A

PROJECT REPORT
ON
CUSTOMER RELATIONSHIP
MANGEMENT
IN PRIVATE SECTOR BANKS
AT
HDFC BANK
SUBMITTED TO KURUKSHETRA UNIVERSITY, KURUKSHETRA
IN PARTIAL FULFILLMENT FOR THE DEGREE
OF MASTER IN BUSINESS ADMINISTRATION
(SESSION – 2006- 2008)

UNDER THE GUIDANCE OF: SUBMITED BY:

Dr.BHATESHWAR SINGH NEETIKA SHARMA
LECTURER IN MMIM ROLL NO. 1606
MULLANA, AMBALA SEM-3RD

M .M INSTITUTE OF MANAGEMENT
 CONTENTS

 PREFACE

 ACKNOWLEDGEMENT

CHAPTER 1.INTRODUCTION

CHAPTER 2. LITERATURE REVIEW

CHAPTER 3. RESEARCH METHODLOGY

o INTRODUCTION TO THE PROBLEM

o OBJECTIVE OF THE STUDY

o METHODS OF DATA COLLECTION

o HYPOTHESIS

o LIMITATIONS

CHAPTER 4. COM PANY PROFILE

CHAPTER 5. ANALYSIS AND INTERPRETATION

CHAPTER 6. FINDINGS AND SUGGESTIONS

 BIBLIOGRAPHY

 ANNEXURE
 PREFACE

Management ideas without any action based on them mean nothing. That is why
practcial experience is vital for any management students.

Executive financing is critical to success of every organization whether small or large. MBA
students of Kurukshetra University are required to undergo a research project practical training as
an integral part of the curriculum. The objective is to develop ability to apply multidisciplinary
concepts, tools and techniques to solve organizational problems.
The main objective of the research project is to expose the business management students to
various financial areas of management.

Any professional degree remains incomplete without practical exposure. The students are required
to develop deep into the intricacies of the financing related activities.

The training involves innovative pedagogy and through it preparing young prospective business
managers for the new millennium.

Learning is like eating food. It is not how much one eats that matters, what counts are how much
you digest. Knowledge is potential power wisdom is real power. Knowledge becomes poor only
when it is acted upon.

NEETIKA
 ACKNOWLEDGEMENT
I record my sense of gratitude, indebtedness and thankful to my supervision, Dr.

BHATASHWAR SINGH reader department of commerce ,MMIM for his ever available

guidance and suggestions through out the research work. Without his co-operation it was not

possible for me to complete this research work.

I express my sincere thanks to the teachers of department of commerce for their co-operation and

valuable suggestions.

I am also thankful to my parents , my sister for their inspiration and co-operation during long

hours of study.

I express my sense of gratitude to all those respondents who provided all the necessary

information required for the present study while collecting the data.

NEETIKA SHARMA
 DECLARATION

I NEETIKA here by declare that the project report titled “ customer relationship management in

private sector banks”for the partial fulfillment of the degree of “Master of Business

Administration”from kurukshetra university, is an original work of mine & the date provided in

the study is authentic, to the best of my knowledge .

This study has not been submitted to any other institutions or university for

award of any other degree.

Neetika
 Certificate

This is certified that Ms.Neetika Sharma, a student of MBA 3rd semester has undertaken a

project on the topic “customers relationship in private sector” under my guidance. It is the

original work of student and the same has not been copied or submitted in fill or part anywhere

else for any degree/ diploma.

Dr.Bhateshawar Singh

Faculty of MMIM
 CHAPTER – 1

INTRODUCTION
 INTRODUCTION

As every business organization has to do business in a very highly competitive and complex

market, it is the customer, according to whom the nature of product and services offered in the

market are decided . In order to remain a leader or retain the position in the market place, every

business firm has to follow customer centric- approach So, the customer becoming more

drastic changes , with the availability of banking services to customers at their doorstep through

the help of on line banking and e-banking . For a bank to survive , succeed and to gain profits,

there is no option left but to learn from and actively respond to customer’s requirement .

Banks need to change their attitude from product - centric approach to customer – centric

approach . The bankers, to be highly successful in today’s competitive environment need to put

in place a system of CRM that addresses the core issue of profit through building good long

term relationship with them . CRM is a customer - centric approach which helps in establishing a

system for maintaining the good relationship between bank and customers . CRM even helps the

banks to serve customer’s unspoken needs . Now banks are increasingly realizing that their

future leis in the patronage of the customers . Enhancing lifetime value of customers and

developing a relationship with profitable customers have become the central focus of bank’s

strategy . Due to cooperative and collaborative process with customers , the bank’s transaction

cost as well as development costs get reduced and ultimately , it helps in increasing profits .

Thus future of banking depends upon the ability to develop close relationship with customers .

It is a big challenge to banks and they have to cope with it .

 DEFINITION

According to PWC consulting, “ CRM is a business strategy that aims to understand, anticipate ,

manage and personalize the needs of an organization’s current and potential customer. ”

“CRM is a business strategy to identify , cultivate and maintain long term profitable customer

relationship . It requires developing a method to select your most profitable customer relationships

(or those with most potential) and working to provide those customers with services that exceed

their expectations. ”

CRM help business people to have always understood relationship between happy customers that

come back again and again and creating long term , sustainable profitability.

CRM is a company wide business strategy, one that puts the customer at the heart of the business.

Jackson says, “CRM is marketing oriented towards strong lasting relationships with individual

accounts”

CRM is a comprehensive strategy , which involves long - term relationships with customers and

satisfy them , with a large variety of product and services through multiple channels.

The term CRM was first wined in the mid 1990s . CRM in those days referred to the software

used to help businesses to manage their customer relationship . The first known organized attempt at

CRM was that at Wal Mart , USA’s largest chain of departmental stores selling economy priced

items . In India we see its usage in Jet Airways , HLL, new generation private sector banks like

HDFC and ICICI and cellular phone companies like Hutchison , Max Touch Limited
 RELATIONSHIP BETWEEN BANK AND CUSTOMER

The relationship between bank and customer is of great practical significance , though it is

contractual in nature . It arises out of a contract made between the bank and the customer ,

involving obligations on both sides.

While examining the relationship between bank and customer first Question asked is as to

what constitutes a ‘customer’:

Or

Who Is customer in relation to banking?

A customer is one who has “ some sort of an account or some similar relation with a bank”

---- Railway vs London County Bank (1901)

It follows that when an account is closed , the relationship of the bank and customer is

terminated . But where a customer has more than one account, one of them may be closed without

terminating the relationship.

But sir john paget is of the view that, “to constitute a customer, there must be some recognizable course

or habit of dealing in the nature of regular banking and business.”

Types of relationship between customer and bank:

1. Debtor and creditor relationship: when a bank opens a account in favour of a person by

accepting some money, naturally it assumes the position of a creditor. But later if the account shows a

debit balance (i.e. excess of borrowing) the roles are changed. The customer becomes a debtor and the

bank a creditor and this relationship continue till the loan is repaid.
2. Bank as a bailee: where jewellery, valuables, stocks, bonds and debentures etc are deposited

for safe custody, the bank becomes the bailee and depositor and bailer. In this case bank acts as

custodian of the property of customer.

3. Bank as an agent: one of the important services rendered by a banker to his customer is to

collect his customer’s cheques, dividend warrants and other credit instruments. Bank also purchases and

sells securities, draws, accepts and endorses cheques, makes periodical payment of debts, premium,

fees, etc. in these transactions, the relationship between the two parties is that of principal and agent.

The bank carrying out customer’s orders and contracting on his behalf.

4. Bank as a trustee: a trust is a relationship between two persons by virtue of which one of them

(the trustee) holds property vested in him for the benefit of the other. Through expert staff and

specialized departments banks undertake administration of will or settlements and trusteeship functions.

5. Bank as a referee: If desired by the customer, the bank can be referee i.e. who can be referred

by the third parties for seeking information regarding the financial position of the customer.

6. Bank as underwriters: Banks also underwrite the securities issued by the government and

corporate bodies of a commission. The name of the bank as an underwriter encourages investors to have

faith in the security.

7. Acting as information bureau: Bank also act as information bureau as they collect the

financial, economical and statistical data relating to industry trade and commerce.

8. Merchant banking services: Bank also provide merchant banking services to their customers.

They help in availing loans from non-banking financial institution.

DIFFERENT FACETS OF CRM

 Identifying qualified leads and gaining new customers.

 Closing sales more effectively and efficiently.

 Allowing customers to perform business transactions quickly and easily.

 Providing service and support following a sale.

SOME CONCEPTS IN CRM

1. Customer satisfaction: The idea of customer satisfaction is not new. It arose in 1950s and

flourished in 1960s and became integral part of banking services now a days. Satisfaction is a feeling of

pleasure resulting from using a product and comparing product’s perceived performance in relation to

his or her expectations. Customer loyalty is based on customer satisfaction. A dissatisfied customer is

likely to become a loyal customer. Instead of it a loyal customer himself advertises the product.

2. Customer loyalty: Loyalty is an outcome of the customer’s faith confidence in the product of

the company. The customer believes and continues to buy or select the company product for the reason

that he/she sees it reflecting his/her values. Loyal customer ensure growth and continued profits which

in turn attract high performing employees and promote investor confidence. Loyal customers are more

profitable because they are willing to pay a premium, as they perceive the product or services to be

superior in value. Loyal customers also help in acquiring in new business. Generally a loyal customer is

a basket of products from the same source expands over a period of time.

3. Customer retention: The trend in marketing towards building relationships with customer

continues to grow and the marketers have become increasingly interested in retaining customers over the
long run. If a customer is lost through dissatisfaction, he will be gained by a competitor. To retain the

customer in a strategic issue for the companies because companies do spend a lot of money through

different media to attract new customers to the business. So if an individual customer is lost then lost

profit from the customer is equal to the customer’s lifetime value. The key to customer retention is to

offer continuous satisfaction. According to Philip Kotler, a highly satisfied customer:

 Stays loyal longer.

 Buys more as the company introduces new products and upgrades existing products.

 Talks favourably about the company and its products.

 Pays less attention to competing brands and advertising and is less sensitive to price.

 Offers product or services ideas to the company.

 Costs less to serve than making new customers because transactions take place in a routine
manner

4. Lifetime value: lifetime value of a customer means if a customer keeps buying the same

product over his entire lifetime, it adds upto a tidy sum. The continuing relationship with customers over

a long period helps an organization to gain values in following parameters:

 Monetary value: The loyal customer contributes to the profit of the organization by

purchasing products and services over a period of time.

 Referral value: Word of mouth communication is very effective in marketing. The

customers of the company refer the products to prospective buyers.

5. Service quality: Quality of service is an elusive concept because of the intangible nature of

service offering. Definition of the quality may vary from person to person and from situation to

situation. Service quality is conformation of services to the customer specifications and expectations.

Quality of services depends on the ability of the provider to meet the expectations of the customers.
GOALS OF CRM

 To discover new customers.

 To build long-term relationship.

 To provide better customer service and in the process gain loyal customers.

 To retain customers through differentiating strategies.

 To provide better service quality.

 To use technology to improve customer services.

 To cross sell products more effectively.

The Bank Needs To Focus On CRM Because Of The Following Reasons:

 Variety of options available to customer for banking.

 Changes in geographic demography of the banks.

 Customer looking towards more and more features rather than plan vanilla banking.

 Customer wants anytime and anywhere banking. Thus he today looks for convenience.

 Change in business scenario as compared to what it used to be fifteen years back.

 Rising income of the customers.

 Customer holds account with different banks.

 Increase in the number of products and services offered by the bank.

 Customer want cost reduction and efficiencies in services delivered.

How Can CRM Help Banks?

CRM can help banks in the following ways:

1. Campaign management: CRM helps the bank in identifying customers, developing products and

services to meet their demands and selling these products to them through campaign management.

Campaign management helps the banks in analyzing the data (both internal and external applications) to

evaluate customer profitability and designing comprehensive customer profiles according to individual

lifestyle preferences, income levels and other related segments. Based on these profiles, banks can

identify most lucrative customers and customer segments and through efficient marketing campaign will

be able to reach these customers and maximize the lifetime value of those relationships.

2. CRM can help in enhancing the productivity of customers, partners and bank employees.

3. Removal of operational inefficiency: CRM can help in strategy formulation, which would help in

elimination of current operational efficiencies. An effective CRM solution supports all channels of

customer interaction like telephone, fax, e-mails, ATMs, wireless devices and face-to-face contacts with

bank personnel. It also links these customer touch points to an operation center and connects the

operation center with relevant internal and external; business partner.

4. Contact center: It enables customer services agent to provide uniform services across
multiple

channels such as phone, internet, e-mail, fax.

5. 360-degree view of the company: It means whoever the bank speaks to, irrespective of
whether

the communication is from sales, finance or support, the bank should aware of the interaction. Removal

of inconsistencies of data makes the client interaction processes smooth and efficient, thus leading to

enhanced customer satisfaction.

6. Personalized sales home page: CRM can provide a single view where sales managers and

agents can get all up-to-date information at one place. This would make sales decision fast and

consistent.

ADVANTAGES OF CRM

 CRM helps in predicting what customers need and want on a more

personalized level.

 It helps understanding how much should be invested at the individual

customer level.

 It helps in understanding how to cost effectively allocate marketing, sales and

service

resources.

 It helps in measuring the effectiveness of resource allocation decision.

 It helps in building long-term customer relationship.

 It helps in retaining customer.

 It simplifies marketing and sales procedures.

Proper relationship management helps to protect and strengthen what is often most valuable
organization asset i.e. customer.

AREA OF CRM

There are 5 broad areas of CRM and these are highly interactive and dynamic in nature.

Different areas of CRM are as follows:

Area of CRM
Strategy Skill Sets Technology Tactics Process

1. Strategy: CRM is a business strategy; it would evolve differently at different

enterprises depending on what strategy is developed. First step in CRM is to develop sound and

appropriate CRM strategy according to the enterprises business strategy.

Eg: a strategy to become a customer center and support multiple channels requires different

solutions than a strategy designed to maximize the life value of customer through forming

relationships between the customer and the enterprise with independent agents. Both seem to be

same but results would be different.

2. Skill Sets: Skill sets means the skills which bopust have to use the technology. So
it is

important that while buying the technology, with which enterprises are going to apply CRM in

our enterprises, must make sure that, that would be easily used by the employees and customer

our enterprises. The persons using the technology must find its real value. So it is necessary that

every stake holder in CRM must have right skill sets to use the technology effectively.

3. Technology: Technology means the technique with which CRM would be applied
in

enterprises. It may be a software package. But merely installing a software package is not

sufficient. The other four areas are to be aligned with the fifth. The general feeling is that if

technology is good, CRM would work well. But it is wrong notion. CRM is not based on

technology only. Many CRM implementations have failed in spite of good technology, whereas
with medicos technology, it has flourished. Hence technology is to be put in the right place as it

enables of the other four areas i.e. strategy statistics, tactics, processes and skill sets.

4. Tactics: Tactics are considered as the daily components of the strategy. Once the

strategy is decided, enterprises would decide how CRM will manifest itself daily to customers.

The enterprises has to develop tactics to implement its CRM strategy by answering following

Question;
 Enterprise’s unified view of customers.

 Customer’s feeling about their dealings with distinct entities within the firm.

5. Process: The various employees like sales force, marketing of human resources, IT
,

finances etc. There are various process found in different enterprises. Enterprises re-assess their

process to adjust to the strategy and technical decisions made. Enterprises must understand the

needs and requirement of customer and accordingly identified and differentiate individual

customers. And then efforts should be made to satisfy the needs or solve the problem identified

earlier, related to customers.

A STRATEGIC FRAMEWORK

A strategic framework in designing effective CRM.

CRM is a concept that combines:

 Management Thought

 Technical Practices

 Business Practices

CRM helps customers, quick delivery, efficient services and building long relationships each

one of them.
The important elements to be considered in the framework in designing strategy for effective

CRM are:

 Customer insight
 Use of technology in CRM
 Customer contact
 Customer profitability
 Achieving superior customer experience.
 Personal customer interaction like:
 Personal selling
 Customer care

CRM DEVELOPMENT CYCLE

An enterprise starts with customer and flourish with increase in the customer and ends if, does

not able to attract customers. The enterprises will get developed if it undergoes a sound CRM life

cycle, phases of which are as follows:

1.Identification of Customers: For identification of customers, it is necessary to

understand them. True understanding is based on a combination of detailed analysis and action.

The important activities are:

 Profile to understand demographics and purchase pattern etc.

 Segmentation to identifying logic unique groups of customers that tend to look

same and

whose liking, preferences and taste are same.

 Doing primary research to capture needs and attitudes.

 Valuing the customers to under the profitability as well as lifetime value.

2. Development of Customer-Centric Attitude: The traditional era was product-

oriented; companies developed products and expected customers to buy them. In a customer-

centric approach, product and channel development has to be accordingly to customers need and
 requirement. Most organization today are not able to cope with effectively customize products

for individual customers. The extent of customization should be based on the potential value

delivered by the customer segments.

3.Interaction and Deliver: Interaction is also an importance of components of a

successful CRM initiative. Customer interaction is in many different areas of enterprises

including distribution and shipping, customer service and online.

To foster relationship, enterprises need to ensure that:

 All areas of the enterprises have easy access to relevant information.

 All areas are trained to use customer information to tailor interaction based on
customer needs.

Delivering value is also an important aspect of relationship. In fact customer perception of value

are based on a number of factors like the quality of product and services, convenience, speed,

ease of use and reasonable price.

1. Identification of 2.Development of 3.Interaction and

customer customer- centric deliver
attitude

7.Evaluating
success CRM DEVELOPMENT CYCLE

6.Developing an 5.Incorporation of 4.Getting and

action plan changes retaining customer
4. Getting And Retaining: The more organizations learn about customers, the easier is to

pin point these that are producing the great value for the organization, customers would be ready

to having relationship with the enterprises which pays attention to the different needs of

customers like right media, right product, right offer, right timing etc. successful customer

retention basically involves getting it right on an ongoing basis.

Principles on which, successful customer relationship is based:

 Maintain interaction. Never stop listening.

 Remember that customer change as they move through different life stages.
 Maintain customer trust on good quality of product and services.

5.Incorporation of change: As there might be many gaps, enterprises will need to have

scope for incorporation of changes. The enterprises should evaluate each of the strategies

identified to resolve gaps based on:

 Cost: so as to implement including initial as well as anticipated on going expenses.

 Overall benefit: Some changes may have larger impact on the enterprise’s ability to
increase customer value and loyalty and preferences
 Feasibility: Based on enterprise data and system support, resource skill set and a
number of other factors.
 Time: Required including the time necessary for training and addressing cultural
changes management issue related to specific strategy.

6. Developing an action plan: While the complete plan might span three or more years, it

should be based on six month phases with clear deliverables that will demonstrate both progress

and quick hits or measures of success.

7. Evaluating success: Implementation of CRM, is time consuming and hence, requires

commitment from organization and it is important that action plan:

 Establishes means of measuring the progress on CRM initiatives

 Establish enterprise wide measures of success and metrics
 Apply these metrics on an on-going basis to ensure the continued finding of CRM
initiative.

ESSENTIALS OF CRM TO BANKS

In order to make effective relationship with customers, banks need to do the following:

 Identify the needs for relationships in different areas of banking operations.

 Collect data and information related to the concepts.
 Carefully scrutinize the list of prospects.
 Design programmes for building relationships.
 Develop plans for approach and reapproach.
 Develop packages for maintaining relationships.
 Develop packages for enhancing relationships.
 Train personnel in relationship marketing.
 Design the system, infrastructure and support services that facilitate relationship.
 Execute the program.
 Design a feed back system.
 Collect feed back and make necessary improvements

FACTORS AFFECTING THE CRM SUCCESS

1. Strong internal partnership around CRM strategy

2. Employees at all levels and all areas accurately collect information.
3. CRM tools are customers and employee friendly.
4. Don’t go hi-tech when low tech will do.

ESSENCE OF CRM CONCEPTS

For CRM, a sound understanding of customer behaviour is essential so that bank will get

benefited in the long run. The essence of CRM concept is captured in three interrelated

orientations:
 Customer wants and needs: When the focus is on identifying and satisfying the

wants and needs of the customers, the invention of the bank is not seen as merely providing

services. Instead, wants and needs satisfaction is viewed as the purpose and providing product

and services is the means to achieve that end.

 Bank objective: customer wants and needs are numerous. Therefore a bank that
concentrate on satisfying a small proportion of all desires will most effectively utilize its

resources. Bank objective and any of the bank’s special advantage are used as criteria to select

specific wants and needs to be addressed.

 Integrated strategy: An integrated effort is most effective in achieving a bank’s

objective through customer satisfaction. For maximum impact this requires that marketing efforts

be closely coordinated and compatible with each other and with each other the bank activities of.

SECTION II

BANKING

Traditionally, the banking business used to mean lending, borrowing and money remittance only.

In the current scenario, the banks have much more services and schemes, in their domain, than

even before. In addition to the traditional services, the banks are now offering many specialized

services and schemes meant to serve the specified needs of the customers. Banking sector has

become probably, the most important financial sector, not just in terms of turnover, profits and

the employment but also in its paramount impact on other spheres of the economy. Hence, the

banking industry plays a key role in the economic development.

Banking is essentially a high contact service industry and there is a close interaction

between service providers and the customer. The real indicator to the performance of the bank is
the degree of the relationship with its customer that is building long term relationship with its

customer and understanding their needs and responding through products and services through

multiple channels. If banks have good relationship with its customers, it will enhance its

goodwill.

DEFINION AND NATURE OF BANKING SYSTEM

Banking sector has contributed to a large extent in the economic development of the country. In

the modern era along with performing the main functions of banking like accepting the deposits

and lending the money, now banks are also engaged in merchant banking, investing credit and

insurance banking. It is rightly called today a “departmental store of financing”. About modern

banking, it may be mentioned that modern banking began with the English goldsmith of 17th

century. Earlier history apart, it Banking sector has contributed to a large extent in the economic

development of the was the goldsmith who first evolved the essential process of receiving money

on deposit for a consideration and lending it at interest.

THE CONCEPT AND DEFINITION

No completely satisfactory definition of the term “banking” has yet been furnished. The early

economist and enactments which attempted to define bank and banking suffered from some

grave errors. They either told nothing or told the things in an ambiguous and incomplete manner.

The Bill of Exchange Act1882 in England says, “Section 3 of the Indian Negotiable

Instrument Act 1881 does not better when it a banker includes any body of person, whether

incorporated or not, who carry on the business of banking”

This fails to explain the functions of the banking.

Section 3 of the Indian Negotiable Instrument Act 1881 does not better when it says that the

term “banker includes person or a corporation or a company acting as a banker.”

It states that a bank is what the bank does. The academicians like Hart and Kin lay etc. also gave

but neglect the other.

Dr. Hart says “A banker is a person or company carrying on the business of receiving money

and collecting drafts, or customers subject to the obligation of honouring cheques drawn upon

them from time to time by the customers to the extent of the amounts available on their current
accounts.”

Kinley writes “A bank is an establishment which makes to the individuals such advances of

money as may be required and safely made and to which individual entrust money when not

needed by them for use.”

It was left to us the Royal Commission on Indian Currency and Finance (popularly known as

Hilton Young Commission), 1925 to propose concrete ideas about a modern bank. In its report in

suggested that the term bank or banker should be interpreted as meaning every person, firm or

company using in its description or its title bank or banker or banking and every company

accepting deposits of money subject to withdrawl by cheque, drafts or order.

The Banking Regulation Act, 1949 (known as Banking Company Act),u/s5(c) defines a

banking company as “ a company which transacts the business of the banking in India”.

u/s 5 (b), The word banking itself has been defined as, “accepting for the purpose of lending or

investment , of deposit of money from the public , repayable on demand or otherwise, and

withdraw able by cheque, draft, order or otherwise.”

This is quite a satisfactory definition, it explains the main activities, which a banking company

engages in and which could be summarized as below:

 A company to be entitled to be called a banking company must perform two acid test
functions of:

(a) Accepting the deposits

(b) Lending or investing these deposits.

 The deposits to be received must be money from the public. Public here mean that

anyone and everyone should be in a position to lodge his/ her money balances with the bank.

There should be no restrictions whatever on grounds of age, sex, community etc.

 The time and mode of the withdrawl of deposits are also significant. The money

deposited should be withdraw able on demand (interest account) and notice, if any should be a

very short one (deposit account). In case of fixed deposit there should not be refunded unless the

requisition for their refund has been made by the depositor.

The features mentioned above are of commercial banks. Many other financial

institutions which also serve as intermediaries between the savers and the ultimate investors are

not covered by the definition. Development banks, called specialized financial institutions in the

country (e.g. Industrial development bank of India (IDBI), Industrial credit and investment

corporation of India (ICICI), Industrial financial corporation of India (IFCI), Stat financial

corporation (SFC), Small industrial development bank of India (SIDBI)), life insurance

corporation of India, Unit trust of India etc. lie outside the preview of banking companies,

because the primary function of these institutions is not the acceptance of the deposits , lending

and investing funds. But these financial institutions supplement the task of the commercial

banks. They provide short term as well as long term finance to the needy persons which

ultimately lead to the economic development of the country.

BANKING SYSTEM OF INDIA

It certainly goes to the credit of Indian banking .It has made a parallel advance with the National

aspirations. As need arouse, it has steadily diversified its structure and enlarged its operations. Today the

Indian banking system compares very favourably with what is to be found in some of the developed

countries of the world. It has all the requisites of developed organizations, except that its volume is

small

Banking in India established with the setting up of the three presidency banks – Bank of

Bengal 1806, the Bank of Bombay 1840, The Bank of madras 1843. These presidency banks were

amalgamated in January 1921 into Imperial bank of India. The intention was to create a central bank in

the country with the monopoly of note issue and serve as banker’s bank and government bank. Because

of this requirement Reserve bank of India was constituted in 1935, under the Reserve bank of India act,

1934 with the objectives as stated in the preamble of the RBI act, “to regulate the issue of the bank notes

and for keeping of resources with a view to securing monetary stability in India and generally to operate

the currency and the credit system of the country to its advantage”. RBI was established with an

authorized capital of Rupees 5 corers divided in shares of Rupees 100 each.

Indian Banking Structure

Banking Non-Banking

Instituti Institution

Commercial Cooperative DFIs Non- Banking

Banks Banks Financial Entities

(A) Development
Bank NBFCs
 All India
Scheduled Non-scheduled State level
Banks Banks
(B) Investment
Institution
(LIC,GIC,UTI)
(C) Special Institutions
Indian Banks Foreign Banks

Public Sector Private Sector

Banks Banks

State Bank of
India & its subsidiaries
Nationalized Banks Regional Rural
banks

SCHEDULE BANKS: The bank which are established under RBI act, 1934, and
must satisfy the following three conditions:

I. It must have a paid up capital and reserves of an aggregate value of at least Rupees 5
lakhs.

II. It must satisfy the RBI that its affairs are not conducted in a manner detrimental to t the
interest of its depositors.

III. It must be a corporation or as cooperative society and not a partnership or a single

owner firm.

The commercial banking system in India consisted of 297 scheduled banks and one non- scheduled bank
by 2001.Of the scheduled banks 233 are in public sector.

NON – SCHEDULED BANKS: Bank whose name does not figure in the II schedule of RBI Act. These
are also subject to SLR, requirements, but are not required to keep them with RBI.

PUBLIC SECTOR BANKS: The government of India entered into the commercial banking when it
took over the imperial bank of India in 1955. And converted it into the state bank of India on 1st July
1955. Now the SBI has seven subsidiary banks which are as follows: State bank of India, State bank of
Hyderabad, State bank of Patiala, State bank of Trayancore, State bank of Bikaner and Jaipur, State bank
of Mysore, State bank of Saurashtra, and State bank of India.
In July 1969, the government of India nationalized 14 large banks. On (April 15, 1980) 6 more banks
were nationalized. These nationalized banks are as follows:
 Bank of Baroda
 Punjab national bank
 Bank of India
 United commerce bank
 Canara bank
 Central bank of India
 Indian bank
 Syndicate bank
 Indian overseas bank
 UCO bank
 Allahabad bank
 United bank of India
 OBC bank
 Corporation bank
 Vijya bank
 Dena bank
 Bank of Maharashtra
 Andhara bank
 Punjab and Sind bank
 New bank of India.

Out of these banks in 1993-1994, New bank of India was merged with Punjab National bank (PNB)

REGIONAL RURAL BANKS (RRBs)

Regional rural banks were set up on the recommendations of a working group headed by M. Narasimaha

in 1975. The objective was to provide credit and other facilities to small and marginal farmers,

agriculture labourers and artisans. The need was felt as commercial banks and co-operative banks were

not able to serve these segments adequately.

FOREIGN BANKS

Foreign banks are those banks, which are registered or incorporated outside India.They, have an office

or branch in India. These banks had their presence from British period. With the deregulation in 1993,

the number of foreign banks will increase. The number of foreign banks (their branches), which stood at
15(71) in 1961 rose to 30 (56) in 1996. At the end of June 2000 186 branches office of 44 foreign banks

were operating in India

PRIVATE SECTOR BANKS

In the post dependence period, it was noticed that private sector banks controlled by industrial

houses or business houses were ignoring the rural areas and agricultural sector.

In earlier phase, the private sector banks were as follows: The Vyasya bank ltd. The federal

bank ltd. The Jammu and Kashmir bank ltd. The south Indian ltd. The united western bank ltd.

TheKagur vysya bank ltd. The Karnataka bank ltd. The Lakshmi vilas bank ltd. Bank of Madura

ltd. The Catholic Syrian bank ltd. The Tamil Nadu Mercantile bank ltd. The Sangli bank ltd. The

Dhan Lakshmi bank ltd. The Nedungadi bank ltd. Lord Krishna bank ltd. Bharat overseas bank

ltd. Etc.

NEW PHASE IN PRIVATE SECTOR BANKING

The economic reforms in1991 have brought the changes in the financial sector at large.

Narsimahan committee was established in order to improve the structure, organization, functions

and the procedure of the banking sector.

In order to regulate the banking industry and follow the recommendations, RBI in1993,

announced the guidelines for entry of new commercial banks.

As the result of the new policy on private sector banks the following private sector banks started

their operations.

 Indus Ind Bank Ltd.

 The UTI Bank Ltd.
 HDFC Bank Ltd.
 The ICICI Bank Ltd.
 Global Trust Bank Ltd.
 Ceturian Bank Ltd.
 The Times Bank Ltd
 IDBI Bank Ltd
 The Development co-operative Bank Ltd
 The Bank of Punjab Ltd.

As compared to old private sector banks, the new private banks are showing much

better performance. Within a short period that they have been in operations, the results have been

excellent. These banks are introducing superior level of technology and customer satisfaction. They are

really going to globalize Indian Banking. The customer-oriented shift given by these banks is going to

improve service and innovative products.

Industrial Credit And Investment Corporation Of India Ltd.

The ICICI was incorporated in1955 at the initiative of the world bank, the government of India

and representatives of Indian industry, with the objective of creating a general development

financial institution for providing medium-term and long-term project financing to Indian

business. In 1994, ICICI sets up ICICI bank. In 2001, the boards of ICICI ltd. And ICICI bank

approved the merger of ICICI with ICICI financial services limited with ICICI bank..

With the liberalization and deregulation of macro economic system and continued technological

advancements and increased competitions in Indian financial markets, the ICICI plan Vanilla

lending strategy of customer oriented product innovations and customized solutions with thrust

on customer acquisition and retention and technology up gradation. The ICICI is using superior

product design and technology intensive delivery mechanisms to differentiate its product in the

market place.
The ICICI has used advanced information technology as a means of customer acquisition and

retention to make long-term relationship with customers. The corporation has set up a dedicated

electronic commerce group to harness the opportunities by the internet revolution and one of the
primary functions of this group is to web enable existing products and services. It has launched a

pioneering web based supply chain management solutions. The client centric relationship

revolves around cross-selling maximization of value to customers. CRM in ICICI bank India is a

business strategy to select and manage the most valuable customer.

Therefore, ICICI bank, is representative of a new breed of Indian companies: ambitious globally

competitive, finely tuned to customer needs and internet savvy.

HDFC BankHousing development Finance Corporation

HDFC bank, established in 1994, is one of India’s new generation private sector banks. Today, it

is accredited with being one of India’s leading private commercial banks with more than 276

branches and 900 networked ATMs in 148 cities. HDFC bank was adjudged the ‘Best IT User in

Banking’ at the IT users awards 2003 by economic times.com and the national association of

software and service companies (ASSCOM).

HDFC banks growing channel reach had leveraged its ability to interact with its customers in a

variety of ways branches, ATMs, net banking, phone banking, mobile banking. Data warehouse

is the only source of customer data for the retail business and is being used to manage customer
relationships and identify cross-selling opportunities.

The CRM solution created a consolidated view of HDFC banks customers across multiple touch-

points, making it possible for HDFC bank to cross sell and up- sell services to existing

customers. In order to CRM solution, the bank implemented revalues channel analytics. This

permitted the bank to understand channel behaviour and usage patterns that would help target

customers for migration to more cost effective channels.

The introduction of new technology and delivery channels has helped banks acquire customers

rapidly. ICICI bank has doubled its customer base through it. Similarly for HDFC bank, it

process mare than 10 million transactions a month in the corresponding previous year.

The Housing Development Finance Corporation Limited (HDFC) was amongst the first to

receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the

private sector, as part of the RBI's liberalisation of the Indian Banking Industry in 1994. The

bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its registered

office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank

in January 1995.

The composition of the Board of Directors of the bank is governed by the Companies Act, 1956,

the Banking Regulation Act, 1949 and the listing requirements of the Indian stock exchanges

where the securities issued by the Bank are listed. The Board had strength of 11 Directors as on

March 31, 2005. The Board had an optimum combination of Executive and Non-executive

Directors and a majority of Directors are independent Directors. The Board consists of eminent

personalities with considerable professional expertise and experience in banking, finance and

other related fields.

None of the Directors on the Board is a member of more than 10 committees and Chairman of
more than 5 committees across all the companies in which he/she is a Director. All the Directors

have made necessary disclosures regarding committee positions occupied by them in other

companies.

Mr. Vineet Jain is nominated by the Bennett, Coleman Group on the Board of the Bank.

All Directors other than Mr. Aditya Puri, Managing Director, are Non–executive Directors on

the Board.
All Directors other than Mr. Jagdish Capoor, Mr. Aditya Puri, Mr. Keki Mistry and Mrs. Renu

Karnad, are Independent Directors on the Board.

The bank has not entered into any materially significant transactions during the year, which

could have a potential conflict of interest between the bank and its promoters, directors,

management and / or their relatives etc. other than the transactions entered into in the normal

course of business.
Chapter – 2

Literature

Review
 REVIEW OF LITERATURE

Peppers and Rogers (1993), a more popular approach with recent application of information

technology is to focus on individual or one to one relationship with customers that integrate database

knowledge with a long term customer retention and growth strategy.

Resenberg and Czepiel (1984), as several studies have indicated, retaining customer is less expensive

and perhaps a more sustainable competitive advantage than acquiring new ones. Marketers are realizing

that it costs less to retain customers than to compete for new ones.

Anitha Dilipan; Nitha Rajan (2005), customer relation innovation is that the product enables the

customers to feel that the product has been made for him alone, thus achieving the exact functionality of

the product and providing real customer satisfaction.

Leong and Leslie lazar (1995) “it is the aim of the relationship marketing to create strong, lasting

relationship with a core group of customers. The emphasis is on developing long term bonds with

customers by making them feel good about how the company interacts with them and by giving them

some kind of ‘personal connection’ to the business.”

In 1981, Levitt, Gronroos (1990), Gummerson (1987), in their study of service marketing proposed

that attracting new customers should be viewed only as an intermediate step in marketing process.

Developing closer relationship with these customers and turning them into loyal ones are equally

important aspects of marketing.

Jackson (1985) applies the individual account concept in industrialmarkets to suggest CRM to mean,

“Marketing oriented towards strong, lasting relationships with individual accounts.”

Berry and Parsuraman (1991); Bitner (1995); Crosby and Stephens (1987); Crosby et.Al. (1990);
Gronroos (1995), proposed that a greater emotional bond between the service provider and the service

user also develops the need for maintaining and enhancing the relationship. It is therefore not difficult to

see that CRM is important for scholars and practitioners of service marketing.

Sheth and Parvatiyar (1995), observed that developing customer relationships has

historical antecedents going back into the pre-industrial era. Much of it was due to direct

interaction between producers of agricultural customized product for each customer. Such direct

interaction led of relational bonding the producer and the customer. Ravi Kumar Sharma (2005) in his

study related to CRM in health care sector observed that while the sector has immense potential, the

need of the hour is to become customer-centric by adopting customer relationship management (CRM).

Customer innovation investing in customer relationship.

Sheth and Sisodia (1995), there is greater opportunity for cross-selling and up selling to a customer

who is loyal and committed to the firm andits offerings. In the world of ever changing customer

expectations, cooperative and collaborative relationship with customer seems to be the

most prudent way to keep track of their changing expectations and approximately influencing it.B.C.

Saraswathy (2006), instead of trying to maximize profit from each and every transaction. CRM focuses

on maximizing profits over the lifetime value of customers. Undoubtedly CRM is a potent tool in

sustaining and boosting sales in this era of hyper competitive world.

Shapiro and Moriarty (1980) found that companies started to insist upon new purchasing approaches

such as national contracts and master purchasing agreements, forcing major vendors to develop key

account management programs. These measures created intimacy and cooperation in the buyer seller

relationships. Instead of purchasing a product or service, customers were more interested in buying a

relationship with a vendor.

The IMP interaction model (Hakansson 1982) was based upon insights obtained on more than 300
industrial marketing relationships. By identifying interactions among actors, the IMP model traces the

nature and sources of relationship development. The IMP model and its research

approach have become a tradition for many scholarly research endeavors in Europe over the past 15

years.

Gronroos and Gummesson (1990), take a broader perspective and advocate that customer relationship

ought to be the focus and dominant paradigm of marketing. Gronroos (1990) states “Marketing is to

establish, maintain and enhance relationships with customers and other partners, at a profit, so that the

objectives of the parties involved are met this is achieved by a mutual exchange and fulfillment of

promises. ”

Dick and Basu (1994); Reicheld (1996) gave the view that in the current era of hyper competition,

marketers are forced to be more concerned with customer retention loyalty.

Jagdish n. Sheth and Atul Parvatiyar (1995), “it is to a firm’s advantage to develop a long term

relationship with existing customers because it is aeasier and less expensive to make anadditional sale to

an existing customer than to make a new sale to a new customer.”

V.V. Gopal (2005), says that implementing the right CRM tools can enhance customer satisfaction

leading to business growth. Banks should implement CRM to meet the emerging demand of “universal

banking.”

Storbacka (2000), observed that another important facet CRM is “Customer selectivity”. As several

research studies have shown that not all the customers are equally profitable for an individual company.

The company must be selective in tailoring its program and marketing efforts by segmenting and

selecting appropriate customers for individual marketing programs.

Hayes et.Al; Speckman (1988), on the supply side it pays more to develop closer relationships with a

few suppliers than to developmore vendors.

Vavra (1992) had given a narrow, yet relevant, view point is to consider CRM only as customer

retentions in which a variety of after marketing tactics are used for customer bonding or staying in touch

after the sale is made.

Paul (1988), O’ Neal (1989), Doyle and Roth (1992), have proposed similar views of customer

relationship management i.e. “Marketing oriented towards strong, lasting relationships with individual

accounts.”

Bickert (1992), a narrow perspective of customer relationship management is data base marketing

emphasizing the promotional aspects of marketing linked to data base efforts.

Reinartz, Manfred and Hoyer, Wayne D. (2004), organizations are now adopting a marketing strategy

that incorporates more of a customer-centric approach than a product or brand centricone as they realize

the economic value of customer to the company.

Dwyer Schurr and oh (1987) have characterized cooperative relationships as being interdependent and

long term oriented rather than being concerned with short term discrete transaction
 CHAPTER- 3

RESEARCH

METHODOLOGY
 INTRODUCTION TO THE PROBLEM

Today maximum people deal with the banks and they face different problems due

to this reason we tried to explain the relation of customers and the bank employees and

what kind of problems the customers have to face . sometimes the people did not get

satisfactory facilities and the other thing is the behaviour of the employees .

CRM consists of those aspects of business , which relate techniques and methods for

attracting and retaining customers . CRM stands for customer relationship management . It

is the process or methodology used to learn more about customer’s needs and behaviour

in order to develop stronger relationship with them This study has been undertaken to

access the concept of customer relationship management in private sector banks , i.e.

whether CRM is applicable and effective in private sector banks or not .

OBJECTIVES OF THE STUDY

 To examine CRM in private sector banks operating in Ambala District.

 To exploit the usage of CRM in private sector banks.

 To look over whether the banks using CRM have an edge over other banks or not so far

the customer satisfaction level is concerned.

METHODOLOGY USED IN THE STUDY

Methodology adopted for the present study consists of the following steps :

1. Sample size: Ambala district has been selected as a universe for the present study. A

representative sample of 100 respondents has been taken into consideration for the
 collection of data. For the present study, a convenience sampling technique has been used.

The sample includes persons belonging to service sector, businessmen and students.
2. Data collection: The present study is based on both primary as well as secondary data.

Collection of secondary data:

The secondary data has been collected from different books, journals and magazines of different

banks and websites of banks.

Collection of primary data:

Primary data has been collected from persons having their accounts in private banks (in Ambala

district) by filling up well-structured questionnaire.

3. Presentation and analysis / techniques used: Collected data has been

presented in the form of tables and charts. Each tables and charts have been accompanied by

appropriate analysis and explanation. The responses have been examined with help of statistical

tools and techniques such as percentage, average of mean and standard deviation.

HYPOTHESIS

Hypothesis is a predictive statement ,capable of being tested by scientific methods, that related

independent variable to some dependent variables.

Ordinarily , when one talks about hypothesis , one simply means assumptions or some

supposition to be proved or disproved . but for a researcher hypothesis is a formal question that

he intends to resolve. My hypothesis is- “ performes of HDFC BANK is not up to mark and

there is sample space of improvement.

 LIMITATION OF THE STUDY

1. The study is limited to Ambala District only.

2. This study has been based on primary data; it is possible that respondents might not
have disclosed the facts fully.

3. Due to time and cost factor, only 100 customers have been surveyed.

4. Banking industry is so wide and this study is based on a sample survey, so 100 %
information will not be available.

So, it will not be appropriate to make the generalizations on the basis of this study.
CHAPTER-4

COMPANY

PROFILE
 COMPANY PROFILE

The Housing Development Finance Corporation Limited (HDFC) was amongst the first to

receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a

bank in the private sector , as part of the RBI's liberalisation of the Indian Banking

Industry in 1994 . The bank was incorporated in August 1994 in the name of 'HDFC

Bank Limited' , with its registered office in Mumbai , India . HDFC Bank commenced

operations as a Scheduled Commercial Bank in January 1995 .

HDFC Bank Limited Financial Results (INDIAN GAAP) for the Year
Ended March 31, 2002

The Board of Directors of HDFC Bank Limited approved the annual audited (Indian GAAP)

accounts for the year ended March 31, 2002 at their meeting held in Mumbai on

April 15, 2002. The Board also considered the unaudited US GAAP financial statements for the

year ended March 31, 2002.

Financial Performance:

For the financial year ended 31 March 2002, the bank recorded healthy growth in both Profit &

Loss Account and Balance Sheet parameters. Total Income increased by 40.9% from Rs. 1445.0

crores in 2000-01 to Rs.2036.2 crores in 2001-02. Net revenues (net interest income plus other

income) increased by 39.2% from Rs.691.2 crores to Rs.962.5 crores in 2001-02. Net interest

income (interest earned less interest expended) increased by Rs.123.5 crores to Rs.629.3 crores,

driven by strong balance sheet growth, partly offset by some pressure on spreads. Other Income
grew by 79.6% to Rs.333.3 crores of which roughly half came from fees and commissions of

Rs.164.4 crores. Despite a significant increase in infrastructural investments, new product

launches etc. operating expenses were well controlled and reduced from 44.8% to 43.4% of net

revenues. After providing for tax of Rs.128.3 crores (previous year Rs. 104.9 crores), Net Profit

increased by 41.4% to Rs.297.0 crores for the year ended March 31, 2002. Earnings per share

(EPS) increased by 27.4% from Rs.8.64 in 2000-01 to Rs.11.01 in 2001-02.

For the year ended March 31, 2002, deposits increased by 51% from Rs.11658 crores to

Rs.17654 crores. The bank's strategy of providing its retail customers convenient and affordable

products delivered through multiple channels, continued to bear fruit with savings account

deposits increasing by 55% from Rs.1903 crores to Rs.2957 crores. Total advances grew by 47%

to Rs.6814 crores. The bank's core customer assets (including advances, commercial paper,

corporate debentures, unamortised cost of leased assets, etc.) increased from Rs.7182 crores as of

March 31, 2001 to Rs.10452 crores as of March 31, 2002. Total balance sheet size grew by 52%

from Rs.15617 crores to Rs.23787 crores.

Net Profit for the quarter ended March 2002 was Rs.90.2 crores, up 37.7%, over the

corresponding quarter ended March 2001 and up 19.6% over the previous quarter (ended

December 2001).

Net Profit computed in accordance with US GAAP for year ended March 31, 2002 (unaudited)

was Rs. 295.8 crores, a growth of 38.2% over the previous year. The net difference between

profits computed in accordance with Indian GAAP and US GAAP is primarily due to differences

in accounting treatment for loan loss provisions, amortization of premium on investments held in

the “Available for Sale” category and deferred stock compensation expense.
Dividend:

The Board of Directors recommended an enhanced dividend of 25% for the year ended March

31, 2002 as against 20% for the previous year.

Capital Adequacy Ratio:

With the expansion of capital due to the US$ 172.5 million American Depository Shares (ADS)

issue in July 2001 and with the 2001-02 retention of profits, the bank's net worth (equity capital

plus reserves & surplus) as of March 31, 2002, stood at Rs.1942 crores, up from Rs.913 crores at

the previous year-end. As at March 31,2002, therefore, the bank's total Capital Adequacy Ratio

(CAR) stood at 13.9% against the regulatory minimum of 9%. Of this, Tier I CAR was at 10.8%.

Business Update:

Despite the tough economic environment and intensifying competition during 2001-02, the bank

grew in business volumes and revenues in all its three business segments – wholesale banking,

treasury and retail banking. In the wholesale banking business, where the bank caters mainly to

corporate and institutional customers, growth was driven by new customer acquisitions,

increased penetration and higher cross-sell. The bank consolidated its position as one of the

leaders in cash management services with total value of throughputs (cheque collections,

disbursements, etc.) crossed Rs.145,000 crores during 2001-02. While the bank maintained its

market leader position as the leading provider of cash settlement services to various leading

stock exchanges in the country, floats in this business declined given the lower settlement

volumes in the stock markets.

During 2001-02, the bank registered robust growth in its retail banking franchise for both deposit

and loan products. Total number of retail accounts increased from 1.4 million in March 2001 to

over 2.2 million in March 2002. These customers can conveniently deal with the bank through

the growing branch network in 77 cities as well as through alternative direct banking channels

like ATMs, phone banking (in 39 cities), net banking and mobile banking. From March 2001 to

March 2002, the number of branches (including extension counters) increased from 131 to 171

and the size of the bank's ATM network more than doubled from 207 to 479.

During 2001-02, the bank launched credit cards and added two-wheeler finance to its existing

range of retail loan products - car loans, clean personal loans, consumer durable loans and

personal loans secured by shares and relief bonds. The total retail loans portfolio as of March

31,2002 was Rs.1531 crores, a growth of 81% over Rs.845 crores as of March 31, 2001.

Risk Management and Portfolio Quality:

The bank's portfolio quality remains amongst the best in the Indian banking industry with net

non-performing assets (NPAs net of specific loan loss provision, interest in suspense and ECGC

claims received) at 0.5% of advances and 0.3% of total customer assets. The bank's policies on

both specific and general loan loss provisions continue to be more conservative than the

regulatory requirements. Total general provisions amounted to about 1% of standard assets as

against the regulatory requirement of 0.25%.

Future:

According to Mr. Aditya Puri, Managing Director, “With the current customer acquisition

momentum, expansion in the bank's product range over the last year and the stepped up

geographical and infrastructural expansion, the bank remains well positioned to grow and build
market share in its major businesses during the current year.”

Note:
(i) Rs. = Indian Rupees
(ii) 1 crore = 10 million
(iii) All figures and ratios are in accordance with Indian GAAP, except where specifically mentioned

he Board has also taken on record the unaudited results for the year ended
March 31, 2002, prepared as per US GAAP. The reconciliation of net incomes
as per Indian GAAP and US GAAP is as follows : (Rs. in millions)

.Certain statements in this release which contain words or phrases such as, "remains", "should",

"will" etc., and similar expressions or variation of these expressions or those concerning our

future prospects are forward looking statements. Actual results may differ materially from those

suggested by the forward looking statements due to a number of risks or uncertainties associated

with the expectations. These risks and uncertainties include, but are not limited to, our ability to

successfully implement our strategy, future levels of non-performing loans, our growth and

expansion, the adequacy of our allowances for investment and credit losses, technological

changes, volatility in investment income, our exposure to market risks as well as other risks

detailed in the reports filed with the United State Securities and Exchange Commission. The

bank may, from time to time make additional written and oral forward looking statements,

including statements contained in the bank's filings with the Securities and Exchange
Commission and our reports to shareholders. The bank does not undertake to update any forward

looking statements that may be made from time to time by or on behalf of the bank, to reflect

Certain statements in this release concerning our future growth prospects are forward looking

statements which involve a number of risks and uncertainties that could cause actual results to

differ materially from those in such forward looking statements. These risks and uncertainties

include, but are not limited to, our growth and expansion, the adequacy of our allowances for

investment and credit losses, technological changes, volatility in investment income, our

exposure to market risks as well as other risks detailed in the reports filed with the United States

Securities and Exchange Commission. The bank may, from time to time, make additional written

and oral forward looking statements, including statements contained in the bank's filings with the

Securities and Exchange Commission and our reports to the shareholders. The bank does not

undertake to update forward looking statements that may be made from time to time by or on

behalf of the bank, to reflect events or circumstances after the date thereof.

PRODUCT PROFILE

Accounts & Deposits Loans Investments & Insurance

Savings Accounts Personal Loans Mutual Funds

Regular Savings Account Home Loans Insurance
Savings Plus Account Two Wheeler Loans
General & Health Insurance
SavingsMax Account New Car Loans
Bonds
No Frills Account Used Car Loans
Financial Planning
Retail Trust Account Overdraft Against Car
 Salary Accounts
Payroll
Classic
Regular
Premium
Defence Salary Account
Kid's Advantage Account
Pension Saving Bank Account
Family Savings Group
Current Accounts
Plus Current Account
Trade Current Account
Cards
Premium Current Account
Regular Current Account
Credit Cards
RFC - Domestic Account
Fixed Deposits
Regular Fixed Deposit
Super Saver Account
Sweep-in Account
Demat Account
Safe Deposit Lockers
Debit Cards
Prepaid Cards
Express Loans Knowledge Centre
Gold Loan Equities & Derivatives
Educational Loan
Mudra Gold Bar
Loan Against Securities
Loan Against Property
Loans Against Rental Receivables Forex Services
Commercial Vehicle Finance
Vehicle Working Capital Finance Trade Finance
Construction Equipment Finance Travellers' Cheques
Foreign Currency Cash
Foreign Currency Drafts
Foreign Currency Cheque Deposits
Foreign Currency Remittances
Cash To Master
Gold Credit Card ForexPlus Card
Woman's Gold Credit Card
Platinum Plus Credit Card
Payment Services
Corporate Credit Card
Business Credit Card NetSafe
Titanium Credit Card Prepaid Refill
Value Plus Credit Card BillPay
Health Plus Credit Card InstaPay
HDFC Bank Idea Silver DirectPay
Card
Visa Money Transfer
HDFC Bank Idea Gold Card
e-Monies Electronic Funds
Transfer
EasyShop International Excise & Service Tax
Debit Card Payment
EasyShop Gold Debit Card Online Payment of Direct
EasyShop International Tax
Business Debit Card
EasyShop Woman's
Advantage Debit Card Access Your Bank
NetBanking
ForexPlus Card
OneView
GiftPlus Card InstaAlerts
MobileBanking
ATM
PhoneBanking
Branch Network
 SWOT ANALYSIS
STRENGTH
 It has an extensive distribution not work comprises of 253 branches in 128 cities and one
international office in Dubia . This provides a competitive edge over the competitors.
 The quality of HDFC bank’s assets portfolio is execellent , with non- performing assests
at just 0.4% of the data the net advantage and 0.3% of customer assets are enjoy a large margin
of safety of its lendings.
 HDFC BANK boasts of a strong brand equity.
 ISO 9001 certification for its depositary and custody operations for its backened
processing of the retail operations and direct banking operations.
 The bank is a market leader in cash management services for the major stock exchange in
the country.

WEAKNESS

 Because of the continous fall in the rate of intrest the margin on the banks whole sale
assets has drastically reduced.
 The branches are not proactively selling the third party products to the customers.

OPPORTUNITIES

 Greater liberalization in the foreign ownership VIA FDI in Indian private sector banks.
 Healthier exposure norms.
 All these points could open up new avenues of growth for the bank.

THREATS

 The banks has started facing competition from the players like SBI, ICICI , UTI, banks in
the financing market itself.
 This might reduced the margins in the future.
 Declining trend in the aggregate deposits growth with the scheduled commercial banks
as can be seen.
 CHAPTER- 5

ANALYSIS

AND

INTERPRETATION
 ANALYSIS AND INTERPRETATION

Data analysis process involves the use of appropriate statistical technique in order to express the

meaning of collected data.

As primary function of the banking institution is to make good relations with the customers by

introducing new schemes , facilities and options to them.. Therefore on the basis of data

collected by me through primary and secondary sources. I conduct the study of comparitive

analysis of customers relation with different banks is as follows:

The present study is designed to explore the usage of customer relationship in management in private

banks. In order to fulfill the objectives of the present study, the obtained data has been analyzed in terms

of percentage .The results obtained through these statistical techniques have been presented as under:

THE SAMPLE
To make the sample a representative one, customers of different sex, occupation and income level have

been taken into consideration. The following table represents the characteristics of respondents taken as

sample for the present study.

DISTRIBUTION OF SAMPLES
RESPONDENTS

100% 86%
% OF

50%
14%
0%
MALE FEMALE
SEX

Chart –5.1
 DISTRIBUTION OF SAMPLE

RE S P O NDE NT S
100%
% OF 66%

50% 26%
4% 4%
0%
BUSINE SERVIC STUDE HOUSE
PERCENTAGE 26% 66% 4% 4%
Chart - 5.2
OCCUPATION

Chart-5.2

DISTRIBUTION OF SAMPLE
% OF RESPONDENTS

100%
78%
80%
60%
40%
14%
20% 8%
0%
LOW MIDDLE HIGH
INCOME INCOME INCOME
INCOME
INCOME LEVEL

Chart –5.3

On the basis of sex, consumers have been divided into two sub –heads i.e. male and female. Chart 5.1

reveals that out of sample taken 86 are male and 14 are females.

The chart 5.3. shows that income level has also three sub- heads i.e. no income consist of <Rs.15000,

with an income consist on Rs.15000-Rs.25000, high income consists of more than 25000. Out of the

sample of 100 respondents, 78% consumers are in low-income group, 14% consumers are in middle-

income group and 8% consumers are in high group.

As far as occupation is concerned, chart5.2 the consumers have been classified as business, employees,

students and housewives. The sample consists of 66% servicemen, 26%businessmen, 4% students and

4% housewives, which have been presented in the following chart.

Ques : 1 Do you have a bank account in the following banks?

HDFC 30%
BANK OF PUNJAB 12%
UTI 18%
ICICI 32%
BANK OF RAJASTHAN 18%
CITY FINANCIAL 8%
ANY OTHER 2%

Table- 5.1

Banks preffered HDFC

35% 32% BANK OF PUNJAB

30%
30%
% of respondents

UTI
25%
20% 18% 18% ICICI
15% 12%
8% BANK OF
10%
RAJASTHAN
5% 2% CITY FINANCIAL
0%
Banks Name ANY OTHER

Chart – 5.4

The consumers who preffered different banks such as 30% people preffered to HDFC bank,

32%preffer ICICI bank,12%,18%,18% 8%,2%respectively to Bank of Punjab,UTI,

BANK OF RAJASTHAN,CITY FINANCIAL and ANY OTHER BANK.

QUES: 2 Specify the resaons for preferring the mentioned banks?

Options Percentage of respondents

Nearness 20%
Quality of service 70%
Variety of services 24%
High rate of intrest 10%
Goodwill 30%
Credit facilities 20%
Security 14%
Emergecy needs 14%
Any other 2%

Table –5.2

Reasons for preferring the mentioned

banks
80% 70%
Nearness
respondrnts

60% Quality of service

%age of

Variety of services
40% 30% High rate of intrest
20%
24% 20%
20% 10% 14%
14% Goodwill

2% Credit facilities
Security
0%
Emergecy needs
reasons Any other

Chart –5. 5

Ques: 3 What is the purpose of first contact?

Options Percentage of respondents

Opening saving a\c 86%
Opening fixed saving a\c 4%
Opening current a\c 4%
Taking lockers on lease Nil
To take loans 10%

Table –5.3
 Purpose of first contact

100% Opening saving a\c

86%
%age of respondents

80%
Opening fixed
60% saving a\c
Opening current
40% a\c
20% Taking lockers on
10%
4% 4% 0% lease
0% To take loans
options

Chart –5.6

Ques: 4 Specify the satisfaction factor which influenced your decision to have an account in
the private bank?
OPTIONS MEAN STANDARD DEVIATION
THE KNOWLEDGE OF THE
EMPLOYEES ABOUT 3.98 .81
SERVICES
HELPING NATURE OF 3.98 .95
EMPLOYES
SERVICES CHARGES 3.60 .98
PAPER FORMALITIES 3.78 1.04
TIME TAKEN BY BANK 3.96 1.09
FOR PROVIDING
SERVICES

TABLE –5.4
The table 5.4 shows the satisfaction factor which influence the decision to have an account in

the private bank is the knowledge of the employees about services and helping nature of

employees.customers having maximum mean 3.98 each and are less influenced from the

services charges having mean of 3.60.`

Ques: 5 What are the various ways used by the banks to maintain continuous relationship
with the customers ?

Options %age of respondents

Personal approach 54%
Telephone 50%
Greetings on special occasion 14%
Customer relations programmes and 8%
customer meets

Table –5.5

Ways used to maintain continuous relationship with the customers

Personal approach
60%
54%
50%
% of respondents

50%
Telephone
40%

30%
Greetings on special
20%
14% occasion

10%
8%
Customer relations
0% programmes and
customer meets
ways used

Chart - 5. 7

The chart 5.7 depicts the various ways used by bank to maintain continous ralationship with

customers .The chart shows that 54% of the respondents have given their responses in the favour

of personnel approach and uses telephone to maintain continous relationship with customers.

Other ways used by private banks are greeting on special occasion and customer relation

programmes and meerts with resp. %age 14 and 8 for making long term and continous relation

programme and customer meets also banks have to present greetings on timely occasions.
Ques: 6 How do you pereceive the behaviour of employees while you are dealing with
them?

Sr. no. Level Mean Standard

deviation
1. Execellent 3.72 .98
2. Good 3.88 .86
3. Average 3.50 .94
4. Poor 1.46 .98

Table – 5.6

The table 5.6 shows the employees behaviour perceived by the customers. The employees of

private banks have good behavior with the maximum mean score of 3.88. excellent and average

behavior have comparatively less mean scores i.e. 3.72and 3.50 respectively also there is poor

behavior with mean score 1.46.

In essence, customers perceived the behaviour of employees good in private banks but they

should try to make excellent behaviour and also to eliminate poor behaviour .

Ques: 7 Specify the level of satisfaction regarding the behaviour of employees?

Sr. no. Skills Mean Standard deviation

1. Politeness 3.96 1.00
2. Amicability 3.86 .92
3. Cooperativeness 4.02 .79
4. Rudeness 1.76 1.03
5. Carelessness 1.76 .99

The table 5.7 shows the behaviour skills of employees . The table shows that the cooperativeness

Table- 5.7
in employees behaviour is maximum with the mean score of 4.02.politeness and amicability are

comparatively less with the mean scores of 3.96 and 3.86 respectively. Rudeness and

Carelessness is also their with the mean score of 1.76 each

So the table 5.7 indicates thet in the private banks employees the behavioural skills such as

Co-operativeness, politeness, amicability are more than the rudeness and carelessness for better

Implementation of CRM .

Ques: 8 Do you feel satisfied with the services provided by your bank?

Options %age of respondents

Yes 98%
No 2%

Table – 5. 8

satisfied with services provided by your bank

150%
respondents

98%
%age of

100%

50%
2%
0%
Yes No
options

Chart – 5.8

The table 5.8 shows that 98% of the people are satisfied with the services provided by the bank

and 2% are not satisfied with the services provided by the bank.

Ques: 9 If yes, what is the satisfaction level?

Services Mean Standard deviation

Deposits 1.38 .52
Withdrawal 1.50 .61
Updating of 1.90 .67
 passbook
Issuing of 1.54 .50
chequebook
Accuracy of interest 1.64 .56
calculation
Overdraft facility 2.02 .76

Table –5.9

The table 5.9 highlights the services provided by private banks . it is inferred from the table that

the service of overdraft facility is more used by customers with the mean score of 2.02.service of

updating of passbook and accuracy of interest calculation with the mean score of 1.90 and 1.64

respectively .Deposits , withdrawals , and issuing of cheque bookswith the mean of 1.38,

1.50,1.54 respectively are the other services offered by private banks.

Ques:10 From where did you get knowledge about the services provided by the bank?

Options %age of respondents

Bank personnel 62%

Friends 28%
Television 44%
Newspaper 38%
Magazine 6%
Hoarding 14%

Table – 5.10
 Knowledge about the services provided by bank

70%
62%
60% Bank personnel
% age of respondents

50% 44% Friends

38%
40% Television
28%
30% New spaper

20% 14% Magzine

10% 6%
Hoarding

0%
options

Chart 5.9

The table 5.10 presents the ways through which private banks inform their customers about

banks new services /schemes. Bank personnels , friends, T.V, newspapers, hoardings and

magazines are the main sources of information with the percentage of 62%,28%,44%,38%,14%

and 6% respectively.62% customers gets information through bank personnel’s.

Ques: 11 Factors that influenced your trust towards private sector bank?

S.no Skills Mean Standard

deviation
1 Services 4.00 .94
2 Safety in transactions 3.98 .84
3 Interest rates 3.62 .89
4 Convenience 3.52 1.20
5 Goodwill 3.88 .99

Table – 5.11

From the above table 5.11 it is inferred that the most important factor that influence the

Customers trust toward private sector banks is services with the mean score of 4.00. Safety in
transactions and goodwill and is relatively less considerable with the mean score of 3.98 and

Respectively. Interest rates and convenience with mean scores of 3.62 and3.52

Respectively also effect the trust of customers towards private banks.

From this table it is conclude that services and safety in transactions are the main factors that

Enhance customer’s trust towards private banks. Private banks should try to enhance their

Goodwill and also provide more interest rates.

Ques:12 Is bank provided you ATM services?

Options Response

Yes 88%
No 12%

Table - 5.12

ATM SERVICES
% of respondents

1 88%
0.8
0.6
0.4
12%
0.2
0
Yes No
RESPONSES

Chart – 5.10

The table 5.12 shows that 88% of respondents are agreed that their banks provided ATM services

and 12 % says that their banks are not provided ATM services .

Ques :13 If yes, then specify the satisfaction level regarding the ATM services provided by
your bank?
 S.no Services Mean Standard deviation

1 Transaction slip 3.38 1.68

2 Bill payment 3.34 1.58

3 Transfer of funds 3.20 1.69

4 Request for cheque 3.28 1.69

books

The table 5.13 highlights the services provided by private banks through ATM. It is inferred
Table – 5.13
from the table that the services of transaction slip is more provided by bank with the mean score

of 3.38. Bill payment , Request for cheque book and transfer of funds with the mean scores of

3.34, 3.28 and 3.20 respectively are other services offered through ATM by private banks .

Ques: 14 Does the bank provide the following facilities?

Options %age of respondents

Yes 94%
No 6%

Table – 5.14

Chart – 5.11
Ques:15 If yes ,then mark the right one

options %age of respondents

Drinking water 78%
Parking Facility 42%
Adequate availabilty of stationery and 60%
writing planks
Lighting and siting arrangements 74%
Magazines and newspapers 44%

Table – 5.15

Chart – 5.12

The chart 5.12 is highlighting the Ameneties provided by banks 78%, 74% and 60% respectively

are for the options of drinking water facility, lighting and sitting arrangements and adequate

availability of stationary and writing planks .Parking facility and magazines and newspapers

responses 42% and 44% respectively for customers.

In essence , private banks should provide proper parking facility to their customers and also there

should be availability of magazines and newspapers for customers that they can get benefit out of

that.
Ques:16 Kindly specify the satisfaction level regarding the following services provided by
your bank:

S.no Services Mean Standard

deviation
1 Net banking 3.58 .98
2 Fund transfer 3.78 .70
3 Enquiry about you’re a/c 3.80 1.00

4 Clearing facility 3.84 .83

5 Customer support 3.82 1.11
6 Phone banking 3.78 .99

Table 5.16

The table 5.16 presents the differential services offered by private banks. Customers of private

banks are mainly getting the facility of cleaning facility and customer support with the mean

score of 3.84 and 3.82respectively.

Mean score of 3.58 in the table tells that net banking service in private banks is least. Other

services like phone banking, fund transfer, and enquiry about your account with mean score is

.99, .70 and 1.00 respectively are also available and used by customers.

Ques:17 Do you think there should be improvement in customer services?

Options %age of respondents

Yes 84%
No 16%

Table- 5.17
 improvement in services

100% 84%
respondents

80%
% age of

60%
40% 16%
20%
0%
Yes No
response

Chart – 5.13

The table 5.17 shows that there is improvement in customer services provided by private banks is

84% and 16 % respondent says that there is no improvement in customers services in private

banks .

Ques :18 If yes , in which area the improvement is desired?

S.no Particulars %age

1 Quality of services
2 Behavior of staff
3 Sitting arrangement
4 Marking of services
5 Variety of services
6 General facilities in bank

Table –5.18

Ques : - 19 Do you encourage your friends and relatives to do the business with this bank?

S.no Response %age of respondents

1 Yes
2 No

Table 5.19
The table 5.19 presents that customers encourage their friend sand relatives to do business

with private banks.

Ques :-20 What is your overall satisfaction level?

S.no Response %age of respondents

1 Fully satisfied
2 Satisfied
3 Not satisfied
 CHAPTER-6

FINDINGS

AND

SUGGESTIONS
The present study was carried out with the objective of examining customer relationship

management in private banks operating in AMBALA district . it is an attempt to exploit the usag

of CRM in private banks.

For doing this research work data has been collected through 100 respondents having different

Demographic characteristics. The sample consisted of 86% male and 14%female. Profession of

the respondents included in sample is business, service, housewives and students with the

percentage of 66%,26%,4%and 4% respectively.78% of the respondents are the low income

14% are of the middle income and 8%are having high income level

In the light of important concepts of CRM following conclusions can be drawn.

Customers retention refers to keep the customers. Retention a customers allows a bank to

develop the relationship and encourages both repeated and increasingly frequent buying activity.

The most profitable consumer are the most valueable that is why bank tried to retain customers

and make retention strategies.

By studing the various ways used by bank to make continuous and long term relationship with

customers, it is inferred that private banks are more using the personal approach and telephone

with the %age of 54% and 50% respectively. Banks are comparatively less using the customer
Relation programmes and customer meets and presenting greeting to customer on timely

occasion with the %age of 8% and 14% respectively.

Through customer retention strategies bank can make continuous and long term relationship with

customers. But private banks are not using more such type of programmes.

Customers satisfaction refers to the customers feelings of pleasure or disappointment resulting

from comparing services perceived performance in relation to his/her expectations. Customers

satisfaction is essential for application of CRM in private banks.

Private banks customers satisfaction about employees performance shows that customers are

more satisfied with the knowledge of the employees about services and helping nature of

employees with the mean scores of 3.98 each and comparatively less satisfied with the time

taken by bank for providing services with mean score 3.96.least satisfied with services charges

with mean score of 3.60. so to make customers more satisfied bank employees should always

ready to help customers and should present a courteous behaviour.

Private banks have to try to improve its customization system i:e bank should give individual

attention to the customers about their news services / schemes through T.V, newspapers,

magazines ,hoarding and banners with the %age of 44%, 38%, 6%, 14% respectively. It is the

inferred that 28% customers gets information through friends, relatives. Customers encourage

friends and relatives to do business with private bank if they are loyal to that bank.

Regains management avoids the switching of customers from one service provides to another.

Regain management is the aimed at winning back customers who have either given notice to

terminate the business relationship or whose relationship has already ended. Service quality,

relationship quality and overall service satisfaction can improve customers intentions to stay with

a firm.
By studying the relationship quality through employees behaviour in private banks and

behavioural skills of private banks employees. It has been inferred that skills such as politness,

amicability and cooperativeness with the agreed mean scores of 3.96, 3.86,and 4.02 respectively

are more than in private bank employees than the rudeness and careless with the strongly

disagreed having a mean score of 1.76 and 1.70 respectively. Hence, private bank employees

should eliminate rudeness and carelessness from their behaviour to make the relationship more

effective. By studying the customer perception about employees behaviour in private banks it has

analysed good behaviour is maximum with mean score of 3.88. There is comparatively less

excellent and average behaviour in banks with mean score of 3.72 and 3.50 respectively.There

is also poor behaviour with mean of 1.46. In essence the private bank employees have to reduce

the poor behaviour to zero and improve the good behaviour to reach the level of excellent

behaviour. Relationship quality can be improved through presentations of good behaviour by

employees for making the long term and continuous relationship with customers.

The findings covered the aspect of service quality and overall service satisfaction by studying

various conventional and modern services provided by private banks to their customers.

By analyzing the ATM services provided by private banks, it is inferred that the trans action slip

and bill payment is more used by customer with mean scores of 3.38 and 3.39 respectively.

Other facilities such as requet for cheque books and transfer of funds are comparatively less used

by customer with mean scores of 3.28 and 3.20 respectively.

Lifetime value increases the number of retained customers. For increasing the lifetime value

private bank are providing many amenities and facilities. Lifetime value can be increased by

enhancing the customers trust towards by enhancing the customers trust towards private sector

bank.
The findings and covered the factors that influence customers trust toward private sector banks.

The factors that largely that largely affect the trust of customers are services with mean of

also safely in transaction and goodwill having mean score of 3.98 and 3.88 respectively

Influence the trust of customers.

It is depicted from the result that private banks should try to enhance its goodwill so that

customers can consider private banks more trustworthy.

By studying the amenities provided by banks it is inferred that drinking water, lighting and

sitting arrangements, and adequate availability of stationary and writing plans are better than the

parking facilities and magazines and newspapers availability with %ages 0f 78%, 74%, 60%,

42% and 44% respectively.

In essence, private banks are implementing CRM but for better implementation of CRM they

have to apply all concepts more effectively. Following are the suggestion for better and effective

implementation of CRM in private banks.

Suggestions
1. “May I help you?” and “customer mitra counter” such type of counters should
be installed by private banks which do not have it. The persons posted to these counters should
have good communication skill, pleasing personality, patience , knowledge about working and be
fully conversant with various types of forms and vouchers and should keep their ready stock.

2. In some banks there is great rush during peak hours and their transactions get
dlayed due to this. To tackle this situation ,more cash counters should be opened and therefore
more personnel should be employed to man these counters.

3. Interest charges and other charges for services should be reasonable and
appropriate.

4. There should be better parking facilityin bank and also there should be
availability of newspapers and magazines for customers so that they can read these in waiting
hours.
5. Employees behavior should be good to the customers. There should not be
rudeness and carelessness in the behavior of the employees.

6. Occasionally, greetings and annually some gifts like wallets, executive diaries,
small bags, calendars etc. should given to the customers Some customers relation programmes
and customers meet should be organized by banks for their customers so as that better and long-
term relationship can be made.

7. More sitting arrangement should be made available to customers as during peak

hours customers have to keep standing till their transactions is completed.

8. Bank should provide flexibility to customers under certain circumstances and

some facilities and services should provide to the customers at door step in emergency.

9. Bank should provide all new and modern facilitiesto customers and also tell
them about the useage of that services and how they can avail that services easily and
profitability.

10. Employees should always be willing to help customers and should show great
interest in solving customers problems.Therefore, customers relationship management is the
need of banking. So it should be applied properly and effectively by private banks. As the bank
have started its applications but it is essential to take more interest and concentration on applying
this concept so as that better and long term relatioship can maintained with customers.
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 WEB SITES

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ANNEXURE