Banking, Customer Satisfaction & IDBI Bank Awareness

CHAPTER- I

1.1 Title of the study

1.2 Scope of the study

1.3 Objective of the study

1.4 Significance of study

1.5 Researcher methodology

1.1 Title of the study:-

“A survey on banking products, customer satisfaction & awareness of IDBI Bank”

1.2 Scope & Importance of the Study

Each and every project study along with its certain objectives also have scope for future. And this scope in future gives to new researches a new need to research a new project with a new scope. Scope of the study not only consist one or two future business plan but sometime it also gives idea about a new business which becomes much more profitable for the researches then the older one.

Scope of the study could give the projected scenario for a new observed in my project are not exactly having all the features of the scope which I described above but also not lacking all the features.

• Research study could give an idea of network expansion for capturing more market and customer with better services and lower cost, with out compromising with quality.
• In future customer requirements could be added with the product and services for getting an edge over competitors.
• Consumer behavior could also be used for the purpose of launching a new product with extra benefits which are required by customers for their account (saving or current ) and/or for their investments.
• Factors which are responsible for the performance for bank can also be used for the modification of the strategy and product for being more profitable.

1.3 Objectives of the study:-

• To know the customer needs and expectations.
• To find out the factors which customer take into consideration in opening a account
• To know that up to what extent a customer is satisfied with the bank
• To know the customer complaints and their redressal

1.4 Significance of the study:-

Every research is conducted to fulfill certain objectives and these objective in turn fulfill some purpose and are of significance for one or more then one party these research is significant for:-

To the Researcher:-

• This study provides the researcher a practical insight of various activities and function of the bank
• The researcher will also be able to develop on in depth knowledge of banking sector
• The study is also required for the partial fulfillment of the requirement for the degree of MBA as per the curriculum

To the Bank:-

The study would help IDBI Bank to know the customers attitude (about awareness and satisfaction level) towards its various products.

1.5 Research Methodology:-

1) Type of Research Research is descriptive in nature

2) Universe Customer of IDBI Bank in New Delhi

3) Sampling Unit Existing customer of IDBI Bank

4) Sampling Technique Convenience method of sampling was used

5) Sample Size 200 respondents

6) Data Type Primary & secondary data

PRIMARY DATA

The Primary data are those which are collected afresh and for the first time, and thus happen to be original in character.

SECONDARY DATA

The secondary data are those which have already been collected by someone else and which have already been passed through the statistical process.

CHAPTER – II

2.1 Industry Introduction

2.2 Introduction to IDBI bank: All about

2.3 Management & Organization

2.4 IDBI bank business chart

2.5 IDBI bank organizational chart

2.6 Product & Services

2.7 Subsidiaries of IDBI

2.8 Review of literature

2.1 Industry introduction

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 in every city and villages of all nook and corners of the land.

The first phase of financial reforms resulted in the nationalization of 14 major banks in 1969 and resulted in a shift from Class banking to Mass banking.

This in turn resulted in a significant growth in the geographical coverage of banks. Every bank had to earmark a minimum percentage of their loan portfolio to sectors identified as “priority sectors”. The manufacturing sector also grew during the 1970s in protected environs and the banking sector was a critical source. The next wave of reforms saw the nationalization of 6 more commercial banks in 1980. Since then the number of scheduled commercial banks increased four-fold and the foreign banks (numbering42), regional rural banks and other scheduled commercial banks accounted for 5.7 percent, 3.9 percent and 12.2 percent respectively in deposits and 8.41 percent, 3.14 percent and number of bank branches increased eight-fold. And that was not the limit of growth.

After the second phase of financial sector reforms and liberalization of the sector in the early nineties, the Public Sector Banks (PSB) s found it extremely difficult to compete with the new private sector banks and the foreign banks. The new private sector banks first made their appearance after the guidelines permitting them were issued in January 1993. Eight new private sector banks are presently in operation. These banks due to their late start have access to state-of-the-art technology, which in turn helps them to save on manpower costs.

During the year 2000, the State Bank Of India (SBI) and its 7 associates accounted for a 25 percent share in deposits and 28.1 percent share in credit.

The 20 nationalized banks accounted for 53.2 percent of the deposits and 47.5 percent of credit during the same period.

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. 

PSBs, which currently account for more than 78 percent of total banking industry assets are saddled with NPAs (a mind-boggling Rs 830 billion in 2000), falling revenues from traditional sources, lack of modern technology and a massive workforce while the new private sector banks are forging ahead and rewriting the traditional banking business model by way of their sheer innovation and service. The PSBs are of course currently working out challenging strategies even as 20 percent of their massive employee strength has dwindled in the wake of the successful Voluntary Retirement Schemes (VRS) schemes.

The private players however cannot match the PSB’s great reach, great size and access to low cost deposits. Therefore one of the means for them to combat the PSBs has been through the merger and acquisition (M& A) route.

Over the last two years, the industry has witnessed several such instances.

For instance, HDFC Bank’s merger with Times Bank Icici Bank’s acquisition of ITC Classic, Anagram Finance and Bank of Madurai. Centurion Bank, Indusind Bank, Bank of Punjab, Vysya Bank are said to be on the lookout. The UTI bank- Global Trust Bank merger however opened a pandora’s box and brought about the realization that all was not well in the functioning of many of the private sector banks.

Private sector Banks have pioneered internet banking, phone banking, anywhere banking, mobile banking, debit cards, Automatic Teller Machines (ATMs) and combined various other services and integrated them into the mainstream banking arena, while the PSBs are still grappling with disgruntled employees in the aftermath of successful VRS schemes. Also, following India’s commitment to the W To agreement in respect of the services sector, foreign banks, including both new and the existing ones, have been permitted to open up to 12 branches a year with effect from 1998-99 as against the earlier stipulation of 8 branches.

Tasks of government diluting their equity from 51 percent to 33 percent in November 2000 has also opened up a new opportunity for the takeover of even the PSBs. The FDI rules being more rationalized in Q1FY02 may also pave the way for foreign banks taking the M& A route to acquire willing Indian partners.

Meanwhile the economic and corporate sector slowdown has led to an increasing number of banks focusing on the retail segment. Many of them are also entering the new vistas of Insurance. Banks with their phenomenal reach and a regular interface with the retail investor are the best placed to enter into the insurance sector. Banks in India have been allowed to provide fee-based insurance services without risk participation, invest in an insurance company for providing infrastructure and services support and set up of a separate joint- venture insurance company with risk participation.

Aggregate Performance of the Banking Industry

Aggregate deposits of scheduled commercial banks increased at a compounded annual average growth rate (Cagr) of 17.8 percent during 1969-99, while bank credit expanded at a Cagr of 16.3 percent per annum. Banks’ investments in government and other approved securities recorded a Cagr of 18.8 percent per annum during the same period.

In FY01 the economic slowdown resulted in a Gross Domestic Product (GDP) growth of only 6.0 percent as against the previous year’s 6.4 percent. The WPI Index (a measure of inflation) increased by 7.1 percent as against 3.3 percent in FY00.

Similarly, money supply (M3) grew by around 16.2 percent as against 14.6 percent a year ago.

The growth in aggregate deposits of the scheduled commercial banks at 15.4 percent in FY01 percent was lower than that of 19.3 percent in the previous year, while the growth in credit by SCBs slowed down to 15.6 percent in FY01 against 23 percent a year ago.

The industrial slowdown also affected the earnings of listed banks. The net profits of 20 listed banks dropped by 34.43 percent in the quarter ended March 2001. Net profits grew by 40.75 percent in the first quarter of 2000-2001, but dropped to 4.56 percent in the fourth quarter of 20002001.

On the Capital Adequacy Ratio (CAR) front while most banks managed to fulfill the norms, it was a feat achieved with its own share of difficulties. The CAR, which at present is 9.0 percent, is likely to be hiked to 12.0 percent by the year 2004 based on the Basle Committee recommendations. Any bank that wishes to grow its assets needs to also shore up its capital at the same time so that its capital as a percentage of the risk-weighted assets is maintained at the stipulated rate. While the IPO route was a much-fancied one in the early ‘90s, the current scenario doesn’t look too attractive for bank majors.

Consequently, banks have been forced to explore other avenues to shore up their capital base. While some are wooing foreign partners to add to the capital others are employing the M& A route. Many are also going in for right issues at prices considerably lower than the market prices to woo the investors.

Interest Rate Scene

The two years, post the East Asian crises in 1997-98 saw a climb in the global interest rates. It was only in the later half of FY01 that the US Fed cut interest rates. India has however remained more or less insulated. The past 2 years in our country was characterized by a mounting intention of the Reserve Bank Of India (RBI) to steadily reduce interest rates resulting in a narrowing differential between global and domestic rates.

The RBI has been affecting bank rate and CRR cuts at regular intervals to improve liquidity and reduce rates. The only exception was in July 2000 when the RBI increased the Cash Reserve Ratio (CRR) to stem the fall in the rupee against the dollar. The steady fall in the interest rates resulted in squeezed margins for the banks in general.

Governmental Policy:

After the first phase and second phase of financial reforms, in the 1980s commercial banks began to function in a highly regulated environment, with administered interest rate structure, quantitative restrictions on credit flows, high reserve requirements and reservation of a significant proportion of lendable resources for the priority and the government sectors. The restrictive regulatory norms led to the credit rationing for the private sector and the interest rate controls led to the unproductive use of credit and low levels of investment and growth. The resultant ‘financial repression’ led to decline in productivity and efficiency and erosion of profitability of the banking sector in general.

This was when the need to develop a sound commercial banking system was felt. This was worked out mainly with the help of the recommendations of the Committee on the Financial System (Chairman: Shri M. Narasimham), 1991.

The resultant financial sector reforms called for interest rate flexibility for banks, reduction in reserve requirements, and a number of structural measures. Interest rates have thus been steadily deregulated in the past few years with banks being free to fix their Prime Lending Rates(PLRs) and deposit rates for most banking products. Credit market reforms included introduction of new instruments of credit, changes in the credit delivery system and integration of functional roles of diverse players, such as, banks, financial institutions and non-banking financial companies (Nbfcs).

Domestic Private Sector Banks were allowed to be set up, PSBs were allowed to access the markets to shore up their Cars.

Implications Of Some Recent Policy Measures:

The allowing of PSBs to shed manpower and dilution of equity are moves that will lend greater autonomy to the industry. In order to lend more depth to the capital markets the RBI had in November 2000 also changed the capital market exposure norms from 5 percent of bank’s incremental deposits of the previous year to 5 percent of the bank’s total domestic credit in the previous year. But this move did not have the desired effect, as in, while most banks kept away almost completely from the capital markets, a few private sector banks went overboard and exceeded limits and indulged in dubious stock market deals. The chances of seeing banks making a comeback to the stock markets are therefore quite unlikely in the near future. The move to increase Foreign Direct Investment FDI limits to 49 percent from 20 percent during the first quarter of this fiscal came as a welcome announcement to foreign players wanting to get a foot hold in the Indian Markets by investing in willing Indian partners who are starved of net worth to meet CAR norms. Ceiling for FII investment in companies was also increased from 24.0 percent to 49.0 percent and have been included within the ambit of FDI investment.

IDBI bank: all about

The economic development of any country depends on the extent to which its financial system efficiently and effectively mobilizes and allocates resources.

There are a number of banks and financial institutions that perform this function; one of them is the development bank. Development banks are unique financial institutions that perform the special task of fostering the development of a nation, generally not undertaken by other banks.

Development banks are financial agencies that provide medium-and long-term financial assistance and act as catalytic agents in promoting balanced development of the country. They are engaged in promotion and development of industry, agriculture, and other key sectors. They also provide development services that can aid in the accelerated growth of an economy.

The objectives of development banks are:

• To serve as an agent of development in various sectors, viz. industry, agriculture, and international trade
• To accelerate the growth of the economy
• To allocate resources to high priority areas
• To foster rapid industrialization, particularly in the private sector, so as to provide employment opportunities as well as higher production 
• To develop entrepreneurial skills
• To promote the development of rural areas
• To finance housing, small scale industries, infrastructure, and social utilities.

2.2 Introduction to the Bank

IDBI the tenth largest development bank in the world has promoted world class institutions in India. A few of such institution built by IDBI are the National Stock Holding Corp. (NSE), the National Securities Depository Services Ltd.( NSDL ) Stock Holding Corp. of India (SHICL) etc. IDBI is a strategic investor in a plethora of institutions, which have revolutionized the Indian Financial Markets.

IDBI promoted IDBI BANK to mark the formal foray of the Idbi group into commercial Banking. Idbi Bank, which began with an equity capital base of Rs. 1000 million (Rs.800 million contribute by IDBI and Rs. 200 millions by SIDBI), commenced its first branch at Indore in November 1995.

The birth of Idbi bank took place after RBI issued guidelines for entry of new private sector banks in January 93. Subsequently, IDBI as promoters sought permission to establish a commercial bank and retained KPMG a management consultant of international repute to prepare the principle approval to establish Idbi bank on February 11th 1994 thereafter the bank was incorporated at Gwalior under companies act on 15th September 1994 with its registered office at Indore. The Certificate of Commencement of Business was received on 2nd December 1994. Bank’s registered office is in Indore and Head Office in Mumbai.

One of the reason for the growth of Indian banks like ICICI and IDBI is that they have been allowed freedom to open any no. of branches in a particular city or suburb. They have also been given the freedom to open ATMs unlike in both cases the foreign banks who have been restricted in both of these areas.

2.3 Management & Organisation

IDBI Bank is a Board-managed organisation. The responsibility for the day-to-day management of operations of the Bank is vested with the Chairman & Managing Director and two Deputy Managing Directors, who draw upon the support and expertise of a cross- disciplinary Top Management Team. As on March 31, 2008, IDBI Bank had a combined employee base of 8989, including professionals from the fields of accountancy, management, engineering, law, computer technology, banking and economics.

Mr. Yogesh Agarwal,

Chairman & Managing Director

Mr. Jitender Balakrishnan, Mr. O.V. Bundellu,

(Deputy Managing Director) (Deputy Managing Director)

OTHER BOARD OF DIRECTORS

2.4 IDBI Bank business chart

2.5 IDBI bank organizational chart

2.6 Products & Services

Free services

Following services are provided to every type of A/C holder in general-

ATMs :

Besides cash withdrawals, some of the important things that you can do through the International Debit cum ATM card are :

Balance Enquiry
Statement Request
Cheque-book Request
Mini statements
Cheque and Cash Deposits
International usage
Make purchases at 51,000 merchant establishments in India and over
10 million worldwide.
Fabulous discounts and great deals at various establishments

Internet Banking:

Internet Banking gives you the power to access your bank account from your Personal Computer. Some of the important features of Internet Banking are :
Account Balance Inquiry
Transaction tracking and history
Cheque status inquiry
Funds transfer facilities to Own-account or third-parties
Cheque book Requests
Stop payment Requests
FD renewal Requests

Phone Banking:

Just pick up your phone and access your account. The following features are available through Phone Banking :
Available round the clock 24*7*365
Current Balance Inquiry
Last 5 transactions inquiry
Statement by fax – fax-back, fax to another number, fax to
registerednumber, Statement by mail
Cheque status enquiry
Cheque book request
Balance as of a particular date

Mobile Banking:

The unique feature is that this facility is available across all mobile service providers.
Balance enquiry
Details of Last three transactions
Cheque payment status
Cheque book request
Statement request

Other services

Sunday Banking

Some of our branches are also open on Sundays that gives you an opportunity to complete all your banking requirements at your convenience.

Locker

Our branches provide lockers facility at nominal charges

Who can open Account?

Resident Individuals, Minors, Hindu Undivided Family (HUF), Trusts, Associations, Clubs, Societies, Foreign National residing in India can open a/c.

Documents required for Account Opening:

Account opening form

Latest passport size photograph

Self cheque or cash deposit

Copy of passport

In the absence of passport copy, copy of one document each from List A and List B is required:

List A

Voter’s ID card *

Defense services Id/ Government ID

Driving License *

PAN card

Photo credit card

List B

Latest bank account/credit card statement

Latest electricity/telephone/mobile phone bill

Latest copy of LIC policy or insurance premium receipt

Latest copy of NSC

Letter from employer certifying current mailing address

Latest house lease agreement

SuperSavings Account

An assortment of benefits, earnings and convenience.

Be it happiness in life or more time for yourself, you have always desired more of it. So why settle for less with your savings account?

The SuperSavings Account is a complete financial package that provides you with easy access to your money and complete banking convenience too. It offers you a whole range of options for optimal management of your money.

Which means, with SuperSavings Account you not only save your money but also make it grow.

So apart from the basic benefits of a savings account, we offer you options for faster transfer of funds, options to pay your bills or tax online and options to grow money at attractive interest rates in the savings account. All these features are offered for a minimum balance of Rs 5,000. Please click on the links given below to find out more about each of these features.

The SuperSavings Account is a complete financial package that provides you with easy access to your money and complete banking convenience too. It offers you a whole range of options for optimal management of your money.

Which means, with SuperSavings Account you not only save your money but also make it grow.

Roaming Current Account

A Current account for every business

No two businesses are the same, which is why IDBI Bank offersfive Roaming

Current Accounts – Gold to suit your

business needs. Based on the balance you choose to maintain in the account, you can then choose your specific Roaming Current Account accordingly.

IDBI Bank Current Accounts not only gives you the flexibility of banking anytime, anywhere, but also allows you to save more money while doing business across the country.

Roaming Current Account from IDBI Bank comes packed with a host of services and facilities that makes your banking convenient and hassle-free.

With services such as multi-city and multi-branch banking, electronic funds  transfers, national clearing in selected cities, 24×7 cash withdrawals from ATMs, Internet Banking, Phone Banking and SMS Banking, you are assured of faster remittances and collection of funds at competitive rates. What’s more, extended IDBI Banking hours and Sunday Banking, all this to simplify banking for you!

Features:-

• Make payments to your vendors in different cities without any costs.
• Receive payments form your customers without any charge deducted from the amount
• Do all your banking right from where you are or wherever you travel
• Most importantly, maintain better relations with your vendors and customers.

All this, only with the IDBI Bank RoamingCurrent Account.

You can open a Current Account (Basic RoamingCurrent Account)with only Rs 10,000. Keep in mind, you will have to maintain an average quarterly balance of Rs 10,000. But this is nothing compared to a host of services and facilities that will make your current account work more effectively and efficiently.

Open Current Accounts

Following can open current A/c:

Sole Proprietorship Firm

Partnership firm

Private and Public Limited Companies

Hindu Undivided Family

Trusts

Societies, Clubs & Associations

Documents required for account opening:

Sole Proprietorship

Account opening form

Signed declaration in the Account Opening form

Passport Copy or Self-cheque along with a copy of (any one)

>>

Voter ID card

>>

Defence Id/Govt ID

>>

Driving License

>>

PAN card

>>

Photo credit card

In addition the following forms are required

Proof of existence of sole proprietorship firm (any one)

>>

Electricity/Telephone bill for the sole proprietorship firm

>>

Shop and Establishment certificate

>>

Proof of PAN /GIR No or Form 60 (only for cash deposits)

>>

Latest passport sized photograph of the sole proprietor

If the address mentioned in any of the above documents is different from that stated in the account opening form, kindly submit any one of the following to confirm the present address

>>

Ration card

>>

gas connection receipt

>>

latest telephone bill

>>

latest electricity bill

Partnership firm

Account opening form

Signed declaration in the Account Opening form

Passport copies of all partners or Self-cheque along with a copy of (any one)

>>

Voter ID card

>>

Defence Id/Govt ID

>>

Driving License

>>

PAN card

>>

Photo credit card

In addition the following forms are required

Proof of existence of partnership firm (any one)

>>

Shop and Establishment certificate

>>

Copy of registration certificate

>>

Copy of partnership deed

>>

Letter of consent signed by all partners (as per banks format)

Private Limited and Public Limited Companies

Account opening form

Copy of certificate of incorporation

Names and latest passport sized photographs of the authorized signatories

Certified true copy of memorandum and articles of association

Certified true copy of commencement of business

PAN /GIR No details or Form 60

Names, addresses of directors of the companies

Certified true copy of board resolution

Hindu Undivided Family

Account opening form

Signed declaration by Karta and Co-parcenors in the Account opening Form

Names and signatures addresses of Karta and co-parcenors

Names, signatures and latest passport sized photographs of authorized signatories

PAN /GIR No details or Form 60

Trusts

Account opening form

Copy of Trust Deed

Copy of the resolution of the Trustees

Copy of registration certificate

Names and latest passport size photographs of the authorized signatories

Names, addresses of the trustees

Clubs/Societies and Associations

Names and signatures and latest passport sized photographs of authorized signatories

Copy of rules and by-laws

Copy of the resolution of members for account operation

Copy of registration certificate

Account Opening Form

Idbi bank’s Business Special Current account gives a host of free services and facilities that ensure optimal utilization of funds, higher liquidity and cost savings. At he same time you don’t have to keep a higher minimum balance. You need to keep an Average quarterly balance of Rs. 50,000 only to avail the free services

 

Business Premium – Bronze (Rs. 1 lac-AQB)

Type of Accounts: Bronze

• Average Quarterly Balance (AQB):1lac
• Free funds transfers (per month)
• Cheque payable locally (in over 65 idbi bank locations) :1.5 cr
• Demand Draft per day (on over 65 idbi bank locations) :10 lack
• Demand Draft (on over 300 non-idbi bank locations) :chargeable
• Electronic Funds Transfers :1.5 cr

Pay Orders : un limited

• Free cheque collection (per month)
• Outstation cheque collection (on idbi bank locations) :50 lac
• Daily cheque pick-up from your establishment* :Yes
• Free Inter-branch banking
• Any branch cash withdrawal (per day) : 1lac
• Any branch cash deposit (per day) : Rs 20,000
• Total limit for Free transactions (per day) : 6.86 cr
• Cost saving to the customer per year : 16 lac

Also available Basic Current Account (AQB of Rs 10,000). you get monthly statement of account, certificate of balance, seep-in from FD and Net, Phone and Mobile banking facilities – all FREE

Business Premium – Silver (Rs. 3 lacks -AQB)

Types of Accounts: Silver

Ø Average Quarterly Balance (AQB):3lac