Executive Summary Executive Summary The banking sector in India has become very much competitive in the last few years with the increasing growth of private and public sector banks. Day by day the competition is becoming more stringent and crucial. I undertook training in AXIS bank limited for profiling to understand the banking operations and services provided by AXIS bank. The topic "Branch Banking" helped to understand the overall banking operations of a branch. This project is basically being formulated to study the branch banking operations in the Branch of Axis Bank. This includes parameters like overall performance, current account, saving account, and other facilities being provided by AXIS BANK. It also includes a study of customer centricity approach of AXIS bank. The market needs are continuously changing and so are the needs of the Current account & Savings account holders. The major backup of any nation are the industrialists of the same and the prior to them is the facility of the current accounts and customer of banks which open saving account. Hence the facilities equipped in current accounts & saving account is always a task for research. AXIS Bank is one of the fastest growing banks in the country and has an extremely competitive and profitable banking franchise evidenced by: Comprehensive portfolio of banking services including Corporate Credit, Retail Banking,
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Executive SummaryExecutive Summary
The banking sector in India has become very much competitive in the last few years
with the increasing growth of private and public sector banks. Day by day the competition is
becoming more stringent and crucial.
I undertook training in AXIS bank limited for profiling to understand the banking
operations and services provided by AXIS bank. The topic "Branch Banking" helped to
understand the overall banking operations of a branch.
This project is basically being formulated to study the branch banking operations in
the Branch of Axis Bank. This includes parameters like overall performance, current account,
saving account, and other facilities being provided by AXIS BANK. It also includes a study
of customer centricity approach of AXIS bank.
The market needs are continuously changing and so are the needs of the Current
account & Savings account holders. The major backup of any nation are the industrialists of
the same and the prior to them is the facility of the current accounts and customer of banks
which open saving account. Hence the facilities equipped in current accounts & saving
account is always a task for research.
AXIS Bank is one of the fastest growing banks in the country and has an extremely
competitive and profitable banking franchise evidenced by: Comprehensive portfolio of
banking services including Corporate Credit, Retail Banking, Business Banking, Capital
Markets, Treasury and International Banking. The quality of service is best among the
competitors
This Project Report involves an attempt to bring forward the various facilities being
provided by the top privatized bank as for the current account& saving account holders. Also
the significance of AXIS BANK has been brought forward in the report.
As this project is a part of the academic curriculum, the learnings and experiences from the training at AXIS Bank are also included in this report.
Industry Overview
(Banking Industry)Banking - An overview:
Banking is an activity of engaging in the business of keeping money for savings and
checking accounts, for exchange or for issuing loans and credit, transacting business with a
bank; depositing or withdrawing funds or requesting a loan etc. In general terms, the business
activity of accepting and safeguarding money owned by other individuals and entities, and
then lending out this money in order to earn a profit.
Banking in the modern sense of the word can be traced to medieval and early
Renaissance Italy, to the rich cities in the north like Venice and Genoa who dominated
banking in 14th century, establishing branches in many other parts of Europe. Perhaps the
most famous Italian bank was the Medici bank, set up by Giovanni Medici in 1397. The
earliest known state deposit bank, Banco di San Giorgio (Bank of St. George), was founded
in 1407 at Genoa, Italy
The oldest bank still in existence is Monte dei Paschi di Siena, headquartered in
Siena, Italy, which has been operating continuously since 1472.
Banking In India Overview:
Banking in India originated in the first decade of 18th century. The first banks were
The General Bank of India, which started in 1786, and Bank of Hindustan, both of which are
now defunct. The oldest bank in existence in India is the State Bank of India, which
originated in the "The Bank of Bengal" in Calcutta in June 1806. This was one of the three
presidency banks, the other two being the Bank of Bombay and the Bank of Madras. The
presidency banks were established under charters from the British East India Company. They
merged in 1925 to form the Imperial Bank of India, which, upon India's independence,
became the State Bank of India. For many years the Presidency banks acted as quasi-central
banks, as did their successors. The Reserve Bank of India formally took on the responsibility
of regulating the Indian banking sector from 1935. After India's independence in 1947, the
Reserve Bank was nationalized and given broader powers.
Banking History:
The first fully Indian owned bank was the Allahabad Bank, established in 1865.
However, at the end of late-18th century, there were hardly any banks in India in the modern
sense of the term. The American Civil War stopped the supply of cotton to Lancashire from
the Confederate States. Promoters opened banks to finance trading in Indian cotton. With
large exposure to speculative ventures, most of the banks opened in India during that period
failed. The depositors lost money and lost interest in keeping deposits with banks.
Subsequently, banking in India remained the exclusive domain of Europeans for next several
decades until the beginning of the 20th century. Foreign banks too started to arrive,
particularly in Calcutta, in the 1860s. The Comptoire d'Escompte de Paris opened a branch in
Calcutta in 1860, and another in Bombay in 1862; branches in Madras and Pondichery, then a
French colony, followed. Calcutta was the most active trading port in India, mainly due to the
trade of the British Empire, and so became a banking centre.
Around the turn of the 20th Century, the Indian economy was passing through a
relative period of stability. Around five decades had elapsed since the Indian Mutiny, and the
social, industrial and other infrastructure had improved. Indians had established small banks,
most of which served particular ethnic and religious communities.
By the 1900s, the market expanded with the establishment of banks such as Punjab
National Bank, in 1895 in Lahore and Bank of India, in 1906, in Mumbai - both of which
were founded under private ownership. Punjab National Bank is the first Swadeshi Bank
founded by the leaders like Lala Lajpat Rai, Sardar Dyal Singh Majithia. A number of banks
established then have survived to the present such as Bank of India, Corporation Bank, Indian
Bank, Bank of Baroda, Canara Bank and Central Bank of India.
Structure of Banking in India:
Indian Banking Sector:
The last decade has seen many positive developments in the Indian banking sector.
The policy makers, which comprise the Reserve Bank of India (RBI), Ministry of Finance
and related government and financial sector regulatory entities, have made several notable
efforts to improve regulation in the sector. The sector now compares favourably with banking
sectors in the region on metrics like growth, profitability and non-performing assets (NPAs).
A few banks have established an outstanding track record of innovation, growth and value
creation. This is reflected in their market valuation. However, improved regulations,
innovation, growth and value creation in the sector remain limited to a small part of it. The
cost of banking intermediation in India is higher and bank penetration is far lower than in
other markets. India’s banking industry must strengthen itself significantly if it has to support
the modern and vibrant economy which India aspires to be. While the onus for this change
lies mainly with bank managements, an enabling policy and regulatory framework will also
deposit upto Rs.2 crores per month, free RTGS/NEFT facility, free DD/PO and also a
Relationship Manager taking care of the account holders daily banking requirements.
Additional benefits offered to this account are continuous cheque stationary with hologram,
subscription to magazines, Gold Plus credit card, complementary Priority Banking accounts
and other lifestyle benefits/privileges.
2. Channel One:
This premium account comes equipped with a host of features like free doorstep
banking, cheque protection facility, free Anywhere banking ,free fund transfer, free home
branch cash deposit upto Rs.1.2 crores per month, free RTGS/NEFT facility along with a
Relationship Manager taking care of the daily banking requirements of the account holder.
This high-end current account comes with a Monthly Average Balance requirement of Rs.10
lacs.
3. Bussiness Privilage:
This current account with a monthly average balance of Rs.5 lacs, has been designed
to suit the transactional needs of the bank's valuable clients and offers enhanced free limits of
home branch cash deposit upto Rs. 60 lacs, free DD/PO and Anywhere Banking upto Rs.6
crores, free funds transfer amongst many other privilages.
4. Business Classic:
The Business Classic current account comes equipped to take care of the growing
business needs of the account holder with free limit of Rs.12 Lacs an home branch cash
deposit, free DD/PO & Anywhere Banking upto Rs.1.2 crores, free funds transfer, etc. All
these come with a Monthly Average Balance requirements of Rs.1 lac only.
5. Business Select:
This unique current account is the first of its kind, which has both flexibility and
fungibility of free limits as its core feature. The flexible limits allow a cash deposit , both
home branch and non home branch, of upto 12 times the Monthly Average Balance
maintained in the same charge cycle, with an assured free limit of Rs.6 lacs. The account also
has a combined free Anywhere banking and DD/PO limit of Rs.60 lacs per month and many
more attractive features at a Monthly Average Balance requirement of Rs.50,000/-.
6. Business Advantage:
The Business Advantage Account, with a Monthly Average Balance requirement of
Rs.25,000/-. It comes loaded with features, which include free home branch cash deposit upto
Rs.3 lacs, free limits for DD/PO & anywhere banking upto Rs.30 lacs, free funds transfer etc.
7. Normal Current Account:
This current account is designed for a Monthly Average Balance of Rs.10,000/-
comes with features like free home branch cash deposit upto Rs.1.2 lacs, DD/PO &
Anywhere banking free upto Rs.12 Lacs, free fund transfer, etc.
Collection and Payment Solutions:
In today’s competitive market place, effectively managing cash flow can make the
difference between success and failure. The Bank's cash-flow solutions gives the customer
maximum control over this vital asset. Whether one does business locally or throughout
India, bank can provide with innovative & integrated cash management solutions tailored to
ones specific needs. Bank's Cash Management products enable the efficient utilisation of
one's receivables through coordinated management of payments, collections and balances in
ones accounts. The objectives are to reduce costs, enhance control and optimise returns by
leveraging banking expertise for mutual gains. Besides banks online collection solutions like
Internet Payment Gateway & Point of Sales terminal will further smoothen ones receivables
management.
Banks extensive network, robust processes, online connectivity, web enabled
collection and payment solutions with single point contact and experienced team across the
country provides a complete transactional banking solution.
Term Deposits At Axis Bank:
1. Recurring Deposits:
Axis Bank's Recurring Deposit scheme will allow the customer with an opportunity to
build up their savings through regular monthly deposits of fixed sum over a fixed period of
time.
Features:
Recurring deposits are accepted in equal monthly installments of minimum Rs 1,000
and above in multiples of Rs 500 thereafter.
The fixed numbers of instalments for which a depositor can opt are 12, 24, 36, 39, 48,
60, 63, 72, 84, 96, 108 and 120 months.
Transfer of Accounts - a recurring deposit account can be transferred from one office
of the Bank to another branch.
The amount of instalment once fixed, cannot be changed.
Instalment for any calendar month is to be paid on or before the last working day of
the month. Where there is delay in payment of instalment, one can regularize the
account by paying the defaulted instalment together with a penalty (at present it is @
PLR plus 4 % for the period of delay).Fraction of a month will be treated as full
month for the purpose of calculating the penalty.
The total amount repayable to a depositor, inclusive of interest, depends on the
amount of monthly instalments and the period of deposit.
2. Encash 24:
The Encash 24 (Flexi Deposit) gives the liquidity of a Savings Account coupled with
high earnings of a Fixed Deposit. This is achieved by creating a Fixed Deposit linked to ones
Savings Account providing the following unique facilities:
Maximum Returns:
As soon as the balance in ones Savings Account crosses over Rs 25,000, the excess, in
multiples of Rs 10,000 will be transferred automatically to a higher interest earning Fixed
Deposit Account. The maturity of fixed or term deposits formed as a result of transfer of
money from the Savings Bank account will be for a maximum period of 181 days and the
interest will be calculated on simple interest rate basis.
Maximum Liquidity:
The money parked in Fixed Deposits as a result of the above mentioned sweep out
from your Savings account can be easily accessed by issuing a cheque, withdrawing through
ATM etc. This amount is automatically reverse swept from the most recently formed Fixed
Deposit in units of Rs 5,000 to the Savings account whenever the balance in your Savings
account falls below Rs 25,000. The amount broken form your Fixed Deposit will earn interest
rates at the applicable rate for the period that the deposit was held with the Bank. The
remaining amount of Fixed Deposit will continue to earn the contracted rate of interest.
Auto Renewal:
On maturity of your linked Fixed Deposit, the Bank will automatically renew it for a
maximum period of 181 days.
3. Tax Saver Fixed Deposit:
In the Finance Bill of 2006, the government had announced Tax benefits to Bank
Term Deposits which are of over 5 year tenure u/s 80C of IT Act, 1961 vide Notification
Number 203/2006 and SO1220 (E) dated 28/07/2006.
The salient points of the scheme notification are; (a) Fixed tenure without premature
withdrawal. (b) Year is defined as a financial year. (c) Amount limited to Rs. 100 minimum
and Rs. 100,000 maximum. (d) Bank will issue a Fixed Deposit Receipt that shall be the basis
of claiming tax benefit.
Benefits of tax break u/s 80C of IT Act Benefit Illustrator Example:
Assume that a customer invests Rs 100,000 in this scheme @ 8% p.a. in fixed deposit
for five years. He will get a benefit of Rs 30,600 at 30.6 % on the eligible investment of INR
100,000 assuming that he is in Rs 2,50000 lac to Rs 10,0000 lac tax bracket, thus his
effective investment would be Rs 69,400. He would earn Rs 8000 (08 percent on 1 lac) as
interest per annum, which would translate to a return of 11.5 percent on the effective
investment of Rs 69,400.
"BRANCH BANKING"
INTRODUCTION
Branch Banking - An Overview
A bank is a financial institution which deals with
deposits, loans, advances and other related services. It receives
money from those who want to save in the form of deposits and
it lends money to those who need it.
A bank is a financial intermediary and appears in several related
basic forms:
a central bank issues money on behalf of a government, and regulates the money
supply
a commercial bank accepts deposits and channels those deposits into lending
activities, either directly or through capital markets. A bank connects customers with
capital deficits to customers with capital surpluses on the world's open financial
markets.
a savings bank, also known as a building society in Britain is only allowed to borrow
and save from members of a financial cooperative.
A Bank's main source of income is interest. A bank pays out at a lower interest rate on
deposits and receives a higher interest rate on loans. The difference between these rates
represents the bank's net income.
Oxford Dictionary defines a bank as "an establishment for custody of money, which it
pays out on customer's order."
A bank is an establishment that helps individuals and organizations, in the issuing,
lending, borrowing and safeguarding functions of money.
The term "bank" is derived from the French word "Banco" which means a Bench or
Money exchange table. In olden days, European money lenders or money changers used to
display (show) coins of different countries in big heaps (quantity) on benches or tables for the
purpose of lending or exchanging.
Concept of "Branch Banking":
Branch is considered as one of the most important
channel of the bank and is generally the most preferred channel
from the customer's point of view. The branch is referred to as
the face of the bank since the customer can visit personally and
meet and interact with the branch officials and avail the various
services offered by the bank. In reality, the branch is the sales and service channel of a bank
and the branch employees are generally responsible for both sales and service of bank's
products. Sales in terms of branch banking could be of any of the bank's deposits, products,
gold, retail or other investment products of other approved organizations, such as life
insurance, general insurance, and mutual fund.
Branch Banking operations refer to certain banking operations carried out by a bank
in certain specific branches. The most common examples of deposit products of a bank are
savings bank account, current accounts, fixed deposit accounts, and recurring deposit
accounts. The customers or the prospects desiring to open any of these accounts have to fill
an Account Opening Form [AOF] and submit the specified documents in order to meet the
Know Your Customer [KYC] guidelines issued by the Reserve Bank of India [RBI]
In most of the banks, the front office activities that involve customer interaction are
handled at the branches, for instance, cash receipts and payments, issue of DD or lockers. The
back office activities, such as clearing and account opening may be centralized at a different
location away from the branch. Activities like clearing centralize payments of drafts and
other instruments, which are related to the local area, may be grouped in to one centre.
Certain other activities that are common across centres may be performed at another place for
the purpose of achieving efficiency of operation and controlling costs.
Literature Review (On Branch Banking)
1. Branch Banking, Bank Competition, and Financial Stability
(Mark Carlson, Kris James Mitchener, NBER Working Paper No. 11291)
- Issued in May 2005.
It is often argued that Branch Banking stabilizes banking systems by facilitating
diversification of bank portfolios; however, previous empirical research on the Great
Depression offers mixed support for this view. Analyses using state-level data find that states
allowing branch banking had lower failure rates, while those examining individual banks find
that branch banks were more likely to fail. We argue that an alternative hypothesis can
reconcile these seemingly disparate findings. Using data on national banks from the 1920s
and 1930s, we show that branch banking increases competition and forces weak banks to exit
the banking system. This consolidation strengthens the system as a whole without necessarily
strengthening the branch banks themselves.
2. Branch Banking - As a Device for Discipline: Competition and Bank Survivorship
During the Great Depression.
(Mark Carlson, Kris James Mitchener, NBER Working Paper No. 12938)
- Issued in February 2007.
Because California was a pioneer in the development of intrastate branching, we use
its experience during the 1920s and 1930s to assess the effects of the expansion of large-
scale, branch-banking networks on competition and the stability of banking systems. Using a
new database of individual bank balance sheets, income statements, and branch
establishment, we examine the characteristics that made a bank a more likely target of a
takeover by a large branching network, how incumbent unit banks responded to the entry of
branch banks, and how branching networks affected the probability of survival of banks
during the Great Depression. We find no evidence that branching networks expanded by
acquiring "lemons"; rather those displaying characteristics of more profitable institutions
were more likely targets for acquisition. We show that incumbent, unit banks responded to
increased competition from branch banks by changing their operations in ways consistent
with efforts to increase efficiency and profitability. Results from survivorship analysis
suggest that unit banks competing with branch bank networks, especially with the Bank of
America, were more likely to survive the Great Depression than unit banks that did not face
competition from branching networks. Our statistical findings thus support the hypothesis
that branch banking produces an externality in that it improves the stability of banking
systems by increasing competition and forcing incumbent banks to become more efficient.
3. Successful Branch Transformations: Towards needs-based sales and service-
oriented delivery
- (Asian Banker Research, White Paper)
FOCUS ON THE FUTURE OF BRANCH BANKING
(The next generation of branch banking in the Asia Pacific region)
While in the last years the retail financial services industry in Asia has paid significant
attention to the development of e-banking, with many banks rolling out full-fl edged mobile
phone banking propositions in 2009 in particular, smart banks have never lost their focus on
fine-tuning their branch propositions and upgrading their infrastructure, seeing it as a key
success element in their overall network architecture as they represent the centre of building
sustainable customer relationships and business growth. Despite criticisms, the predominant
branch concept going forward will continue to be the one-stop shop, in particular for local
domestic banks.
They are building branches that are designed to cater more effectively to surrounding
communities by offering extraordinary levels of customer experience, service quality and
efficiency. The timing and degree to which a bank moves forward in transforming its branch
network will depend on market factors, demographics, customer preferences and a bank’s
own financial constraints and staffing capabilities, branch banking is moving away from an
undifferentiated, unintentional and inconsistent interaction with the customer to a branded
one which is actually valued by all segments because the proposition is relevant.
A major survey by Asian Banker Research indicates that a growing pool of banks
have begun assigning more capital for branch transformations. The new wave of branch
banking projects addresses the creation of superior front line execution by marrying front line
automation, workflow process optimization and the human element. More attention is also
paid to interactivity, discovery and instant delivery to assist in creating a market beating
customer experience for gaining competitive advantage.
ObjectivesObjectives
To get the knowledge of the concept of branch banking.
To study the different products and services offered by the bank.
To study the Customer Centricity approach of the Bank.
To understand the banks vision
Research Methodology
Introduction:
Research is systematic quest of knowledge. The purpose of research is to discover
answers to questions through the application of certain procedures. The research design
applied in the project is Descriptive research design as the major objective of the research is
to describe the preferences of the AXIS bank's customers. And the action which banks takes
to accomplish the goal of customer centricity.
Research Design:
Descriptive Research Design:
The major objective of descriptive research is to describe something usually market
characteristics and finding out views preferences of customers. It also includes surveys and
fact-finding enquiries of different kinds.
Descriptive research is preplanned and structured. It is typically based on
representative samples. A formal research design specifies the method for selecting the
sources of information and for collecting data from those sources.
Sampling:
Sample Element:
An element is the object about which or from which the information is desired . The
sample element of this project is the Customers who have their Saving and Current accounts
in Axis Bank in Ambernath.
Sampling Extent:
It refers to geographical boundaries in which sampling has been done. The sampling
extent of this project is Ambernath.
Sampling Size:
It refers to the number of units to be included in the study. The sampling size of the
study is 50 People who have their Savings and Current accounts in AXIS bank.
Sampling Technique:
The sampling technique refers to the technique used for getting response from the
respondent. Probability sampling refers to the technique wherein each and every unit of the
universe has an equal chance of being selected as sample. Non probability sampling refers to
the technique wherein each and every unit does not stand an equal chance of being as sample
and sample chosen relies on the personal judgment of researcher. The researcher can
arbitrarily or consciously decide what elements to include in the sample.
For the purpose of this study, Probability Sampling is used which relies on the chance to
select sample elements. The purpose of using this technique was to yield good estimates of
the population characteristics within non-probability sampling.
Convenient Sampling:
It is the least expensive and least time consuming of all sampling techniques.
Sampling units are accessible, easy to measure and co-operative so convenient sampling is
used for the purpose of project.
Instrument Decision:
A Structured set of Questionnaire supported by personal interviews has been used
to collect primary data in this project.
Data Collection:
The data collected for the research includes both primary and secondary data. The research used is descriptive and involve study of services provided by AXIS Bank and customer respond to services. Hence most of the data used is primary data. Secondary data has been used to support the study at some places. The information collected has been dissected and presented in a very lucid manner.
Methods Of Data Collection:
The task of data collection begins after a research design has been defined.
Collection Of Primary Data:
Several methods of collecting primary data, particularly in surveys and descriptive
researches are used. They are:
Observation method:
During the training program of two months, an observation was done of how
the bank employees perform their duties in the bank. Also it was observed that
what kind of customers visit the bank and how do employees deal with the
customers. The overall banking operations were also observed.
Interview method:
Both the structured and unstructured interview methods were used for
collecting primary data. A structured interview was done with the help of structured
questionnaires. Informal interactions with the bank employees and the customers
were also done for collecting the primary data.
Questionnaires:
A structured set of Questionnaire was prepared for collecting primary data.
The questionnaire was made for the Customers (Savings and Current Account
holders) of AXIS Bank.
In this project the source of primary data collection are structured
questionnaires supported by interviews.
Collection Of Secondary Data:
The collection of secondary data has been done by using various publications, books,
Manuals of AXIS bank, Annual reports, Bank's brochures, magazines, journals, newspapers
and internet. By way of caution, before using data, it was confirmed that it possess following
characteristics:
Reliability of data
Suitability of data
Adequacy of data
The information from the above sources has been searched, collected and interpreted in the best possible manner.
Data Interpretation And Analysis
ANALYSIS OF CUSTOMER CENTRICITY APPROACH OF AXIS BANK
ANALYSIS 1:This analysis displays the division of sample according to the occupation of 50 people who were surveyed.