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"Retail Banking": A Project Report
"Retail Banking": A Project Report
"Retail Banking": A Project Report
On
“RETAIL BANKING”
For
By
Madhusudan Narayan
Submitted to
Madhusudan Narayan
Roll no.: 13/MBA/75
Session: 2013-15
TITLE OF PROJECT
DATA COLLECTION
SAMPLE SIZE
Sample size was restricted to 50 respondents, since it was not possible to cover
the whole universe in the available time period.
SAMPLING METHOD
For this research Non- Probability Convenience Sampling has been used
because time limit for the completion of the work is limited and also managers
and employees were not available all the time.
Area of Study – Patna, Bihar
Duration - 2 months (13th May 2014 – 16th July 2014)
SUGGESTIONS
42% of the Respondent are unhappy with E-Products so bank personnel
should improve this issue because customer is a source through which
business can be increase and satisfy customers is a source to create more
customers.
Bank should introduce/ Open new ATMs Especially in Bihar because there is
much Scarcity of IOB-ATMs.
24% of the Respondent were not fully satisfied with Branch Personnel
cooperation in sorting out problems faced in banking issue, IOB should
work on this because CRM is the major aspect of any Business.
S.Venkata Seshaiah & Vunyale Narender (2007) in their study entitled as,
“Factors Affecting Customer’s Choice of Retail Banking”, have identified various
factors affecting customer’s choice and study consumer behavior with respect to
the people’s choice of retail banks. In this study efforts have been made to go
deep into the psychology of the customer’s loyalty. Through a survey is different
factors have been identified (1) Safety of deposits (2) size and strength (3)
Accuracy (4) General Survey Quality (5) Speed of delivery (6) proximity (7)
Security of Environment (8) Cordiality of staff (9) Price & services charges (10)
Product packaging (11) General Public Impression (12) Peer Group Impression
(13) Face lift (Structural) (14) Friendship with staff (15) advertising & Publicity.
The findings showed that retail banking must reorganize their activities to achieve
their corporate mission through customer orientation.
Sudhir (2005) in his study entitled as, “Growth Pattern of Retail Banking”
emphasizes that existing potential of Retail Banking was untapped in rural and
semi-rural areas and that untapped clientele provided a good and vast opportunity
for growth in this segment
Tapan K. Panda & Bivraj Bhushan Parida (2006) in their study entitled as
“Customer Relationship Management in Retail Banking in India” talk about the
implementation of CRM principles in Retail banking sector, analyze the need for
drivers of CRM implementation and the challenges associated with illustration of
HDFC Bank and PNB. The article discusses the retail banking challenges like
customer retention and finding new customers and the need for implementing
CRM in this sector. The study revolved around the perception that the CRM has
opened a new path to the world of customer intelligence. In today’s environment
business decision & strategies are made looking at the proximity to customers.
Retail Banking P a g e | 10
INTRODUCTION TO THE CONCEPT:
Technology has become the driver for retail banking explosion, and
technology products like ATM, Internet Banking, Mobile Banking, Card products
like Debit Cards and Credit Cards and remittance products like RTGS and NEFT
are making their presence felt in retail space. Banks are embracing different
strategies, redesigning their conventional business silos, reengineering their
channels, product and services to increase the share of customer wallet.
Retail Banking P a g e | 11
withdrawals of money; money transfer; foreign currency exchange and traveller's
cheque encashment. They also deal with personal and small loans, credit and
mortgages; insurance policies; investment schemes; pension funds; and advice
to customers on various financial matters. Apart from offering home loans, car
loans, educational loans, consumer loans, etc. they also develop various deposit
schemes and help people fill their offers.
Treasury group: This group takes care of the total funds of a bank including
foreign exchange reserves. Responsibilities include bank portfolio management,
dealing in foreign currency, etc. There are Forex (foreign exchange) dealers in this
group who exclusively deal with the foreign market. They buy and sell foreign
exchange at the minimum exchange cost thereby earning maximum profit from
the transactions.
Rural Banking: This group deals with the banking and credit needs of people in
the rural sector. Not all banks have this group and some banks have separate
subsidiary companies for rural banking.
Retail Banking P a g e | 12
then develops; implements and manages them. They have the responsibility for a
banking product (meaning services like personal loans, home loans, credit cards,
loans against shares, educational loans, etc.).
Apart from these main functional groups, there is an appraisal group
to analyse economic feasibility of industrial projects, the bank's exposure to
financial risk and long term returns. There are internal auditors who audit the
bank's internal books of accounts.
There are various groups of professionals like lawyers, engineers,
agricultural scientists, chartered accountant, company secretary, cost accountant
and economists who work in various departments in advisory capacities. They help
make decisions on issues that are legal, technical or economic in nature. For
example, the economist advises various functional groups on the implications of
the Union budget on the business of the banks, consumer buying pattern, etc.
INDUSTRY PROFILE
INDIAN BANKING SECTOR
The Indian Banking Sector is quite different from the banking system
in the rest of Asia, because of the distinctive geographic, social and economic
characteristics of the country. India is the second most populated nation in the
world; it has marked economic disparities and high levels of illiteracy.
The country followed a socialist approach for well over 4 decades after
independence till the government initiated the economic reforms through the
policy of liberalization. The banking structure in India is therefore a reflection of
the countries socialistic set up. It had to meet the goals set by the five year plans,
especially with regard to equitable distribution of wealth, balanced regional
economic growth and removing private sector monopolies in trade and industry.
The government nationalized the banks in 2 different phases (1969
and 1980). On July 19, 1969, 14 major banks of the country were nationalized
and on 15th April 1980, six more commercial private sector banks were taken
over by the government. As a consequence the banking system in India
concentrated on the domestic sector; very few banks in India had a presence
internationally. The nationalized banks had a social obligation of taking the
banking sector to the people by expanding the branches and by getting more
people to open an account.
Retail Banking P a g e | 13
SCOPE FOR RETAIL BANKING IN INDIA
It is reported that Indian retail market has the potential to be second only
to the USA. National Readership Survey 5puts Indian households with monthly of
over Rs. 5000 at 4.5 million. According to the survey, the category of households
with annual income of Rs. 2 lakhs and above is growing at the rate of 30 per cent
per annum. No wonder, banks with vision and insight are trying to woo this market
through a series of innovative additions to their products, services, technology
and marketing methods. Fixed and unfixed Deposits, (cluster deposits which can
be broken into smaller units to help meet depositors’ overdraft without breaking
up entirely), centralised database for ‘any branch banking’ (whereby the customer
can access his account in any of the branches irrespective of where the account is
maintained), room services (whereby the customers are visited at their residences
offices to enable them to open their accounts), automatic teller machines, tele
banking network, extended banking time, courier pickup for cheques and
documents, etc. are some of the privileges extended to the customers by the
banks in are eagerness to cultivate the retail market. In short, in the bold new
world of retail banking the customer is crowned as king.
Retail Banking P a g e | 14
or credit cards is very low. With very few focused multi-line banks, non-banks
are often significant players in retail lending, as HDFC is in house loans. Yet,
many non-banks lack the minimum size to make the necessary investments and
address the challenges of retail banking.
A large number of banks have launched or relaunched retail products and
are attempting to grow their share of the personal financial services market. Even
the term lending institutions have decided that they need to go retail to raise
funds. Many organization like ICICI are betting that a large part of their future
growth will come from retail customers. All round increase in economic activity.
Increase in the purchasing power. The rural areas have the large purchasing
power at their disposal and this is an opportunity to market Retail Banking. India
has around 200 million households and 400 million middleclass population more
than 90% of the savings come from the house hold sector. Falling interest rates
have resulted in a shift. "Now People Want To Save Less And Spend More."
Nuclear family concept is gaining much importance which may lead
to large savings, large number of banking services to be provided are day-
by-day increasing. Tax benefits are available for example in case of housing
loans the borrower can avail tax benefits for the loan repayment and the
interest charged for the loan.
Retail Banking P a g e | 15
COMPANY PROFILE
Website www.iob.in
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INDIAN OVERSEAS BANK : INTRODUCTION
IOB was youngest the one of 14 major banks which were nationalised
in 1969. Indian Overseas Bank (IOB) is a major bank based in Chennai
(Madras), having branches in India and abroad with more than 3,388
domestic branches (as on 31.03.2014) and 13 Branches in Foreign
Countries.
Retail Banking P a g e | 17
VISION CORE VALUES MISSION
VISION
To be among the top five nationalised bank in terms of business volume and
sustained profitability with global recognition guided by high standards of
governance and ethics; and emerge as a “Most preferred Banking partner” to
unlock the value of its stakeholders”
CORE VALUES
Customer centricity
MISSION
Retail Banking P a g e | 18
PRODUCT AND SERVICES
PERSONAL BANKING
Personal banking of Indian Overseas Bank is further divided into these main
categories:
i) Saving Bank
ii) Current Account
iii) Term Deposit
iv) Retail Loans
v) Home Loans and Mortgages
vi) Depository Services
vii) ABSA (Application Supported by Block Amount)
viii) International VISA Cards
ix) Insurance and Mutual Funds
x) Real Time Gross Settlement (RTGS)
xi) Pension Payment Scheme
xii) Saving Scheme
DEPOSIT PRODUCTS
SB Regular RD Gold
SB Basic/Small Recurring Deposit
SB Little Star Reinvestment Deposit
SB Silver Special Fixed Deposit
SB Gold Easy Deposit
SB Platinum Wedding Deposit
SB Student Education Deposit
SB Corporate Salary Account Vardha (for Senior Citizen)
Tax Saver Deposit
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NRI Accounts IT Products
Foreign Currency (Non Residence) IOB VISA International Debit Card
Non Residence External Internet Banking
Non Residence Ordinary Mobile Banking
Resident Foreign Currency IOB VISA International Credit Card
IOB NRI Plus IOB-AMEX Gold Charge Card
Insurance Products Gold Coin
IOB Jeevan
IOB Health Care Plus Gold Coin
Vidya Jyothi With Suraksha
Liability Insurance
Third Party Products Current Deposit
Life Policies LIC CD Regular
Non Life Polices – USGICO CD Classic
Mutual Funds CD Super
CD Supreme
Tax Saver Products
Tax Saver Deposit
IOB Health Care Plus
IOB Jeevan
Housing Loan – Subha Gruha
LIC Tax Saver Plans
ELSS Mutual Funds
Retail Credit Schemes
Home Improvement Scheme
Home Décor
Home Loan for NRIs
Housing Loan – Subh Gruha
Vehicle Loan – Pushpaka
Clean Loan
Pensioner’s Loan
Sahayika
Sanjeevani
IOB Akshay
Easy Trade Finance
Education Loan –Vidya jyothi
Retail Banking P a g e | 20
Deposit Products
Deposit Products
SB – Regular
• Minimum Balance: Rs 500/- (with Out Cheque Book) & Rs 1000/- (With Cheque Book).
• Interest rate at 4.00 % on Daily Product Basis.
• Free International VISA Debit Card
• SMS alerts for daily transactions.
• Free Internet & Mobile Banking Facilities
• Anywhere Banking & ASBA Facility Available
• Online Tax payment facility.
• Utility Bill payment facility
• Life & Health Insurance cover available at affordable premium.
SB – Silver
• Account can be opened with '0' balance.
• Minimum Average daily balance - Rs.5,000.
• Free International VISA Debit Card
• SMS alerts for daily transactions.
• Free Internet & Mobile Banking Facilities
• Anywhere Banking
• Online Tax payment facility.
Retail Banking P a g e | 21
• Free Personal Accident Insurance cover for Rs. 1 lakh
• Utility Bill payment facility
• Overdraft facility up to one-month salary in case of salary earners.
SB – GOLD
• Minimum average quarterly daily balance is Rs.50000.
• Free International VISA Debit Card
• SMS alerts for daily transactions.
• Free Internet & Mobile Banking Facilities
• Any where Banking
• Sweep in – Sweep Out Facility
• Online Tax payment facility.
• Free Personal Accident Insurance cover for Rs. 5 lakh
• Utility Bill payment facility
• Personalized cheque books free of cost.
• Preferential rate for gold coins ( Concession of Rs 15/- per Gm).
SB – Platinum
• Minimum Balance : Rs 750/-
• Free 75 Cheque Leaves per annum
• Free International VISA Debit Card
• SMS alerts for daily transactions.
• Free Internet & Mobile Banking Facilities
• Free Personal Accident Insurance cover for Rs 75,000/-
• Transfer of funds through RTGS/NEFT (75% concession on charges).
• Any where Banking
• Online Tax payment facility.
• Utility Bill payment facility
• Life & Health Insurance Cover available at affordable premium.
SB – Student
• For the students from the age of 16 Years
• Minimum Balance : Rs 500/-
• Free 60 Cheque Leaves per annum
• Free Multipurpose Usage Card
• SMS alerts for daily transactions.
• Free Internet & Mobile Banking Facilities
• Free Personal Accident Insurance cover of Rs.1 Lac
• Transfer of funds through RTGS/NEFT
• Any where Banking
• Online Tax payment facility.
• Utility Bill payment facility
Retail Banking P a g e | 22
• Life & Health Insurance Cover available at affordable premium.
SB – Corporate Salary Account
• Zero Balance Salary Account for Employees of reputed organization.
• Free 60 Cheque Leaves per annum
• Free IOB International VISA Debit Card
• SMS Alerts for all transactions.
• Withdrawal up to Rs 50,000 per Day in ATMs
• Free Internet Banking Facility
• Free Mobile Banking Facility
• Free RTGS/NEFT Facilities
• Free Personal Accident Cover for Rs 1 Lac
• Over Draft Facility* & much more
• Life & Health Insurance cover available at affordable premium.
Current Account
CD - Regular
• Minimum Balance Rs 2000/- for Metro & Urban Branches & For others Rs 1000/- only.
• Internet Banking Facility
• Any where Banking
• NEFT & RTGS Facilities
• Cheque Book facility
• Online Tax payment facility.
• Utility Bill payment facility
• Multicity Cheques facility
• ASBA facility available.
CD - Classic
• Minimum Balance > 1 Lac daily Balance over 3 Months
• Free Internet Banking Facility & Any where Banking
• Free NEFT,25% concession on RTGS
• Free Personal Accident Cover for Rs 1 Lac
• Free name- Printed Cheque Books
• Online Tax payment facility.
• Utility Bill payment facility
• 50% concession on Multicity Cheques, Folio Charges & DD Charges
• ASBA facility available.
CD - Super
• Minimum Balance > 5 Lac daily Balance over 3 Months
• Free Internet Banking Facility & Any where Banking
• Free NEFT,50% concession on RTGS
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• Free Personal Accident Cover for Rs 5 Lac
• Free name- Printed Cheque Books
• Online Tax payment facility.
• Utility Bill payment facility
• Free Multicity Cheques
• Free Folio Charges
• 50% concession on Outstation cheque collection charges & DD Charges
• ASBA facility available.
CD - Supreme
• Minimum Balance Rs.7500/-
• Free Debit Card
• Free Cheque Leaves
• Free Internet Banking
• 75% concession on NEFT/RTGS.
• Free Cash withdrawal up to RS. 50,000/- under CBS transactions from any Branch
• Concession on Gold Coin purchase ( Rs 7.50/- per Gram on minimum purchase of 76
gms in a day)
• ASBA facility available.
Recurring Deposits
• Deposits received for 6 months to a maximum of 10 years as monthly fixed
installments.
• The amounts saved and interest compounded at quarterly intervals paid at the time
of maturity.
• Ideal for depositors who save in installments for future big occasions.
RD - Gold
• This scheme combines the features of RD and Easy deposit schemes and on maturity,
Gold coins are given equivalent to the maturity value of the deposits.
• Minimum deposit will be Rs.250/- and thereafter in multiples of Rs.50/-.
• The minimum and the maximum period of deposit will be 12 months and 24 months
respectively.
• Concession of Rs 25/- per gram is applicable
Reinvestment Deposit
• Earn Interest on the interest.
• Deposits accepted for 6 months to 10 years.
• Interest compounded quarterly and paid at the time of maturity.
• Avail loans up to 85% on the principal
• Minimum deposit - Rs. 1,000/-.
Special Fixed Deposit
• Deposits accepted for 6 months to 10 years.
• Interest payable every quarterly or monthly.
• Monthly interest is payable at discounted rate.
Retail Banking P a g e | 24
• Ideal for depositors who want regular monthly or quarterly interest income.
Easy Deposit
• The minimum monthly savings amount between Rs.100 to Rs.1000 is to be decided by
the depositor.
• This will be the core amount and depositor is free to deposit up to 10 times the core
amount every month.
• Interest at term deposit rates is payable and calculated on the minimum balance
between the 10th and the last day of the month.
• Deposit amount and accrued interest is repayable after a specified period, which ranges
from 6 months to 10 years.
Wedding Deposit
• This is a variation of RD. The deposit can be made for 63, 84,120 months.
• The monthly deposit amount increases every year by the amount of initial deposit.
E.g. if the monthly deposit in the first year is Rs.100 it will be Rs.200 in the second
year and Rs.300 in the third year and so on.
• The deposit can be made in such a way that maturity proceeds are used for marriage
expenses of their children.
Education Deposit
• This is also another variation of RD.
• The deposit is accepted for 63 months and 84 months.
• The monthly deposit from the second year decreases by 1/5 in the case of 63 month
deposit and 1/7 in the case of 84 month deposit. For E.g. if the installment in the first
year is Rs.250 the second year it will be Rs.200 and third year Rs.150 and so on.
Minimum deposit is Rs.250 for 63 months and Rs.350 for 84 months.
• Monthly installments can be planned in such a way that the maturity proceeds are
utilized for meeting the education expenses.
Vardhan Deposit
• Deposit scheme for senior citizens.
• Deposits accepted for a maximum period of 10 years.
• Minimum deposit amount is Rs.5000.
• Depositor is eligible for additional interest of 0.75%.
• Cap of Rs 25 Lac applicable to special deposits only.
Tax Saver Deposit
• Amount from Rs. 10,000 to 1,00,000
• Amount deposited is eligible for tax benefit under Sec 80 ( C) of IT Act.
• Period of deposit - 5 years to 10 years.
• Premature closure is not permitted till 5 yrs, Interest Rate – 9.00 %.
Retail Banking P a g e | 25
Retail Credit Schemes
Home Loan Scheme- Subha Gruha
• Housing Finance scheme for resident individuals up to Rs.500 Lakhs.
• Margin - 20%. Repayable in 20 years for purchase / construction of new / old houses /
flats.
• Holiday period – up to 18 months for construction and 3 months for purchase.
• Interest rate depends on the size of the loan and repayment period.
• Security - Mortgage of house.
Home Improvement Scheme
• Loan scheme for repair / renovation / up gradation of existing houses to individuals in
service, profession, trade. Loan amount - up to Rs.10 Lakhs
• Repayable in 120 EMI with a holiday period of 3 months.
• Security: Mortgage of property being repaired or any other unencumbered property
with market value twice that of the loan amount.
Vehicle Loan Scheme- Pushpaka
• Car finance scheme for purchase of new as well as used car and 2-wheeler.
• 90% of cost of new car and two-wheeler and 75% of market value of used car financed
against hypothecation of vehicle.
• Higher amount of loan for used car considered on case to case basis.
• Repayment - 60 EMI for new cars and 36 EMIs for used cars..
Clean Loan
• Loan for salaried employees to meet personal and domestic expenses
• Quantum of loan – 10 times monthly salary / 10 lac whichever is lower
• For LIC agents up to Rs 5 Lacs
• Repayment – 60 EMI for 10 times salary and 36 EMI for others
• Undertaking letter from the employer to deduct from the salary ,loan installments
every month and remit to bank to be produced.
Pensioner’s Loan
• All pensioners excluding Malaysian Government pensioners receiving pension through
our bank branch are eligible.
• The loan amount is restricted to 10 months pension with a ceiling of Rs.2.00 lakhs for
those not over 65 years of age and Rs.1 lakh for those who are over 65 years of age.
• Repayable out of pension amount in 48 EMI for those not more than 65 years and 36
EMI for those over 65 years.
Retail Banking P a g e | 26
• Loan scheme for Non-resident Indians / Persons of Indian Origin with monthly income
not less than Rs.10, 000/, to buy / construct house / flat in India.
• Maximum loan - Rs. 500 Lakhs or 80% of the cost.
• Repayable in 15 years.
• Security - Mortgage of property.
Sahayika Loan
• Loan to meet expenditure on social financial commitments
• Applicant should be an individual in employment or business / professional or
Self-employed with regular income.
• Maximum loan amount - Rs.5 Lakhs.
• Security and margin: NSC, LIC, ULIP etc. = 25%, Life policies = 10%,
• Immovable property = 50%.
• Repayment - 48 equated monthly installments. No holiday period.
Sanjeevini Loan
• Loan Scheme for registered medical practitioners for construction of nursing home,
hospitals, purchase of equipment, vehicle, ambulance etc.
• Maximum loan - Rs.2 crore in Metro/urban area, Rs.50 Lakhs in semi-urban area and
Rs.10 Lakhs in rural area.
• Margin - 15-25% for purchase of equipment, 25-30% for construction of nursing home.
Repayment – 5 - 7 years.
Educational Loan – Vidya Jyothi
• Loan scheme to students for education in India and abroad.
• Maximum Loan amount - Rs.10.00 Lakhs for study in India and Rs.20.00 Lakhs for
foreign study.
• Repayable in 5- 7 years, after completion of studies.
• No collateral security for loans up to Rs.4 lac.
IOB Akshay
• Loan against life policies of LIC and other private insurance companies approved by
IRDA.
• Maximum loan amount - 90% of surrender value in the form of CC/DL/TOD.
• Repayment - 36 EMI.
Easy Trade Finance
• Hassle free advance to retail traders, who can be individuals, proprietary, partnership
or company.
• Insurance of stock, submission of stock statement etc. are not insisted.
• Maximum advance - Rs.300 lakhs.
• Margin - ranges from 10% to 50%.
• Security: Collateral security of immovable property. Liquid security in the form of NSC,
Life policies etc may also be considered.
Retail Banking P a g e | 27
CORPORATE BANKING
It comprises of following :
Micro small and Medium Enterprise (MSME)
IT and Ites BPO
SWIFT Centres
Authorised Dealers
BG Verification
IOB Expo Gold Card
RURAL BANKING
It comprises of following:
IOB’s Commitment for Social Causes
Rural Products
Agricultural Short Terms Loans
Financial Inclusion
Agri-Business Consultancy
PM 15 Point Program
Agriculture Term Loans
IOB Special Credit Schemes
PMRY Subsidy
Agriculture loan forms
NRI ACCOUNTS
It comprises of following:
NRI Newsletter
NRI Queries
Non-Resident Ordinary (NRO)
Resident Foreign Currency Account (RFC)
Foreign Currency Non-Resident Accounts (Banks)
IOB NRI Plus Deposit
NRI Homeloan Scheme
NRI Remittances
INTERNATIONAL BANKING
Indian Overseas Bank has 13 International Branches.
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OTHER SERVICES
Other important services of Indian Overseas Bank are:
i) Government Business
E Payment of Direct Taxes
E Payment of Indirect Taxes
Sales Tax Collection
ii) E – Products
iii) Debit Cards/Credit Cards
iv) National Eligibility Fund Transfer (NEFT)
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VARIOUS RETAIL LENDING SCHEMES
Rate of Interest under Retail Credit Products. (as on 31st May 2014)
S No Name of Scheme Interest Rate %
1 Pushpaka-loan p.a10.75 %
(Floating)
2 Sahayika-loan to meet social financial commitments 14.00%
3 Sanjeevini - loan to medical practitioners for setting up nursing
homes/hospitals and for purchase of equipments 12.00%
For Loans up to Rs. 1.00 Crore. 12.50%
Above Rs.1 Crore to 5.00 Crores
4 Pensioners' loan Scheme - loan to pensioners for meeting immediate emergency 14.25%
needs
5 Home Décor - loan for furnishing your home. 13.00%
6 Liquirent - loan against future rent receivables
Tenor up to 36 months 13.00%
Tenor more than 36 months 13.50%
7 Akshay - loan against life policies of LIC and private insurers approved 14.00%
by IRDA
8 Vidya Jyothi - loan for pursuing higher education
Up to Rs. 4 Lacs 12.25%
Above Rs. 4 lacs to Rs.7.50 lacs 13.50%
Above Rs.7.50 lacs 13.25%
Ward of Staff 12.00%
Vocational Courses 12.25%
9 Clean Loan - loan to employees of reputed organizations to meet personal 15.25%
expenditure
10 Easy Trade Finance - Hassle free working capital finance and term loan to
retail traders: Working Capital: Term Loan: 13.25%
Term Loan: 13.75%
11 IOB Career Dream
Loan Secured by NSC,LIC,KVP etc 14.00%
Loan without security/against immovable property 14.25%
12 IOB Scholar
Up to Rs. 4 Lacs 12.75%
Above Rs. 4 lacs 13.50%
Ward of Staff 12.00%
13 Jewel Loans 11.75%
Up to Rs. 3 Lacs 12.75%
Above Rs. 3 lacs
14 Home Improvement 10.25%
15 IOB Personal Loan 12.00%
*1.00% interest concession if 100% collateral security is provided
0.50% interest concession for women borrowers
16 Reverse Mortgage 11.25%
17 IOB Surya 11.75%
Scheme A -- For Individuals 12.50%
Scheme B -- For Institutions
18 IOB Royal
Repayment Less than 4 years 14.50%
Repayment Above 4 years 15.25%
Retail Banking P a g e | 30
WORK FLOW MODEL
DEPOSITS
Introduction
Documentation
Deposits Withdrawal
Cashier Cashier
Retail Banking P a g e | 31
ACCOUNT OPENING
Choose an Institution
Agree to Terms
Congratulate Yourself!
Retail Banking P a g e | 32
MCKINSEY’S SEVEN S MODEL
Retail Banking P a g e | 33
change manager's thinking about how companies could be improved. It says that
it is not just a matter of devising a new strategy and following it through. Nor is
it a matter of setting up new systems and letting them generate improvements.
----Shared values” ―are commonly held beliefs, mindsets, and assumptions
that shape how an organization behaves – its corporate culture. Shared values
are what engender trust. They are an interconnecting centre of the 7S’s model.
Values are the identity by which a company is known throughout its business
areas, what the organization stands for and what it believes in, it central beliefs
and attitudes. These values must be explicitly stated as both corporate objectives
and individual values
―Staff” refers to the number and types of personnel within the organization and
how companies develop employees and shape basic values.
Retail Banking P a g e | 34
STRUCTURE
Board of Directors
CONSTITUTION:
The Constitution of the Board of the Bank is governed by "The
Nationalized Banks (Management and Miscellaneous Provisions) Scheme, 1970,
formulated by the Central Government, after consultation with the Reserve Bank of
India, in exercise of the powers conferred by section 9 of "The Banking Companies
(Acquisition and Transfer of Undertakings) Act,1970".
COMPOSITION:
The Composition of the Board of Directors of a Bank is governed by "The
Nationalised Banks (Management and Miscellaneous Provisions) Scheme 1970" read
with "The Banking Companies (Acquisition and Transfer of Undertakings) and
Financial Institutions Laws (Amendment) Act 2006" and amendment to the vide
Extraordinary Gazette Notification dated 19.02.2007 of the Central Government.
CONTRIBUTION:
In terms of The Banking Companies (Acquisition and Transfer of Undertakings
Act 1970, the General Superintendence, Direction and Management of the affairs
and business of the Bank vests in the Board of Directors which is entitled to
exercise all such powers and do all such acts and things as the Bank is authorized
to exercise and do.
Presently, there are 13 Directors on the Board of the Bank. Brief Particulars
of each of the directors are placed below:
Date of
Desination Name Appointment/ Charge
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Shri.Nirmal Chand
RBI Nominee Director 13 March 2014
Officer Employee Shri. Jai Deo
Director Sharma 02 May 2013
Part-Time Non-Official Shri Niranjan Kumar Agarwal 01 November 2011
Director
(Nominated by GOI)
08 December 2011
Share holder Director Shri.Ajit Vasant Sardesai
Retail Banking P a g e | 36
objectives, both quantitative and qualitative, and encourages cross sell and team
spirit. Indian Overseas Bank performance management process will be supported
by a robust rewards and recognition strategy for each business and a market
based compensation structure that is flexible, responsive and helps retention
through asset building and wealth creation for top performers.
STRATEGY
Being one of the leading banking institutions with rich culture of professionalism
the bank has various strategies to tackle with competitors in the market. The bank
has the strategy to make use of the growing potential of the rural sector as well
as the global academy, the business landscape will be changing magically and so
will the financial service need.
The bank has the strategy to enhance the reach of anytime and anywhere
banking. It has the ATM’s almost in all the cities and in good numbers but quite
less ATMs in Bihar. With the growing of the net banking the bank have several
new products and facilities with state-of-the-art facilities, enabling you to conduct
all your banking activities using your personal computer, from the comfort of your
home or office. Thus providing you with secure, 24 hour access to all your accounts
from anywhere in the world.
Unique Advantages:
Single Access Key: Our revolutionary technology allows you to access your
account with your Internet Banking. Just log on to our website (www.iob.in),
select Internet Banking services and key in your Login ID and Password. On
successful validation you will be allowed to access to your account.
Retail Banking P a g e | 37
Secure Technology: For the first time in India, our Two Factor Authorization
allows for "One Time Passwords" for Internet Banking transaction
authentication to be delivered via SMS to your Mobile Phone. This password
enhances your Internet Banking security and allows you the freedom of banking
without remembering multiple passwords.
Instant Payment Solutions: Our Real Time Gross Settlement (RTGS)
Payment and Electronic Funds Transfer (NEFT) facilities allow you to transfer
funds to own or third party accounts instantly. You can also request for multiple
Demand Drafts at various locations and set up standing instructions for your
account to execute routine payments
SYSTEM
Formal and informal procedures that support the strategy and structure
(systems are more powerful than they are given credit).
The bank follows a systematic procedure at all the levels. The bank has very
good performance appraisal system, training and development system, resource
allocation system, distribution and recovery system. The instructions flow from
top management to lower levels of management.
The training needs are developed after TNI (Training Needs Identification)
and all the programs are put on the monthly/annual training calendar to be
implemented.
STAFF
The people/human resources management – processes used to develop
managers, socialization processes, ways of shaping basic values of management
cadre, ways of introducing young recruits to the company, ways of helping to
manage the careers of employees.
Indian Overseas Bank envisaged that for an individual to work with the
organization in perfect synergy, his/her goals had to be linked with the goals of
the organization. This process of aligning individual and organizational goals was
termed as the performance management process. The main objective of these
innovative performance management practices was to encourage the employees
to think innovatively.
SHARED VALUE
The bank aimed at building a culture to inculcate professional
entrepreneurship in them to make themselves and the shareholders prosperous.
Retail Banking P a g e | 38
Indian Overseas Bank has planned to steadily increase its presence in retail
business. Earlier bank has purposely maintained a low-key presence in the retail
market, now is planning to increase exposure in this segment. There is
tremendous scope for IOB’s growth as it was trying to take care of the latent
needs of the customers with highly skilled and involved employees.
SWOT ANALYSIS
STRENGHTS:
IOB is one of the largest public sector banks operating in India. It has an
extensive distribution network comprising of 3376 branches in pan India and 7
branches in abroad.
Best Customer Relationship Management.
Customers of IOB are IOB Marketers.
Quick Disbursement of Loans.
The Bank has a strong retail depository base & has good number of
customer.
Retail Banking P a g e | 39
Bank boasts of strong brand equity.
The bank has a near competitive edge in area of operations.
It has a highly automated environment in terms of information technology &
communication system.
Awards
Best Public Sector Banker Award.
Best Indian Banker Award.
SME Award.
Skoch Award for Financial Inclusion.
Best in rural Outreach
Best CSR Practise from IPE BFSI Award
It has many innovative products like Little Star Account, NRI services, Vardhan
Deposit for Senior Citizens.
WEAKNESS:
OPPORTUNITY:
Branch expansion.
Door step services.
A strong Corporate identity can be achieved through Branding (Public
Awareness)
IOB should focus on to increase Tie up with Private Organisations, Colleges
and Universities.
Infrastructure improvements & better systems for trading & settlement in
the government securities & foreign exchange markets.
IOB should open more Branch in Rural areas to target more Rural Public.
THREATS:
Retail Banking P a g e | 40
RESEARCH METHODOLOGY
Retail Banking P a g e | 41
DATA COLLECTION
There are several approaches of data collection. The primary sources of data
collection are done through: -
Observations and Questionnaire
QUESTIONNAIRE
SAMPLING TECHNIQUE
(a) Sampling Unit: -
Walk in customers and the company database of high ended customer.
(b) Sample Size:-
Sample size for this project was restricted to 50 respondents. Since it was
not possible to cover the whole universe in the available time period, it was
necessary for me to take a sample size of 50 respondents.
(c) Sampling Method:-
There are three methods of sampling:-
1. Probability Sampling
2. Non-Probability Sampling
3. Quota
For this research work Non- Probability Convenience Sampling has been
chosen because time limit for the completion of the work is limited.
Area of Study - Patna, Bihar
Duration - 2 months (13th May 2014 – 16th July 2014)
1. Primary Data:
The data are collected directly from the universe by conducting
Retail Banking P a g e | 42
interviews, etc. these are the original sources from which the researcher
directly gathers data which are not previously referred. All the people from
different profession were personally visited and interviewed. They were the
main source of primary data. The method of collection of primary data was
personal direct interview through a structured questionnaire.
The primary data was collected by means of survey. Questionnaires were
prepared and customers of Indian Overseas Bank were approached to fill up these
questionnaires. The filled up information was later analyzed to obtain the required
information.
2. Secondary Data:
The data are collected from the secondary sources such as magazines,
journals, etc. These sources consist of already variable data in the form of
statements, and reports, which may include sensory reports, financial
statements of the company, reports of governments departments, etc.
It was collected from internal sources. The secondary data was
collected on the basis of organizational file, official records, newspapers,
magazines, management books, preserved information in the company’s
database and the website of the company.
Both Primary and Secondary sources was used for data collection.
RESEARCH DESIGN
Research design is simply the framework or plan for a study, used as a guide in
collecting and analyzing data. There are three types of Research Design:-
1. Exploratory Research Design
2. Descriptive Research Design
3. Casual Research Design
For the study, Exploratory Research Design was undertaken to classify the
investors on their risk and return profile.
PLAN OF ANALYSIS
The data obtained from the structured questionnaire was interpreted
and recorded. The table and graph were constructed using data from the
Retail Banking P a g e | 43
questionnaire through simple techniques like average, percentage, etc. which
was then used for analysing the acquired data.
LIMITATIONS
Designing own and new financial products is very costly and time consuming
for the bank.
Customers now-a-days prefer net banking to branch banking. The banks that
are slow in introducing technology-based products, are finding it difficult to
retain the customers who wish to opt for net banking.
Customers are attracted towards other financial products like mutual funds etc.
The volume of amount borrowed by a single customer is very low as compared
to wholesale banking. This does not allow banks to exploit the advantage of
earning huge profits from single customer as in case of wholesale banking.
Though banks are investing heavily in technology, they are not able to exploit
the same to the full extent.
Profile of Respondents
Respondents were the customers of Indian Overseas Bank, Main branch, of
age group 21-65 years.
1. What is your Age Group?
Parameters In Numbers In Percentage
Below 25 11 22%
25-30 13 26%
30-35 11 22%
35-40 7 14%
40-45 5 10%
Above 45 3 6%
30%
Age Group
25%
20%
15%
26%
10% 22% 22%
14%
5% 10%
6%
0%
below 25 25-30 30-35 35-40 40-45 above 45
Series1 22% 26% 22% 14% 10% 6%
Table Number – 01
Interpretation: The purpose of this question is to know the age group of the
Retail Banking P a g e | 44
Respondent.
Inference: 94% of the Respondent are below the age of 45.
2. Do you have any Bank Account? If Yes which type of Account?
Account Type
80% 72%
60%
40%
20%
20% 8%
0%
SB CA LL
SB CA LL 72% 20% 8%
Table Number --- 02
Interpretation: The purpose of this question is to know Account type of the respondent.
Occupation
40% 34%
30% 26%
22%
18%
20%
10%
0%
Service Self-Employed Student Business
Series1 34% 26% 18% 22%
Table No -- 03
Interpretation: The purpose of this question is find the Occupation of the Respondent.
Retail Banking P a g e | 45
Inference: 34% of the Respondent are service holder and 22% and 26% are
Businessman and Self-Employed Respectively.
Inference: 36% of the respondent are happy with Bank’s Good Customer Relations and
30% are happy with Quick response of the bank. Since, both of them are related to
customers satisfaction which is good.
50% 44%
45% 38%
40%
35%
30%
25%
20%
15% 12%
10% 6%
5%
0%
Friend
GOI Undertaking Recomendation Brand Value Advertisement
Recommendation
Series1 38% 44% 12% 6%
Table No. -- 05
Interpretation: The purpose of this question is to know that what Influence respondent to
avail service from Indian Overseas Bank?
Retail Banking P a g e | 46
Inference: 44% of the Respondent are availing service after friends/ Relative
Recommendation it says that IOB Customers are IOB Marketers. 38% of the Respond are
availing service of IOB in favour of Govt. of India Undertakings.
Ambience_Layout
60%
50%
50% 44%
40%
30%
20%
10% 6%
0%
0%
Could be Better Satisfactory Good Excellent
Ambience_Layout 0% 6% 44% 50%
Table No. --- 07
Interpretation: The purpose of this question is to know about branch ambience & layout
Inference: 94% of the Respondent are satisfied with branch layout and ambience.
Retail Banking P a g e | 47
8. Is the waiting time at the Teller Counter was minimal?
Waiting_Time
60%
50%
50%
40% 36%
30%
20%
12%
10%
2%
0%
Could be Better Satisfactory Good Excellent
Waiting_Time 2% 12% 36% 50%
Table No. ---08
Interpretation: The purpose of this question is to know about the waiting time at counter.
Inference: 86% of the Respondent are happy with waiting time at the teller counter.
Retail Banking P a g e | 48
Interpretation: The purpose of this question is to know about Transactions Feedback.
Inference: 94% of the Respondent are satisfied with smooth and error free Trasactions.
10. Is IOB looks into the feedback provided by you and takes necessary
action if required?
Parameters In Numbers In Percentage
Could Be Better 1 2%
Satisfactory 8 16%
Good 32 64%
Excellent 9 18%
Customer_feedback
70% 64%
60%
50%
40%
30% 18%
16%
20%
10% 2%
0%
Could be Better Satisfactory Good Excellent
1 8 32 9
Series1 2% 16% 64% 18%
Table No. ---10
Interpretation: The purpose is to know response on feedback provided by customers.
Inference: 98% of the Respondent are satisfied with their response on feedback.
20% 14%
10%
10%
0%
Could be Better Satisfactory Good Excellent
E-Product 10% 32% 44% 14%
Table No. --- 11
Interpretation: The purpose of this question is to know the satisfaction on E-Products.
Retail Banking P a g e | 49
Inference: 44% of the Respondent are not fully satisfied with E-Product, Especially ATM
they told there is Scarcity of IOB’s ATM in the State. So Bank should look in this regard.
12. How do you find IOB employees provide you good customer relation and
quick services?
Parameters In Numbers In Percentage
Could Be Better 2 4%
Satisfactory 4 8%
Good 25 50%
Excellent 19 38%
CRM
60%
50%
50%
38%
40%
30%
20%
8%
10% 4%
0%
Could be Better Satisfactory Good Excellent
CRM 4% 8% 50% 38%
Table No. ----12
Interpretation: The purpose of this question is to know the Satisfaction on CRM.
Inference: 88% of the Respondent are happy with CRM of the IOB.
13. How do you find the processing procedure while availing different services
provided by IOB?
Parameters In Numbers In Percentage
Could Be Better 2 4%
Satisfactory 8 16%
Good 24 48%
Excellent 16 32%
Processing_procedure
60%
48%
50%
40% 32%
30%
20% 16%
10% 4%
0%
Could be Better Satisfactory Good Excellent
Processing_procedure 4% 16% 48% 32%
Table No. ----13
Retail Banking P a g e | 50
Interpretation: The purpose of this question is to know about Processing Procedure.
Inference: 96% of the Respondent are satisfied with the Processing Procedure.
14. Is the branch personnel have been very helpful and courteous?
Parameters In Numbers In Percentage
Could Be Better 1 2%
Satisfactory 2 4%
Good 28 56%
Excellent 19 38%
Branch_helpfullness
60% 56%
50%
38%
40%
30%
20%
10% 4%
2%
0%
Could be Better Satisfactory Good Excellent
Branch_helpfullness 2% 4% 56% 38%
Table No. ----14
Interpretation: The purpose of this question is to know about branch personnel nature.
Inference: 94% of the Respondent are happy with branch personnel helpfulness.
15. How do you find the cooperation of the bank employees in processing and
helping you with documentation, services and problem faced by you in
banking issue ?
Parameters In Numbers In Percentage
Could Be Better 1 2%
Satisfactory 11 22%
Good 27 54%
Excellent 11 22%
Employee_co-operation
60% 54%
50%
40%
30% 22% 22%
20%
10% 2%
0%
Could be
Satisfactory Good Excellent
Better
Employee_co-operation 2% 22% 54% 22%
Table No. ---14
Retail Banking P a g e | 51
Interpretation: The purpose to know the Employee helping nature on banking Problems.
16. Are you happy with the TAT (Turn Around Time) post request ? ***
Parameters In Numbers In Percentage
Could Be Better 1 2%
Satisfactory 7 14%
Good 27 54%
Excellent 15 30%
TAT
60% 54%
50%
40%
30%
30%
20% 14%
10% 2%
0%
Could be Better Satisfactory Good Excellent
TAT 2% 14% 54% 30%
Table No. ----15
Interpretation: The purpose of this question is to know about TAT feedback.
30%
20% 14%
10%
0%
0%
Dis-satisfied Not Dis-satisfied Satisfied Over Satisfied
OverAll_satisfaction 0% 14% 50% 36%
Table No. ----16
Interpretation: The purpose of this question is to know the overall satisfaction with IOB
Retail Banking P a g e | 52
Inference: 36% of the Respondent are delighted with IOB service and rest 64% are
happy with IOB Service. Since more than one-third Respondents are delighted with Service
it is a very great sign for any Business Organisation for Rapid Progress.
S.P.S.S.
(STASTICAL PACAGE FOR SOCIAL SCIENCES)
OUTPUT, ANALYSIS AND INTERPRETATION
Analysis:
Factor Analysis
Factor analysis is a statistical method used to describe variability among observed,
correlated variables in terms of a potentially lower number of unobserved variables
called factors. In other words, it is possible, for example, that variations in three or four
observed variables mainly reflect the variations in fewer unobserved variables. Factor
analysis searches for such joint variations in response to unobserved latent variables.
The observed variables are modelled as linear combinations of the potential factors, plus
"error" terms. Factor analysis is related to principal component analysis (PCA), but the
two are not identical.
KMO and Bartlett's Testa
df 55
Sig. .001
a. Only cases for which rescaledsatis = 1 are used in the analysis phase.
Retail Banking P a g e | 53
collected to the problem being addressed through the study. For Factor Analysis to be
recommended suitable, the Bartlett’s Test of Sphericity must be less than 0.05.
Communalitiesa
Initial Extraction
Once the extraction of factors has been completed, we examine the table of
'Communalities' which tells us how much of the variance in each of the original variables
is explained by the extracted factors. Higher communalities are desirable. This is the
proportion of each variable's variance that can be explained by the factors. It can be
defined as the sum of squared factor loadings for the variables. This explains how much
important variables are. Average of Extraction is .658 which is more than .6, so factor
analysis is possible.
Initial: This is the proportion of each variable’s variance that can be explained by the
factors.
Extraction: The values in this column indicate the proportion of each variable’s variance
that can be explained by the retained factors. Variables with high values are well
represented in the common factor space, while variables with low values are not well
represented.
Factor: The initial no. of factors is the same as the no. of variables used in the factor
analysis.
Initial eigen values- Eigen values are the variances of the factors. Because we
conducted our factor analysis on the correlation matrix, the variables are standardized,
which means that the each variable has a variance of 1 and the total variance is equal to
the no. of variance used in the analysis.
Retail Banking P a g e | 54
TOTAL VARIECE EXPLAINED :
The value which I got is 90.512 it is very very good. The table is below:
Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings
Correlation Matrixa,b,c
Correlation Branch_
1.00
Timing .745 .336 .367 .255 .381 .135 .496 .113 .192 .372
0
Retail Banking P a g e | 55
Ambienc
1.00
e_Layout .745 .767 .418 .580 .868 .575 .636 .484 .439 .601
0
Waiting_
1.00
Time .336 .767 .642 .835 .957 .647 .868 .891 .807 .651
0
Error_fre
e_transa .367 .418 .642 1.000 .303 .454 .642 .592 .540 .367 .000
ction
Custome
1.00
r_feedba .255 .580 .835 .303 .807 .334 .872 .773 .923 .923
0
ck
CRM
1.00
.381 .868 .957 .454 .807 .645 .767 .788 .713 .709
0
E_Produ
ct .135 .575 .647 .642 .334 .645 1.000 .271 .322 .135 .108
Processi
1.00
ng_proce .496 .636 .868 .592 .872 .767 .271 .867 .930 .750
0
dure
Branch_
1.00
helpfulln .113 .484 .891 .540 .773 .788 .322 .867 .906 .571
0
ess
Employe
1.00
e_co_ope .192 .439 .807 .367 .923 .713 .135 .930 .906 .806
0
ration
TAT
1.00
.372 .601 .651 .000 .923 .709 .108 .750 .571 .806
0
a. Only cases for which rescaledsatis = 0 are used in the analysis phase.
Retail Banking P a g e | 56
b. Determinant = .000
A Scree Plot is a simple line segment plot that shows the fraction of total variance in the
data as explained or represented by each PC. The PCs are ordered, and by definition are therefore
assigned a number label, by decreasing order of contribution to total variance. The PC with the
largest fraction contribution is labelled with the label name from the preferences file. Such a plot
when read left-to-right across the abscissa can often show a clear separation in fraction of total
variance where the 'most important' components cease and the 'least important' components
begin. The point of separation is often called the 'elbow'. The Scree Plot graphs the eigen values
against the factor no.. we can see these values in the first two column of the table immediately
Retail Banking P a g e | 57
above. From the third factor on we can see that the line is almost flat, meaning the each
successive factor is accounting for smaller and smaller amount of the total variance.
Component Matrixa,b
Component
1 2 3
Branch_Timing .462 .319 .762
Ambience_Layout .795 .342 .437
Waiting_Time .973 .122 -.168
Error_free_transaction .576 .592 -.309
Customer_feedback .905 -.337 -.025
CRM .937 .116 .008
E_Product .519 .691 -.267
Processing_procedure .939 -.150 .014
Branch_helpfullness .866 -.173 -.362
Employee_co_operation .870 -.437 -.161
TAT .779 -.476 .302
Extraction Method: Principal Component Analysis.
a. 3 components extracted.
b. Only cases for which rescaledsatis = 0 are used in the analysis phase.
With the help of component matrix, we can find the correlation between variables
and factors which we get from Principal Component Matrix (PCM). But for our analysis,
we apply rotated variables and factors which we get from PCM. This table contains the
unrotated factor loadings, which are the correlations between the variable and the factor.
The possible value range of this correlation lies between -1 to +1.
Rotated Component Matrixa,b
Component
1 2 3
Branch_Timing .093 .107 .936
Ambience_Layout .401 .419 .777
Waiting_Time .756 .600 .241
Error_free_transaction .191 .853 .118
Customer_feedback .932 .150 .202
CRM .704 .500 .381
E_Product .084 .885 .165
Processing_procedure .852 .292 .306
Branch_helpfullness .859 .412 -.059
Employee_co_operation .979 .118 .039
TAT .859 -.162 .402
Retail Banking P a g e | 58
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization. a,b
a. Rotation converged in 5 iterations.
b. Only cases for which rescaledsatis = 0 are used in the analysis phase.
Another important aspect that needs mention is the Rotated Component Matrix. While
deciding how many factors one would analyze is whether a variable might relate to more than
one factor. Rotation maximizes high item loadings and minimizes low item loadings, thereby
producing a more interpretable and simplified solution.
This table contains the rotated factor loadings (factor pattern matrix),
which represents both how the variables are weighted for each factor but also the correlation
between the variables and the factor. The possible value range for this correlation is between -1
to +1.
CONCLUSION
Retail Banking P a g e | 59
OPPORTUNITIES AND CHALLENGES
Second, rising indebtedness could turn out to be a cause for concern in the
future. India’s position, of course, is not comparable to that of developed
world where household debt as a proportion of disposable income is much
higher. Such a scenario creates high uncertainty. Expressing concerns about
the high growth witnessed in consumer credit segments the reserve bank
Retail Banking P a g e | 60
has, as a temporary measure, put in place risk containment measures and
increased the weight from 100 percent to 125 percent in the case of
consumer credit including personal loans and credit cards.
Fourth, KYC Issues and money laundering risks in retail banking is yet
another important issue. Retail lending is regarded as a low risk area for
money laundering because of the perception of the sums involved. However,
competition for clients may also lead to KYC procedures being waived in the
bid for new business. Banks must also consider seriously the type of
identification documents the will accept and other processes to be
completed. The Reserve Bank has issued details guidelines on application of
KYC norms in November 2004.
Fifth, the issue of money laundering is very important in retail banking. This
compels all the banks to consider seriously all the documents which they
accept while approving the loans.
Sixth, Banks are expected to take utmost care to retain the ongoing trust
of the Customers. Someone has rightly said, "It takes months to find a
good customer but only seconds to lose one." Thus, Customer service
should be t h e f i r s t a n d f i n a l s t r a t e g y at the end all in retail banking.
Retail Banking P a g e | 61
RESOURCE SIDE
Retail deposits are stable and constitute core deposits.
They are interest insensitive and less bargaining for additional interest.
They constitute low cost funds for the banks.
Effective customer relationship management with the retail customers
built a strong customer base.
Retail banking increases the subsidiary business of the banks.
ASSESTS SIDE:
Retail banking results in better yield and improved bottom line for a
bank.
Retail segment is a good avenue for funds deployment.
Consumer loans are presumed to be of lower risk and NPA perception.
Helps economic revival of the nation through increased production
activity.
Improves lifestyle and fulfils aspirations of the people through affordable
credit.
Innovative product development credit.
Retail banking involves minimum marketing efforts in a demand -driven
economy.
Diversified portfolio due to huge customer base enables bank to reduce
their dependence on few or single borrower.
Banks can earn good profits by providing non fund based or fee based
services without deploying their funds.
DISADVANTAGES
Designing own and new financial products is very costly and time
consuming for the bank.
Customers now-a-days prefer net banking to branch banking. The banks
that are slow in introducing technology- based products, are finding it
difficult to retain the customers who wish to opt for net banking.
Customers are attracted towards other financial products like mutual
funds etc.
Though banks are investing heavily in technology, they are not able to
exploit the same to the full extent.
A major disadvantage is monitoring and follow up of huge volume of loan
accounts inducing banks to spend heavily in human resource
department.
Retail Banking P a g e | 62
Long term loans like housing loan due to its long repayment term in the
absence of proper follow-up, can become NPAs.
The volume of amount borrowed by a single customer is very low as
compared to wholesale banking. This does not allow banks to to exploit
the advantage of earning huge profits from single customer as in case of
wholesale banking.
Retail Banking P a g e | 63
Extended branch hours are increasingly common in many markets, as
banks seek to increase customer convenience.
Identify and eliminate barriers and obstacles. Policies that do not make
sense; procedures that get in the way; and rules, norms that make
satisfying customers difficult all need to be eliminated to successfully
improve service.
Learn and develop skills. Clearly, personnel at all levels should learn new
skills related to service excellence and serve the customer.
Retail Banking P a g e | 64
Listen to customers, Measurement of customer satisfaction can be a
powerful way to improve service if the feedback is not focused on
punishment.
Managers need to help staff hear, first hand, how they are doing. For this
feedback to be effective, however, it must be tied to specific targets and
goals and needs to be frontline driven.
SUMMARY OF FINDINGS
Retail Banking P a g e | 65
98 % of the Respondent feels satisfied cooperation of the bank employees
in processing and helping them in documentation, services and problem
faced by them in banking issue.
84% of Respondent are happy with Turn around Time (TAT).
36% and 50% of the Respondent were over satisfied and Satisfied
Respectively with Overall level of Satisfaction.
Suggestions are always considered to be the most important part of any project
report because for every pros; there is cons associated with and to reduce the
effect of latter, following suggestions must be taken into consideration in regard
to retail banking.
The employees can do more marketing activities to improve their
presence in the minds of their potential target market. As we see that media
coverage of IOB is not so strong, hence for the maximum market coverage
and to attract new customer they should go for mass media coverage like
TV, Radio etc.
42% of the Respondent are unhappy with E-Products so bank personnel
should improve this issue because customer is a source through which
business can be increase and satisfy customers is a source to create more
customers.
Bank should introduce/ Open new ATMs Especially in Bihar because there is
much Scarcity of IOB-ATMs.
24% of the Respondent were not fully satisfied with Branch Personnel
cooperation in sorting out problems faced in banking issue, IOB should work
on this because CRM is the major aspect of any Business.
As we seen percentage of non-performing loan is increasing year by year
that means their current strategy regarding recovery of loan is not working
appropriately. To recover the non-performing assets the current strategy
need to be executed and monitored properly.
Since day by day the requirements and demands of public is increasing so
it is quite hard to provide full range services. So, it is required to put more
attention toward the expansion of branch network as well as ATM outlets
The Branch personnel should listen to customer patiently and should be able
to respond to their queries and clarifications because some customer are new
to some of the bank services and until and unless they will come to know
Retail Banking P a g e | 66
about those services they will be not be satisfied.
The Indian Overseas Bank should focus on business and service portfolio for
a reputation of being niche players in the industry.
The bank should concentrate on few reliable high net worth companies and
individuals rather than cater to the mass market.
As 10% customer response is not good for the clarification of the queries
response towards them so bank personnel should improve this issue because
customer is a source through which business can be increase and satisfy
customers is a source to create more customers.
As it is only 04% respondent said that sometime there was a error in the
transaction happened so to avoid these kinds of errors should be avoided
because it is unnecessarily results in wastage of time for both staff members
and service rendered.
Retail Banking P a g e | 67
in a positive manner.
The project aims to study the retail banking operations of INDIAN OVERSEAS
BANK. The study was very fruitful, it yielded the desired results, helped me
understand the retail banking. The study also helps in what are the customer
opinions towards operations of bank & its various product and services.
Any serious discussion of the future of the retail banking industry eventually
raises a basic question: will future customers still need retail banks? The answer,
it turns out, depends on banks themselves. With technology and non-blank
businesses providing new options for safeguarding and managing their finances,
customers will continue to depend on banks only as long as banks can provide
service and value that cannot be found anywhere else.
The need to become highly customer focused has forced the slow-moving
public sector banks to adopt a fast track approach. The unleashing of products
and services through the net has galvanized players at all levels of the banking
and financial institutions market grid to look a new at their existing portfolio
offering. Conservative banking practices allowed.
Indian banks to be insulated partially from the Asian currency crisis. Indian
banks are now quoting at higher valuation when compared to banks in other Asian
countries (viz. Hong Kong, Singapore, Philippines etc.) that have major problems
linked to huge Non Performing Assets (NPAs) and payment defaults. Co-operative
banks are nimble footed in approach and armed with efficient branch networks
focus primarily on the high revenue niche retail segments.
The Indian banking has finally worked up to the competitive dynamics of
the new Indian market and is addressing the relevant issues to take on the
multifarious challenges of globalization. Banks that employ IT solutions are
perceived to be futuristic and proactive players capable of meeting the multifarious
requirements of the large customer’s base.
Despite stiff competition among banks operating in both domestic and
overseas, Indian Overseas Bank (IOB) has achieved satisfactory progress in
areas of its operations. The bank hopes to achieve a reasonable level of
progress in all areas of operations to achieve their objective and for wealth
maximization. Credit Division of IOB has a very qualified and dedicated group
of officers and staffs who are always trying to provide their best service to the
clients. They always monitor the credit in different sectors and before providing
the loan they make appraisal to access whether the loan will be profitable
Retail Banking P a g e | 68
and whether the client is credit worthy and capable of repaying the loan within
the specified period. Indian Overseas Bank is the preferred choice in banking
for friendly and personalized service by the individuals and customers
LEARNING EXPERIENCE
The dissertation is to define the retail banking and regarding the general
services of bank. The study was very fruitful, it yield the desire result, helped me
to understand the banking services better. The study also yields what are the
factors that banking is looking forward for the customer.
The Indian banking has come from a long way from being a sleepy business
institution to a highly proactive and dynamic entity. This transformation has been
largely brought about by the large dose of liberalization and economic reforms
that allowed banks to explore new business opportunities rather than generating
revenues from conventional streams (i.e. borrowing and lending). The banking in
India is highly fragmented with 30 banking units contributing to almost 50% of
deposits and 60% of advances.
Under the ambit of the nationalized banks come the specialized banking
institutions. The bank gives great importance towards customer satisfaction. The
senior staffs with their busy schedule try to advice the customer how to invest in
better way. The employees in the bank are well behaved and give a great deal of
satisfaction to see them how they approach their customers.
The bank plays an important role not only to fulfil their duties towards customer
but also to understand them better regarding what they want and how to
maximize the return on the investment.
The bank has set up separate department to impart training program for the
employees. The biggest achievement is the implementation of core banking
solution.
Retail Banking P a g e | 69
ANNEXURE
BALANCE SHEET
Audited Financial Results for the year ended 31st March 2014
Retail Banking P a g e | 70
QUESTIONNAIRE
Retail Banking P a g e | 71
11. How do you find IOB employees provide you good customer relation and quick services?
( ) Excellent ( ) Good ( ) Satisfactory ( ) Could be better
12. How do you find the processing procedure while availing different services provided by
IOB?
( ) Excellent ( ) Good ( ) Satisfactory ( ) Could be better
13.Is the branch personnel have been very helpful and courteous?
( ) Excellent ( ) Good ( ) Satisfactory ( ) Could be Better
14. How do you find the cooperation of the bank employees in processing and helping you
with documentation, services and problem faced by you in banking issue ?
( ) Excellent ( ) Good ( ) Average ( ) Could be better
15.Are you happy with the TAT (Turn Around Time) post request ? ***
( ) Excellent ( ) Good ( ) Satisfactory ( ) Could be Better
16.Your overall level of satisfaction with IOB?
( ) Over satisfied ( ) satisfied () Not Dis-satisfied ( ) below satisfaction
*** Housing Loan 5 days, Education Loan 2 days, Vehicle Loan 2 days, Personal Loan 2 days
We would like to know about your experience of banking with us. Please tick as appropriate
We are very grateful to you for spending your precious time with us. Thank you have a Nice Day
Thank You
BIBLIOGRAPHY
BOOKS:
Risk Management, (Dr. S.B. Verma) Deep & Deep Publication, Delhi
Dynamics of E-Commerce (Dr. S.B. Verma) Deep & Deep Publication, Delhi
Retail Banking (By Indian Institute of Banking and Finance), Macmillan
Retail Marketing Tool kit ( 3rd Edition Published by IOB, Chennai)
Retail Management (By Bajaj Tulsi Shrivastva), OXFORD, University Press
Report of Sheetal on Credit Management for IOB.
INTERNET:
www.iob.in
www.rbi.org.in
www.wikipedia.org
www.moneycontrol.com
www.wikipedia.org/Mckinsey7S_Framework
www.mindtools.com/pages/article/newSTR_91.htm
www.bankbazar.com
www.profit.ndtv.com/stock/indian-overseas-bank_iobf/inancials
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