Customer Relationship Management In Indian Retail Banking

A Project Study Report On

“CUSTOMER RELATIONSHIP MANAGEMENT IN INDIAN RETAIL BANKING” Submitted in partial fulfillment for the Award of degree of Master of Business Administration 2008-2010

Maharaja College of Management (Affiliated to Rajasthan Technical University, Kota) Submitted By: PUNEET AUDICHYA CHOPRA MBA Sem. IV

Submitted To:Mrs. ANAMICA FACULTY MCM

DECLARATION I hereby declare that the work incorporated in the present research project entitled:

“CUSTOMER RELATIONSHIP MANAGEMENT IN INDIAN

RETAIL BANKING”

is my own work and is original in nature. This work

(in Part or in full) has not been submitted to Rajasthan Technical University, Kota for the award of a degree.

Place: Date:

PUNEET AUDICHYA MBA Semester-IV

1

CERTIFICATE I feel great pleasure in certifying that the research project entitled “CUSTOMER RELATION SHIP MANAGEMENT IN INDIAN RETAIL BANKING”

embodies a record of the result of investigations carried out AUDICHYA

by PUNEET

under my guidance.

I am satisfied with the analysis of the data, interpretation of results and conclusions drawn. I recommend the submission of research project.

Place: Udaipur

Mrs. Anamica

Chopra Date:

2

ACKNOWLEDGEMENT I express my sincere thanks to my project guide, Mrs. Anamica Chopra, Senior Lecturer, Marketing, for guiding me right from the inception till the successful completion of the project. I sincerely acknowledge him/her/them for extending their valuable guidance, support for literature, critical reviews of project and the report and above all the moral support she/they had provided to me with all stages of this project. I would also like to thank the supporting staff of Maharaja College of Management, for their help and cooperation throughout our project.

PUNEET AUDICHYA

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PREFACE

The viewing of the marketing in business administration of an organization is a fast growing concept in India. Marketing in any undertaking requires aptitude, skills, expertise, knowledge and efforts in sales as well as marketing. Marketing is considered to be the most valuable asset of the organization in revenue generation, which is greatly influenced by the performance of its executives. All professional post graduates course like MBA/PGDBM envisage for a student to acquire proficiency in academic knowledge as well as its application in practice by way of exposure to the business world. Industrial training is therefore a part of MBA/PGDBM curriculum, which helps in developing analytical and interpreting skills in the students through application of several concepts of management to understand the functioning of industries. This training was conducted in Kotak Mahindra Bank.

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INDEX S.NO. CONTENTS

PAGE NO.

1

Chapter 1. – Introduction of Industry

1-5

2.

Chapter 2. – Company Profile

6-26

3.

Chapter 3. – Introduction to CRM

27-75

4.

Chapter 4. – Research Methodology

76-78

Title of the Study. Objective of the Study. Scope of the study Types of Research / Method of conducting research. Limitations of Study. 5.

Chapter 5 - Analysis and Interpretation

79-89

6.

Chapter 6. - Comparative Analysis

90-94

7.

Chapter 7.- SWOT Analysis

95-97

8.

Conclusion.

98-100

9.

Suggestion and Recommendation.

101-103

10.

Bibliography

104-105

11.

Annexure - Questionnaires

106-113

.

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INTRODUCTION OF INDUSTRY

WHAT IS BANKING?

Banking in a traditional sense is the business of accepting deposits of money from public for the purpose of lending and investments. These deposits can have

6

a distinct feature of being withdrawal by cheques, which no other financial institution can offer. In addition, banks also offer various other financial services, which includes: – • Issuing Demand Draft and Travelers Cheques • Credit Card • Collection of Cheques, Bills of Exchange • Safe Deposit Lockers • Issuing Letters of Credit and Letters of Guarantee • Sale and Purchases of Foreign Exchange • Custodial Services • Investment and Insurance services The business of banking is highly regulated since banks deal with money offered to them by the public and ensuring the safety of this public money is one of the prime responsibilities of any bank. That is why banks are expected to be prudent in their lending and investment activities. Every bank has Compliance department, which is responsible to ensure that all the services offered by the banks and the processes followed are in compliance with the local regulation and the bank’s corporate policies: • Banking Regulation Act, 1949 • Foreign Exchange Management Act, 1999 • Indian Contract Act, 1872 • Negotiable Instrument Act, 1881 Banks lend money either for productive purposes to individuals, firm corporate etc. or for buying house property, cars and other durable and for investment purposes to individuals and others.

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However banks do not finance any speculative activity. Lending is risk taking; having prudent norms for lending should cover the risk. The depositors of banks are also assured of their money by deploying some percentage of deposits in statutory reserve like SLR and CRR.

BANKING INDUSTRY IN INDIA Banking in India has its origin as early as the Vedic period. It is believed that the transition from money lending to banking must have occurred even before Manu. The great Hindu Jurist, who has devoted a section of his work to deposits and advances and lay down rules relating to rate of interest. During the Mogul period, the indigenous banker played a very important role in lending money and financing foreign trade and commerce. During the days of the East India Company it was the turn of the agency houses to carry on the banking business. The General Bank of India was the first joint Stock Bank to be established in the year 1786. The others, which followed, were the Bank of Hindustan and Bengal Bank. The bank of Hindustan is reported to have continued till 1906 while the other two failed in the meantime. In the first half of the 19th century of East India Company establish three banks; The Bank of Bengal in 1809, the Bank of Bombay in 1840 and the bank of madras in 1843. These three banks also known as presidency Bank were independent units and functioned well. These three banks were amalgamated on 27th January 1921. With the passing of the State Bank of India Act in 1955 the Reserve Bank of India Act 1934. In the wake of the Swadeshi Movement, a number of bank with Indian management were establish in the country namely, Punjab National Bank Ltd., Bank of India Ltd., the Central Bank of India Ltd., Indian Bank Ltd., the Bank of Baroda Ltd., and the Central Bank of India Ltd. On July 19, 1969 fourteen major banks of the

8

Country were nationalized & in 15th April 1980 six more commercial private sector banks were also taken over by the Government. Today the commercial banking system in India may be distinguished into: PUBLIC SECTOR BANKS: State Bank of India & its associate bank called the State Bank Group, 20 nationalized banks, Regional Rural Banks mainly sponsored by public sector banks Old generation private bank, New generation private bank, foreign banks in India, Scheduled co-operative bank, non-scheduled banks. CO-OPERATIVE SECTOR BANKS: The co-operative sector has been developed in the country to the supplement the Village moneylender. The co-operative banking sector in India is divided into four components State Co-operative Banks, Central Co-operative Banks, Primary Agriculture Credit Societies, Land Development Banks, Urban Cooperative banks, Primary Agriculture Development Banks, Primary Land Development Banks, and State Land Development Banks. DEVELOPMENT BANKS: Industrial Finance Corporation of India (IFCI) Industrial Development Bank of India (IDBI) Industrial Credit and Investment Corporation of India (ICICI) Industrial Investment Bank of India (IIBI) Small Industrial Development Bank of India (SIDBI) National Bank for Agriculture and Rural Development (NABARD) Export Import Bank of India (EXIM) NATIONAL HOUSING BANK: The Indian banking can be broadly categorized into Nationalized, Private Banks & Specialized Banking Institution. The RBI Acts as a centralized body,

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monitoring and discrepancies and short coming in the system. Since the Nationalization of Banks in 1969, the public sector banks have accrued a place of prominence and have since then seen tremendous progress. Conservative banking practices allowed India Banks to be insulated partially form the Asia currency crises, India banks are now quoting all higher valuation when compared to Bank to other Asian countries that have major problems linked to huge NPA’s and payment defaults. Co-operative banks are nimble footed in approach and armed with efficient branch network focus primarily on the high revenue niche retail segments. The India banking was finally worked up to the competitive dynamic of the new India market and is addressing the relevant issues to take on the multifarious challenges of globalization. Private Banks has been fast on the uptake and is reorienting their strategies using the interest as a medium. The Internet has emerged as the new and challenging frontier of marketing. The large dose of liberalization have largely brought this transformation and economic reforms that allowed banks to explore new business opportunities rather generating revenues from conventional streams i.e. borrowing and lending. The banking in India is highly fragmented with banking unit contributing to almost 55 of deposits and 60% of advances. Indian nationalized banks continue to be the major lender in the economy due to their sheer size and penetrative networks which assures them high deposit mobilization. The India banking can be broadly categorized into nationalized, private banks and specialized banking institutions. The RBI acts as a centralized body monitoring any discrepancies and shortcoming in the system. It is foremost monitoring body in the Indian financial sector. The nationalized banks continue that out of commercial banks operating in India, banks are in the public sector and 5 are in the private sector.

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COMPANY PROFILE

11

KOTAK MAHINDRA GROUP KOTAK MAHINDRA GROUP is one of India's leading financial institutions, offering complete financial solutions that encompass every sphere of life. From commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the financial needs of individuals and corporate. The group has a net worth of around Rs.2900 Crores and employs over 8800employees in its various businesses. With a presence in 74 cities in India and offices in New York, London, Dubai and Mauritius, it provides services to a customer base of over 500000. Kotak Mahindra has international partnerships with Goldman Sachs (one of the world's largest investment banks and brokerage firms), Ford Credit (one of the world's largest dedicated automobile financiers) and Old Mutual (a large insurance, banking and asset management conglomerate).

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THE JOURNEY SO FAR...

HISTORY OF GROUP The Kotak Mahindra Group was born in 1985 as Kotak Capital Management Finance Limited. Mr.Uday Kotak, Sidney A. A. Pinto and Kotak & Company promoted this company. Industrialists Harish Mahindra and Anand Mahindra took a stake in 1986, and that's when the company changed its name to Kotak Mahindra Finance Limited. Since then it's been a steady and confident journey to growth and success.

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1985

The company was incorporated on 21st November 1985 under the name Kotak Capital Management Finance Ltd. The Company has been promoted by Mr. Uday S. Kotak, Mr. S.A.A Pinto and Kotak & Company. The company obtained the certificate of commencement of business on 11th February 1986 and the Existing promoters were joined by Mr Harish Mahindra and Mr. Anand Mahindra. The company's name was changed on 8th April 1986 to its present name Kotak Mahindra Finance Ltd. - The Company deals in Bill discounting, leasing and hire purchase, corporate

finance,

management

of

fixed

deposit

mobilization, financing against securities, money market operations, consumer finance, investment banking and clients' money management 1986 1987

Kotak Mahindra Finance Limited starts the activity of Bill Discounting. Kotak Mahindra Finance Limited enters the Leases and Hire Purchase

1990

market. 3,08770 No. of equity shares subscribed for by the promoters, directors, 3,41,230 No. of equity shares allotted as rights as on 28.3.89. 19,50,000 shares issued as bonus (6,50,000 shares in prop. 1:1 as on 29.7.89 and 13,00,000 shares in prop. 1:1 as on 27.2.91). The Auto Finance

1991

Division is started The Investment Banking Division is started. Takes over FICOM, one of India’s largest financial retail marketing networks. An application was made to SEBI for approval for setting up a Mutual Fund trust and an asset management company. The newly set up Corporate Advisory Services Group received several mandates for advice on mergers and acquisitions and re-structuring.

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The Company's newly established Foreign Exchange Risk Management Service carters to the vast potential demand for price risk management. The Company established itself as a major leasing and hire-purchase company and as a source of finance for purchasers of automobiles. 1992

Enters the Funds Syndication sector. In January, the Company offered and allotted 15,50,000 - 14% secured partly convertible debentures of Rs 90 each for a total value of Rs 13.95 crores in the following manner: (i) 2,00,000 debentures to promoters, directors, etc. (ii) 77,500 debentures to employees (including working directors)/workers on preferential basis (iii) 12,72,500 debentures to Indian public through prospectus. - Additional 30,000 debentures to promoters, directors, etc., 9,500 debentures to employees and 1,93000 debentures to Indian public were allotted to retain oversubscription. - As per the terms of debenture issue, a portion of Rs 45 of each debenture of Rs 90 was to be converted into 1 equity share of Rs 10 each at a premium of Rs 35 per share as on the date of allotment of the debentures. Accordingly 17,82500 No. of equity shares allotted as on 25th February, 1992, being the date of allotment of the debentures. The non-convertible portion of Rs 45 of each debenture would be redeemed at par in three equal installments of Rs 15, Rs 15 and Rs 15 at the end of the 7th, 8th and 9th year respectively from the date of allotment of the debentures. - In April, the Company has raised Rs. 18 crores by issue of Commercial Paper which has been awarded P1 + rating by Credit Rating and Information Services of India limited (CRISIL) indicating highest standards of safety.

1993

During February, the Company issued 69,82,500 Rights equity shares

15

of Rs 10 each at a premium of Rs 15 per share in proportion 1:1 (all were taken-up). Additional 13,950 shares were allotted to those who had applied for additional shares. - The Company issued through a Prospectus 4400000 No. of equity shares of Rs 10 each for cash at a premium of Rs 140 per share of which the following were reserved for allotment (i) 130000 shares to promoters,

directors,

their

relatives

etc.,

(ii)25000

shares

to

Foreign/Indian Financial Institutions (all were taken up). Of the remaining 50,000 shares reserved for allotment on a preferential basis to employees (only 34,600 shares taken up). Another 555000 shares to NRIs were reserved on non-repatriation basis (all were taken up). - Balance 3640000 shares, along with 15,400 shares not taken up by employees', were offered for public subscription. - At the 8th Annual General Meeting held on 28th September the Company has reserved 6122000 No. of equity shares of Rs 10 each for cash to be allotted at such issue price as may be decided by the board to Foreign Institutional Investors and/or, Foreign and/or Indian Pension and/or Mutual and/or other Funds and/or Institutions, Banks, Companies, Bodies and/or individuals and/or Groups of Individuals. - The Company's newly set up Corporate Advisory Services Group received several mandates for advice on mergers and acquisitions and re-structuring and some have already been executed with success. 1994

The Company entered into a Memorandum of Understanding with KB Currency Advisors Inc. USA to market their Foreign Exchange Fund Management programme. - 183,65,500 Rights equity shares issued in prop. 1:1. 11,800 No. of

16

equity shares forfeited. - The Company has received the approval of Securities and Exchange 1995

Board of India (SEBI) for setting up a Mutual Fund. Brokerage and Distribution businesses incorporated into a separate company - Kotak Securities. Investment Banking division incorporated into a separate company Kotak Mahindra Capital Company. The Company issued 400000 - 17% Secured Redeemable Non-convertible Debenture of Rs 2500 each including 96000 - 16% NCDs reserved for NRIs/URB (only 9510 taken-up). Unsubscribed portion of 90 debentures issued to the public. These are redeemable at par on 7.3.2001 with an option for early redemption up to a maximum of 5% of the issue amount every year. The Company entered into a joint venture agreement with Ford Credit International Inc. (FCI), a subsidiary of Ford Motor Credit Co., USA. It was proposed to finance all non Ford Passenger cars.

1996

Kotak Mahindra Capital company became a subsidiary of the Company The Auto Finance Business is hived off into a separate company Kotak Mahindra Primus Limited. Kotak Mahindra takes a significant stake in Ford Credit Kotak Mahindra Limited, for financing Ford vehicles. The launch of Matrix Information Services Limited marks the Group’s entry into information distribution. The Company's operations were affected by the liquidity crunch, scarcity of resources, sluggishness in the capital markets and the overall deceleration of economic growth. The Company has entered into a MOU with the Chubb Corporation, New Jersey, U.S.A., one of the largest American Insurance firms, to develop a Joint Venture dedicated to the conduct of casuallity and property insurance business in India. 17

The Company has invested a sum of about Rs 200 lakhs in Matrix Information Services private Ltd. (Matrix), a company formed for providing comprehensive value added information to business and general users. Matrix is a wholly owned subsidiary of the company. The Company has divested its entire holding of 20,00,070 No. of equity shares of Rs 10 each of Kotak Mahindra Securities Ltd. (KMSL) and 20,00,000 ordinary shares of US $ 1 each of Kotak Mahindra International Ltd. Hamko Financial Services Ltd., Kotak Mahindra Securities Ltd., provides of broking services to institutional and corporate clients, Kotak, Mahindra Asset Management Company, Kotak Mahindra International Ltd., an offshore company and Kotak Mahindra (UK) Ltd., are all subsidiaries of the Company. The Company's public issue of 400000 16-17% Secured Redeemable Non-Convertible Debentures of Rs.2500 each for cash at par aggregating Rs.100 crores in January. 1997

In recognition of the Company's prudent funds management, CRISIL has assigned a rating of AA+ to the Company's public issue of NonConvertible Debentures and P1+ for all short term borrowings up to Rs.35000 lakes. Kotak Mahindra Finance Ltd. has decided to venture into health insurance business. Kotak Mahindra Finance has launched a new consumer finance product called Kotak Mahindra K-Value. Hamko is a 100 per cent subsidiary of KMFL and investment in it was structured to avoid limitations of Section 372 under the Companies Act. The company has diversified into various activities for which it has set

18

up subsidiaries including broking, capital market activities, auto finance, etc

1998

Enters the Mutual Fund market with the launch of Kotak Mahindra Asset Management Company. Kotak Mahindra Asset Management Company Limited (KMAMCL) launched its mutual fund schemes in December. The Company it would launch its mutual fund with two schemes -KGilt Unit Scheme and K30 Unit Scheme. Kotak Mahindra Finance is a joint venture with Goldman Sachs.

1999

The `FAA' (pronounced `F double A') rating assigned to the fixed deposit programme of Ford Credit Kotak Mahindra (FCKM) has been reaffirmed. the allotment to the Company of 50,000 equity shares of Rs. 10 each by Kotak Mahindra Trustee Company Limited (KMTCL) on 12th May

2000

Kotak Mahindra ties up with Old Mutual Plc. for the Life Insurance business. Kotak Securities launches kotakstreet.com - its on-line broking site. Formal commencement of private equity activity through setting up of Kotak Mahindra Venture Capital Fund. Kotak Mahindra Finance Ltd (KMFL) and Chubb Corporation of the US have decided to call off their joint venture for entering the general insurance business in India. The Company has decided to set up a venture capital fund with an initial corpus of Rs. 100 crore.

19

KMFL has set up a new asset reconstruction division to offer recovery management services to players in the financial services industry. The Company Issue of 91,82,500 No. of Equity Shares of Rs. 10/- each for cash at a premium of Rs. 90/- per share aggregating Rs. 91,82,50,000 to the Equity Shareholders of the Company on Rights basis in the ratio of one equity share for every our equity shares held on 15th February. Mr. K.K. Sheth has resigned effective from May 8. Kotak Securities an affiliate of Kotak Mahindra Finance Ltd., has launched electronic broking services for retail investors. Kotak Mahindra Finance is in talks with foreign insurers for a joint venture in the life insurance business. The Company has proposed to start-up capital of Rs 150 crore in its life insurance joint venture with Old Mutual, the UK based financial services group. The Company proposes to make the necessary applications to the RBI and the Insurance Regulatory and Development Authority for entering the life insurance business. OM Kotak Mahindra Life Insurance Company, the recently formed joint venture company of Kotak Mahindra Finance and Old Mutual Plc has filed its application for approve of life insurance license on 1st September. Kotak Mahindra Finance Ltd has been assigned And AAA rating (indicating highest credit quality) for its Rs.510 million medium term borrowing programme. Fitch India has assigned a rating of Ind AAA to the Rs 51-crore medium term borrowing program of Kotak Mahindra Finance Ltd for 20

high credit quality and negligible risk factor. 2001 The Company recommended a swap ratio of 25 shares of KMFL for every share of Pannier Trading which has a 75 per cent equity stake in Kotak Securities. The Bharath Petroleum Corporation Ltd (BPCL) has decided to part ways with Kotak Mahindra, one of the leading domestic financial 2002

services company, in its convenient store venture In & Out. Matrix sold to Friday Corporation Launches Insurance Services. KMFL's business has seen a fast growth with the total disbursement of commercial vehicle loan of the company in the last fiscal was tuned to Rs. 250cr. RBI has given in-principle approval to Kotak Mahindra Finance Ltd to convert itself into a bank, thereby becoming the first ever non-banking finance company converted into a bank. Mr Uday Kotak says, there won't be any fresh capital infusion in the bank in the near future. KMFL informed BSE the FITCH ratings assigned: Fixed Deposit Programme - Ind AAA Non-Convertible Debenture - Ind AAA Mr.Ajay Sondhi has been appointed as the Additional Director of Kotak Mahindra Finance Ltd. Kotal Mahindra Finance Company has shortlisted i-flex solutions 'Flexicube' and 'Infosys', 'Finnacle' for its core banking solutions. KMFL has raised 76.22cr by selling securitized commercial vehicle loans to investors. CRISIL has assigned ‘AAA (SO)' rating for Rs.83cr securitization Programme of Kotak Mahindra Finance Ltd. 21

Mr.Uday Kotak has been appointed as the Executive Vice Chairman and Managing Director of the company. Kotak Mahindra Finance Ltd has mobilized Rs.10489cr , asset-backed securitization of commercial vehicle receivables. Business Standard and Business Standard digital have ceased to be the subsidiaries of Kotak Mahindra Finance Ltd. Mr.C Jayaram and Mr. Dipak Gupta are appointed as whole time Directors on the Board of Kotak Mahindra Finance Ltd. 2003

Finance limited converts to a commercial bank-the first Indian company to do so. Madison Communications has won the Rs.30cr Kotak Mahindra's media AOR account. The proposal of changing the name from 'Kotak Mahindra Finance Ltd' to 'Kotak Mahindra Bank Ltd' and the proposal to change the Authorized capital from 100,00,00,000 divided into 10,00,00,000 equity shares of Rs.10 each has been approved by the company shareholders. RBI has granted license to Kotak Mahindra Finance Ltd to embark on its banking business. O & M has got the creative account of Kotak Mahindra Bank, and has said to be working professionally. Kotak Mahindra Bank has received a lot of interest from portfolio investors, private equity investors and potential strategic investors. Kotak Mahindra Bank has entered into an ATM sharing agreement with UTI Bank, which would allow KMB's customer free access to around 800 ATM's. Kotak Mahindra Bank has started its operations in New Delhi by

22

inaugurating a branch Cannaught place office. Dr.Shankar Acharya has been appointed as the Additional Director to the board of the bank. The Board of Kotak Mahindra Bank Ltd accepts the resignation of Mr.S.A.A Pinto and Mr.M.R Punja as the Directors of the Bank. Kotak Mahindra Investment Co Ltd. PCC a subsidiary of Kotak Mahindra Capital Company has constituted itself from a private company to a public limited co. and has changed its name to 'Global Investment Opportunities Fund Ltd'. Kotak Mahindra bank has unveiled several home finance products options which includes Home loan, Home equity Loan, Home loan transfer and Home improvement loans. Kotak Mahindra Bank launches online remittance services called, FUNDS to HOME for Non-resident Indians. In response to the repo rate cut by the RBI, the Kotak Mahindra Bank has reduced its lending rates in home loans. Kotak Mahindra Bank Limited has informed that the equity shares of the Bank have been delisted from the Delhi Stock Exchange Association Ltd w.e.f December 10, 2003. 2004

Launches India growth fund, a private equity fund. Kotak Mahindra Bank Limited has informed that the Bank's equity shares will be delisted from The Stock Exchange, Ahmadabad with effect from January 20, 2004. Kotak Mahindra Bank sets up branch in Surat Kotak Mahindra Mutual Fund has launched Kotak Opportunities, an open-ended equity growth scheme

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Kotak Mahindra Bank inks pact with Reuters 2005

Kotak group realigns joint venture in ford credit. Buys Kotak Mahindra Prime (formerly known as KM Primus Limited) and sells Ford Credit Kotak Mahindra Launches a real estate fund. Kotak Mahindra Bank purchases stressed assets worth Rs 1,000 cr Kotak Bank join hands with IndianNGOs.com Kotak Mahindra Bank invests Rs 25 cr in BFW

2006

Bought the 25% stake held by Goldman Sachs in Kotak Mahindra Capital and Kotak Securities. Kotak Mahindra joins hand HDFC Bank to share ATMs. Kotak Mahindra to buy out Goldman Sachs' stake in JVs Kotak Mahindra Bank sets up branch in Valsad Kotak Mahindra subsidiary acquires Ford Credit's auto portfolio

2007

Kotak Mahindra Bank Launches Home Banking, Improves Banking Experience. Kotak Mahindra Bank Launches Home Banking, Improves Banking Experience Kotak Mahindra Bank Launches Salary 2 Wealth Kotak Mahindra Bank Launches Kotak Gold Debit Card Kotak Mahindra Bank Ties up with Taxshax.com, Simplifies Filing of IT Returns

2008

Kotak Mahindra Asset Management Company Limited (KMAMCL) launched its mutual fund schemes in December. The Company it would launch its mutual fund with two schemes -24

KGilt Unit Scheme and K30 Unit Scheme. Kotak Mahindra Finance is a joint venture with Goldman Sachs. 1999 The `FAA' (pronounced `F double A') rating assigned to the fixed deposit programmes of Ford Credit Kotak Mahindra (FCKM) has been reaffirmed. With the allotment to the Company of 50,000 equity shares of Rs. 10 each by Kotak Mahindra Trustee Company Limited (KMTCL) on 12th May. - Kotak

2009

Mahindra Bank launched credit cards for its customers.

Kotak entered into tie up with Russia's top investment bank Kotak Mahindra Bank Wins IT Team of the Year for 3rd Consecutive Time at the Banking Technology Awards 2008

CORPORATE IDENTITY An idea in the highest sense of a word cannot be conveyed, but a symbol can be:

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The symbol of the Infinite Ka reflects our global Indian personality. The Ka is uniquely while its curve forms the infinity sign, which is universal. One of the basic tenets of economics is that man’s needs are unlimited. The Infinite Ka symbolizes that we have an infinite number of ways to meet those needs.

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VISION STATEMENT

 The global Indian financial services brand: our customers will enjoy

the benefits of dealing with a global Indian brand that best understand their needs and delivers customized pragmatic solutions across multiple platforms. We will be a world-class Indian financial services group. Our technology and best practices will be benchmarked along international lines while our understanding of customers will be uniquely Indian. We will be more than a repository of our customers’ savings. We, the group, will be a single window to every financial service in costumer’s universe.  The most preferred employer in financial services: A culture of

empowerment and a spirit of enterprise attracts bright minds with an entrepreneurial streak to join us and stay with us. Working with a homegrown, professionally-managed company, which has partnerships with international leader, gives our people a perspective that is universal as well as unique.  The most trusted financial services company: We will create an ethos

of trust across all our constituents. Adhering to high standards of compliance and cooperate governance will be an integral part of building trust.  Value creation: Value creation rather than size alone will be our business

driver

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KEY GROUP BUSINESSES:

Kotak Mahindra Capital Ltd

Kotak Securitie s Ltd

Kotak Mahindra Prime Ltd

Key Group Businesses

Kotak Old Mutual Life Insurance

Kotak Mahindra Bank Ltd

Kotak Mahindra AMC Ltd.

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KEY GROUP COMPANIES AND THEIR BUSINESSES: Kotak Mahindra Bank Ltd. is the Kotak Mahindra Group’s flagship company. Kotak Mahindra Finance Ltd that was established in 1985, was converted into a bank - Kotak Mahindra Bank Ltd in March 2003 thus becoming the first Indian finance company to be converted into a Bank. It’s banking operations offers a central platform for customer relationships across the group’s various businesses. The bank has a presence in the Commercial Vehicles, Retail Finance, Corporate Banking and Treasury and has recently entered the Housing Finance segment Kotak Mahindra Capital Company Kotak Mahindra Capital Company Limited (KMCC), India's premier Investment Bank and a Primary Dealer (PD) approved by the RBI, is a strategic joint venture between Kotak Mahindra Bank Limited and the Goldman Sachs Group, LLP. KMCC's core business areas include Equity Issuances, Mergers & Acquisitions, Structured Finance and Advisory Services, Fixed Income Securities and Principal Business. Kotak Securities Ltd., a strategic joint venture between Kotak Mahindra Bank Limited and the Goldman Sachs Group, LLP, is one of the India’s largest brokerage and securities distribution house. Over the years, Kotak Securities has been one of the leading investment broking houses catering to the needs of both institutional and retails investor categories with presence all over the country through franchisees and coordinators. Kotak Street - the retail arm of Kotak Securities Ltd., offers online and offline services well-researched expertise and financial products to the retail investors.

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Kotak Mahindra Primus Limited (KMP) is a joint venture between Kotak Mahindra Bank Ltd and Ford Credit International Inc., (USA) formed to finance all Ford passenger vehicles. KMP is one of the country’s leading players in car finance and is focused to financing and supporting automotive and automotive related manufacturers, dealers and retail customers.

Kotak Mahindra Asset Management Company (KMAMC), a subsidiary of Kotak Mahindra Bank, is the asset manager for Kotak Mahindra Mutual Fund (KMMF). KMMF manages funds in excess of Rs. 4000 crores and offers schemes catering to investors with varying risk- return profiles. It was the first fund house in the country to launch a dedicated gilt scheme investing only in government securities.

Kotak Mahindra Old Mutual Life Insurance Limited is a joint venture between Kotak Mahindra Bank Ltd. and Old Mutual plc. Kotak Life Insurance helps customers to take important financial decisions at every stage in life by offering them a wide range of innovative life insurance products, to make them financially independent.

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About Kotak Mahindra Bank

Kotak Mahindra Bank is the flagship company of the group. The company was incorporated in 1985 and over the years has spread its business into the entire spectrum of financial services, either directly or through subsidiaries Creating banking history Established in 1984, The Kotak Mahindra group has long been one of India's most reputed financial organizations. In February 2003, Kotak Mahindra Finance Ltd, the group's flagship company was given the license to carry on banking business by the Reserve Bank of India (RBI). This approval creates banking history since Kotak Mahindra Finance Ltd. is the first Finance company in

India

to

be

converted

to

a

bank.

The complete bank At Kotak Mahindra Bank, we address the entire spectrum of financial needs for individuals and corporate. From Retail Finance to Equities, Mutual Funds to Life Insurance and Investment Banking, we have the products, the experience, the infrastructure and most importantly the commitment to deliver pragmatic, end-to-end solutions that really work. A license authorizing the bank to carry on banking business has been obtained from the Reserve Bank of India in terms of Section 22 if the Banking Regulation Act, 1949. It must be distinctly understood, however, that in issuing the license, the Reserve Bank of India does not undertake any responsibility for the financial

31

soundness of the bank or the correctness of any of the statements made or opinion expressed in this connection.

MAIN RETAIL BANKING SERVICES:  Deposits • Savings Account • Current Account • Term Deposits  Investment Services • Demat • Mutual Funds • Banc assurance  Convenience Banking • Net Banking • Phone Banking • Home Banking • ATM Network • Global Debit Card • Mobile Banking & Alerts Loans • Personal Loans

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• Home Finance

INTRODUCTION TO “Customer Relationship Management in Indian Retail Banking”

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CUSTOMER RELATIONSHIP MANAGEMENT Customer relationship management (CRM) is developing into a major element of corporate strategy for many organizations. CRM, also known by other terms such as relationship marketing and customer management, is concerned with creation, development and enhancement of individualized customer relationships with carefully targeted customers and customer groups resulting in maximizing their customer life time value. Industry leaders are now addressing how to transform their approach to customer management. A new form of cross-functional marketing, i.e. CRM is replacing narrow functionally based traditional marketing. The traditional approach marketing has been continuously questioned in recent years. This approach emphasized on the management of the key marketing mix elements such as product, price, promotion, and place within the functional context of the marketing department. The new CRM approach, while recognizing these key elements still need to be addressed, reflect the need to create an integrated cross functional which focus on marketing – one which emphasizes keeping as well as winning customers. Thus the focus is shifting from customer acquisition to customer retention and ensuring the appropriate amount of time, money and managerial resources are directed towards these tasks. The adoption of CRM is being filled by a recognition that long-term relationship with customers is one of the most important assets of the organization and that information – enabled systems must be developed that will give them “customer

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ownership”. Successful ownership will create competitive advantage, which result in improved customer retention and profitability for the company. CRM an overview Businesses today are continually looking for ways to achieve a competitive advantage. Margins are shrinking, competition is increasing and industries are consolidating. While customer expectation intensify for quality, service and delivery, businesses are reducing staff and the same time searching for ways to arm employees with information to make better decisions and innovate. Customer is the most important asset in businesses. Consequently, applying some management resources to improve the customer’s experience and maximize the profit, potential of that asset is important. The concept of CRM as a strategy reflects the business process and technology that can be combined to optimize revenue, profitability and customer royalty. The CRM market is evolving rapidly and is one of the fastest growing market segments in application software .CRM has captured the mind share of senior executives across a variety of industries. With a rapid growth of E-customer applications and the increasing need to sell to and support customers through Internet, CRM solutions must provide a focal point for all the customers- facing activities across the channels.

What is Customer Relationship Management? 35

 It is a comprehensive approach that provides seamless coordination between sales, customer service, marketing and field support and other customer touching functions. CRM integrates people, process and technology to maximize relationship with all customers including ecustomers, distribution channels and suppliers.  It is customer focused business strategy designed to optimize revenue, profitability and customer royalty. By implementing a CRM strategy, an organization can improve the business processes and technology solutions around selling and marketing and servicing functions across all customer touch – (for example: web, e-mail, phone, fax, in- person). A primary objective of CRM is to provide the entire organization with a complete, 360 –degree view of the customer, no matter where the information resides or where the customer touch point occurred. Today, many businesses manage different customer relationships with multiple information systems, which weaken customer service and ultimate reduce total sales potential. To realize the benefits of CRM, it is important to have an integrated solution across all customers information systems, tying together the front and front offices for a complete view of the customers in order to serve them better.

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Why is it necessary? Many companies are turning to customer relationship management systems to better understand customer wants and needs. CRM applications often used in combination with data warehousing ecommerce application and call-center, which allows companies to assess information about customers buying history, preferences, complaints and other data so they can better anticipate what customer will want. The goal is to instill greater customer loyalty. Other benefits include:  The ability to provide faster response to customer inquiries.  Increase efficiency through automation.  Having a deeper knowledge of customers.  Getting more marketing of cross selling opportunities.  Identifying the most profitable customers.  Receiving the customer feedback that leads to new and improved product and services.  Doing One to One marketing. WHY NOW? What makes CRM appropriate for today’s environment? While there are many number of environmental factors and business advancement that impact and enable the real importance for CRM in today’s environment is competitive and differentiation. CRM promises to be competitive and differentiation in today’s environment.

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Organization today is finding it difficult to compete on the basis of product. Technology advancement has enabled the near immediate replication of product features and functions. It is just a matter of weeks between a product launch and saturation of the market. Just think about it, are there many products out there that are truly unique? Price, which has traditionally been another basis of competitive differentiation, is no longer a means for many to compete. Complex channel networks have caused parity pricing. Promotion strategies have similarly lessened as a means of differentiation. Clubs abound, special offer are the norm, and sales are continual. Place of distribution has likewise become less influential in the success or failure of a business. The Internet has created an avenue for even the smallest business to compete. While all these factors are still important, none of them can alone support the success of most business. CRM –the ability to provide a more meaningful sales and service experience promises to be means of differentiating, of providing customers with a reason to frequent your business rather than that of your competitors. Ownership of customer relationship provides exponentially greater rewards than differences in product, price, promotion or place of distribution could ever offer. All of these factors can even be mitigated if you can serve as the one stop provider that can identify. Quantify, and service customer’s need.

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Implementing CRM If CRM involves optimizing product, price, place of distribution, promotion, sales and service, why are so many companies struggling? Hasn’t anyone really mastered the art and science of CRM, and if not, why is it so difficult? CRM is difficult because it is an enterprise-wide initiative.  CRM is not a technology initiative. Many have confused CRM as a technology initiative, and assigned the CRM implementation project to their I.S or I.T group. CRM conferences often equates to technology exhibits and demonstration. Technology is needed in order to implement CRM, particularly the customization part but technology is not the driver of CRM, or the solution to successful CRM implementation  CRM is not exclusively a sales initiative. Similar to marketing, CRM is often lodged within the sales department. The sales force, after all, is extremely close to their customers, understanding their needs and wants, and trying to fulfill them. Sales, however, is just one functional area that can benefit from CRM, and that is necessary for effective CRM.  CRM is not exclusively a marketing initiative. Many organizations have merely equated CRM with customer-focused marketing, or datadriven/database marketing. CRM requires marketing expertise. But CRM is not strictly a marketing initiative.  CRM is not exclusively a service initiative. As with sales and marketing, customer service is one functional aspect of successful CRM implementation. But customer service is not the sole driver of the process.

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 CRM involves marketing, sales, service and technology, as well as the other inner workings of an organization. Thus it is properly described as an enterprise-wide initiative. It involves all the areas of the organization and all the functions of the organization and it requires all areas of the organization to be working together in harmony. CRM requires all areas of the organization to not only exist in harmony, but to be working toward the common goal of stronger relationships. IMPORTANCE OF CRM Value of CRM to business A CRM strategy is designed to increase revenue and profitability by attracting new customers, growing customer business, increasing customer satisfaction and loyalty, enabling more efficient business processes and utilizing lower cost technologies. The primary goal of CRM is higher revenue, not cutting costs. A CRM solution improves sales and marketing efforts and enables organizations to provide superior service to customers. New customers are gained, and existing customers are retained and buy more in greater quantity. And customer’s benefits are receiving superior customer service and getting the products and services they want, when they want them. An enterprise that does not have CRM strategy or use CRM applications is at a competitive disadvantage. Before engaging on a mission to implement a CRM strategy, it is critical to determine what the specific objectives are and how to measure the return on investment.

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There are sobering statistics that over one-half of CRM implementations ”fail”, primarily due to lack of consensus on agreed –upon and more importantly, measurable goals. While objectives can address specific points of poor performance-for examples low sales performance or customer satisfaction scores-it is important that they also address supporting the entire customer life cycle. CUSTOMER RELATIONSHIP MANAGEMENT IN BANKING Banks Become Customer-Centric The post-liberalized banking sector in India has been witnessing spectacular changes. The major reasons for the recent radical changes in banking industry’s portfolio are competition, consolidation, information technology and the need to be customer-centric. Banks could improve the profitability by adopting strategies like market segmentation, innovation, price bundling and relationship. Technology has a major role to play in retail banking, but its role is complementary to customer service initiatives. Due to increased financial market products like commercial paper and variety of financial instruments, big corporate clientele of several commercial banks have shifted their loyalty, and have been raising resources from the market directly and commercial banks have become more retail customer-centric by offering wide range of services. Banks have identified new customer segments like students, workingwomen, and high rich net worthy individuals.

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CUSTOMER RELATIONSHIP PROFITABILITY Regulated era has given assured profits to banks, but in the post deregulation period as margins are falling down substantially, banks are concentrating on customer relationships. Banking services can be divided into three categories: core services, facilitating services and supporting services. Core service is the reason for being in the market. Facilitating services are needed so that the core service can be used, and supporting services exactly discriminates the service package from the services of competitors. Customer relationship is the base on which the structure of retail banking will evolve. The cost to develop customer relationship is always higher than the revenue, But when the relationship grows new demands will appear and then the incremental revenue would be higher than incremental costs. The cost associated with building up of the relationship is huge. They are advertising costs, price incentives, set up costs for accounts and service costs etc. Customer service delivery is vital for the success of banking operations. This is not possible only through technology. Process consistency within and across service channels is paramount. Banks are increasingly making investment in a single type of process, rather investing in asset of processes that depends on human resource policies.

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Who are HNI Customers?  They are High net worth individual customer.

 They are the major targets for private bankers.  Bank provides premium class facilities to these clients and tries to cater their special needs related to financial and non-financial in nature.  They are high profile customers.  They have income of above Rs.10 lakhs per annum.  The customer who can maintain at least a very high amount in their accounts.  Bank tries to maintain long-term relationship with these clients.  HNI customers have a Relationship Manager

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How to approach HNI Customers: Approaching to prospective customer is very important for any organization. If banks rightly approach customer then a long-term relation can be expected. Followings are the steps how a bank approached to HNI customers. DATA COLLECTION: Normally banks maintain their data bank, which is collected from various sources like Credit Card holders, Different Account Holder’s Primary data, Yellow pages, Directories. TELE CALLING: Once the data is collected then the tele callers call upon to these contacts and make the clients aware about various facilities provided by the banks. If the clients show their inclination then a appointment is fixed with these clients and the Relationship managers visit the clients. ROLE OF RELATIONSHIP MANAGER: This appointment is called as a LEAD. This lead is transferred to the relationship manager and the client is approached personally. Relationship manager explain the facilities provided and take note to the clients’ additional needs which can also be fulfilled by their services. If the client is convinced the lead converts in the customer form. CORPORATE BANKING: Relationship manager analyses the requirements of the customers and provide the best-suited product. Relationship manager explains the various investment options available in the market and give the customer the opportunity to select the option, which is suitable to him. PORTFOLIO MANAGEMENT: If the customer has invested then the role of the manager is to design his portfolio keeping in mind the risk and return factors. Portfolio manager provide these customer the requisite information 44

about the investment opportunities available in the market according to the profile of the customer. HANDLING QUERIES: Frequent services and time to time updating of the market circumstances are shared with these customers. The relationship manager with the help of other officers clarifies their doubts and queries are handled with a special care.

HNI CUSTOMERS

V.K.I Industry Area. Gems and Jewellery Industry.

Builders (Real Estate)

Suspects

Prospects

First Time Customers

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Mainly my work was to deal with HNI customers and to find out the interested potential customers for opening the account in KMBL.I had convinced them to build a new and healthy relationship by opening the account. Instead of covering all the areas, I have decided to cover 2 important sectors:  Gem and Jewellery Industry  Builders Industry (Real Estate)  Local Businessmen I have selected the first two sectors, as they are the booming sectors of market. These two segments are my suspects. Suspects are those persons who might buy the product and who will be ready to open the account in KMBL. Then I have determined the most likely prospects from these suspects through telecalling and explaining about the features of account. /prospects are those persons who are interested in opening the account. By opening the account and building relationship, they have become the first-time customers. These three steps can be referred as customer development Process, how you are creating the relationship with customers.

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Current Account

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CURRENT ACCOUNT Basically a current account is opened for artificially created entity. This artificially created entity can be a firm, sole proprietorship, association, partnership or anything else. No interest is paid on the current account. The bank charges some nominal amount for the transaction that takes place. Tools for opening of the Current accounts Walk in: - There was a huge number of walk in customers in KMBL, we use to open their current accounts References: - References were being collected from the leads which we were having and from other sources like Chartered Accountants, Relatives, Friends etc. Cold Calls: - This refers to the telephonic call, which we use to make; we use to take appointment before approaching the person. Hot calls: - This refers to the direct face-to-face calls, which we use to make without taking any prior appointments. Databases: - The various databases provided by the KMBL itself, which includes directories, yellow pages, club directories, etc.

Procedure of opening of the account is as follows  Preparing the proposal  Meeting to the financial advisor of that office and giving him the

proposal, telling him the benefits, which the firm will be getting after opening its account in HSBC bank.  Seeking permission of opening of account.  Meeting to the owner of the firm/company

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 Filling up the forms and completing the necessary Documentation.

KMBL and Current Account HSBC Bank has various current accounts to match different needs of the businessman. All these account are designed to suit the various need of the businessman. Types of Current Account at KMBL  Kotak Edge Current Account  Kotak Pro Current Account  Kotak Ace Current Account

KMBL and Savings Account  Kotak Edge Current Account  Kotak Pro Current Account  Kotak Ace Current Account

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Kotak Edge Current Account Features • Attractive Returns • Business Advantages •

Convenience Banking.

Everyone needs a well-equipped bank account to keep pace with the business endeavors. Kotak Mahindra Bank offers the Kotak Edge Current Account, armed with Kotak 2-Way Sweep and entire gamut of banking privileges, providing the extra edge to get ahead. The feature rich Kotak Edge Current Account is the ideal way to make money work harder.

ATTRACTIVE RETURNS: Kotak Edge Current Account combines liquidity of a Current account with the attractive returns of a Term Deposits through the unique Kotak 2-Way Sweep. KOTAK ADVANTAGES Experience the ‘edge’ of business gains while banking through a host of advantages offered by Kotak Edge Current Account. Free Demand Drafts Avail Demand Drafts, free of cost, payable at any of the branch locations, just by calling Phone Banking services. There is no limit to the number/value of Demand Drafts drawn by the customer at these locations

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Free Home Banking For free cash/demand draft delivery, dial phone banking service and enjoy time saving banking experience from the comfort of home or office. The customer can also use the facility for free cash/cheque pickup. Free At par Cheques Kotak Mahindra Bank’s At-par cheques are treated as ‘local clearing’ cheques across select locations in the country. The At-par cheque facility comes to the customer free of charge. The customer can now save DD making charges while enjoying the convenience of a cheque Free Cheque Collections Outstation cheques, drawn on any of the branch locations, would be collected ‘free of charge’ for the account holder. Only a nominal charge is levied for nonbranch location. Free Electronic Fund Transfer Transfer funds to third party accounts in other banks, without drawing a Demand Draft or a cheque, by using Electronic Transfer facility. With this facility, the accountholder can save on Demand Draft making/couriering charges and also transfer funds faster. Overdraft against Term Deposit As a Kotak Edge Current accountholder, you can avail an overdraft against Term Deposit held with KMBL. This facility helps effectively tackle short-term cash flow problems and since the Term Deposits remains intact, the accountholder continue to earn interest on the investment.

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CONVENIENCE BANKING A host of convenience banking facilities allows the accountholder to access account anytime, anywhere. Global Debit Card Access the account free of cost at 1000+ Kotak Mahindra Bank and HDFC Bank ATMs by using the VISA Global Debit Card. The accountholder can also use Debit Card at all VISA affiliated merchant establishments and ATMs worldwide. Phone Banking Dial 24 hour Toll Free number 1800 116022 (North India) OR (Rest of India) from anywhere and customer Care Officer will help instantly with all banking requirements. Net Banking Just log on to “www.kotak.com” to access Net banking facility. Take advantage of the Internet to bank from home, office or anywhere in the world at a time of convenience.

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At-Home Services This service enables the accountholder to make Utility Bill payments like electricity, telephone and mobile phone bills and also get document delivery and pickup from the bank. Mobile Banking Use this service to access bank account anywhere, anytime. It is quick and easy, available to the accountholder 24X7 and it’s absolutely free. The accountholder don’t have to pay any charge to avail this service. The account holder can use Mobile Banking to check account balance, last 3 transactions details, issued cheque status and request a cheque book. The customer can use Alerts Service to get Alerts by SMS and/or email whenever the balance falls below the Average Quarterly Balance or a Standing Instruction set by the account holder fails.

Eligibility Criteria These current accounts are offered to Sole Proprietorships, Partnerships and Private Limited Companies.

To be eligible Edge Account customers need to maintain a minimum average quarterly balance of Rs.25000. Non-maintenance of this balance invites a fee of Rs.750 per quarter.

Documentation Criteria Account Opening Requirements:  Completed Account Opening Form  Passport size photograph of every signatory duly signed  PAN card 53

 Address Proof document  Identity card Additional documents required: Partnerships: Partnership Deed Limited Company: Memorandum and Articles, Board Resolution,

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Kotak Pro Current Account Features • Attractive Returns • Business Advantages • Pro Privileges • Convenience Banking. •

Everyone needs a well-equipped bank account to keep pace with the business endeavors. Kotak Mahindra Bank offers the Kotak Pro Current Account, armed with Kotak 2-Way Sweep and entire gamut of banking privileges and ‘user friendly’ Convenience Banking facilities. The feature rich Kotak Pro Current Account is the ideal way to make money work harder. ATTRACTIVE RETURNS: Kotak Pro Current Account combines liquidity of a Current account with the attractive returns of a Term Deposits through the unique Kotak 2-Way Sweep. BUSINESS ADVANTAGES The host of features offered by Kotak Pro Current Account makes money to work while offering Convenient Banking experience. Free Demand Drafts Avail Demand Drafts, free of cost, payable at any of the branch locations, just by calling Phone Banking services. There is no limit to the number/value of Demand Drafts drawn by the customer at these locations. What’s more, the customer can avail free DDs upto a pre-specified limit, at non-branch locations too.

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Free Cheque Collections Outstation cheques, drawn on any of the branch locations, would be collected ‘free of charge’ for the account holder. Only a nominal charge is levied for nonbranch location. Free Home Banking For free cash/demand draft delivery, dial phone banking service and enjoy time saving banking experience from the comfort of home or office. The customer can also use the facility for free cash/cheque pickup. Free At par Cheques Kotak Mahindra Bank’s At-par cheques are treated as ‘local clearing’ cheques across select locations in the country. The At-par cheque facility comes to the customer free of charge. The customer can now save DD making charges while enjoying the convenience of a cheque. Free Electronic Fund Transfer Transfer funds to third party accounts in other banks, without drawing a Demand Draft or a cheque, by using Electronic Transfer facility. With this facility, the accountholder can save on Demand Draft making/couriering charges and also transfer funds faster. PRO PRIVILAGE Kotak Pro Savings account comes with special privileges that provide an extra fillip to banking experience.

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Family Savings Account Kotak Pro Savings package entitles a Family Savings Account. This account comes with a host of benefits like Kotak 2-Way Sweep, At-par cheque facility and other beneficial features. So now, even dear ones of the accountholder can enjoy the banking. Free Cheque Pick-up The accountholder can avail the added benefit of a ‘free’ cheque pick up service. This service enables to have cheques and documents picked up from the doorstep on a daily basis, helping the accountholder to devote more time and energy to business Free At-Home Services This service enables the accountholder to make Utility Bill payments like electricity, telephone and mobile phone bills and also get document delivery and pick up from the bank.

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CONVENIENCE BANKING A host of convenience banking facilities allows the accountholder to access account anytime, anywhere. Global Debit Card Access the account free of cost at 1000+ Kotak Mahindra Bank and HDFC Bank ATMs by using the VISA Global Debit Card. The accountholder can also use Debit Card at all VISA affiliated merchant establishments and ATMs worldwide. Phone Banking Dial 24 hour Toll Free number 1800 116022 (North India) OR (Rest of India) from anywhere and customer Care Officer will help instantly with all banking requirements. Net Banking Just log on “www.kotak.com” to access “Net banking facility” . Take advantage of the Internet to bank from home, office or anywhere in the world at a time of convenience. Mobile Banking Use this service to access bank account anywhere, anytime. It is quick and easy, available to the accountholder 24X7 and it’s absolutely free. The accountholder don’t have to pay any charge to avail this service. The account holder can use Mobile Banking to check account balance, last 3 transactions details, issued cheque status and request a cheque book. The customer can use Alerts Service to get Alerts by SMS and/or email whenever the balance falls below the Average Quarterly Balance or a Standing Instruction set by the account holder fails or the 58

accountholder can even ask for account balance to be sent on a daily basis or weekly basis.

Eligibility Criteria These current accounts are offered to Sole Proprietorships, Partnerships and Private Limited Companies.

To be eligible Pro Account customers need to maintain a minimum average quarterly balance of Rs.50000. Non-maintenance of this balance invites a fee of Rs.750 per quarter.

Documentation Criteria Account Opening Requirements:  Completed Account Opening Form  Passport size photograph of every signatory duly signed  PAN card  Address Proof document  Identity card Additional documents required: Partnerships: Partnership Deed Limited Company: Memorandum and Articles, Board Resolution, List of Directors

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Kotak Ace Current Account Features • Attractive Returns • Business Advantages • Ace Privileges •

Convenience Banking.

ATTRACTIVE RETURNS: Kotak Ace Current Account combines liquidity of a current account with the attractive returns of a Term Deposits through the unique Kotak 2-Way Sweep. KOTAK ADVANTAGES Ace current Account comes with a host of advantages that are aimed at providing superior banking experience. Free Demand Drafts Avail Demand Drafts, free of cost, payable at any of the branch locations, just by calling Phone Banking services. There is no limit to the number/value of Demand Drafts drawn by the customer at these locations. What’s more, the customer can avail free DDs up to a pre-specified limit, at non-branch locations too.

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Free Cheque Collections Outstation cheques, drawn on any of the branch locations, would be collected ‘free of charge’ for the account holder. Only a nominal charge is levied for nonbranch location. Free Home Banking For free cash/demand draft delivery, dial phone-banking service and enjoy time saving banking experience from the comfort of home or office. The customer can also use the facility for free cash/cheque pickup. Free At par Cheques Kotak Mahindra Bank’s At-par cheques are treated as ‘local clearing’ cheques across select locations in the country. The At-par cheque facility comes to the customer free of charge. The customer can now save DD making charges while enjoying the convenience of a cheque. Free Electronic Fund Transfer Transfer funds to third party accounts in other banks, without drawing a Demand Draft or a cheque, by using Electronic Transfer facility. With this facility, the accountholder can save on Demand Draft making/couriering charges and also transfer funds faster. Overdraft against Term Deposit As a Kotak Ace Current accountholder, you can avail an overdraft against Term Deposit held with KMBL. This facility helps effectively tackle short-term cash flow problems and since the Term Deposits remains intact, the accountholder continue to earn interest on the investment.

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ACE PRIVILAGES Ace account has been designed with exclusive benefits that give an extra fillip to banking. Free Cheque Pick-up The accountholder can avail the added benefit of a ‘free’ cheque pick up service. This service enables to have cheques and documents picked up from the doorstep on a daily basis, helping the accountholder to devote more time and energy to business Free Demat Account As an Ace Current Account customer, the accountholder can open a Demat Account with Kotak bank free of charge. Even the annual charges towards the Demat account are waived off. Family Savings Account Ace account allows extending the Kotak banking experience with 3 family savings accounts. The family savings account comes with a host of benefits like Kotak 2-Way Sweep, At-par Cheque facility and other attractive features. Free Trading Account Kotak Ace savings account customer can avail a ‘free Trading account with Kotak Securities, giving access to online trading through Kotaksecurities.com. And with Payment Gateway facility, the accountholder can pay trading bills online from bank account directly. Free Investment Account Avail a free investment account that provides a consolidated view of all the investments. The Investment account statement gives a ‘single window view’ of Mutual Fund portfolio, listing the NAV of each scheme invested into, current 62

consolidated value of portfolio, and realized/unrealized returns against each investment made. Personal Investment Advisor To identify and analyze the specific investment requirements, KMBL provide a dedicated Personal Investment Advisor. This person alerts the customer of investment opportunities, sends regular updates and feedback on the performance of the investments, helping for monitor, manage and grow wealth in the ever fluid investment climate.

CONVENIENCE BANKING A host of convenience banking facilities allows the accountholder to access account anytime, anywhere. Global Debit Card Free Access the account free of cost at 1000+ Kotak Mahindra Bank and HDFC Bank ATMs by using the VISA Global Debit Card. The accountholder can also use Debit Card at all VISA affiliated merchant establishments and ATMs worldwide.

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Phone Banking Dial 24 hour Toll Free number 1800 116022 (North India) OR (Rest of India) from anywhere and customer Care Officer will help instantly with all banking requirements. Net Banking Just log on www.kotak.com to access Net banking facility. Take advantage of the Internet to bank from home, office or anywhere in the world at a time of convenience. At-Home Services This service enables the accountholder to make Utility Bill payments like electricity, telephone and mobile phone bills and also get document delivery and pickup from the bank. Mobile Banking Use this service to access bank account anywhere, anytime. It is quick and easy, available to the accountholder 24X7 and it’s absolutely free. The accountholder don’t have to pay any charge to avail this service. The account holder can use Mobile Banking to check account balance, last 3 transactions details, issued cheque status and request a cheque book. The customer can use Alerts Service to get Alerts by SMS and/or email whenever the balance falls below the Average Quarterly Balance or a Standing Instruction set by the account holder fails or the accountholder can even ask for account balance to be sent on a daily basis or weekly basis.

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Eligibility Criteria These current accounts are offered to Sole Proprietorships, Partnerships and Private Limited Companies.

To be eligible Ace Account customers need to maintain a minimum average quarterly balance of Rs.250000. Non-maintenance of this balance invites a fee of Rs 750 per quarter.

Documentation Criteria Account Opening Requirements:  Completed Account Opening Form  Passport size photograph of every signatory duly signed  PAN card  Address Proof document  Identity card Additional documents required: Partnerships: Partnership Deed Limited Company: Memorandum and Articles, Board Resolution, List of Directors

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Savings Account

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Kotak Edge Savings Account Features • Attractive Returns • Kotak Advantages • Convenience Banking. Everyone needs a savings avenue that makes the most of their hard earned money. Kotak Mahindra Bank offers the Kotak Edge savings Account, armed with Kotak 2-Way Sweep and entire gamut of banking privileges. The feature rich Kotak Edge savings Account is the ideal way to make money work harder.

ATTRACTIVE RETURNS: Kotak Edge savings Account combines liquidity of a savings account with the attractive returns of a Term Deposits through the unique Kotak 2-Way Sweep. 2-Way Sweep 2-Way Sweep ensures that the money never stops working by linking the savings account to a term deposit. •

Attractive Returns: Funds above a pre-set limit in the saving account are automatically swept into a Term Deposit account in units of Rs 10,000 and invested for a period of 181 days, allowing the customer to earn higher interest on the savings.

•

Maximum Liquidity: Should cash withdrawals and cheques issued exceed the balance in the savings account, KMBL make sure that the transactions are honored. KMBL do that by sweeping the Term Deposits

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into the savings account in units of Rs 10000. And then too, it takes care to transfer only the latest term deposits which ensure that the interest loss is minimized. The remaining amount in the term deposit account continues to earn higher interest at the original applicable rate. KMBL levy no penalty for premature withdrawals from term deposits. KOTAK ADVANTAGES Experience the ‘edge’ while banking through a host of advantages offered by Kotak Edge Savings Account. Free Home Banking For free cash/demand draft delivery, dial phone banking service and enjoy time saving banking experience from the comfort of home or office. The customer can also use the facility for free cash/cheque pickup. Free At par Cheques Kotak Mahindra Bank’s At-par cheques are treated as ‘local clearing’ cheques across select locations in the country. The At-par cheque facility comes to the customer free of charge. The customer can now save DD making charges while enjoying the convenience of a cheque. Free Cheque Collections Outstation cheques, drawn on any of the branch locations, would be collected ‘free of charge’ for the account holder. Only a nominal charge is levied for nonbranch location.

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Free Electronic Fund Transfer Transfer funds to third party accounts in other banks, without drawing a Demand Draft or a cheque, by using Electronic Transfer facility. With this facility, the accountholder can save on Demand Draft making/couriering charges and also transfer funds faster. CONVENIENCE BANKING A host of convenience banking facilities allows the accountholder to access account anytime, anywhere. Global Debit Card Access the account free of cost at 1000+ Kotak Mahindra Bank and HDFC Bank ATMs by using the VISA Global Debit Card. The accountholder can also use Debit Card at all VISA affiliated merchant establishments and ATMs worldwide. Phone Banking Dial 24 hour Toll Free number 1800 116022 (North India) OR (Rest of India) from anywhere and customer Care Officer will help instantly with all banking requirements. Net Banking Just log on www.kotak.com to access Net banking facility. Take advantage of the Internet to bank from home, office or anywhere in the world at a time of convenience.

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At-Home Services This service enables the accountholder to make Utility Bill payments like electricity, telephone and mobile phone bills and also get document delivery and pickup from the bank. Mobile Banking Use this service to access bank account anywhere, anytime. It is quick and easy, available to the accountholder 24X7 and it’s absolutely free. The accountholder don’t have to pay any charge to avail this service. The account holder can use Mobile Banking to check account balance, last 3 transactions details, issued cheque status and request a cheque book. The customer can use Alerts Service to get Alerts by SMS and/or email whenever the balance falls below the Average Quarterly Balance or a Standing Instruction set by the account holder fails.

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Kotak Pro Savings Account Features • Attractive Returns • Kotak Advantages • Pro Privileges • Convenience Banking. Everyone needs a savings avenue that makes the most of their hard earned money. Kotak Mahindra Bank offers the Kotak Pro savings Account, armed with Kotak 2-Way Sweep and entire gamut of banking privileges and ‘userfriendly’ Convenience Banking facilities. The feature rich Kotak Pro savings Account is the ideal way to make money work harder. ATTRACTIVE RETURNS: Kotak Pro Savings Account combines liquidity of a savings account with the attractive returns of a Term Deposits through the unique Kotak 2-Way Sweep. KOTAK ADVANTAGES The host of features offered by Kotak Pro Savings Account makes money to work while offering Convenient Banking experience. Free Home Banking For free cash/demand draft delivery, dial phone banking service and enjoy time saving banking experience from the comfort of home or office. The customer can also use the facility for free cash/cheque pickup.

Free At par Cheques

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Kotak Mahindra Bank’s At-par cheques are treated as ‘local clearing’ cheques across select locations in the country. The At-par cheque facility comes to the customer free of charge. The customer can now save DD making charges while enjoying the convenience of a cheque. Free Demand Drafts Avail Demand Drafts, free of cost, payable at any of the branch locations, just by calling Phone Banking services. There is no limit on the number/ value of DD’s drawn by the customers at these locations. What’s more, the customer can avail free DDs up to a pre-specified limit, at non-branch locations too. Free Cheque Collections Outstation cheques, drawn on any of the branch locations, would be collected ‘free of charge’ for the account holder. Only a nominal charge is levied for nonbranch location. Free Electronic Fund Transfer Transfer funds to third party accounts in other banks, without drawing a Demand Draft or a cheque, by using Electronic Transfer facility. With this facility, the accountholder can save on Demand Draft making/couriering charges and also transfer funds faster. PRO PRIVILAGE Kotak Pro Savings account comes with special privileges that provide an extra fillip to banking experience. Family Savings Account Kotak Pro Savings package entitles a Family Savings Account. This account comes with a host of benefits like Kotak 2-Way Sweep, At-par cheque facility and other beneficial features. So now, even dear ones of the accountholder can enjoy the banking.

72

Free At-Home Services This service enables the accountholder to make Utility Bill payments like electricity, telephone and mobile phone bills and also get document delivery and pickup from the bank. CONVENIENCE BANKING A host of convenience banking facilities allows the accountholder to access account anytime, anywhere. Global Debit Card Access the account free of cost at 1000+ Kotak Mahindra Bank and HDFC Bank ATMs by using the VISA Global Debit Card. The accountholder can also use Debit Card at all VISA affiliated merchant establishments and ATMs worldwide. Phone Banking Dial 24 hour Toll Free number 1800 116022 (North India) OR (Rest of India) from anywhere and customer Care Officer will help instantly with all banking requirements. Net Banking Just log on www.kotak.com to access Net banking facility. Take advantage of the Internet to bank from home, office or anywhere in the world at a time of convenience. Mobile Banking Use this service to access bank account anywhere, anytime. It is quick and easy, available to the accountholder 24X7 and it’s absolutely free. The accountholder don’t have to pay any charge to avail this service. The account holder can use 73

Mobile Banking to check account balance, last 3 transactions details, issued cheque status and request a cheque book. The customer can use Alerts Service to get Alerts by SMS and/or email whenever the balance falls below the Average Quarterly Balance or a Standing Instruction set by the account holder fails.

Kotak Ace Savings Account Features • Attractive Returns • Kotak Advantages • Ace Privileges • Convenience Banking. Everyone needs a savings avenue that makes the most of their hard earned money. Kotak Mahindra Bank offers the Kotak Ace savings Account, armed with Kotak 2-Way Sweep and entire gamut of banking privileges and ‘userfriendly’ Convenience Banking facilities. The feature rich Kotak Ace savings Account is the ideal way to make money work harder

ATTRACTIVE RETURNS: Kotak Ace savings Account combines liquidity of a savings account with the attractive returns of a Term Deposits through the unique Kotak 2-Way Sweep. KOTAK ADVANTAGES Ace savings Account comes with a host of advantages that are aimed at providing superior banking experience. Free Home Banking

74

For free cash/demand draft delivery, dial phone banking service and enjoy time saving banking experience from the comfort of home or office. The customer can also use the facility for free cash/cheque pickup. Free At par Cheques Kotak Mahindra Bank’s At-par cheques are treated as ‘local clearing’ cheques across select locations in the country. The At-par cheque facility comes to the customer free of charge. The customer can now save DD making charges while enjoying the convenience of a cheque. Free Demand Drafts Avail Demand Drafts, free of cost, payable at any of the branch locations, just by calling Phone Banking services. There is no limit to the number/value of Demand Drafts drawn by the customer at these locations. What’s more, the customer can avail free DDs up to a pre-specified limit, at non-branch locations too. Free Cheque Collections Outstation cheques, drawn on any of the branch locations, would be collected ‘free of charge’ for the account holder. Only a nominal charge is levied for nonbranch location. Free Electronic Fund Transfer Transfer funds to third party accounts in other banks, without drawing a Demand Draft or a cheque, by using Electronic Transfer facility. With this facility, the accountholder can save on Demand Draft making/couriering charges and also transfer funds faster.

Free At-Home Services 75

This service enables the accountholder to make Utility Bill payments like electricity, telephone and mobile phone bills and also get document delivery and pickup from the bank. ACE PRIVILAGES Ace account has been designed with exclusive benefits that give an extra fillip to banking. Free Demat Account As an Ace Savings Account customer, the accountholder can open a Demat Account with Kotak bank free of charge. Even the annual charges towards the Demat account are waived off. Family Savings Account Ace account allows extending the Kotak banking experience with 3 family savings accounts. The family savings account comes with a host of benefits like Kotak 2-Way Sweep, At-par Cheque facility and other attractive features.

76

Free Trading Account Kotak Ace savings account customer can avail a ‘free Trading account with Kotak Securities, giving access to online trading through Kotaksecurities.com. And with Payment Gateway facility, the accountholder can pay trading bills online from bank account directly. Free Investment Account Avail a free investment account that provides a consolidated view of all the investments. The Investment account statement gives a ‘single window view’ of Mutual Fund portfolio, listing the NAV of each scheme invested into, current consolidated value of portfolio, and realized/unrealized returns against each investment made. Personal Investment Advisor To identify and analyze the specific investment requirements, KMBL provide a dedicated Personal Investment Advisor. This person alerts the customer of investment opportunities, sends regular updates and feedback on the performance of the investments, helping for monitor, manage and grow wealth in the ever fluid investment climate. CONVENIENCE BANKING A host of convenience banking facilities allows the accountholder to access account anytime, anywhere. Global Debit Card Free Access the account free of cost at 1000+ Kotak Mahindra Bank and HDFC Bank ATMs by using the VISA Global Debit Card. The accountholder can also use Debit Card at all VISA affiliated merchant establishments and ATMs worldwide. 77

Phone Banking Dial 24 hour Toll Free number 1800 116022 (North India) OR (Rest of India) from anywhere and customer Care Officer will help instantly with all banking requirements. Net Banking Just log on www.kotak.com to access Net banking facility. Take advantage of the Internet to bank from home, office or anywhere in the world at a time of convenience. Mobile Banking Use this service to access bank account anywhere, anytime. It is quick and easy, available to the accountholder 24X7 and it’s absolutely free. The accountholder don’t have to pay any charge to avail this service. The account holder can use Mobile Banking to check account balance, last 3 transactions details, issued cheque status and request a cheque book. The customer can use Alerts Service to get Alerts by SMS and/or email whenever the balance falls below the Average Quarterly Balance or a Standing Instruction set by the account holder fails or the accountholder can even ask for account balance to be sent on a daily basis or weekly basis.

78

Different Savings Account FEATURES

EDGE A/C

PRO A/C

ACE A/C

AQB

10000

20000

75000

Investment a/c

Free

Free

Free

Add. Savings a/c

Nil

1 a/c

3a/c

2-Way Sweep

Above 20k

Above40K

Above150k

Home Banking

Free

Free

Free

DD

Charged

Free up to Rs 5 lacs

Free up to Rs 30 lacs

Free

p.a Free Monthly

Cheque Collections Statements

Quarterly

p.a Free Quarterly

Convenience

Free

Free

Free

Banking At par Cheque Book ATM cum Debit card

Free Free for 1st yr

Free Free for 1st yr.

Free Free for life

Daily cash Limit

25K

25K

75K

Daily POS Limit

25K

25K

50K

Own/HDFC ATM’s Visa Domestic ATM

Free Charged

Free Free

Free Free

Visa International

Charged

Charged

Free

ATM

Different Current Accounts 79

Procedure Adopted for Opening the Account FEATURES

EDGE A/C

PRO A/C

ACE A/C

AQB

10000

20000

75000

Investment a/c

Free

Free

Free

Add. Savings a/c

Nil

1 a/c

3a/c

2-Way Sweep

Above 20k

Above40K

Above150k

Home Banking

Free

Free

Free

DD

Charged

Free up to Rs5

Free up to Rs30 lacs

Cheque Collections

Free

lacs p.a Free

p.a Free

Statements

Quarterly

Quarterly

Monthly

Convenience

Free

Free

Free

At par Cheque

Free

Free

Free

Book ATM cum Debit

Free for 1st yr

Free for 1st yr.

Free for life

Daily cash Limit

25K

25K

75K

Daily POS Limit

25K

25K

50K

Own/HDFC ATM’s

Free

Free

Free

Visa Domestic

Charged

Free

Free

Charged

Charged

Free

Banking

card

ATM Visa International ATM

Call up the prospective customer 80

Customer Interested

Visit to the prospective customer Customer Convinced And Applies

Collect the necessary documents

Deviations sent to the sales .Dept.

Documents Sent to Sales. Dept.

Deviations

Sales department check the documents

Verification of Documents by Bank

Negative

Collection of further required documents

File Rejected

81

RESEARCH METHODOLOGY

82

Title of the Study: “CUSTOMER RELATION SHIP MANAGEMENT IN INDIAN RETAIL BANKING”

Objective:  To understand the Indian Banking System.  To understand the retail trends followed by the modern retail Banks. To

understand the banking relationship of organizations with their existing banker.  Product Innovation for them.  To generate the business by generating leads. Type of research:  Research design

Descriptive

 Sample size

100 customers

:

Method of selecting sample: •

Questionnaire: The data was collected through questionnaire, in which different question were asked

Scope of study: • My study will help to understanding the Indian banking system as well as to identify the existing bank “Market reputation” •

My study will provide information about general practices adopted by the various bank in order to carry their customers in the area of retail banking business.

83

. Limitations of the study:  Due to time constraint, the research was confined to Udaipur only  Sample size is very small.  Some of the respondents shows biasness and gave wrong information.

 Some of the respondents do not cooperate and are not interested in answering.

84

Analysis and Data Interpretation

85

1. ACCOUNTS IN THE BANK AND THE NATURE OF THE ACCOUNTS.

SBBJ

30

2

PNB

15

1

CENTRAL BANK

4

STATE BANK OF INDIA

12

BANK OF INDIA

4

IDBI

10

BANK OF RAJASTHAN

10

BANK OF BARODA

5

ICICI

10

HDFC

6

1

CENTURION BANK

1

1

SYNDICATE BANK

4

CITIBANK

3

UCO

4

UTI

3

OBC

4

UNION BANK OF INDIA

3

86

45

SAVINGS ACCOUNT

40 35 30 25 20 30 15 10

10

PN C EN

TR AL

SB

BJ

B

0

12

4

10

5

10

6

1

4

3

4

3

4

BA N SB K I BO I ID BI BO R BO B IC IC I H D FC

4

3

C EN TUS RYN IOD NICC AITT IEB AN K U C O U TI O BC U BI

15

5

Interpretation: As it can be predicted from the graph, 30 organizations have their savings account with SBBJ bank. Most of the consumers have their savings account in nationalized bank as they found nationalized banks very safe and trustworthy. The other major players are Punjab National Bank and Bank of Rajasthan.

87

2. REASONS BEHIND THE RELATIONSHIP WITH BANKS. 80 70 60 50 40 30

60 9

20 10

7

24

0 Safety

Past relationship Proximity to office with banks

others

Interpretation: Most of the consumers have relationship with their existing bankers because they have very long term and past relationship with their banks and they are quite satisfied with their services. Another reason for relationship is safety. Out of 100, 60 favored past relationship and 24 favored safety as their reason.

88

3. FACILITIES PROVIDED BY BANKS AND USED BY THE CONSUMER

85 85

Facility used

25

ba nk in g

Ba nk in g

st ep

Ph on e

an ki ng

22

H om

In te rn et B

AT M

39

36

e/ D oo r

35

Br an ch

40

Bank Provides

45

41

s

100 90 80 70 60 50 40 30 20 10 0

Interpretation: Each is using Branch facility. The other facility used by them is Phone Banking as they consider it safe.

89

4. AWARENESS FORM SERVISESES PROVIDED BY BANKS.

100

87

90 80 70 60 50

Aware

40 30 20 10

Availed

31 18 8

20

17 0

0 Auto swep in FD At par cheques

Credit Cards

0 Investment Advisory

Interpretation: Only 18 consumers out of 100 are aware about Auto swep FD facility and 8 are availing it. 31 are aware about At-par cheque book facility and 17 are availing it as bank takes charges for this facility. 30 is availing Credit card and 11 is from investment advisory services.

90

5. FCRA ACCOUNTS IN BANKS

16 14

14

12 10 8

Res pons e in num bers

6 4 2

2

1

1

1

1

1

1

1

SB BJ IC IC I HD FC BO B BO R SY P ND NB IC AT E OB Ci C t ib an k

0

Interpretation: Consumers who receive foreign funds from outside the country have to register themselves under Foreign Contribution Regulation Act, 1986 (FCRA). The main purpose of this act is to curb the use of foreign funds. For instance NGOs have to open a FCRA account in any bank to deposit that received foreign funds so that government can know about the use of foreign funds.14 consumers have FCRA account in SBBJ bank reason being safety and past relationship else the rest don’t have major hold on FCRA account.

91

6. SOURCES OF FUND AND THEIR FREQUENCY

Sources of Funds 30

27

25 20

18

15

Response in nos.

10 5 0 INDIA

ABROAD

Frequency

16 14

14

12 10 8

Resonse in nos.

6

4

4

5 3

2

0

0 Below 10 Lacs

11-30 Lacs

31-50 Lacs

51-70 Lacs

71 Lacs and Above

92

Form of Receipts 30 26 25

21

20 15

Response in nos.

10 5

3

0 Demand Draft

Cash

Cheque

Interpretation: Though most of the organizations have registered themselves under FCRA account

but majority of funds come from India only. Most of FCRA Registered

organizations in udaipur get funds from India only. But some of organizations receive huge money from abroad like Consumer Unit Trust of India, Rajasthan Cancer Society. The average frequency of funds received by these organizations in Udaipur is below 10 lacks and only 5 of such organizations get above Rs71 Lakhs. Cheque is the major form in which these organizations received their fund either from India or Abroad. Demand Draft is another form in which they receive funds.

93

7. MAJOR AREA OF INCOMING FUND

100 80

80 60

38 Response in nos.

40 20

20

26

0 With in the City

With in All over India Rajasthan

Abroad

Interpretation: 80 out of 100 organizations receive the funds from all over India and 38 received from Abroad. A very few of them received only from Rajasthan or within city.

94

8.MAJOR PAYMENT AND THE FORM IN WHICH THEY ARE MADE

PAYMENT MODE 35

33

31

29 28

30 25

22 17

20 15 2

G

E S

1

JE

C

FU

T

N

D

E X

R

P

E

A IS

N

S

IN

Y R A LA

P

R

O

A

D

S

A T IV E

2

M IN IS T R

0

CHEQUE DRAFT

8

10 5

CASH

Interpretation: As it can be predicted from above chart, cash is the major mode of payment made by these firms whether it is Administrative, salary or project related Draft is also a mode of payment used by these firm but is not used so much as used only when to buy some machines or to make payment through draft only The other form is cheque and the payment by cheque are mostly done for project related expenses or salary. Administrative expenses are not carried by cheque

95

COMPARATIVE ANALYSIS OF ACCOUNTS WITH COMPETATIVE BANKS

96

COMPARATIVE ANALYSIS Today is the world of competition. In this competitive scenario, each and every company has to keep an eye on its competitor. To help this out, I have done comparative analysis of different banks and their services keeping in mind of Kotak Mahindra Bank Limited. I have done comparative analysis so that I can be able to know about the competitor’s services. This will help me out to handle the customer queries and make them understand how Kotak Bank is different and better than other banks. This analysis will help to convince the customer easily for creating and building a new and fair, healthy relationship with Kotak Bank.

Procedure adopted for comparative analysis:  Study and understood the services provided by Kotak Mahindra Bank Limited in its current account and savings account  Visited various banks and gather information about their services through: • Personal Interview • Internet • Broachers and Pamphlets • Questionnaire. Now along with Kotak Mahindra Bank, I had visited various other banks also to know the difference in the financial products being offered by them in the market and by doing that I came on the following comparison.

97

COMPARATIVE ANALYSIS OF SAVINGS ACCOUNTS

FEATURES

ICICI

HDFC

UTI

IDBI

HSBC

KOTAK

MIN AQB

5,000

5,000

5,000

50,000

25,000

20,000

2 WAY SWEEP

YES

NO

NO

YES

YES

YES

HOME

NO

NO

NO

YES

CHARGED

YES

FREE

YES

FREE

FREE

/ BANK

BANKING DEMAND

CHARGED CHARGED

DRAFT ECS

YES

YES

YES

YES

YES

YES

DEBIT CARD

ICICI

HDFC

UTI

IDBI

HSBC

VISA DOMESTIC

PHONE

YES

YES

YES

YES

YES

YES

NET BANKING

YES

YES

YES

YES

YES

YES

MOBILE

YES

YES

YES

YES

YES

YES

BANKING

BANKING TRADING A/C

CHARGED CHARGED CHARGED

NO

CHARGED

FREE

DEMAT A/C

CHARGED CHARGED CHARGED

YES

CHARGED

FREE

COMPARITIVE ANALYSIS OF CURRENT ACCOUNTS FEATURES

ICICI

HDFC

UTI

IDBI

HSBC

KOTAK

100000

100000

AMB-

10000

100000

250000

100000

0

/ BANK MIN AQB

98

2 WAY SWEEP HOME

NO

YES

NO

YES

YES

YES

LIMITED

NO

NO

YES

FREE

FREE

LIMITED

FREE

BANKING DEMAND DRAFT

UPTO Rs.

Rs.30

UPTO A 20 LAKH

Lakh

LIMIT

UPTO A UNLIMITED LIMIT

(P.M)

FOR BRANCH LOCATION .FREE FOR NON-BRANCH LOCATION UPTO Rs.30

DEBIT CARD

ICICI

HDFC

UTI

IDBI

HSBC

LAKHS. ALL

VISA

DOMESTIC AND INTERNATION AL ATM’s PHONE

FREE

FREE

FREE

YES

FREE

FREE

NET BANKING

FREE

FREE

FREE

YES

FREE

FREE

MOBILE

FREE

FREE

FREE

YES

FREE

FREE

NO

NO

NO

NO

NO

FREE

DEMAT A/C

FREE

FREE

YES

YES

NO

FREE

AT PAR

FREE

FIRST

UPTO

UPTO

FREE

UNLIMITED

FREE

Rs.75

Rs.5C

THEN

LAKH

r. P.M

CHARGED

(P.M)

free

BANKING

BANKING TRADING A/C

CHEQUE BOOK

FREE

99

SWOT ANALYSIS

100

SWOT ANALYSIS OF KMBL:

Strengths:  Very fast growing bank of Rajasthan as well as of India.  Track record of high growth and profitability.  Strong financial background.  One of the biggest financial institutions before converting into bank.  Long experience of banking that is why it is called 25 years old new bank.

 Latest technology used by the bank.  Free Home Banking transaction facility.  Very good database maintained by the bank, i.e., Banking Customer Information Database.

Weaknesses:  Low brand image.  High average quarterly balance to be maintained by the costumer.  Lack of coordination between different departments.  Lack of costumer awareness regarding services and bank because of low advertising.

Opportunities:  Opportunities of entering into major cities of Rajasthan.

 Scope of more ATM networks. 101

 Opportunities to increase its customer base in liabilities section by

marketing their products on local television channels, canopy, hoardings. Threats:  Threats from nationalized banks.  Threats from private bank like ICICI, UTI, HDFC because these banks

open both savings and current account at a very nominal amount with somewhat similar services

102

CONCLUSION

103

CONCLUSION Limitations of Retail Banking The bank into retailing will have to face following bottlenecks in its operations • Huge sales and promotion expenditure • Managing human resources • Managing technology • Pressure on margins • Continuous follow-up • Attitude hurdles • Security problems Huge Sales and Promotion Expenditure In order to survive in the world of fierce competition with so many players, each bank has to incur huge amount of funds on sales and promotion. No bank can deny this expenditure because they need to build their image among the customers, to get business. Managing Human Resources Retail banking caters to the need of individual customers. For this purpose qualified and trained staff is needed to be maintained. For training those employees, banks spend a huge amount of money. Sometimes these trained personnel leave the job halfway which increases the expenditure of the bank. Apart from this banks also have to maintain various cells regarding customer grievance, employee grievance, etc. which again increases the expenditure of the bank. Managing Technology Technology plays an important role in retail banking. Today majority of transactions in banks are done through ATMs, Mobile banking, Phone banking, Internet banking. For this purpose it is necessary effective and efficient management of technology. Maintaining technology incurs huge expenditure, which sometimes create problem for the banks to accumulate funds for these purposes.

104

Pressures on Margin To retain the existing customer base as well as to expand, the banks are pressurized to keep the minimum prices possible. Thus the banks have huge pressures on their margins. Continuous Follow-up In order to earn more profit banks are going for mass banking. But in this race the maintenance of the customer base becomes very difficult. The problems like NPA’s and delay in payment of usage changes occur which leads to losses for the banks. Thus the banks have to maintain continuous follow-up programs, which require efficient technology, human resources as well as surplus funds to control expenditure on such programs. Attitude Hurdles Earlier the major players in the banking industry were public sector banks. But due to the advent of liberalization and globalization, private and foreign sectors banks have come up which has resulted into a drastic change in the Indian Banking scenario. With these banks the latest technology has also come up. But still a huge chunk of people does not avail itself with the benefits. People still prefer going to banks and carry out the regular paper work when then same thing can be done very easily through their mobile phones and internet. Thus people from rural areas should be given proper information and should be educated and their attitude needs to be changed, since it is a major hurdle for the growth of the retail banking products. Security Problems Retail banking products like net banking, phone and mobile banking and ATMs are solely dependent on technology. If there is any problem in the network or a system as a whole, it would result into huge losses for the banks as well as their customers. Therefore proper security measures should be in place to secure customers’ date and identification codes. “This study has helped me to know the whole functioning of one of the major pillars of our economy which is Banks. With the Advent of Globalization and Liberalization new ways to improve customer relationship have emerged in front of the banks. These new ideas will help them in acquiring new customers and maintaining the existing customer base. One of the new fast emerging tools with banks to improve up on customer retention and satisfaction is Retail Banking and by adopting this many banks have achieved growth in their business like never before”

105

Suggestions & Recommandations

106

SUGGESTIONS & RECOMMENDATIONS  Kotak Mahindra Bank should chalk out some programs to create general

awareness regarding its presence and various services of the bank. More attention is required in distant located firms and caters the needs of those commercial areas.  Personal Marketing / Aggressive Marketing: Today is the era of

competition. In order to increase the banking network (in terms of clients and business volume) an aggressive approach is required. The bank should recruit more number of marketing personnel, so that they can cover the whole of the city. Personal marketing can be one of the methods or modes of taking people into confidence.  Promotional campaign: - In the era of such stringent competitiveness

one has to take care of promotional activities. It can be done in following ways: •

Promotion Through Customers : Through motivating the existing customers to get more business can be one of the modes to have greater access or approachability. The motivation to the customers can be through gifts or through any memento.

•

Reference Selling: Few of the Bank’s existing customers specially esteemed ones can be asked to give references about relatives/ friends or any acquaintance that they consider potential customer. Thus the business volume can be increased.

107



Advertising: - Initially when we took our work we found

that general awareness amongst people regarding KMBL Bank was very low. The bank should instead of being centrally advertised, try to advertise locally. This can be done in following ways: -

• Public welfare banners: - An excellent way to advertise which can be done through tree guards having KMBL Bank’s name. • Traffic posts especially at commercial locations can have boards of Bank. •

One or two Neon boards can be put at the center places of Udaipur.

• Ad Campaign through FM, Radio, Hoardings, and Television



The bank should come up with more branches in other major

cities of Rajasthan 

The bank should open more ATM networks.



There should be Education training programmes for Sales

Executives by KMBL. 

Processing time of opening an account should be reduced.

 Introduction of HR practices

108

Bibliography

109

Bibliography

1. KOTHARI C.R., “RESEARCH METHODOLOGY”, Second Edition, Vishwa Prakashan, New Delhi, 1990.

2. KOTLER PHILIIP, “MARKETING MANAGEMENT” PRANTICE- HALL OF INDIA, NEW DELHI, 1991.

3. Literature provided by the company.

4. http://www.kotak.com

5. http://www.google.co.in

110

ANNEXURE

111

Questionnaire Name: _______________________________________ Nature of Occupation (a) Salaried [ ] Government (b) Self-Employed [

Semi-govt.

Private

]

Lawyer

Doctor

Engineer

Architect

Builder

Consultant

Exporter

Importer

Jeweler

Others, Please specify_____________ Q1. In which bank you are operating your savings account? ____________________________________ Q2. In which bank you are operating your current account? ________________________________________ Q3. How much minimum balance or average quarterly balance you have to maintain in your account? Savings Account _________________ Current Account _________________

112

Q4.Why has you chosen this bank? Past Relationship

Brand name

Near to home/office

Others, Please specify_______

Q5. Are you satisfied with the services provided by your bank? Yes

No

(i) If yes, then What core benefits you are availing from your bank? Home Banking Net Banking

(Free/ charged) (Free/ charged)

113

Phone Banking

(Free/ charged)

At-par cheque Book (Free/ charged) Global Debit Card

(Free/ charged)

Demand Draft

(Free/ charged)

Auto Sweep FD

(Free/ charged)

24 hrs ATM

(Free/ charged)

Investment a/c

(Free/ charged)

Additional savings a/c(Free/ charged) Others, please specify ______________________________ (ii) If No, then why? ___________________________________________________ Q6. What exactly you are looking for in your bank? Please write your expectations. ______________________________________________________________ ______________________________________________________________ _

Address:

______________________

Phone No: ___________

______________________ ______________________ ______________________

114

Questionnaire 1) Name of the Organization: 2) Address: ________________________________________________________ _______________________________________________________________ _______________________________________________________________ 3) Telephone Number 4) Name of Contact person: 5) About Organization: ______________________________________________ _______________________________________________________________ 6) In which bank do you have an account and what is the nature of the account? _____________________________________________________________ 7) What are the reasons you have relationship with these banks? ‫ ٱ‬Safety ‫ ٱ‬Past relationship ‫ ٱ‬Proximity ‫ ٱ‬others

8) Which of the following facilities does your bank provide you and which one does

115

You use?

Facility

Provides

Use

Frequency

Branch Banking Internet Banking Phone Banking Home Banking ATM

9) Are you aware of the following services provided by banks?

Facility

Aware

Availed

Auto sweep into FD At par cheques Credit Cards Investment Advisory

10) Do you have an FCRA account & where? ___________________________________________________________ 11) What are the various sources of funds, their frequency and form of receipts?

Source

Response in numbers

116

INDIA ABROAD

Form of receipt

Response in numbers

Demand Draft Cash Cheque Other

Amount

Response in numbers

Below 10 Lacks 11–30 Lacks 31–50 Lacks 51–70 Lacks 71 Lacks and above

12) Could you specify the areas from which the majority of your funds come? ‫ ٱ‬Within

City

‫ ٱ‬Within

Rajasthan

‫ ٱ‬All

Over India

‫ ٱ‬abroad

117

13) What are the major payments you make and in what form they are made?

118