A PROJECT REPORT ON

IDENTIFYING PROSPECTIVE CUSTOMERS IN SMES BUILDING CUSTOMER RELATIONSHIP MANAGEMENT

A CASE STUDY OF YES BANK LTD. MUNICIPAL NO. 3, PRESTIGE OBELISK, KASTURBA ROAD, BANGALORE SUBMITTED TO

ALL INDIA MANAGEMENT ASSOCIATION

CENTRE FORMANAGEMENT EDUCATION
MANAGEMENT HOUSE, 14 INSTITUTIONAL AREA, LODHI ROAD, NEW DELHI110003

MAY 2009 By ANAND KUMAR THACKER

REGISTRATION NO. 750620182

Guided By MRS.CHANDRA NIRANJAN DEAN, IBMR

For the partial fulfilment of

Post Graduate Diploma in Management

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University Study Centre Certificate

This is to certify that Project Report entitled

Identifying Prospective Customers in SMEs Building Customer Relationship Management

Submitted in partial fulfillment of the degree of Post Graduate Diploma in Management of AIMA-New Delhi by

Mr. Anand Kumar Thacker Registration No.750620182

Has worked under my guidance and that no part of this report has been submitted for the reward of any other degree, diploma, fellowship or other similarities or prizes and that work has not been published in any journal or magazines.

Certified

Mrs. Chandra Niranjan Dean, IBMR, Bangalore.

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DECLARATION
I, Anand Kumar Thacker, pursuing my Post Graduation Diploma in Management from IBMR, Bangalore, hereby declare that the project report titled Identifying Prospective Customers in SMEs Building Customer Relationship Management with reference to Yes Bank, Bangalore, submitted under the able guidance of my faculty guide Mrs. Chandra Niranjan, Dean, IBMR and company guide Mr. H. R. Kiran, Relationship Leader, Yes Bank Ltd is my original work. I also declare that this project is the result of my effort and has not been submitted to any other University or Institution for the award of any degree or personal favor whatsoever. The empirical findings in the report are based on the data collected from various sources. All interpretations and suggestions made in the report are my own views.

Anand Kumar Thacker. PGDM, Marketing. Registration No.750620182. (2006-2008)

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CERTIFICATE
This is to certify that Mr. Anand Kumar Thacker student of Institute of Business Management and Research, Bangalore has done his project in Yes Bank Ltd, Bangalore under the guidance of Mr. H. R. Kiran, Relationship Leader.

His project topic was Identifying Prospective Customers in SMEs Building Customer Relationship Management - with reference to Yes Bank, Bangalore. This project will help Yes Bank in identifying key prospective clients and better customer relationship building.

I on behalf of Yes Bank Ltd wish Anand Thacker all the very best for his future endeavours. For Yes Bank Ltd.

Mr. H.R.Kiran Relationship Leader Yes Bank Ltd Bangalore-560001.

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ACKNOWLEDGEMENT
Many people contributed to the success of this project. I would like to express my gratitude to all those who helped me to complete this project. I want to thank Yes Bank to give me the permission to do this project in the first instance, to do the necessary research work and to use company data. Furthermore, I would like to thank Mr. Rajnish Malhotra, Regional Business Leader (South) and Mr. K. Janaki Ram Babu, Cluster Business Leader (Karnataka) who gave and confirmed this permission and encouraged me to go ahead with my project. I am deeply indebted and bound to the Honorable Relationship Leader Mr. H. R. Kiran for his support, stimulating suggestions and encouragement, without which this project would not have come to an end. I express my sincere and humble gratitude to Mrs. Chandra Niranjan, Dean IBMR my faculty guide, who made me realize the hidden potential that lay within me. It was his consistent motivation, support and guidance that boosted me to complete my project successfully. I thank the Honorable Director, IBMR, Mr. Manish Kothari for providing me this opportunity to show my talent and gain firsthand experience of corporate world. Last but not the least I would like to extend special thanks to my colleagues, friends and family who supported me in my project work write from the beginning. I want to thank them for all their help, support, interest and valuable hints.

Place: Bangalore. Date:

Anand Thacker. (2006-2008)

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CONTENTS
Chapter
1. EXECUTIVE SUMMARY

Page No.
7

2. INTRODUCTION 2.1. Global banking scenario 2.2. Recent trends in global Banking 2.3. Indian Banking Industry 2.4. Challenges faced by Banking Industry in India

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3. RESEARCH METHODOLOGY 3.1. Statement of problem 3.2. Objective of study 3.3. Research design 3.4. Sources of data 3.5. Analysis and Presentation 3.6. Limitations of study 3.7. Scope of the study

20-49

4. PROFILE OF YES BANK LTD. 4.1. Introduction and Growth 4.2. Present scenario 4.3. Human Capital
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51-70

4.4. Products offered

5. CASE STUDY OF SMES IN BANGALORE

72-78

6. CONCLUSION AND SUGGESTIONS

80-83

ANNEXTURE

BIBLIOGRAPHY

EXECUTIVE SUMMARY
In the last decade, banks have operated in an environment of significant change, and to a large extent, shown an ability to transform themselves to keep up with an evolving environment. Bank will need to keep drawing on the flexibility and adaptability they have developed to meet the changes that will unfold in the year ahead. Currently (2007), banking in India is generally fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. In terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets relative to other banks in comparable economies in its region. The Reserve Bank of India is an autonomous body, with minimal pressure from the government. Foreign Banks in India always brought an explanation about the prompt services to customers. After the set up foreign banks in India, the banking sector in India also become competitive and accurative. The SME segment has lately come into the limelight, with increased focus from several government institutions, corporate bodies and banks, and is viewed as agents of growth. Apart from the policy

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focus and governments thrust towards promoting the SME segment, globalization and Indias robust economic growth has opened several latent business opportunities for this segment. CRM is a multifaceted process, mediated by a set of information technologies that focuses on creating two-way exchanges with customers so that firms have an intimate knowledge of their needs, wants and buying patterns. In this way, CRM is intended to help companies understand, as well as anticipate, the needs of current and potential customers. Functions that support this business purpose include sales, marketing, customer service, training, professional development, performance management, human resource development, and compensation. Many CRM initiatives have failed because implementation was limited to software installation without alignment to a customer-centric strategy.

CHAPTER 1

INTRODUCTION
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GLOBAL BANKING SCENARIO

Banking, the principal intermediation agency, has a vital role to play in the realm of financial globalization. Its importance however, differs from country to country. Generally, in developing nations the pure form of commercial banking has a primacy of place, but not so in developed nations. With the convergence of commercial banking, securities trading and insurance streams, banking has indeed undergone a transformation. Banking, on a global plane, faces many challenges. With years, banks are also adding services to their customers. The Indian banking industry is passing through a phase of customers market. The customers have more choices in choosing their banks. A competition has been established within the banks operating in India. With stiff competition and advancement of technology, the services provided by banks have become more easy and convenient. The past days are witness to an hour wait before withdrawing cash from accounts or a cheque from north of the country being cleared in one month in the south

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Banking Industry has revolutionized the transaction and financial services system worldwide. Through the development in technology banking services has been availed to the customers at all times, even after the normal banking hours, on a 24x7 basis. Banking Industry services is nothing but the access of most of the banking related services (such as verification of account details, going with the transactions, etc.). In todays world, progress of online services is available to all customers of the concerned bank and can be accessed at any point of time and from anywhere provided the place is equipped with the Internet facility. Now-a-days, almost all the banks all over the world, especially the multinational ones, provide their customers with Online Banking facility.

RECENT TRENDS IN GLOBAL BANKING

Two decades ago global banking was traditionally characterized by relatively high levels of controls where regulatory authorities maintained a protected banking environment that inhibited competition. However, market conditions have undergone extensive changes over recent years. On the demand side, customer preferences have changed substantially, becoming more sophisticated and price conscious. On the supply side, the globalization of financial markets has been accompanied by governmental deregulation, financial innovation and automation. These factors imply an increase in the number of competitors and a tougher operating environment. In addition, progress in technology, both back and front-office has enabled financial firms to extend their activities beyond narrow local or national boundaries and to increase their market share by providing competitive products to wider markets at a lower price. New suppliers of financial services have entered the market. As such, banks are now faced with strong competition from both banks and non-bank institutions.

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Deregulation has also allowed banks to seek new business in much wider fields of activity such as in insurance, loan purchase, hedge funds, private equity and other off-balance sheet transactions. Moves into new business areas and an increased competitive environment have implications for the nature of banks' and systemic risks the growing emphasis on investment banking by some major commercial banks have obvious market risk implications. The changing environment has promulgated a regulatory response in the form of Basel 2, where market discipline complements rule-based regulations. Risk management has become the key to success for banks to manage riskreturn pay-offs accurately and manage their capital effectively. Beyond the ongoing 'short-term' subprime crisis, the 'mega trends' that will shape banking and its growth in the long term will be globalization, the growth of capital markets and global asset growth and its impact on how it's managed. The seismic shocks' to the world's credit markets has given rise to new opportunities where cash transactions will take precedence in the short term. The current market dislocation is an opportunity for everyone today.

The global banking industry has been undergoing deep transformation. The following trends can be outlined: The technological breakthrough caused by the eruption of e-banking and e-finance. Worldwide consolidation and consequent restructuring. Increasing competition in terms of both markets (geographic diversification) and products. Contamination among different industries, thanks to a progressive relaxation of regulations and huge inter industry acquisitions. A slowing population growth and increasing average life expectancy and per capita income. Since Western governments need to cut expenditures for old-age benefits to keep deficits under control, there will be an increase in the importance of private pensions, mutual funds, and private banking operations.
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 The growing importance of a clear strategic intent in the banking industry. Banks, especially commercial banks, will be obliged to rethink their strategic positioning. While some banks are opting to offer a vast variety of products/services on a global scale, others are focusing on some specific market segment (retail banking, private banking, and corporate banking) or specific geographic area. New competitors are entering the financial service business. In the retail banking industry, large department stores in the United Kingdom have entered the market for personal and mortgage loans, primarily to retain their customers. These trends are having and will have a major impact on banks and financial institutions risk management process. Contamination also means that firms in the different sub industries will face risks that were once specific to another sub industry.

INDIAN BANKING SCENARIO

The Indian Banking industry, which is governed by the Banking Regulation Act of India, 1949 can be broadly classified into two major categories, non-scheduled banks and scheduled banks. Scheduled banks comprise commercial banks and the co-operative banks. In terms of ownership, commercial banks can be further grouped into nationalized banks, the State Bank of India and its group banks, regional rural banks and private sector banks (the old/ new domestic and foreign). These banks have over 67,000 branches spread across the country.
Table 1: Indian Banking at a Glance

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Source: Reserve Bank of India

The banking system in India is significantly different from that of other Asian nations because of the countrys unique geographic, social, and economic characteristics. India has a large population and land size, a diverse culture, and extreme disparities in income, which are marked among its regions. There are high levels of illiteracy among a large percentage of its population but, at the same time, the country has a large reservoir of managerial and technologically advanced talents. Between about 30 and 35 percent of the population resides in metro and urban cities and the rest is spread in several semi-urban and rural centers. The countrys economic policy framework combines socialistic and capitalistic features with a heavy bias towards public sector investment. India has followed the path of growth-led exports rather than the export led Growth of other Asian economies, with emphasis on self-reliance through import substitution. The banking systems international isolation was also due to strict branch licensing controls on foreign banks already operating in the country as well as entry restrictions facing new foreign banks. A criterion of reciprocity is required for any Indian bank to open an office abroad. These features have left the Indian banking sector with weaknesses and strengths. A big challenge facing Indian banks is how, under the current ownership structure, to attain operational efficiency suitable for modern financial intermediation. On the other hand, it has been relatively easy for the public sector banks to recapitalize, given the increases in nonperforming assets (NPAs), as their Government dominated ownership structure has reduced the conflicts of interest that private banks would face. The Indian banking industry is presently in a situation of great flux. There are various developments, changes within the Indian economy and deregulations occurring that have the potential to drastically change the way this industry functions in the future. As per the changes envisaged by the Reserve
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Bank of India (RBI), a roadmap has been laid down to gradually deregulate this sector to the foreign banks. Some of these regulations include the following proposals: Lifting the ceiling on voting rights in banks Smoothen mergers and acquisitions of private banks Permit foreign banks to set up subsidiaries in India. The banking industry caters to the following broad categories of products/services: Retail banking Retail products such as credit cards, debit cards etc. Portfolio Management: Mutual Funds etc. Corporate lending and project financing (including loans) Investment banking Foreign exchange trading All of these areas have attracted substantial foreign interest in the event of the opening up of the Indian economy. Traditionally, Indian banks have used very conservative risk managing strategies, shying away from derivatives, commodities and real estate. However as the appetite for credit and newer banking products are increasing, this sector is no longer limited to Private Sector banks (PSBs). This also implies that there is a scope for consolidation, amongst various sectoral banks as well as financial institutions so as to be able to provide these newer products and services to customers. The growth in the Indian Banking Industry has been more qualitative than quantitative and it is expected to remain the same in the coming years. Based on the projections made in the "India Vision 2020" prepared by the Planning Commission and the Draft 10th Plan, the report forecasts that the pace of expansion in the balance-sheets of banks is likely to decelerate. The total assets of all scheduled commercial banks by end-March 2010 is estimated at Rs 40,90,000 crores. That will comprise about 65 per cent of GDP at current market prices as compared to 67 per cent in 2002-03. Bank assets are expected to grow at an annual composite rate of 13.4 per cent during the rest of the decade as against the growth rate of 16.7 per cent that existed between 1994-95 and 2002-03. It is expected that there will be large additions to the capital base and reserves on the liability side.
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The Indian Banking Industry can be categorized into non-scheduled banks and scheduled banks. Scheduled banks constitute of commercial banks and co-operative banks. There are about 67,000 branches of Scheduled banks spread across India. As far as the present scenario is concerned the Banking Industry in India is going through a transitional phase. The Public Sector Banks (PSBs), which are the base of the Banking sector in India account for more than 78 per cent of the total banking industry assets. Unfortunately they are burdened with excessive Non Performing assets (NPAs), massive manpower and lack of modern technology. On the other hand the Private Sector Banks are making tremendous progress. They are leaders in Internet banking, mobile banking, phone banking, ATMs. As far as foreign banks are concerned they are likely to succeed in the Indian Banking Industry. In the Indian Banking Industry some of the Private Sector Banks operating are IDBI, ING Vyasa Bank, SBI Commercial and International Bank Ltd, Bank of Rajasthan Ltd. and banks from the Public Sector include Punjab National bank, Vijaya Bank, UCO Bank, Oriental Bank, Allahabad Bank among others. ANZ Grindlays Bank, ABN-AMRO Bank, American Express Bank Ltd, Citibank are some of the foreign banks operating in the Indian Banking Industry.

Table 2: Group Wise, Number of Banks

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Source: Indian Banks Association/ Reserve Bank of India. * Includes Industrial Development Bank of India Ltd. Table 3: Group Wise: Comparative Average

Source: Reserve Bank of India. Table 4: Bank Groups: Key Indicators

CHALLENGES FACED BY BANKING INDUSTRY IN INDIA

The banking industry in India is undergoing a major transformation due to changes in economic conditions and continuous deregulation. These multiple changes happening one after other has a ripple effect on a bank (Refer fig. 2.1) trying to graduate from completely regulated sellers market to completed deregulated customers market.

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Source: http://www.ecs-limited.com/download/Challenges%20facing%20Banking%20Industry%20in%20India.pdf

Deregulation: This continuous deregulation has made the Banking market extremely competitive with greater autonomy, operational flexibility, and decontrolled interest rate and liberalized norms for foreign exchange. The deregulation of the industry coupled with decontrol in interest rates has led to entry of a number of players in the banking industry. At the same time reduced corporate credit off take thanks to sluggish economy has resulted in large number of competitors battling for the same pie. New rules: As a result, the market place has been redefined with new rules of the game. Banks are transforming to universal banking, adding new channels with lucrative pricing and freebees to offer. Natural fall out of this has led to a series of innovative product offerings catering to various customer segments, specifically retail credit.

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Efficiency: This in turn has made it necessary to look for efficiencies in the business. Banks need to access low cost funds and simultaneously improve the efficiency. The banks are facing pricing pressure, squeeze on spread and have to give thrust on retail assets Diffused Customer loyalty: This will definitely impact Customer preferences, as they are bound to react to the value added offerings. Customers have become demanding and the loyalties are diffused. There are multiple choices; the wallet share is reduced per bank with demand on flexibility and customization. Given the relatively low switching costs; customer retention calls for customized service and hassle free, flawless service delivery. Misaligned mindset: These changes are creating challenges, as employees are made to adapt to changing conditions. There is resistance to change from employees and the Seller market mindset is yet to be changed coupled with Fear of uncertainty and Control orientation. Acceptance of technology is slowly creeping in but the utilization is not maximized. Competency Gap: Placing the right skill at the right place will determine success. The competency gap needs to be addressed simultaneously otherwise there will be missed opportunities. The focus of people will be on doing work but not providing solutions, on escalating problems rather than solving them and on disposing customers instead of using the opportunity to cross sell.

Strategic options with banks to cope with the challenges

Leading players in the industry have embarked on a series of strategic and tactical initiatives to sustain leadership. The major initiatives include: Investing in state of the art technology as the back bone of to ensure reliable service delivery
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 Leveraging the branch network and sales structure to mobilize low cost current and savings deposits Making aggressive forays in the retail advances segment of home and personal loans Implementing organization wide initiatives involving people, process and technology to reduce the fixed costs and the cost per transaction Focusing on fee based income to compensate for squeezed spread, (e.g. CMS, trade services) Innovating Products to capture customer mind share to begin with and later the wallet share Improving the asset quality as per Basel II norms Transformation initiatives needed for banks

Source: http://www.ecs-limited.com/download/Challenges%20facing%20Banking%20Industry%20in%20India.pdf

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CHAPTER 2

RESEARCH METHODOLOGY

STATEMENT OF THE PROBLEM

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This project has mainly been taken up to understand the brand awareness of Yes Bank, motives of the clients and to ensure better perspective of the customers towards relationship with Yes Bank. Apart from this, it is to understand new opportunities in the market for the improvement of brand awareness and develop relationship with more clients. In addition to this, it is important for a banker to segment the market appropriately as per its product offerings and to understand the needs of its targeted clients. To expand its presence not only geographically by increasing no. of branches but also creating its place in the hearts of the customers in terms of reliability, trust and faith. Hiring most aspiring candidate with adequate and relevant experience is another important aspect of any bank that needs to be understood thoroughly. To research the quality products and services that would fulfill the customers needs and would create a long lasting impression in their minds which would force them to stick to Yes Bank.

OBJECTIVES

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The main objective of this study is as following: To study the performance of the Indian Banking Industry. To gain first-hand experience of different departmental functions at Yes Bank. To study the various products of Yes Bank. To study the need, preferences and expectations of the customers from a bank. To identify the target segment for SME Liabilities in Yes Bank. To understand how to develop and maintain relationship with clients. Identify and recommend promising new strategies to position the Yes Bank product in the market in such a way that they are poised to uniquely meet the requirements of the customers.

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METHODOLOGY

For the purpose of this study, data was collected from various primary and secondary sources. World banking scenario and the Indian banking scenario have been referred to from various secondary sources such as internet. These have been listed in the bibliography. Information about the organization has been collected from the company website and internal sources. To identify the requirements of the customer and their banking behavior, primary data was collected by preparing a questionnaire and conducting a survey. The database was generated from Yellow pages and other internal database of Yes Bank. The selected sample was contacted by both e-mail and telephone to establish willingness to participate in the survey, as well as to filter out those who did not match the research definition. Following this, the respondents were interviewed by telephone. The company Finance Manager, Director, CEO, CFO or any other finance decision maker of the company contacted. Used references from existing customers and friends to tap the market. Cross Tabulations and Factor Analysis using SPSS. Study of records Collection of primary and secondary data Market survey using questionnaire Discussion with existing customers Observations

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Customer Relationship Management

Peter Drucker said, The purpose of a business is to create customers. Implied in his words is the importance of keeping those same customers and of growing the depth of their relationship with you.

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Customer relationship management (CRM) can be the single strongest weapon we have as a manager that customers become and remain loyal. Customer Relationship Management is a comprehensive approach for creating, maintaining and expanding customer relationships. Nowadays, many businesses such as banks, insurance companies, and other service providers realize the importance of Customer Relationship Management (CRM) and its potential to help them acquire new customers retain existing ones and maximize their lifetime value. At this point, close relationship with customers will require a strong coordination between IT and marketing departments to provide a long-term retention of selected customers. CRM is a process or methodology used to learn more about customers' needs and behaviors in order to develop stronger relationships with them. There are many technological components to CRM, but thinking about CRM in primarily technological terms is a mistake. The more useful way to think about CRM is as a process that will help bring together lots of pieces of information about customers, sales, marketing effectiveness, responsiveness and market trends.CRM helps businesses use technology and human resources to gain insight into the behavior of customers and the value of those customers. CRM is a combination of philosophies, polices and strategies connecting different players within an organization so as to coordinate their efforts in creating an overall valuable series of experiences, products and services for the customer.

DATA ANALYSIS AND PRESENTATION

Banks play very important role in the economic life of the nation. The health of the economy is closely related to the soundness of its banking system. Although banks create no new wealth but
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their borrowing, lending and related activities facilitate the process of production, distribution, exchange and consumption of wealth. In this way they become very effective partners in the process of economic development. Today, modern banks are very useful for the utilization of the resources of the country. The banks are mobilizing the savings of the people for the investment purposes. The savings are encouraged and saving rate increases. If there would be no banks then a great portion of a capital of the country would remain idle. On the other hand, small and medium-sized enterprises are contributing to employment growth at a higher rate than larger firms. In the EU economy about 99.9 per cent of the enterprises are SMEs of which 93 per cent are micro enterprises. In 1992, there were 15.7 million SMEs in the private nonprimary (i.e. non-farming) sector of the Community; the private sector and in particular SMEs form the backbone of a market economy and for the transition economies in the long-term might provide most of the employment (as is the case in the EU countries). A World Bank sector policy paper shows that their labor intensity is from 4-10 times higher for small enterprises. Support for SMEs will help the restructuring of large enterprises by streamlining manufacturing complexes as units with no direct relation to the primary activity are sold off separately. And through this process the efficiency of the remaining enterprise might be increased as well. They curb the monopoly of the large enterprises and offer them complementary services and absorb the fluctuation of a modern economy; Through inter-enterprise cooperation, they raise the level of skills with their flexible and innovative nature. Thus, SMEs can generate important benefits in terms of creating a skilled industrial base and industries, and developing a well-prepared service sector capable of contributing to GDP through higher value-addition.

A characteristic of small industrial enterprises is that they produce predominantly for the domestic market, drawing in general on national resources.

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The structural shift from the former large state-owned enterprises to smaller and private SMEs will increase the number of owners, a group that represents greater responsibility and commitment than in the former centrally planned economies; An increased number of SMEs will bring more flexibility to society and the economy and might facilitate technological innovation, as well as provide significant opportunities for the development of new ideas and skills. SMEs use and develop predominantly domestic technologies and skills. New business development is a key factor for the success of regional reconversion where conventional heavy industries will have to phased out or be reconstructed (especially in the field of metallurgy, coalmining, heavy military equipment, etc.). On giving a glance at the importance of Banking and SMEs individually, we find that they have their own role to play towards the development of the economy. Keeping in mind the contribution of the SMEs, banks need to come forward to assist them in best possible way so that they may grow and on the whole the economy would grow. For the banks to provide assistance to the SMEs it is very important for them to understand what are the requirements and banking behavior of the SMEs in India. For this it is necessary to conduct a time to time survey.

Here, at Yes Bank we were supposed to generate leads which means, search for those SMEs who were interested in developing a banking relationship with Yes Bank either by opening a current account which was known as International Trade Account (explained earlier) or through fulfilling their loan requirements. We developed our own database by collecting information from Yellow Pages, Just Dial - a company which provided phone numbers on supplying the name of the other organization, etc.

After developing the database we were required to call them and try to fix an appointment with those clients who were interested in developing a relationship with Yes Bank. This step is called telecalling. Once an appointment is fixed, we need to meet the client at the scheduled time and location. During this small talk we are expected to understand the requirements of the client. Then comes Pitching wherein we try to offer our products according to the requirements of the clients. Products may be various types of Current Accounts, Bank Guarantee, Letter of Credit, Term Deposit, Loans, etc. Once the clients agrees to enter into banking relationship the deal is said to be closed (Called
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Deal Closure) and here comes the documentation work wherein we collect all the required documents (See Annexure I). After verification of the collected documents Yes Bank enters into a relationship with the concerned client. Knowing the objective of a bank to serve the SMEs a survey is conducted with reference to Yes Bank. In this survey I found out the banking preferences of the respondents as well as their requirements. I also identified their banking habits and behavior of the SMEs in Bangalore.

Process flow to develop Relationship with Clients

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FINDINGS OF THE SURVEY

I. International Traders Portfolio

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Yes Bank is private bank. It is important to identify the exporters and importers portfolio in Bangalore. The FOREX spread seems to be one of the main profit earners for Yes Bank. The database provided constituted of 37 percent of the respondents to be exporters and 28 percent of importers. On the other hand, 35 percent were both exporters and importers. These SMEs traded in textiles, software, steel, wireless network, etc.

Graph 1: International Traders Portfolio

Source: Survey as conducted

II.

Sector identification
Bank,

About 46 percent of the respondents were banking with foreign banks such as ABN Amro, Citibank, Deutsche HSBC and
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Standard Chartered Bank. However, 18 percent were banking with public sector banks such as Vijaya Bank, Union Bank Pvt. Ltd, Punjab National Bank, State Bank of Mysore, Bank of India, Bank of Maharashtra, Corporation Bank, and SBI. Private Banks such as HDFC, AXIS, Citi Union bank, ICICI bank, ING Vysya Bank, Yes Bank and Kotak Mahindra Bank were preferred by 36 percent of the respondents.

Graph 2: Sector Identification

Source: Survey as conducted

III.

Banking Portfolio

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The survey conducted reveals that 9 percent have banking relationship with more than 3 banks. Most respondents bank with two banks with a contribution of 31 percent of the total respondents. 17 percent prefer banking with atleast three banks. The study revealed that more than 50 percent of the respondents banked with two or more than two banks either because they do not rely on their individual bankers or because they have good relationship with those particular bankers and hence is not willing to leave any of the banks.

Graph 3: Banking Portfolio

Source: Survey as conducted

IV.

Banking Preference

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Respondents were asked about their banking preferences for their business. Most of them who answered had a banking relationship in one bank or the other either in the form of a loan or a current account or term deposits. 6% of the respondents were banking with HSBC which is the lowest and the majority of the respondents preferred banks which fall in the others category. The Others category included banks such as HDFC, AXIS, ING Vysya, Corporation Bank, Bank of India, State Bank of Mysore, Canara Bank, ABN Amro, Vijaya Bank, SBI, Kotak Mahindra, Citi Union Bank Pvt. Ltd, Punjab National Bank, Bank of Maharashtra, Yes Bank & Deutsche Bank. These banks are the choices of 58% of the respondents. 8 percent of the respondents preferred to be with SCB.

Graph 4: Preference

Banking

Source: Survey as conducted

Note: Many respondents were banking with two or more banks hence each choice considered as separate response.

V.

Degree of Loyalty

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According to the survey conducted, it is found that most of the customers are loyal to their banker as 44 percent of the respondents are banking with their present bank since last 5 to 10 years. They do not prefer changing their bank either because they have very good relationship with their present banker or because changing banks involve lot of documentation and delay of all other activities. Only 9 percent of the respondents are seen to be banking since last 1 to 2 years. This is so because either they have switched their bank recently or they have set up new business. 16 percent of the respondents are banking with their present bank since last 1 year or less. It is also seen that 25 percent of the respondents stayed with their bank on an average of 2 to 5 years. Further, we can see that only 6 percent of the respondents are extremely loyal to their banker since last 10 years or more and are still not willing to switch their bank or even share their transactions with any other bank when said to have a taste of Yes Bank.

Graph 5: Degree of Loyalty

Source: Survey as conducted

VI.

Level of Customer Satisfaction

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Customer service has become one of the most widely preferred areas in service industry. Hence, it is important to identify the performance of the banks with respect to customer service. 24 percent of the respondents were found to be highly satisfied with the customer service provided by their present banker. However, 7 percent of the respondents were not happy with the services of their banks. 17 percent were moderately satisfied with the type of services they received from their bankers.

Graph 6: Level of Customer Service

Source: Survey as conducted

Although banks were able to remain in the hearts of the SMEs in huge number, yet their main focus should be to take care of those unsatisfied customers in order to retain them. For this they need to give promising services to them and try to develop a better relationship with them.

VII.

Reasons for Banking

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Normally, SMEs or be it any other customer, look for good in fact the best product in the market. However, in the banking sector relationship with the manger has over taken any other requirement of the customers. Today, it has become very important for the bankers to develop and maintain a very good relationship with their clients as the reason to have a relationship with a bank has contributed 36 percent of importance. 26 percent of the respondents think that the care of their present banker is tremendous and hence they are banking with them. However, convenience of banking contributed just 9 percent of importance as a reason of banking.
Graph 7: Reasons for Banking

Source: Survey as conducted

Hence, bankers have to do a lot more to attract new customers and to retain old ones. Apart from providing good and quick service bankers need to work hard on relationship development and network building.

VIII.

Expectations A Pre-requisite

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Facilities are the core requirement of any product, be it an FMCG product, industrial product or a banking product. The more you provide facilities along with your product the more customers are attracted by your product. Hence, to find out the pre-requisites of the customers, this question was designed. It is found that as high as 32 percent of the respondents prefer phone banking. SMS alerts disturb most of the respondents hence not preferred much contributing only 6 percent.
Graph 8: Expectations-A Pre-requisite

Source: Survey as conducted

There are various other benefits expected from the respondents such as quick response from the bank, fast Clearance of Cheques, Door Step Banking, proper Online Banking, TeleBanking, good ATM services, etc. as these services make the life of the customer much faster and easier.

IX.

Ease of changing banks

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A maximum of 39 percent of the respondents feel its very difficult to change or switch a bank due to the burden of huge documentation and time involved. However, 17 percent of the respondents find it very easy to switch their bankers.
Graph 9: Ease of Changing Banks

X.

Willingness to Change bank

66 percent of the respondents are not willing to change their bank or even distribute their transactions between other banks. Out of the rest 34 percent, 21 percent are ready to open an account with Yes Bank as they are facing some difficulties with their present bankers. The rest of the 13 percent of the respondents would think about opening an account in Yes Bank.
Graph 10: Willingness to change Bank

XI.

Benefits expected

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The survey reveals the importance of hassle free documentation being 36 percent of the respondents give this as highest priority. Apart from documentation what is important in today snaking business is providing dedicated staff support to the existing clients as 32 percent of the respondents demand this.
Graph 11: Benefits Expected

XII.

Factors influencing banking decision

The survey reveals the role of brand name to be the most important factor which influences the banking decision of any customer, with 30 percent responses. Sales representatives have to work harder on their marketing strategies and their convincing power as it is as low as 17 percent. Yes Bank also has to give more importance to the advertisement as 24 percent of the respondents decisions are influenced by awareness.
Graph 12: Factors influencing banking decision

XIII.

Willingness to Build Relationship with Yes Bank

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19 percent of the respondents are interested in developing a banking relationship with Yes Bank whereas 47 percent directly refuse to get into any relationship with Yes Bank. This is either due their loyalty towards their current banker or due to bad experience with Yes Bank earlier or they are not interested in going through the lengthy procedure of opening an account with another bank or because simply they dont even have time to think about it. Rest of the 34 percent has committed to give a thought on this matter as to whether open an account with Yes Bank or not. They would decide after meeting the assistant sales manager or someone from the company who can explain them what services can they avail from Yes Bank.
Graph 13: Willingness to build relationship with Yes Bank

Source: Survey as conducted

When asked to the respondents who refused to open an account with Yes Bank mentioned, they replied that they did not know Yes Banks performance and were not sure of their services. Hence, Yes Bank needs to work a lot upon creating better awareness in the market.

XIV.

Analysis Using SPSS:

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A. Cross Tabulation I
On forming cross tabulations of type of traders and the type of bank they bank with, we obtain the following figures:

Here, we find that out of a total of 74 exporters in Bangalore 12 prefer banking with a Public Sector Bank, 32 prefer Private Sector Bank and 30 prefer a Foreign Bank. Furthermore, a total of 56 Importers were surveyed out of which 8 were banking with Public Sector Banks, 21 with Private Sector Banks and 27 with Foreign Banks. Similarly, 70 International traders who are both Importers as well as Exporters, 17 were banking Public Sector bank, 19 with Private Sector Bank and 34 with a foreign Banks.

B. Cross Tabulation II
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In the following tabulation we can see that out of 14 highly dissatisfied respondents 10 are willing to change their banks and 4 respondents agree to give a thought. Hence, these 14 respondents form as the first target clients of Yes Bank and can be convinced to develop a banking relationship with Yes Bank. The second group of target customers is those who are dissatisfied with their present bankers which contribute to be 48 respondents. Out of these 48 respondents 31 have expressed their willingness to switch their banker and 7 are strictly loyal to their banks, whereas 10 of them say they would think about this. 2 of the moderately satisfied respondents are willing to open an account with another bank. Hence, a total of 43 respondents can be approached by the Yes Bank officials to understand their requirements and develop a business banking relationship with them.

Customer Services * Willingness to Change Bank Cross Tabulation

Count

Willingness To Change Bank

Yes Customer Services Highly Satisfied Satisfied Moderately Satisfied Dissatisfied Highly Dissatisfied Total 0 0 2 31 10 43 No 48 53 24 7 0 132 Think Over 0 3 8 10 4 25

Total Yes 48 56 34 48 14 200

C. Cross Tabulation III

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Here, we can see the 16.2 percent of the total exporters (74) have an account with Yes Bank and 54.4 percent of total Yes Bank customers are exporters. Similarly, out of total of 56 Importers, 4 are Yes Bank clients and out of 70 International traders who are both exporters as well as importers, 6 are banking with Yes Bank. Hence, we find that a total of 22 respondents are Yes Bank customers. Type Of Trader * Bank Choice Cross tabulation
Bank Choice

Yes Bank
Type Of Trader Exporter Count % within Type Of Trader % within Bank Choice Count % within Type Of Trader % within Bank Choice Count % within Type Of Trader % within Bank Choice Count % within Type Of Trader % within Bank Choice 12 16.2% 54.5% 4 7.1% 18.2% 6 8.6% 27.3% 22 11.0% 100.0%

Total
HSBC ICICI Citi Bank Others

6 8.1% 33.3% 4 7.1% 22.2% 8 11.4% 44.4% 18 9.0% 100.0%

15 20.3% 50.0% 5 8.9% 16.7% 10 14.3% 33.3% 30 15.0% 100.0%

12 16.2% 26.1% 14 25.0% 30.4% 20 28.6% 43.5% 46 23.0% 100.0%

29 39.2% 34.5% 29 51.8% 34.5% 26 37.1% 31.0% 84 42.0% 100.0%

74 100.0% 37.0% 56 100.0% 28.0% 70 100.0% 35.0% 200 100.0% 100.0%

Importer

Both

Total

D. Cross Tabulation IV

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From the following cross tabulation we can infer that out of total respondent (48) who were highly satisfied with their bankers customer service 10 were influenced from advertisements, 13 each were through Brand name and sales representatives and 6 were influenced by their family opinion. This shows that the bank has to work upon creating better awareness about their brand name and products offered for the SMEs as higher section of the Target group depend upon the awareness. However, on the other hand, we see that as high as 17 dissatisfied respondents were influenced by the brand name of the company. AS low as 2 respondents who were highly dissatisfied were influenced by advertisements. This tabulation focuses mainly only the inefficiency of the advertisements to create a value for their brand in the market. The company needs to work a lot in this area.
Customer Services * Factors Influencing Banking Decision Cross tabulation Factors Influencing Banking Decision
Count Customer Services Highly Satisfied Satisfied Moderately Satisfied Dissatisfied Highly Dissatisfied Total Advertisem ents 10 15 8 13 2 48 Family Opinion 6 10 1 4 3 24 Sales Representative 13 8 6 7 0 34 Brand Name 13 15 11 17 5 61 Others 6 8 8 7 4 33 48 56 34 48 14 200 Total

E. Cross Tabulation V
Customer Services * Facilities Expected Cross tabulation Count ATM cum Debit Card Customer Services Highly Satisfied Satisfied Moderately Satisfied Dissatisfied Highly Dissatisfied Total 6 10 7 4 6 33 Internet Banking 11 11 8 10 2 42

Facilities Expected
Mobile Banking 10 4 2 4 2 22 Free Cheque Book 3 9 4 7 3 26 Phone Banking 15 16 9 14 1 55 SME Alert 3 6 4 9 0 22

Total 48 56 34 48 14 200

F. Ranking according to preferences

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Following is the cross table formed between the ranks provided by the respondents to the various parameters they give preference to. Rank 1 considered as the highly preferred and rank 10 considered as the least preferred for any banking transactions. Ranks 5 6 16 12 22 13 23 12 17 28 21 33 27 29 25 19 21 19 15 17 13 18

Time Convenience Staff response time Lighting Space Seating arrangement Water availability ATM One window shop Customer service

1 49 21 21 2 14 17 12 10 21 33

2 38 27 33 2 3 18 8 21 27 23

3 28 31 26 3 6 8 7 45 27 19

4 23 18 24 6 8 11 15 38 43 14

7 12 20 22 22 29 31 32 11 12 9

8 11 18 17 23 21 10 31 24 18 27

9 8 14 14 43 23 17 24 9 17 31

10 3 16 8 54 42 32 27 2 3 13

Observing the above table we find that Time is the most highly prepared parameter as 49 respondents have ranked it no.1. Next best considered parameter is Customer Service which includes Door Step Banking, Tele Banking, etc.. However, the least preferred parameter was found to be lighting. People were least bothered about the lighting arrangement in the banking premises. Only 2 people have ranked it no. 1 as both of them were highly aged men.

G. Factor Analysis

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SPSS Output 1 shows several very important parts of the output: the Kaiser-Meyer-Olkin measure of sampling adequacy and Bartlett's test of sphericity. The KMO statistic varies between 0 and 1. A value of 0 indicates that the sum of partial correlations is large relative to the sum of correlations, indicating diffusion in the pattern of correlations (hence, factor analysis is likely to be inappropriate). A value close to 1 indicates that patterns of correlations are relatively compact and so factor analysis should yield distinct and reliable factors. Kaiser (1974) recommends accepting values greater than 0.5 as acceptable (values below this should lead you to either collect more data or rethink which variables to include). Furthermore, values between 0.5 and 0.7 are mediocre values between 0.7 and 0.8 are good, values between 0.8 and 0.9 are great and values above 0.9 are superb. For these data the value is 0.516, which falls into the range of being mediocre. Output 1
KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. Bartlett's Test of Sphericity Approx. Chi-Square df Sig. .516 46.483 28 .016

SPSS Output 3 lists the eigenvalues associated with each linear component (factor) before extraction, after extraction and after rotation. Before extraction, SPSS has identified 5 linear components within the data set (we know that there should be as many eigenvectors as there are variables and so there will be as many factors as variables). The eigenvalues associated with each factor represent the variance explained by that particular linear component and SPSS also displays the eigenvalue in terms of percentage of variance explained (so, factor 1 explains 27.483% of total variance). It should be clear that the first few factors explain relatively large amounts of variance (especially factor 1) whereas subsequent factors explain only small amounts of variance. SPSS then extracts all factors with eigenvalues greater than 1, which leaves us with four factors. The eigenvalues associated with these factors are again displayed (and the percentage of variance explained) in the columns labeled Extraction Sums of Squared Loadings as the values before extraction, except that the values for the discarded factors are ignored (hence, the table is blank after the fourth factor).

Output 2
Total Variance Explained

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Initial Eigenvalues Component 1 2 3 4 5 Total 1.374 1.085 .959 .938 .643 % of Variance 27.483 21.704 19.180 18.769 12.865 Cumulative % 27.483 49.187 68.366 87.135 100.000

Extraction Sums of Squared Loadings Total 1.374 1.085 % of Variance 27.483 21.704 Cumulative % 27.483 49.187

Extraction Method: Principal Component Analysis.

Scree Plot

1.6

1.4

Eigenvalue

1.2

1.0

0.8

0.6 1 2 3 4 5 6 7 8

Component Number

Below is the three-dimensional factor loading plot of the first three factors, requested as a "Rotation" option. For a two-factor solution, a two-dimensional plot is shown. The plot is not displayed if only one factor is extracted. Plots display rotated solutions if rotation is requested, as it was in this case.
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Component Plot in Rotated Space

1.0 TypeOfTrader

Component 2

0.5 FacilitiesExpected 0.0

BankChoice WillingnessToChangeBank

TypeOfBank DurationOfBanking CustomerServices FactorsInfluencingBankingDecision -1.0

-0.5

-1.0 -1.0 -0.5 0.0

Compone nt

0.5

1.0

1.0

n pone Com

0.5

0.0

-0.5

t3

LIMITATIONS
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A project is not completely free from its limitations. One has to work within some restrictions. Following were the limited boundaries within which I had to work: The survey is focused in a small geographical area of a vast city Bangalore. Time is a major constraint wherein within 8 weeks time it was expected to complete the project. The sample size of 200 may not be sufficient to conclude effectively. Though the population size was 450 but it had a limitation whereby approximately 100 odd respondents did not have correct addresses or phone numbers while the remaining 150 refused to share information. This data and information was provided by the company to conduct the survey. However, the study gave an idea about the mind of SMEs Banking habits. Due to confidentiality of data it was not possible for us to obtain most of the data from the company. As most of the data was considered sensitive to the growth of the company and it was against the companys terms & conditions. Respondents may not be willing to reveal the information hence, making the response biased.

SCOPE
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 The study plays a very important role in market research. It also helps to understand and indentify the human action towards the brand. The information thus gathered by conducting a systematic market research would help to finding out the brand awareness of the customers. This study is mainly focused towards people in Bangalore who belong to different sectors and are based in different localities, in order to find out their preference given to particular brand. Since the project has lot of limitations, there is further scope to study in depth on the banking behaviour of SMEs who are engaged in international trade. We can still do lot more analysis using various techniques such as Chi square Method, Discriminant Analysis, etc.

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CHAPTER 3

PROFILE OF YES BANK LTD.

About YES BANK

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YES BANK, Indias new age private sector Bank, is an outcome of the professional entrepreneurship of its Founder, Rana Kapoor and his highly competent top management team, to establish a high quality, customer centric, service driven, private Indian Bank catering to the Future Industries of India. YES BANK is the only Greenfield license awarded by the RBI in the last 14 years, associated with the finest pedigree investors. YES BANK has fructified into a full service commercial Bank that has steadily built Corporate and Institutional Banking, Financial Markets, Investment Banking, Corporate Finance, Business and Transaction Banking, Retail and Wealth Management business lines across the country, and is well equipped to offer a range of products and services to corporate and retail customers. The Bank has adopted international best practices, the highest standards of service quality and operational excellence, with innovative state-of-the-art technology, and offers comprehensive banking and financial solutions to all its valued customers. A key strength and differentiating feature of YES BANK is its knowledge driven approach, which goes beyond the traditional realm of banking, and helps adoption of a diagnostic and prescriptive approach towards superior product structuring. YES BANK has a vision to champion Responsible Banking in India where the concepts of Corporate Social Responsibility and Sustainability are embedded in the DNA of the organization and integrated in its Business Focus. YES BANK is committed to adding long term value to society, to differentiate itself in the marketplace based on a strong 'sustainability mandate' and to build in flexibility and openness as part of its core strategy. The Bank has engaged with global thought leadership forums like the Clinton Global Initiative (CGI), Triple Bottom Line Investing (TBLI) and Tallberg Forum. YES BANK has recently become the first Indian Bank to become a signatory with the United Nations Environment Programme (Financial Initiative). YES BANK is founded by Mr. Rana Kapoor and Late Mr. Ashok Kapur, who have a collective financial stake of 32.58%.

Financial Trust

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The vast banking experience of Founder, Rana Kapoor, has been strengthened by the financial support of Rabobank Netherlands, a AAA rated private Bank, and respected global institutional investors like Orient Global, Rabobank, Franklin Templeton, AIF Capital, Swiss Re, Khazanah Nasional, Fidelity amongst others to provide YES BANK a strong foundation of enduring financial trust.

Human Capital At YES BANK, we look to offer comprehensive banking and financial solutions. Which is why, we have inducted top quality Human Capital across all our banking functions, including Corporate & Institutional Banking, Financial Markets, Investment Banking, Business & Transactional Banking and Retail Banking & Wealth Management. Knowledge Banking Our differentiated view of banking as a knowledge-based industry has ensured that our Bankers are also industry experts in sectors like Food & Agribusiness, Life Sciences, Telecommunications, Media & Technology, Infrastructure, Retailing & Textiles and Select Engineering. These Knowledge Bankers offer invaluable and in-depth insights into these sectors, thereby helping our clients to develop great ideas and nurture them to fruition. Technology Edge Technology is another key differentiator at YES BANK. Our alliances with best-of-breed technology partners ensure proactive, on-demand support to meet our growth requirements, as well as the continuous development of our systems infrastructure and delivery channels.

Corporate Governance Our foundations have been inscribed with stringent Corporate Governance measures, whereby transparency, disclosure norms and accountability have paramount importance, in order to safeguard the trust and wealth of each and every stakeholder and customer. Responsible Banking

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Our commitment extends further, from our customers, investors, stakeholders and employees to society at large. By focusing on sustainability and corporate social responsibility, we aspire to be a role model institution in Responsible Banking.
Growth

Indeed, at YES BANK, we look to partner the growth of our clients, while they gain from leveraging our financial expertise, thereby enabling us to accomplish our mission of Creating and Sharing Value.

KEY MANAGEMENT

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Rana Kapoor Sunil Gulati

Managing Director & CEO Group President - Corporate & Institutional Banking

Rabo India Finance, ANZ, Bank of America GE Commercial Finance, ING Vysya, Bank of America ICICI Bank, Entrepreneur Rabo India Finance, Standard Chartered Bank AMEX, Birla Global Finance Ltd. Standard Chartered Bank

Deepak Gaddhyan Sumit Gupta Rajnish Datta Sanjay Agrawal Aalok Gupta Ravi Shankar Sandeep Sarkar Arun Agrawal Surendra Jalan Aditya Sanghi Vikas Dawra Sandeep Baid Somak Ghosh Sanjay Palve Samir Chawla Varun Tuli

President- Government Relationship Management President- Commercial Banking President- Small Business Banking EVP & Country Head- Credit Risk, Business Banking

EVP & Country Head- Credit Risk, Small Business HSBC, HDFC, Bank of Banking & Operations Risk Management GEVP & Country Head- Cash Management & Direct Banking Managing Director- Financial Market, Sales President & Global Head-International Banking EVP & Country Head- Indian Financial Institutions Senior Managing Director - Investment Banking Managing Director - Investment Banking Managing Director - Investment Banking Group President - Corporate Finance and Development Banking Rabo India Finance, KPMG, Lazard India Rabo India Finance Rabo India Finance Rabo India Finance, Reliance, ICICI Bank America ABN AMRO, HDFC Bank Bank of America, ANZ Grindlays ICRA, Larsen & Toubro ICICI Bank

Managing Director - Infrastructure Banking Group ICICI Bank EVP & Country Head - Corporate Finance Group President - Business Banking and Retail Banking & Wealth Management DBS Bank Ltd. Avigo Capital Partners, Strategic Capital

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HUMAN CAPITAL
YES BANK pursues a strong Employee Value Proposition of Creating & Sharing Value, with a vision to build an organization, driven by Professional Entrepreneurship, where all YES BANKers truly partner to direct, manage and accelerate the development of YES BANK as the Young and Dynamic Bank of Emerging India. It is this untiring and relentless passion for Professional Entrepreneurship that has resulted in YES BANK being recently ranked as the THIRD Best Bank in India by Businessworld. YES BANK also received the Continuous Innovation in HR Strategy award at The Indiatimes Mindscape Employer Branding Awards 2007. YES BANK recognizes that the only real source of sustainable competitive advantage for an organization is the power of its High Quality Human Capital. Therefore, they foster a leadership mindset that embraces meritocracy as a vital force to reward performance and exceptional competency. They have also institutionalized various key strategic initiatives including: 1. YES Entrepreneur in Action 2. YES Professional Entrepreneurship Program (Y-PEP) 3. YES Retail Entrepreneurship Program (Y-REP) 4. YES Mentor 5. YES School of Banking 6. YES UNIVERSITY and SCHOOL Relations

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Their Objectives
To build a strong employer brand. To attain a preferred employer status in the Banking and Financial Services industry. To ensure that the Bank is able to attract, engage and retain high quality human capital for its long-term success.

Their Focus
The focus of the Human Capital function at YES BANK is to build a world-class team, based on professional recruitment methodologies, and attract the best talent in the industry. While their immediate hiring has primarily been lateral, to bring the relevant skills, competencies and experience into the organization, their focus is on building the requisite talent bench strength to support the business plans of the Bank. They are making a concerted effort towards building learning and development solutions that continuously enhance employee value, in line with the growth plans of the Bank.

Our Culture & Processes

Building a high performance culture is another key prerogative of the HR function. They envisage a credible and transparent performance management process that helps in aligning individual goals with corporate objectives, both quantitative and qualitative, and encourages cross sell and team spirit. Their performance management process will be supported by a robust rewards and recognition strategy for each business and a market based compensation structure that is flexible, responsive and helps retention through asset building and wealth creation for top performers. Their Promoters believe that a broad employee ownership of the shares of the company has a positive impact on performance. Therefore, their stock option scheme covers a large cross-section of our employees.

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The HR function at YES BANK is working closely with leading international consultants, including Hewitt and Korn Ferry, to operationalize this strategy and ensure that the organizational architecture of the Bank is operational and adequately supports its business plans.

Diversity Data
As an entrepreneurial start-up venture, YES BANK is a congruence of diverse cultures and individual work-styles. Their Diversity data is intended to provide a snapshot of the key activities happening across the organization in the HR space. In addition to providing information, it ensures a focus on the areas being indexed and measured.

Workforce Profile
1. Gender Distribution @ YES The gender distribution within the Bank is a good measure to evaluate whether they are
equal opportunity employers and is an important element in achieving best employer status.

2. Educational

Qualifications:

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3. Experience profile The experience profile captures the past work experience of our employees both in terms of number of years as well as the industry segments represented.

4. Work experience w.r.t industry segments

5. Age profile The age profile captures the age range of our employees
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Global Indian Banking

YES BANK is Emerging Indias newest private bank. It is the outcome of a professional commitment to establish a high quality, technology-driven, state-of-the-art private Indian bank. The vast banking experience of the team at YES BANK has been strengthened by the financial support of Rabobank Nederland, the worlds only AAA rated private bank. The bank is also supported by three respected global institutional private equity investors including CVC Citigroup, AIF Capital and ChrysCapital, together lending YES BANK a strong foundation of enduring financial trust. YES BANK offers a host of financial solutions for the Global Indian. The product suite ranges from bank accounts and deposits to structured products and other investment products.

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Business Overview
Yes Bank is a new bank. They received license to commence commercial banking on May 24, 2004 and launched Corporate and Institutional Banking and Business Banking operations in August 2004, their financial markets and treasury operations in September 2004 and their transaction banking business in October 2004. They set up their first branch in Mumbai. Their strategic goal is to build Yes Bank into a One Bank for their customers. Their One Bank business model is directed towards maximizing revenue generation from customers by offering our full range of products and services to address all their banking needs. To this end, they offer integrated products, where possible, to a particular client segment or focus industry. In addition, their One Bank business approach is targeted to deliver their products across all our delivery channels, including their relationship management teams, branches, Internet banking, phone banking and other channels. The bank has divided its business into three distinct genres: Corporate & Institutional Banking (C&IB) that caters to large corporate and institutional clients, multinational corporations and Government owned organizations. Business Banking that caters to emerging local corporates and entities that are present in the supply chain of C&IB customers, and Retail Banking that caters to individual customers.
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While the C&IB segment was the principle source of revenue in the early years of the bank, income from Business Banking and Retail Banking is expected to gain momentum, in line with the branch rollout. The asset mix is expected to change from C&IB (70%) and Business Banking (30%) in FY06 to C&IB (40%), Business Banking (30%) and Retail Banking (30%) by FY09.

PRODUCT SUITE
The Financial Markets business at YES BANK provides both plain vanilla and structured financial products to a wide range of Institutional, Corporate, High Net Worth and Retail customers, including Non-Resident customers. Their competitive and consistent pricing is supported by sophisticated customer handling. They look to provide comprehensive financial risk management solutions to clients across asset classes, including foreign exchange and fixed income. Their existing suite of products encompasses the following categories of products:

1.

Foreign Exchange

The highly experienced and dedicated team of FM provides comprehensive services to meet their clients' foreign exchange needs. In order to help their customers to effectively conduct transactions and manage risks in the global markets, the team has dedicated sales personnel who focus on providing in depth insights and timely advice on various currencies and markets. They offer spot and forward foreign exchange for hedging receivables and payables

Spot (INR and Non-INR denominated) Forwards (INR and Non-INR denominated)

2.

Online FOREX Solutions

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They, at Yes Bank, have introduced On-line Forex Trading Services for privileged customers to make Forex transactions more profitable and convenient. This user-friendly Forex Trading Service gives you the freedom to trade in various currencies directly, at the click of a button. Thier experienced team of Forex experts will provide timely inputs to maximize the customers returns on every Forex transaction made. Add to it the technical wizardry of their proprietary trading platform that ensures you real time transactions with superior security levels to maintain user confidentiality. With this state-of-the-art service you can do everything right from tracking real time trading rates of all major currencies, booking and cancelling deals online.
3.

Fixed Income

FM ensures fulfillment of the financial needs of clients by offering solutions around fixed income distribution, mutual fund sales, securitization and loan syndication in the domestic market. YES BANK has the expertise and experience to develop the best solutions and execute them with precision. Through the syndication of funds from the domestic markets, the group assists corporate clients in their endeavor to raise funds For clients with surplus funds, the group facilitates the selection and execution of investments in fixed income instruments, including both SLR and non-SLR
4.

Derivatives & Structured Products

Their team provides structured risk management solutions for clients looking to manage their foreign currency and interest rate exposures. Their solutions range from basic to complex derivative products, and include the following: 1. Interest Rate Swaps (Rupee and foreign currency) 2. Cross Currency Swaps, including Principal Only Swaps, Coupon Only Swaps 3. Interest Rate Options including caps, floors, collars and digitals 4. Cross Currency Options 5. Structured Products involving a combination of the above
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Through a combination of different derivatives, they also design Structured Products, enabling their clients to manage exposures and take advantage of developments in the interest rate and currency markets.

5.

Commodity Risk Management Advisory

The FM Commodity Risk Management Advisory Services support their clients business by helping them in developing robust commodity risk management frameworks which enable managing the increasing volatility in the underlying commodity much more efficiently. The key objective of this program is to create an enabling environment and minimize the shocks of the price volatility, so as to let the customer focus on the core business activity and optimize overall realization.

6.

Liquidity & Balance Sheet Management

With the growing complexity and sophistication of financial products and the corresponding liquidity/interest rate risks associated, today's business environment requires asset-liability management and planning tools that deliver timely and reliable results and simplified solutions. This desk within the Financial Markets group is primarily involved in managing liquidity/assetliability mismatch and Funds Transfer Pricing Process for various streams and offers a complete set of asset-liability management solutions to help clients measure, monitor and analyze performance to achieve their financial goals. Their team develops new products and innovative market solutions tailored to meet clients' individual needs. They combine their extensive product and service offerings with an indepth understanding of financial management concepts to help their clients to optimize their balance
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sheet performance. They also extend this expertise to their institutional clients, including cooperative banks, selective state banks and NBFCs.

CURRENT SCENARIO
The industry is currently in a transition phase. On the one hand, the PSBs, which are the mainstay of the Indian Banking system, are in the process of shedding their flab in terms of excessive manpower, excessive Non Performing Assets (NPAs) and excessive governmental equity, while on the other hand the private sector banks are consolidating themselves through mergers and acquisitions. With the advancement of technology and the birth of competition, banks are in the race of becoming the best in the country. With an eye upon customer satisfaction policy they are providing best of the best services with the minimum hazards. Market Share The share of Public Sector Banks showed deceleration in respect of major areas of business, where as that of the new private sector and Foreign Banks earned higher share of business. The market share of the Old Private Sector Banks too came under pressure. Public Sector Banks hold 75% market share in major areas of business.

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Table 5: Major Components of Business, Bank GroupWise (in %)

Source: Reserve Bank of India * Industrial Development Bank of India Ltd ** Includes Industrial Development Bank of India Ltd

Nationalized Bank: Allahabad Bank , Andhra Bank , Bank of Baroda, Bank of India, Bank of Maharashtra, Canara Bank, Central Bank of India, Corporation Bank, Dena Bank, Indian Bank, Indian Overseas Bank, Oriental Bank of Commerce, Punjab and Sind Bank, Punjab National Bank, State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of India (SBI), State Bank of Indore, State Bank of Mysore, State Bank of Patiala, State Bank of Saurashtra, State Bank of Travancore, Syndicate Bank, UCO Bank, Union Bank of India, United Bank of India, Vijaya Bank Private Banks: Bank of Punjab, City Union Bank, Development Credit Bank, Laxmi Vilas Bank, Bank of Rajasthan, Bharat Overseas Bank, Catholic Syrian Bank, Centurion Bank of Punjab, Dhanalakshmi Bank, Federal Bank, HDFC Bank, ICICI Bank, IDBI Bank, IndusInd Bank, ING Vysya Bank, Jammu & Kashmir Bank, Karnataka Bank, Karur Vysya Bank, Kotak Mahindra Bank, SBI Commercial and International Bank, South Indian Bank, United Western Bank, UTI Bank, YES Bank.

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Foreign Bank: ABN-AMRO Bank, Abu Dhabi Commercial Bank, Bank of Ceylon, BNP Paribas Bank, Citi Bank, China Trust Commercial Bank, Deutsche Bank, HSBC, JPMorgan Chase Bank, Standard Chartered Bank, Scotia Bank, Taib Bank

YES BANK CURRENT SCENARIO Key Financial Highlights

Net Profit after Tax of Rs. 3038.4 million in FY09 compared to Rs. 2000.2 million in FY08 representing an increase of 51.9%; Net Profit after Tax of Rs. 801.1 million in Q4FY09 compared to Rs. 645.1 million in Q4FY08 representing an increase of 24.2% Net interest income (NII) of Rs. 5111.8 million in FY09 compared to Rs. 3305.7 million in FY08 representing an increase of 54.6%; NII of Rs. 1552.2 million in Q4FY09 compared to Rs. 1067.4 million in Q4FY08 representing an increase of 45.4% Total Net income (NII plus Non Interest Income) of Rs. 9801.6 million in FY09 compared to Rs. 6912.4 million in FY08representing an increase of 41.8%; Total Net income of Rs. 2449.8 million in Q4FY09 compared to Rs. 2143.2 million inQ4FY08 representing an increase of 14.3%
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 Operating Profit of Rs. 5616.1 million in FY09 compared to Rs. 3500.8 million in FY08 representing an increase of 60.4%; Operating Profit of Rs. 1539.4 million in Q4FY09 compared to Rs. 1209.4 million in Q4FY08 representing an increase of 27.3% Non-interest income to total income ratio of 47.8% in FY09; 36.6% in Q4FY09 Cost to income ratio of 42.7% in FY09; 37.2% in Q4FY09 Advances at Rs. 124.0 billion as at Mar 31, 2009; growth of 31.5% y-o-y Gross yield on advances of 12.8% in FY09; 13.0% in Q4FY09 Deposits at Rs. 161.7 billion as at Mar 31, 2009; growth of 21.8% y-o-y Cost of funds of 9.0% in FY09; 8.8% in Q4FY09 Net Interest Margin of 2.9% in FY09; 3.0% in Q4FY09 Gross NPA at 0.68% to Gross Advances as at Mar 31, 2009 Net NPA at 0.33% to Net Advances as at Mar 31, 2009 Loan loss provisions of Rs. 265.4 million in FY09; total loan loss provisions of Rs. 791.2 million as at Mar 31, 2009 Total loan loss coverage ratio of 144.7%; Specific loan loss coverage ratio of 51.5% as at Mar 31, 2009 Total Capital Funds (Tier I + Tier II) of Rs. 30.67 billion as at Mar 31, 2009 Basel II Capital Adequacy Ratio of 16.63% at Mar 31, 2009 (Tier I at 9.50%) Return on Average Assets of 1.52% in FY09; 1.50% (annualized) in Q4FY09 Return on Equity of 20.7% in FY09; 20.2% (annualized) in Q4FY09
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 Book value per share of Rs. 54.69 as at Mar 31, 2009 Basic EPS of Rs. 10.24 and Diluted EPS of Rs. 10.14 for FY09; Rs. 2.70 and Rs. 2.67 for Q4FY09 Total headcount stands at 2671 as at Mar 31, 2009

Key Business Highlights

Well capitalized for upturn: Basel-II Tier I capital at 9.50% and total capital adequacy of 16.63% as at Mar 31, 2009 provides significant headroom for growth. During the fiscal year, Bank mobilized capital funds of Rs. 10.6 billion (the highest since inception in the most challenging environment) including Rs. 1.54 billion of Tier 1 Perpetual Capital Bonds during Q4FY09 (issue over-subscribed by 105%), the first by any Indian private sector Bank during FY09. Total capital funds stand at Rs.30.67 billion as at Mar 31, 2009 (Rs. 20.72 billion as at Mar 31, 2008) Strong Asset Quality: High quality corporate exposure (80% of the externally rated exposure rated A and above) resulted in 13% reduction of total RWA for the bank improving the CRAR to 16.63% under Basel II as against 14.53% under Basel I as at Mar 31, 2009; manageable Gross and Net NPA ratios coupled with prudent provisioning policy (total provisioning cover of 144.7% as at Mar 31, 2009) Sustainable NIM in a challenging macro-environment driven by pricing power on Corporate loan book and re-pricing of a relatively higher proportion of interest sensitive liabilities; NIM of 2.9% in FY09 (2.7% in FY08) Superior Shareholders returns: Amongst the highest RoE (20.7%) and RoA (1.52%) in the banking industry during FY09signifying sustained and profitable revenue growth during a difficult year for the economy

Continuing Awards & Recognitions

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 YES BANK was ranked as one of the Worlds 25 Unsung Innovative Companies by the leading international BusinessWeek magazine. The Unsung list is based on a Boston Consulting Group survey of senior executives across the world when asked to name an innovator others would not have thought of. YES BANK is the only Indian Bank to be ranked in this prestigious global ranking. YES BANK was recognized with a Special Citation for its Innovative & Superior Direct Banking Services, at the Financial Insights Innovation Awards (FIIA) 2009 presented at the 5th Annual Asian Financial Services Congress held at Singapore on February 27, 2009

CHAPTER 4

CASE STUDY- YES BANK

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Open to Collaboration

Slowdowns bring with them a sea of changes. Purse strings become tighter and less is just enough. Expansions take a back seat and companies play it safe. But there is something that cannot afford to succumb to this changing environment: the quality of customer service.

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It is a time when the phrase customer is king holds more water than ever before. Especially for an industry that is facing a lot of heat: banking. Keeping their existing customers intact and adding to that customer base is an imperative for banks. The definition of customer relations is broadening. When every new piece of customer data can reveal a new facet of a customer, information becomes a business opportunity. The more data, the merrier everyone is. YES Bank was no exception. It managed customer relations via Excel sheets, something that the bank was beginning to regret. The problem was that it was a one-way information sharing system that restricted data flow from the customer to the company. Although it was used extensively by the banks staff for cross-selling and up-selling, it lacked interactive features like capturing feedback from a customer. Neither was it the smartest way to run the banks sales force. We had instances when we lost sales leads, or multi-interfaces to the same lead and re-assignment of leads. We just couldnt track older leads because there were multiple registrations and entry for tracking them, says a branch manager of YES Bank who prefers not to be named. Having a customer relationship management (CRM) solution was the need of the hour. But, not just any CRM solution. If the banks management was going to get one, it needed to be flexible and have the scalability to follow the business wherever it went. While conceptualizing the CRM, I was not looking at a mature and stable CRM package because our retail business model itself was demand-based and hence very fluid. We wanted to start with a small framework-based model which changes with our business needs, says Suvanjay Kumar Sharma, VP (corporate strategy) & chief enterprise architect, YES Bank. An off-the-shelf CRM solution would have made Sharmas job much easier but he believed that a CRM tool should have customer feedback at every step and only a system based on Open Source would give him the agility that he was looking for. Neither was he willing to settle for a
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stopgap solution so he decided to build the solution in-house a tough task by any standard. Joint Account A relatively new entrant in the field where the big daddies such as nationalized banks have already celebrated their cetenaries, YES Bank was established in 2004 with financial support from Rabobank Netherlands. From the banks perspective, its late entrance didnt have to be a disadvantage. It could give miss to legacy migration since there wasnt any and it could also adopt and implement technology according to the needs of a 21st century bank serving the new needs of the modern customer. We consciously wanted to avoid settling for a system and working with it just because our organization was still evolving. We wanted a flexible solution that would change in accordance to the dynamics of our business. What we wanted was a scalable CRM that could grow as we grew and not just any CRM solution, says Sharma. And from those priorities was born the concept of the Yes Bank Collaborative CRM (YCCRM). But Sharmas in-house YCCRM wasnt satisfied with just fulfilling these needs. Sharma felt that customer feedback was vital, and that the bank needed to embrace its customers. The difference was collaboration. We wanted to make it collaborative by making the customer part of the system. We were keen on empowering the customer to share his ideas and feedback. The system has two logical separation models: a pre-acquisition and a post-acquisition service cycle for customers, explains Sharma. It took six to eight months to develop and implement the solution in the first branch. The YCCRM banks very heavily on employee collaboration. Information lying in islands, without being shared across, is of no use at all. Internal collaboration adds a productive edge to the information we capture, says Sharma. The customer information captured in the YCCRM is mapped to blog-like entries made by employees. These entries include ideas, suggestions, and perceptions of the sales representatives. The sales and product teams can then analyze this

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information and figure out related business opportunities. Such information can also be leveraged to customize existing products or conceive new products altogether. Earlier, with Excel sheets, sales staff culled out details of customers by tabs in the form (name, company, account number, etcetera). But with YCCRM, they were provided with a template where they can fill details (other than the standard keywords) noted during their interaction with the customers. This meant they could personalize their dashboards. Typically, sales staff interacts with customers over the phone, jotting down the most important parts of their conversation on little pieces of paper. This information was later filled on a separate form. With the new CRM, sales reps can now upload or download scribbled information from their phones to the main CRM system. We focused more on capturing data from mobile phones into the CRM system instead of capturing CRM system in the mobile phones. We leveraged the fact that people are more comfortable with their cell phones than their computers to introduce greater comfort for the user, says Sharma. The new system also helped sales representatives in other ways. As a sales rep, part of the job includes being constantly on the field, which leaves them little time to fill in their reports. As a result, it is not always possible to feed details of their interaction with customers on the day they meet them. The old system marked the day they filed their report, not the day they met their customer. YCCRM has changed that. It provides an additional tab of source date (the date mentioned as the source date when they meet the customer and the system date when it is registered in the system). Sharma says, Adding the source and system date has helped calculate the turnaround time of serving a client. The integrated and personalized dashboard with an activities planner enables the smooth functioning of a sales rep. And its social value-based relationship management helps in crossselling. Take for instance a software developer who wants to move from an employee status to being an owner of his own firm. That piece of insight can be uself for the bank. The social valuebased relationship management component will help cater to his changed needs.
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On the dashboard, a small search box allows the bank staff to do an internal as well as a Web search on their customers. We modeled the system so that it is practical. We wanted people to take part in the development of the system. The system has to be agile and ideas have to come from the users. This also allows you to add features according to your requirements, points out Sharma. Credit Limit But this convenience comes at a price. It wasnt easy to implement the CRM solution across YES Banks multiple branches. The foremost challenge was convincing the business about using the Open-source CRM software and customizing it for their use. But Sharma was convinced it was the way to go. He also knew that it was a decision that would introduce its own special set of challenges. One example is an initial performance issue related to JBOSS. When the number of concurrent users grew to over 80 to 100, performance started deteriorating and JBOSS shutdown. We have done some optimization to solve the issue and also have logged the issue with Red Hat and have received some patches, he shares. Developing a CRM solution in-house was not just about having faith and confidence in Sharmas team but meant that he needed to get involved with even the smallest details of the project. This gave him complete visibility of how the project was shaping. Since they worked closely with business, articulation of business needs was very clear and hence, Sharmas team was to develop features close to user requirements. Getting business users who were accustomed to off the-shelf products to use the unique collaborative features of the YCCRM which could possibly give the bank competitive advantage was a task. The business users needed to be convinced because people prefer to walk the conventional path and hesitate to give up their existing mode and processes of working. But once you help them understand smaller processes they gradually accept the change, says Sharma.

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The idea of making the system with self-servicing functionality is to give the business users the ability to define the fields that they want. The business division rather than the IT division should be responsible for all the contents displayed and they can manage the user interface without ITs help, he says. The Credit List The implementation of a key tool like CRM has already started reflecting positively. There has been a drastic improvement in customer acquisition after sales leads were passed on via discussion boards. There is servicing of 10 lakh leads and around 5 lakh service requests per year. Customer service has improved by 60 percent and turnaround time for its processes by almost 70 percent, says Sharma. This helped achieve greater service excellence, capturing all customer queries, complaints and their feedback into the common system. It has helped us understand our customers better and analyze the resolution time for each query or complain and then improve internal process accordingly. It also added lots of intangible business benefits and helped retain customers better, says Sharma. The cross-selling of products has substantially surged after the implementation. The collaborative CRM has given a new window of social value based relationship which is key for future cross-selling. Further, the centralized repository for reports generated numerous benefits for the organization. When data gets captured in a central repository there is more than one advantage to it. First, data loss is prevented. Second, data can be extracted and analyzed, which helps in understanding the business better. It allows us to observe trends and take proactive action to improve the customer experience and products, says Sharma. The repository also enables geography wise customer segmentation to plan a promotional campaign better. With the implementation of the YCCRM almost complete in all the metro
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branches, the next phase aims to cover the non-metro branches, bringing all 60 locations of the bank on board. The next logical step is to take YCCRM online, where customers can directly be part of the system. Since this is an initiative to accommodate customers in the banks process, we want to get the CRM system online soon so that customers can directly send their feedback or use blogs to interact with us. This will definitely open new sources of information and at the same time it will provide us with a new set of opportunities in understanding the customer. This would surely help us serve our customers better, says Sharma.

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CHAPTER 4

CONCLUSION AND SUGGESTIONS

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SWOT ANALYSIS
STRENGTH

They have very good global tie ups with correspondent banks. They are very well aware of global and local markets. Yes Bank charges are the most competitive in the market for charge of converting 24 hour customer care. Relationship managers for each and every customer. Bank with latest technology and safety.

currencies.

WEAKNESSES

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Policies not clear for general public to understand. Less number of advertisements of Yes Bank.

Less number of branches. Not able to make good impression in the Indian banking sector. No global presence. Less number of products to offer. Customers complain for poor services. In the sector the competition is high since the numbers of players are high. Less ATMs

OPPORTUNITIES
year. They should come up with the services which are more suitable to Indian market. In the Indian market there is huge possibility of success in banking sector. Increase number of ATM machine in the region Increase number of branches Accessibility of ATM machine in Multiplex & Shopping Malls Reduce defaulter charges The market is still large to serve since the business is growing. To gain the market as banking sector has shown very good growth in the last five

THREAT

As ICICI have 32 different schemes Yes Bank dont have that much number of Threats from nationalize bank and foreign players.

schemes.
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Offering account on zero balance. Offers free credit for customer. Loan availability on fewer amounts. Total customer satisfaction. Large number of competitors in market with higher brand name and presence. Not being a PSU it is avoided in India. Customer retention is high but the customers tend to change the banks for a particular Due to large number of players the policies are very volatile in nature. So its hard to

service. control the market.

SUGGESTION
As the market is becoming more and more competitive and competitors are increasing in a greater pace than before Yes Bank has to pick this pace as soon as possible in order to remain in the race. Yes Bank needs a few changes. Following are a few suggestions:
During the period of my summer training I found that Yes Bank has access to very limited

resources. Like every assistant sales manager should be provided a work station with a computer so that they need not queue for their chance to use the system as was seen during my presence there. This would reduce wastage of time and in turn productivity would increase. SME Liabilities department is a new division started in 2007 hence they need to work on increasing their teams and recruit more people. Once an employee is recruited, he/ she should be given a through product knowledge. Once an employee learns and understands all the products only then they should be left
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independently for the field work. This would reduce flaws while approaching new clients and will also reduce lot of time and energy. To remain competitive, commercial banks will have to exploit new sources of income: Offering new services (launch mutual funds). Charging customers with non-interest fees. Offering new services through the phone and the web. Entering into joint ventures with independent companies. Entering new geographic markets yielding higher returns.

Banks will need more expertise to manage new sources of risk. Market risk management

models must become an integral part of a banks risk management culture.

Net banking, phone banking, mobile banking, ATMs and bill payments are the new buzz

words that banks are using to lure customers. Hence, this is an area where Yes Bank can work upon.

CONCLUSION
With the Indian economy moving on to a high growth trajectory, consumption levels soaring and investment riding high, the Indian banking sector is at a watershed. Further, as Indian companies globalize and people of Indian origin increase their investment in India, several Indian banks are pursuing global strategies. The industry has been growing faster than the real economy, resulting in the ratio of assets of commercial banks to GDP increasing to 92.5 per cent at end-March 2007. The Indian banks have also been doing exceptionally well in the financial sector with the price-to-book value being second only to china, according to a report by Boston Consultancy Group. The face of banking is changing rapidly. Competition is going to be tough and with financial liberalization under the WTO, banks in India will have to benchmark themselves against the best in the world. For a strong

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and resilient banking and financial system, therefore, banks need to go beyond peripheral issues and tackle significant issues like improvements in profitability, efficiency and technology, while achieving economies of scale through consolidation and exploring available cost-effective solutions. These are some of the issues that need to be addressed if banks are to succeed, not just survive, in the changing milieu. Banks need to really work hard to provide the best customer service as this is one of the most demanding act expected from any bank. The bank which provided best service will definitely lead the race. Banks are becoming popular for both relationship building and hubs for innovative financial services. Although the number of commercial banks has declined sharply since 1984, by other measures, such as the number of bank offices and total bank assets relative to gross national product (GNP), the banking industry has not been shrinking. Some economists contend that the banking industry has excess capacity. Even more argue that without significant changes in regulation, the banking industry is destined to wither. The relaxation of restrictions on interstate branching and the securities activities that commercial banks are permitted to perform are two of the most frequently proposed regulatory changes that proponents view as necessary to preserve the health of the banking industry.

Banking is essential to a modern economy. Banks are not. Edward Furash (1993)

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ANNEXTURE

Annexure I: Questionnaire

Help us to serve you better!!! Personal Details Name

Company Name

: _____________________________________
: ________________________________________

Email Phone Number Address

: _____________________________________ : _____________________________________ : _____________________________________

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____________________________________ Personal Banking 1. Are you an ..? a. Exporter b. Importer c. Both

2. What type of bank would satisfy your requirement? a) Public Sector b) Private Sector c) Foreign Bank

3. How many Banks are you banking with? a. 1 d. More Than 3 b. 2 c. 3

4. Which bank are you banking with? a. Yes Bank b. HSBC d. CITI Bank e. Others (Name them) _____________________________ 5. How long have you been banking with them? a. Less than a Year c. 2 5 Years d. 5 10 Years b. 1 2 Years

c. ICICI

e. More than 10 Years

6. How much are you satisfied with the present banks services? a. Highly Satisfied Highly Dissatisfied b. Satisfied c. Moderate d. Dissatisfied e.

7. What makes you stay with this bank? a. b. c. d. e. Good products Low interest rates/charges Your relationship with your manager Really care for you as a customer Convenience

8. Please circle the following

Very good good Average Poor Very poor

How will you rank the services of your bank? How is the bank staff response towards your query

1 1

2 2

3 3

4 4

5 5

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9. How would you rank your expectations from a bank in terms of services being rendered according to your preference as per the following scale? a. Highly Satisfied Highly Dissatisfied S. No. 1 2 3 4 5 6 7 8 9 10 b. Satisfied c. Moderate d. Dissatisfied e.

Rank

Time Convenience

Staff response time Lighting Space Seating arrangement Water availability ATM One window shop Customer service

10. What are the facilities you expect along with your bank account

a. ATM cum Debit Card c. Internet Banking e. Mobile Banking

b. Free cheque book d. Phone Banking f. SMS alert

11. How easy is it for you to change banks? a. Very easy difficult b. Quite easy c. A bit difficult d. Very

12. Would you change your bank if it was easy? a. Yes b. No

13. What benefit would you like to be provided by your banker? a. Good Conversion rate b. Dedicated Support of Staff c. Hassle Free Trade Documentation d. Others Specify __________________________________________
14. Who influence your decision while opening up of account in the Bank?

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a) Advertisements b) Family opinion c) Sales Representative d) Brand Name e) Others

15. Would you like to open an account with SCB? a. Yes Any other suggestions b. No c. Think over

Thank YouKeep Banking!!!

Leading the Way

Annexure II Revised List of Documents - Individuals

There has been lot of representation from sourcing units to expand the list of acceptable documents. The list has been reviewed and the following documents can now be accepted as Identity/Address proof of Individuals who are Owners/Controllers of accounts (primary holders/joint holders/ GPOAs/Directors/Partners etc.). Identity & Address proof (Cat A) Passport Voter ID

Identity Proof Only (Cat B) Driving License Photo Pan Card PSU/Govt ID Card with Photo

Address Proof only (Cat C) Non-Photo Ration Card with RV report Latest Electricity Bill Latest Telephone bill

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Marriage Certificate for name change Marriage Card+Marriage Photo+Affidavit (for name change)- Marriage Certificate is not available College ID Card+Mark Sheet for new recruits (Only for Account Opening in the Year of issuance of Mark Sheet) Pan Number to be provided within 3 months of account opening College/School ID Card with Parent's address proof (ration card/passport where child name is included) for Minors

Latest Mobile bill Recent 3 months Credit Card statement

Latest Property/ Water /Other tax receipts Sale Deed + RV Bank Statement 2 Quarterly (not older than 4 months) or 3 monthly statements (not older than 2 months) 1st page of statement carrying name and address of customer will do. All pages need not be enclosed. Bank pass book + RV Pan Intimation Letter Income Tax/Wealth Tax Assessment Order Latest Housing Society Receipts in select States (Maharashtra) Latest Insurance Policy Premium Receipt (life/health) Latest Mahanagar Gas Bill Latest Insurance Receipt (life/health) Gas Connection Card PPF Passbook + RV Post office savings pass book + RV Employer Certificate for residence address with signature attestation (Cat A, B companies and Forbes Top 500 list) Arms Licence Issued by State/Central Govt Rental Agreement+RV

Birth certificate for Minors Arms License Issued by State/Central Govt Bhopal Gas Victims Card issued by Govt Household ID Card issued Govt of Andhra Pradesh, J & K Employee Identity Card of Cat A (BSE/NSE) companies with Photo Employee Identity Card with Salary slip or appointment letter for other public limited companies Employee identity card issued by companies in the Forbes Top 500 list of companies Post Office ID Certificate Photo ID issued by ICAI/ICWAI/ICSI/Bar /stock exchange council to its members

Revised List of Documents Non-Individuals

Proprietorship Firms Sales Tax Registration Certificate

Service Tax Registration Certificate All Apex body registrations (General Chamber of Commerce, VAT)
Shops & Establishments Certificate Factory Registration certificate SEBI Registration Certificate IE Code + Pan Proof of proprietor Bank Statement with existing Banker for last 6 months plus a local clearing cheque signed by the Proprietor for over Rs.10000/CA Certificate +BVRC(new entities opened in the last 3 months)

CA Certificate +BVRC for Proprietorship firm accounts of self-employed professionals like Lawyers/Architects/CA Firms

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Partnership Firms Mandatory Documents Partnership Deed and Supplemental Deeds for any change in constitution Category A Document o Registered Partnership Deed or Certificate of Registration from the Registrar of Firms o Sales Tax/Service tax/VAT Registration Certificate/Equivalent printout from Government Website o Shops & Establishments Certificate o Factory Registration certificate o SEBI Registration Certificate o IE Code + Pan Proof of proprietor o CA Certificate (for new entities opened in the previous 3 months) Category B Document o IT/Wealth Tax Assessment Order o Pan Intimation/Pan Card of the Firm o Acknowledged IT Return of the Firm Category C Document o IT/Wealth Tax Assessment Order o Pan Intimation/Pan Card of the Firm o Acknowledged IT Return of the Firm o Utility Bill in the name of the Firm o Utility in the name of a Landlord along with Lease Agreement Limited Companies Mandatory Documents o MOA & AOA & True Copy of Certificate of Incorporation o True Copy Extract of Board Resolution o True Copy of Certificate of Commencement of Business (only for Public Ltd Cos) o Form 32s with ROC acknowledgement for Directors not in AOA and not in Annual Reports (if submitted)

Annual Return (for Companies incorporated >18 months back)

Category A Document o Form 18 and ROC receipt filed for recording registered address o Sales Tax Registration certificate o Shops & Establishments certificate o Factory Registration certificate o SEBI Registration certificate o Importer- Exporter code certificate Note: Bank statement of account with existing Banker + SVC is not available as a Cat A document Category C Document o A Utility Bill in the name of the Co o A Utility Bill in the name of a Landlord along with the Lease agreement o Audited Annual Return o IT Assessment Order o PAN Intimation o Acknowledged ITR of the Company

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BIBLIOGRAPHY

WEBSITES

http://www.economywatch.com/banking/ http://www.inderscience.com/browse/callpaper.php?callID=747 http://media.wiley.com/product_data/excerpt/34/04713931/0471393134.pdf http://www.researchandmarkets.com/reports/4020/

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http://www.ecs-limited.com/download/Challenges%20facing%20Banking%20Industry %20in%20India.pdf http://books.google.co.in/books? hl=en&id=DE2Pbd_qmgkC&dq=customer+relationship+management&printsec=frontcov er&source=web&ots=6-EAOSjAfE&sig=tS2RLffSvwkc7_QAZQbu_3wEpk&sa=X&oi=book_result&resnum=8&ct=result#PPP1,M1 http://www.yesbank.in/aboutyes.htm http://www.yesbank.in/keymanagement.htm http://www.yesbank.in/global_indian_banking/index.php http://www.sebi.gov.in/dp/yesfin.pdf http://www.equitymaster.com/mc/download/2009200603YES7167.pdf http://www.researchandmarkets.com/reportinfo.asp?report_id=4020 http://www.iloveindia.com/finance/bank/nationalised-banks/index.html http://www.iloveindia.com/finance/bank/private-banks/index.html http://finance.indiamart.com/investment_in_india/foreign_banks_in_india.html

MAGAZINES COMPANY JOURNALS

********

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