBI was established on 1 April 1935 during the British Raj in accordance with the provisions of the Reserve Bank of India Act, 1934
The Bank was constituted for the need of following: To regulate the issue of banknotesTo maintain reserves with a view to securing monetary stability andTo operate the credit and currency system of the country to its advantage.
Rates Current Rates
Bank Rate 8.25%
Cash Reserve Ratio (CRR) 4.00%
Statutory Liquidity Ratio (SLR) 23%
Repo Rate under LAF(Liquidity
adjustment Facility)
7.25%
Reverse Repo Rate under LAF * 6.25%
Current Policy Rates
RBI decides these Rates by considering Liquidity, Inflation and Credit supply in Economy.
Types of Risk
Financial Risk Non Financial Risk
Strategic Risk
Operational Risk
Political Risk
Legal Risk
Market RiskCredit Risk
Liquidity Risk
Interest Rate Risk
Exchange rate Risk
Counter Part or Borrower Risk
Portfolio or concentration risk
Risk in Banking
Banks like HDFC, SBI & ICICI are too big fail
Basel II Integrated Risk Management system
Three Pillars of Basel IIMinimum Capital RequirementIt states the Capital Adequacy that bank should maintain to cover three types of risks it defined; credit risk, market risk and operational risk. According to the Basel II the CAR should >8% but in India its 9%. Supervisory review ProcessIt sets out the new supervisory review process. It requires financial institutions to have their own internal process to access their overall capital adequacy ratio in relation to their risk profile. Market DisciplineIt requires transparency and the obligations of the banks to disclosure meaningful information to all stakeholders. Clients and shareholders should have sufficient understanding of activities of banks and the way they manage the risks.
Capital Adequacy Ratio
• CAR is also called Capital to Risk (weighted) assets ratio (CRAR), is a ratio of a bank’s capital to its risk. RBI tracks bank’s CAR to ensure that it can absorb a reasonable amount of loss and complies with statutory requirements.
Tier 1 Capital +Tier 2 CapitalCAR
Risk Adjusted Assets
=
Capital elementsTier 1(a) Paid-up share capital/common stock(b) Disclosed reserves
Tier 2(a) Undisclosed reserves(b) Asset revaluation reserves(c) General provisions/general loan-loss reserves(d) Hybrid (debt/equity) capital instruments(e) Subordinated debt
HDFC Bank an Introduction
Incorporated in 1994 under the name HDFC Bank Limited.It started its operations after one year of commencement since January 1995, with the mission to be “World-class Indian Bank”.
Name Designation
C M Vasudev Chairman
Aditya Puri Managing Director
Harish Engineer Executive Director
Paresh Sukthankar Executive Director
Renu Karnad Director
Partho Datta Director
Pandit Palande Director
Bobby Parikh Director
Anami N Roy Director
Keki Mistry Director
Vijay Merchant Additional Director
Management Team HDFC Bank
Retail Product Matrix
Accounts and Deposits
Saving Accounts
Salary Accounts
Demat Account
Safe Deposit Locker
Rural Accounts
Loans
Personal Loans
Business loans
Home loan
Car Loans
Two wheelers Loans
Loans against Assets
Educational Loan
Rural Loans
Cards & Forex
Credit Cards
Debit Cards
Prepaid Cards
Credit Card reward program
Travel Solutions
Remittance Products
Other Forex Services
Investments and Insurance
Wealth Service
Investment Products
Life Insurance
Health Insurance
Motor Insurance
Travel Insurance
Home Insurance
Business Segmentation
WholesaleIn this segment HDFC Bank targets for big projects and blue-chip companies.
Retail:The objective of the Retail Bank is to provide its target market customers a full range of financial products and banking services, giving the customer a one-stop window for all his/her banking requirements.
TreasuryWithin this business, the bank has three main product areas - Foreign Exchange and Derivatives, Local Currency Money Market & Debt Securities, and Equities.
Branch Structure
3Man Branches Teller, Authorizer and BM– objective cost cutting --- In rural Area
4 Man BranchesPB, teller, PB& Teller Authorizer and BM
5 Man BranchesLike 4 man branches only addition is relationship manager.
SWOT Analysis
Competent Human Resources
High Customer Driven system
Popular brand
Wide coverage, also International presence too
Strengths
High A/c maintenance or Monthly average balance (MAB)
Weakness
Rising per capita income along with disposable income
The recent government provision that bank a/c is mandatory for avail direct cash subsidy brings more people in formal banking channel.
The rising standard of rural India and still out of formal banking system.
OpportunitiesFinancial industry is dominated by shadow banking and offering alternative investment scheme.
Government is considering giving license to new entity that definitely snatches the market share.
Basel III implementation will hurt the profitability as banks are required to increase their paid up capital for safety of depositor’s. money
Threats
Competitors Analysis
Leader State Bank of India
Challenger HDFC Bank
Followers ICICI, Axis and others
Comparing Mcap
Market Capitalization as on 27th April
2013
Bank M.cap in CRs
SBI 164,975.31
HDFC 164027.85
ICICI 132020.79
Axis 69614.84
Kotak Mahindra 53076.44
IndusInd 23962.05
SBI
HDFCIC
ICI
Axis
Kotak
Mah
indr
a
Indu
sInd
0.0020,000.0040,000.0060,000.0080,000.00
100,000.00120,000.00140,000.00160,000.00180,000.00
Net Profit Comparison
Net Profit in CRs
Banks 2012 2011 2010 2009 2008
SBI 11686.9 7370.35 9166.05 9121.23 6729.12
HDFC 5167.09 3926.4 2948.7 2244.94 1590.18
ICICI 6465.26 5151.38 4024.98 3758.13 4157.73
0
2000
4000
6000
8000
10000
12000
14000
SBIHDFCICICI
2008
Net Profit in crores
2012 2011 2010 2009
Profitability Analysis and Trend Analysis
Year ROA In % EPS
2010 1.53 13.5
2011 1.58 17
2012 1.77 22.1
2010 2011 20120
5
10
15
20
25
13.517
22.1EPS
EPS
in R
S.
2010 2011 2012
1.531.58
1.77ROA In %
Net NPA and Gross NPA
Year Gross NPA% Net NPA %
2010 1.43 0.31
2011 1.05 0.19
2012 1.02 0.18
2010 2011 20120
0.20.40.60.8
11.21.41.6 1.43
1.05 1.02
0.310000000000001
0.19 0.18
NPA
Gross NPA% Net NPA %
Research
“Satisfaction Level for Banking Services: A Case Study of HDFC Bank Customers”
Research Methodology
Type of Research: ExploratoryPopulation(N) People who have HDFC Bank a/cSample Size(n): 250 RespondentsSample Design: Convenience Questionnaire type: Likert ScaleStatistical Tools ; Mean, Percentage & standard Deviation.
Points of Scale Assigned Score
Very Satisfied 5
Satisfied 4
Neither Satisfied Nor Dissatisfied 3
Dissatisfied 2
Very Dissatisfied 1
Likert Scale
Objective and Limitations of the Study
Objectives of the Study•To find out the current customer satisfaction level.•To find out the weakest facet of Bank that is hurting customer satisfaction.•To suggest bank to improve where required.
Limitations of the Study•Respondents are selected on Convenience basis•The study covers only the satisfaction level among customers who have bank account in sector 8 branch CHD.
Gender No of Respondents %
Male 187 74.8
Female 63 25.2
Total 250 100
Demographic distribution of Respondents
75%
25%
Gender Male Female
Age group
No of
Respondents %
Below 20 13 5.2
20-35 137 54.8
35-60 83 33.2
60above 17 6.8
Total 250 100
5%
55%
33%
7%
AGE Below 20 20-35 35-60 60above
Age group
Gender
Education
No of
Respondents %
Diploma and
Below 85 34.4
Graduation 129 51.6
P.G and Above 36 14.4
Total 250 250 Diploma and Be-low
Graduation P.G and Above0
20
40
60
80
100
120
140
Income
Class
No of
Respondents %
0-5 L 187 74.8
5-10 L 56 22.4
Above 10 L 7 2.28
Total 250 100 0-5 L 5-10 L Above 10 L0
20406080
100120140160180200
Education
Income Class
Results and Interpretation
S.N. Dimensions Mean score Standard Deviation
1 Accounts and Deposits 3.48 1.03
2 Investments 3.12 0.97
3 Health Plans 3.32 1.11
4 Loans 3.08 1.22
5 Credit Cards 3.39 1.20
1 Product Features
Accounts and Deposit has the maximum mean that is 3.48, on the contrast the loans of HDFC bank has got the mean score of 3.08 that shows it is product which is least preferred by the customers of HDFC Bank.
Similarly, the S.D. of Loans and the S.D. of Investments are highest and lowest in this product features category. The S.D. shows the consistency in the response of the customers which participate in this research.
S.N
.
Dimensions Mean
score
Standard
Deviation
1 Location of the Branches 4.10 0.93
2 Infrastructure 3.70 1.01
3 Waiting Lounge 3.57 1.06
4 Lolly Pops (Signage’s) 3.4 0.87
5 Parking Facilities 3.32 1.10
2 Infrastructure and Accessibility
Here in the above table the means Score of Location of the bank is highest and the Parking facilities get the minimum mean scores.
Customers believe the bank is in the right place and people say the parking doesn’t belong to bank so they still show quite satisfactory response. At the same time the S.D. of parking facility is highest and the Lolly pop gets the lowest S.D.
S.N. Dimensions Mean
score
Standard
Deviation
1 Helpfulness 3.44 1.05
S2 Attentiveness 3.60 0.93
3 Politeness 3.68 0.89
4 Knowledge of the Staff 3.72 0.93
5 Presentation of the Staff 3.72 0.81
6 Honesty and Trustworthiness of the staff 3.60 1.01
7 Preference to the Senior Citizen 3.58 0.84
3 The Level of Customer Satisfaction
The dimension knowledge of the staff and the presentation has the highest mean score that’s indicates customer feel the staff have good knowledge and the present in a good manner at same time they feel they staffs are not helpful enough
S.N. Dimensions Mean
score
Standard
Deviation
1 Quick Dealings 3.44 0.88
2 Query Resolve 3.66 0.98
3 Educating Customer 3.64 0.96
4 Desire to listen customer
queries / Complaint
3.60 0.86
5 Satisfactory Closure of a
Compliant
3.52 1.13
4. Efficiency of the Staff
Query resolve has the highest mean score and the Quick in dealings get sthe low mean score.
S.
N.
Dimensions Mean
score
Standard
Deviation
1 A/c Maintenance charges 3.16 0.97
2 Competitive Interest Rate 3.37 0.85
3 Misc. Charges(Instant alert, cheque return or
bounce)
3.34 0.83
4 Service charges on Loan 3.53 0.97
5 Compensation policy- Redressal 3.02 1.02
5. Interest and Charges
The mean score of dimension called competitive interest rate highest and the compensation policy has the lowest mean score.
S.N
.
Dimensions Mean score Standard
Deviation
1 Net Banking 3.29 1.14
2 Phone Banking 3.60 0.91
3 Mobile Banking 3.67 1.14
6 Ways of banking-Techno Banking
The mean score of e-banking ways are given above among three the Mobile banking gets the highest and net banking gets the lowest mean score. The standard deviation of phone banking is lowest among other two alternatives.
Combined mean factor wise
S.N. FACTORS Mean Score
1 Product Features 3.28
2 Infrastructure & Accessibility 3.62
3 The Level of Customer Service 3.62
4 Efficiency of the Staff 3.57
5 Interest and Charges 3.29
6 Techno Banking 3.52
Findings:
As per the study suggests people are less satisfied with the charges it charge against the service, HDFC a big brand but the bank have to act before it is too late while others bank offering same products in a lower Charges.
The loan product gets lower means score among 38 dimensions which are asked in the questionnaires that points the bank should give wider range of investment options and financial education to the customers.
Every dimension of Each factors which ere asked have mean more than three that shows customers are not dissatisfied but there is lot of room for improvement.
Recommendations:
We find some customers are extremely dissatisfied with the staffs’ behaviour so HDFC Bank can offer the Staffs some courses like behaviour modification and anger management.
People don’t want lock their money and the HDFC Bank account require to maintain Rs.10000 MAB that is not suitable for customers. So if it really wants to serve the bottom of pyramid segment they should lower its MAB it definitely gives bank more market share.
Staffs who are given target for month should think for years ahead. They are hunting customers with insufficient knowledge about product the product and services to meet the short term target.
BibliographyPatanaik Ila, Shah Ajay(2004);interest rate volatility & risk in Indian bankingTirupathi Kanchu, Kumar Manoj (2013); Risk management in Indian Banking sector: An empricical study Volume No 2 , ISSN 2277-3622Fawzi AI-Khatib, Abdullah Al-Khulaifi, Khalid Al-Sulaiti; Banking services and customer's satisfaction in Qatar :A statistical analysisMesay Sata Shanka (2012): Bank Service Quality, Customer Satisfaction andLoyalty in Ethiopian,Banking Sector: Journal of Business Administration and Management Sciences Research Vol. 1(1), pp. 001-009Ayyanar G.(2012); Customers’ Satisfaction in Public and Private Sector Banks and their Comparison: Vol. 5 (11) Nov. (2012)Federation Of Indian Chambers Of Commerce & Industry: Indian banking system: the current state & road aheadHdfcbank.comrbi.org.ineconomist.comfinanceindiamart.comallbanking.com
Thank you for your Patience!!!
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