Dhanlaxmi Bank

Organizational Study of Dhanlaxmi Bank
CHAPTER-1
INTRODUCTION
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REVIEW OF LITERATURE:
RETAIL BANKING
DEFINITION:
“Retail banking is typical mass-market banking where individual

customers use local branches of larger commercial banks. Services
offered include: savings and checking accounts, mortgages, personal
loans, debit cards, credit cards, and so”
The Retail Banking environment today is changing fast. The

changing customer demographics demands to create a differentiated
application based on scalable technology, improved service and banking
convenience. Higher penetration of technology and increase in global
literacy levels has set up the expectations of the customer higher than
never before. Increasing use of modern technology has further enhanced
reach and accessibility.
The market today gives us a challenge to provide multiple and
innovative contemporary services to the customer through a consolidated
window as so to ensure that the bank‟s customer gets “Uniformity and
Consistency” of service delivery across time and at every touch point
across all channels. The pace of innovation is accelerating and security
threat has become prime of all electronic transactions. High cost structure
rendering mass-market servicing is prohibitively expensive.
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Present day tech-savvy bankers are now more looking at reduction in

their operating costs by adopting scalable and secure technology thereby
reducing the response time to their customers so as to improve their client
base and economies of scale.
The solution lies to market demands and challenges lies in innovation of
new offering with minimum dependence on branches – a multi-channel
bank and to eliminate the disadvantage of an inadequate branch network.
Generation of leads to cross sell and creating additional revenues with
utmost customer satisfaction has become focal point worldwide for the
success of a Bank.
Today’s retail banking sector is characterized by three basic

characteristics:
 Multiple products (deposits, credit cards, insurance, investments
and securities)
 Multiple channels of distribution (call center, branch, internet)
 Multiple customer groups (consumer, small business, and
corporate).
STRATEGIES FOR INCREASING RETAIL BANKING

BUSINESS
 Constant product innovation to match the requirements of the

customer segments
The customer database available with the banks is the best source of
their demographic and financial information and can be used by the
banks for targeting certain customer segments for new or modified
product. The banks should come out with new products in the area of
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securities, mutual funds and insurance.
 Quality service and quickness in delivery

As most of the banks are offering retail products of similar nature, the
customers can easily switchover to the one, which offers better
service at comparatively lower costs. The quality of service that banks
offer and the experience that clients have, matter the most. Hence, to
retain the customers, banks have to come out with competitive
products satisfying the desires of the customers at the click of a
button.
 Introduction of new delivery channels

Retail customers like to interface with their bank through multiple
channels. Therefore, banks should try to give high quality service
across all service channels like branches, Internet, ATMs, etc.
 Tapping of unexploited potential and increasing the volume of

business
This will compensate for the thin margins. The Indian retail banking
market still remains largely untapped giving a scope for growth to the
banks and financial institutions. With changing psyche of Indian
consumers, who are now comfortable with the idea of availing loans
for their personal needs, banks have tremendous potential lying in this
segment. Marketing departments of the banks be geared up and
special training be imparted to them so that banks are successful in
grabbing more and more of retail business in the market.
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 Infrastructure outsourcing
This will help in lowering the cost of service channels combined with
quality and quickness.
 Detail market research

Banks may go for detail market research, which will help them in
knowing what their competitors are offering to their clients. This will
enable them to have an edge over their competitors and increase their
share in retail banking pie by offering better products and services.
 Cross-selling of products
PSBs have an added advantage of having a wide network of branches,
which gives them an opportunity to sell third-party products through
these branches.
 Business process outsourcing

Outsourcing of requirements would not only save cost and time but
would help the banks in concentrating on the core business area.
Banks can devote more time for marketing, customer service and
brand building. For example, Management of ATMs can be
outsourced. This will save the banks from dealing with the intricacies
of technology.
 Tie-up arrangements
PSBs with regional concentration can reap the benefit of reaching
customers across the country by entering into strategic alliance with
other such banks with intensive presence in other regions. In the
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present regime of falling interest and stiff competition, banks are

aware that it is finally the retail banking which will enable them to
hold the head above water. Hence, banks should make all out efforts
to boost the retail banking by recognizing the needs of the customers.
It is essential that banks would be imaginative in predicting the
customers' expectations in the ever-changing tastes and environments.
It is the innovative and competitive products coupled with high
quality care for clients will only hold the key to success in this area.
In short, bankers have to run very fast even to stay where they are
now. It is the survival of the fastest now and not only survival of the
fittest.
EMERGING ISSUES IN HANDLING RETAIL BANKING
 KNOWING CUSTOMER
„Know your Customer‟ is a concept which is easier said than practiced.
Banks face several hurdles in achieving this. In order to that the product
lines are targeted at the right customers-present and prospective-it is
imperative that an integrated view of customers is available to the
banks. The benefits flowing out of cross-selling and up-selling will
remain a far cry in the absence of this vital input. In this regard the
customer databases available with most of the public sector banks, if not
all, remain far from being enviable.
What needs to be done is setting up of a robust data warehouse
where from meaningful data on customers, their preferences, there
spending patterns, etc. can be mined. Cleansing of existing data is the
first step in this direction. PSBs have a long way to go in this regard.
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 TECHNOLOGY ISSUES
Retail banking calls for huge investments in technology. Whether it is
setting up of a Customer Relationship Management System or
Establishing Loan Process Automation or providing anytime, anywhere
convenience to the vast number of customers or establishing
channel/product/customer profitability, technology plays a pivotal role.
And it is a long haul. The Issues involved include adoption of the right
technology at the right time and at the same time ensuring volumes and
margins to sustain the investments.
It is pertinent to remember that Citibank, known for its
deployment of technology, took nearly a decade to make profits in credit
cards. It has also to be added in the same breath that without adequate
technology support, it would be well nigh possible to administer the
growing retail portfolio without allowing its health to deteriorate.
Further, the key to reduction in transaction costs simultaneously with
increase in ability to handle huge volumes of business lies only in
technology adoption.
PSBs are on their way to catch up with the technology much
required for the success of retail banking efforts. Lack of connectivity,
stand alone models, concept of branch customer as against bank
customer, lack of convergence amongst available channels, absence of
customer profiling, lack of proper decision support systems, etc., are a
few deficiencies that are being overcome in a great way. However, the
initiatives in this regard should include creating flexible computing
architecture amenable to changes and having scalability, a futuristic
approach, networking across channels, development of a strong
Customer Information Systems (CIS) and adopting Customer
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Relationship Management (CRM) models for getting a 360 degree view

of the customer.
 ORGANIZATIONAL ALIGNMENT
It is of utmost importance that the culture and practices of an institution
support its stated goals. Having decided to take a plunge into retail
banking, banks need to have a well defined business strategy based on
the competitive of the bank and its potential. Creation of a proper
organization structure and business operating models which would
facilitate easy work flow are the needs of the hour. The need for
building the organizational capacity needed to achieve the desired
results cannot be overstated.
This would mean a strong commitment at all levels, intensive
training of the rank and file, putting in place a proper incentive scheme,
etc. As a part of organizational alignment, there is also the need for
setting up of an effective Corporate Marketing Division. Most of the
public sector banks have only publicity departments and not marketing
setup. A fully fledged marketing department or division would help in
evolving a brand strategy, address the issue of alienation from the
upwardly mobile, high net worth customer group and improve the recall
value of the institution and its products by arresting the trend of getting
receded from public memory. The much needed tie-ups with
manufacturers/distributors/builders will also facilitated smoothly. It is
time to break the myth PSBs are not customer friendly. The attention is
to be diverted to vast databases of customers lying with the PSBs till
unexploited for marketing.
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 PRODUCT INNOVATION
Product innovation continues to be yet another major challenge. Even
though bank after bank is coming out with new products, not all are
successful. What is of crucial importance is the need to understand the
difference between novelty and innovation? Peter Drucker in his path
breaking book: “Management Challenges for the 21st Century” has in
fact sounded a word of caution: “innovation that is not in tune with the
strategic realities will not work; confusing novelty with innovation
(should be avoided), test of innovation is that it creates value; novelty
creates only amusement”. The days of selling the products available in
the shelves are gone. Banks need to innovate products suiting the needs
and requirements of different types of customers. Revisiting the
features of the existing products to continue to keep them on demand
should not also be lost sight of.
 PRICING OF PRODUCT
The next challenge is to have appropriate policies in place. The industry
today is witnessing a price war, with each bank wanting to have a larger
slice of the cake that is the market, without much of a scientific study
into the cost of funds involved, margins, etc. The strategy of each
player in the market seems to be: „under cutting others and wooing the
clients of others‟. Most of the banks that use rating models for
determining the health of the retail portfolio do not use them for pricing
the products. The much needed transparency in pricing is also missing,
with many hidden charges. There is a tendency, at least on the part of
few to camouflage the price. The situation cannot remain his way for
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long. This will be one issue that will be gaining importance in the near
future.
Retail Banking in India

With a jump in the Indian economy from a manufacturing sector, that
never really took off, to a nascent service sector, Banking as a whole is
undergoing a change. A larger option for the consumer is getting
translated into a larger demand for financial products and customisation
of services is fast becoming the norm than a competitive advantage. With
the Retail banking sector expected to grow at a rate of 30% [Chanda
Kochhar, ED, ICICI Bank] players are focussing more and more on the
Retail and are waking up to the potential of this sector of banking. At the
same time, the banking sector as a whole is seeing structural changes in
regulatory frameworks and securitisation and stringent NPA norms
expected to be in place by 2004 means the faster one adapts to these
changing dynamics, the faster is one expected to gain the advantage. In
this article, we try to study the reasons behind the euphemism regarding
the Retail-focus of the Indian banks and try to assess how much of it is
worth the attention that it is attracting.
Potential for Retail in India: Is sky the limit?
The Indian players are bullish on the Retail business and this is not totally
unfounded. There are two main reasons behind this. Firstly, it is now
undeniable that the face of the Indian consumer is changing. This is
10
reflected in a change in the urban household income pattern. The direct

fallout of such a change will be the consumption patterns and hence the
banking habits of Indians, which will now be skewed towards Retail
products. At the same time, India compares pretty poorly with the other
economies of the world that are now becoming comparable in terms of
spending patterns with the opening up of our economy. For instance,
while the total outstanding Retail loans in Taiwan is around 41% of GDP,
the figure in India stands at less than 5%. The comparison with the West
is even more staggering. Another comparison that is natural when
comparing Retail sectors is the use of credit cards. Here also, the
potential lies in the fact that of all the consumer expenditure in India in
2001, less than 1% was through plastic, the corresponding US figure
standing at 18%.
But how competitive are the players?
The fact that the statistics reveal a huge potential also brings with it a
threat that is true for any sector of a country that is opening up. Just how
competitive are our banks? Is the threat of getting drubbed by foreign
competition real? To analyze this, one needs to get into the shoes of the
foreign banks. In other words, how do they see us? Are we good takeover
targets?
Going by international standards, a large portion of the Indian
population is simply not “bankable” – taking profitability into
consideration. On the other hand, the financial services market is highly
over-leveraged in India. Competition is fierce, particularly from local
private banks such as HDFC and ICICI, in the business of home, car and
consumer loans. There, precisely lie the pitfalls of such explosive
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growth. All banks are targeting the fluffiest segment i.e. the upwardly
mobile urban salaried class. Although the players are spreading their
operations into segments like self- employed and the semi-urban rich, it
is an open secret that the big city Indian yuppies form the most
profitable segment. Over-dependence on this segment is bound to bring
in inflexibility in the business.
INDUSTRY
PROFILE
12
BANKING BASICS
The Indian banking industry which is governed by the Banking
Regulation Act of India, 1949 can be broadly classified into two major
categories.
 Scheduled Banks
 Non-scheduled Banks
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RESERVE BANK OF INDIA

(CENTRAL BANK AND
SUPREME MONETORY
AUTHORITY)
SCHEDULED
BANKS
(96)
COMMERCIAL CO-OPERATIVE
BANKS BANKS
REGIONA PUBLIC PRIVATE

FOREIGN L RURAL SECTOR URBAN CO-
SECTOR OPERATIVE
BANKS BANKS BANKS
BANKS BANKS
(40) (196) (30)
(27) (52)
SBI & OLD

ASSOCIATE PRIVATE STATE CO-
BANKS BANKS OPERATIVE
(8) (22) BANKS
(16)
NEW
OTHER PRIVATE
NATIONALIZED BANKS
BANKS (8)
(19)
FIGURE:-1 STRUCTRE OF INDIAN BANKING INDUSTRY
Scheduled banks comprise commercial banks and the co-operative banks.

In terms of ownership commercial banks can be further grouped into
nationalized banks, the State Bank of India and its group banks, regional
rural banks and private sector banks(old/new domestic and foreign)
Banking regulation act of India, 1949 defines banking as “accepting, for
the purpose of lending or investment of deposits of money from the
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public, repayable on demand or otherwise and withdraw able by

cheques, draft and order or otherwise.”
In addition, Banks are allowed to perform certain activities which are

ancillary to this business of accepting deposits and lending. A bank‟s
relationship with the public, therefore, revolves around accepting deposit
and lending money. Another activity which is assuming increasing
importance is transfer of money, both domestic and foreign, from one
place to another. This activity is generally known as “Remittance
Business” in banking parlance. The so called forex (foreign exchange) is
largely a part of remittance. It involves buying and selling o0f foreign
currencies.
The law governing Banking Activities in India is called “Negotiable
Instrument Act 1881”. The banking activities can be classified as:
 Accepting deposits from public/others
 Transferring money from one place to another
 Acting as trustees
 Keeping valuable in safe custody
 Collection business
 Deposits
 Loans
 Lending money to public
HISTORY
Banking in India originated in the last decades of the 18th century with
The General Bank of India which came into existence in 1786. This was
followed by The Bank of Hindustan. Both of these are now defunct. The
oldest bank in existence in India is the State Bank of India, which
originated in the Bank of Calcutta (later Bank of Bengal) in June 1806. A
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couple of decades late, foreign banks like Credit Lyonnais started their
Calcutta operations in 1850s. The first fully Indian owned bank was The
Allahabad Bank, which was established in 1865.
By the 1900s, the market expanded with the establishment of banks such
as Punjab National Bank, in 1895 in Lahore and Bank of India in 1906, in
Mumbai. Both these were founded under private ownership. The Reserve
Bank of India formally took on the responsibility of regulating the Indian
banking sector from 1935. After India‟s independence in 1947, the
Reserve Bank of India was nationalized and given broader powers.
POST-INDEPENDENCE
The partition of India in 1947 adversely impacted the economies of

Punjab and West Bengal, paralyzing banking activities for months.
India's independence marked the end of a regime of the Laissez-faire for
the Indian banking. The Government of India initiated measures to play
an active role in the economic life of the nation. This resulted into greater
involvement of the state in different segments of the economy including
banking and finance. The major steps to regulate banking included:
 In 1948, the Reserve Bank of India, India's central banking

authority, was nationalized, and it became an institution owned by
the Government of India.
 The Banking Regulation Act also provided that no new bank or
branch of an existing bank could be opened without a license from
the RBI, and no two banks could have common directors.
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However, despite these provisions, control and regulations, banks in India

except the State Bank of India, continued to be owned and operated by
private persons. This changed with the nationalization of major banks in
India on 19th July 1969.
NATIONALIZATION
By the 1960s, the Indian banking industry had become an important tool
to facilitate the development of the Indian economy. At the same time, it
had emerged as a large employer, and a debate had ensued about the
possibility to nationalize the banking industry. The Prime Minister of
India expressed the intention of the GOI in the annual conference of the
All India Congress Meeting in a paper entitled "Stray thoughts on Bank
Nationalization."
After this, until the 1990s, the nationalized banks grew at a pace of
around 4%, closer to the average growth rate of the Indian economy.
LIBERALISATION
In the early 1990s, the then Narsimha Rao government embarked on a

policy of liberalization, licensing a small number of private banks. These
came to be known as New Generation tech-savvy banks, and included
Global Trust Bank (the first of such new generation banks to be set up),
which later amalgamated with Oriental Bank of Commerce, Axis
Bank(earlier as UTI Bank), ICICI Bank and HDFC Bank.
This move, along with the rapid growth in the economy of India,
revitalized the banking sector in India, which has seen rapid growth with
strong contribution from all the three sectors of banks, namely,
government banks, private banks and foreign banks.
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CURRENT SITUATION
Currently, India has 96 scheduled commercial banks (SCBs) - 27 public

sector banks (that is with the Government of India holding a stake), 31
private banks (these do not have government stake; they may be publicly
listed and traded on stock exchanges) and 38 foreign banks. They have a
combined network of over 53,000 branches and 49,000 ATMs.
The industry is currently in a transition phase. On the one hand, the

Public Sector Banks which are the mainstay of Indian banking system,
are in the process of shedding their flab in terms of excessive manpower,
excessive Non Performing Assets (NPAs) and excessive governmental
equity, while on the other hand the private sector banks are consolidating
themselves through mergers and acquisitions.
With he growth in the Indian economy which is expected to be strong for

services sector, the demand for the banking services, especially retail
banking, mortgages and investment services are expected to be strong.
One may also expect mergers and acquisitions, takeovers and asset sales.
Banking industry has completely moulded the system with some great
technological developments and few revolutionary thoughts. Introduction
of MIS (MANAGEMENT INFORMATION SYSTEM), HRIS (HUMAN
RESOURCE INFORMATION SYSTEM), ERP SYSTEMS has made
this system quick and efficient.
Investment is the part of services sector which is facing a tough

competition these days. Both the public and private sector banking
institutions are the major players.
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The scenario which they have brought up in the market through their
unpretentious hardworking and high quality work, has made a cluster
breaking entry in the era of competition.
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TRADITIONAL BANKING
Traditionally the relationship between bank and its customer has
been on a one-to-one level via the branch network. This was put into
operation with clearing and design making responsibilities at the
individual branch level. The head office had the responsibility for the
overall clearing network, the size of the branch network and the training
of staff in the branch network. The branch monitored the organizations
performance and set the decision making parameters, but the information
available to both branch and their customers was limited to one
geographical location.
Customer Customer Customer
Bank Branch Bank Branch Bank Branch
Clearing Decision Clearing Decision Clearing Decision
Central clearing Central clearing
FIGURE:-2 Traditional banking structure
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RELATIONSHIP BANKING
The modern bank cannot rely on its branch network alone.
Customers are now demanding new, more convenient, delivery systems.
And services such as internet banking have a dual role for the customer
thus increasing the productivity of this sector. They provide traditional
banking service, but additionally offer much greater access to information
on their account and on the banks many other services. To do this
banking has to create information layers, which can be accessed both by
bank staff as well as by the customers themselves.
The use of interactive electronic links via the internet can go a
long way in providing the customers with greater deal of information
about both their financial situation and about the services offered by the
bank.
FIGURE:-3-RELATIONSHIP BANKING
Customers
Telephone, Branch, Electronic Banking, etc.
Shared Information
Clearing systems Head Office Risk

Monitoring
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Financial Statement Analysis :
 “Financial Statements Analysis is largely a study of relationship
among the various financial factors in a business as disclosed by a
single set of statements and a study of trends of these factors as
shown in a series of statements” this is according to Myer.
Analysis is the process of critically examining in detail accounting
information given in the financial statements. For the purpose of
financial analysis, individual items are studied, their
interrelationships with other related figures established, the data is
sometimes rearranged to have better understanding of the
information with the help of different techniques or tools for the
purpose. Analyzing financial statements is a process of evaluating
relationships between component parts of financial statements to
obtain a better understanding of firm‟s position and performance.
Objectives Of Analysis Of The Financial Statements :
 The present and future earnings capacity or profitability of the
concern.
 The operational efficiency of the concern as a whole and of its
various parts or departments.
 The short term and long term solvency of the concern for the
benefit of the debenture holders and trade credit.
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 The comparative study in regard to one firm with another firm or
one department with another department.
 The possibility of developments in future by making forecasts and
preparing budgets.
 The financial stability of a business concern.
 The real meaning and significance of financial data.
 The long term liquidity of its funds.
Techniques (Tools Or Methods) Of Analysis And ANALYSIS AND
INTERPRETATION:
The following techniques can be used in connection with analysis and
ANALYSIS AND INTERPRETATION of financial statements:
a. Comparative financial statements
b. Common measurement statements
c. Trends percentages analysis
d. Fund flow statement
e. Net working capital analysis
f. Cash flow statement
g. Ratio analysis
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Introduction To Ratios:
Ratio Analysis:
 “The indicated quotient of two mathematical expressions”.
 Ratio analysis is one of the powerful tools of the financial analysis.
This is done to develop meaningful relationship between individual
items or group of items usually shown in the periodical financial
statements published by the concern.
 It shows the relationship between the two interrelated accounting
figures as gross profit to sales, current assets to current liabilities,
loaned capital to owned capital etc.
 A Ratio is the numerical or an arithmetical relationship between
two figures. It is expressed where one number is divided by
another. A ratio can be used as a yardstick for evaluating the
financial position and performance of a concern, because the
absolute accounting data cannot provide meaningful understanding
and ANALYSIS AND INTERPRETATION.
 A ratio is the relationship between two accounting items expressed
mathematically. Ratio analysis helps the analyst to make
quantitative judgment with regard to concern‟s financial position
and performance.
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 Absolute figures are valuable but they standing alone convey no
meaning unless compared another.
 Accounting ratios show inter-relationships which exist among
various accounting data. When relationships among various
accounting data supplied by financial statements are worked out,
they are known as accounting ratios.
Importance Of Ratio Analysis:
Ratio analysis stands for the process of determining and presenting the
relationship of items and groups of items in the financial statements. It is
an important technique of financial analysis. It is a way by which
financial stability and health of a concern can be judged. The following
are the main points of importance of ratio analysis:
1)Useful in financial position analysis: Accounting ratios reveal the
financial position of the concern. This helps the banks, insurance
companies and other financial institutions in lending and making
investment decisions.
2)Useful in simplifying accounting figures: According ratios simplify,
summarize and systematize the accounting figures in order to make
them more understandable and in lucid form. They highlight the
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interrelationship, which exists between various segments of the business
as expressed by accounting statements.
Often the figures standing alone cannot help them convey any meaning
and ratios help them to relate with other figures.
3) Useful In Assessing Operational Efficiency: Accounting ratios help
to have an idea of the working of a concern. The efficiency of the firm
becomes evident when analysis is based on accounting ratios. They
diagnose financial health by evaluating liquidity, solvency, profitability,
etc. This helps the management to assess financial requirements and the
capabilities various business units.
4) Useful in forecasting purposes: If accounting ratios are calculated for
a number of years, then trend is established. This trend helps in setting
up future plans and forecasting. For example, expenses as a percentage
of sales can be easily forecasted on the basis of sales and expenses of the
past years.
5) Useful in locating the weak spots of the business: Accounting ratios
are of great assistance in locating weak spots in the business even though
the overall performance may be efficient. Weakness in financial structure
due to incorrect policies in the past or present are revealed through
accounting ratios. For example, if a firm finds that increase in
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distribution expenses is more than proportionate to the results expected or
achieved, it can take remedial steps to overcome this adverse situation.
6) Useful in comparison of performance: Through accounting ratios
comparison can be made between one department of a firm with another
of the same firm in order to evaluate the performance of various
departments in the firm. Manager is naturally interested in such
comparison in order to know the proper had smooth functioning of such
departments. Ratios also help him to make any change in the
organization.
Limitations Of Accounting Ratios :
Ratio analysis is very important in revealing the financial position and
soundness of the business. But, in spite of its advantages, it also has
some limitations which restrict its use. These limitations should be kept
in mind while making use of ratio analysis for interpreting the financial
statements.
The following are the main limitations of accounting ratios:
1) False results if based on incorrect accounting data: Accounting
ratios can be correct only if the data is correct. Sometimes, the
information given in the financial statements is affected by window
dressing i.e. showing position better than what actually is.
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2) Ignores qualification factors: Accounting ratios are tools of
quantitative analysis only. But sometimes qualification factors may
surmount the quantitative aspects. The calculations derived from the
ratio analysis may be distorted.
3) No idea of probable happenings in future: Ratios are an attempt to
make an analysis of the past financial statements, they are historical
documents. In the present scenario of complexities of the business, it is
important to have an idea of the happenings in future.
4) Variation in accounting methods: The tow firms‟ results are
compatible with the help of accounting ratios only if they follow the same
accounting methods or bases. Comparison will become difficult if the
two concerns follows the different methods of providing depreciation or
valuing stock.
5) No common standards: It is very difficult to lay down a common
standard for comparison because circumstances differ from concern to
concern and the nature of each industry is different. For example, a
business with current ratio of more than 2:1 might not be in a position to
pay current liabilities in time because of an unfavorable distribution of
current assets in relation to liquidity.
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Financial ratio analysis groups the ratios into categories which tell us
about different facets of a company's finances and operations. An
overview of some of the categories of ratios is given below.
atios
These are ratios, which show the extent that debt is used in a company's
capital structure.
These are ratios which give a picture of a company's short term financial
situation or solvency.
These are ratios which use turnover measures to show how efficient a
company is in its operations and use of assets.
These are ratios which use margin analysis and show the return on sales
and capital employed
Solvency Ratios
These are ratios which give a picture of a company's ability to generate
cash flow and pay it financial obligations
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CHAPTER 2-
COMPANY
PROFILE
30
Dhanlaxmi Bank Ltd – At a Glance
Type Public company Private sector (BSE: 532180,

NSE: DHANBANK)
Industry Banking
Financial services
Insurance
Founded 1927
Headquarters Dhanlaxmi Bank Ltd,
Dhanalakshmi Buildings, Naickanal
Thrissur,
Kerala, India
Key people GN Bajpai, PG Jayakumar
Products Investment Banking
Commercial Banking
Retail Banking
Private Banking
Mortgage
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Credit Cards
Website Dhanbank.com
Dhanlaxmi Bank Ltd. was incorporated in 1927 at Thrissur, Kerala by a

group of ambitious and enterprising entrepreneurs. Over the 86 years that
followed, Dhanlaxmi Bank with its rich heritage has earned the trust and
goodwill of clients. It is due to their strong belief in the need to seek
innovation, deliver best service and demonstrate responsibility that they
have grown from strength to strength. Be it in the number of customers,
the scale of business, the breadth of our product offerings, the banking
experience we offer or the trust that people invest in them. With more
than 670 touch points across India at your service; their focus has always
been on customizing services and personalizing relations.
Dhanlaxmi Bank Ltd (BSE: 532180, NSE: DHANBANK) is an old

private sector bank headquartered in Thrissur City, Kerala, India. The
bank was focusing mostly on Southern states like Karnataka, Tamil
Nadu, Andhra Pradesh and Kerala but it is looking for a pan India
presence since the last few years.
32
Dhanalakshmi Bank Ltd was incorporated on 14 November 1927 by a

group of enterprising entrepreneurs at Thrissur city, the "Cultural Capital
of Kerala" with a capital of Rs 11,000 and 7 employees. It became a
Scheduled Commercial Bank in the year 1977. It has today attained
national stature with 275 branches and 404 ATMs spread over the states
of Kerala, Tamil Nadu, Karnataka, Andhra Pradesh, Maharashtra,
Gujarat, Delhi, West Bengal, Madhya Pradesh, Punjab, Uttar Pradesh,
Rajastan, Chandigarh, Goa, and Haryana.
The Dhanalakshmi Bank has deployed technology widely as an

instrument for enhancing the quality of customer service. It has
introduced Centralized Banking Solution (CBS) on the Flexcube Platform
at all its branches for extending anywhere/anytime/anyhow banking to its
clientele through multiple delivery channels. The bank has set-up a state-
of-the-art Data Centre in Bangalore, to keep the networked system
operational round the clock. A Disaster Recovery Centre is also
operational at Thrissur for meeting various contingencies.
Current employee strength is around 4400
VISION AND MISSION
"To become a strong and innovative bank with integrity and social
responsibility and to maximize customer satisfaction and the satisfaction
of its employees, shareholders and the community."
 To be amongst the top 5 Private Sector Banks in terms of
 Bank‟s Balance sheet size

 Profits
33
 Branch network
 Asset Quality
 To be a large profitable “A” rated bank.
AFFILIATIONS
Major Exchange Houses
UAE Exchange Centre LLC
Al Ahalia Money Exchange Bureau
Foreign Correspondent Banks
Deutsche Bank Trust Company Americas
Wachovia Bank NA - A Wells Fargo Company
Commerzbank AG
National Westminister Bank PLC
Insurance Partner
Bajaj Allianz
34
Milestones
1927 - Founded on 14 November, 1927, at Thrissur, Kerala
1975 - Set up the first branch outside the home state of Kerala, at Chennai
Mount Road
1977 - Designated as Scheduled Commercial Bank by the Reserve Bank

of India (RBI)
1980 - 100-strong branch network
1986 - Total business of Rs. 100 crores
1996 - First public issue. Total business of Rs. 1,000 crores
2000 - Installed the first ATM
2002 - First Rights Issue
2002 - Platinum Jubilee year
2007 - Total business of Rs. 5,000 crores. 80th Anniversary year
2008 - Total business of Rs. 7,500 crores. Second Rights Issue
2009 - Opened 45 new branches and 102 new ATMs
2010 - Raised Rs. 381 crores through QIP in July 2010, Opened 20 new
branches and 280 new ATMs, launched new brand identity; created
platform for a unified image
2011- Launched its 275th branch in Jan 2011; ATM network expanded to
456, Total asset base for the bank was Rs.14,268 cr, as on 31.03.2011.
35
Growth and Development of Dhanalaxmi Bank

1927 - The Dhanalaxmi Bank Limited (DBL) was incorporated. It took
banking business of all kinds.
1991 - 2,30,000 shares issued.
1992 - The Bank opened a branch at Veerappan Chatram. It also opened

an Extension Counter at Hyderabad; Our Extension Counter at
Nanthencode, Trivandrum was upgraded to a full fledged branch.
- On 22nd April, the bank opened a branch at Peelamedu.
- 3,50,000 shares issued to the public.
1993 - Modernisation has begun in the Bank with the inauguration of

EDP Section in the Central
Office on 28-01-'93. Computer support has been extended to all the three
Regional Offices also.
- Computer supported banking will be introduced in several selected
branches during the course of the year 1993-'94. Some of the branches
will be provided with on-line computer facilities. Efforts are also on to
build up in house expertise in software development.
1994 - Rights equity shares issued at a prem. of Rs 25 per share.
1995 - The Bank has co-managed 5 issues, participated in 60 public

issues in the capacity of Bankers to the Issue and extended underwriting
support to 104 Public Issues.
- The the Bank has entered in the field of project appraisal. Requests for
26 bridge loans were also entertained.
- New branches of the bank were opened at Chevarambalam (Kozhikode
Dist.), Ponnani (Malappuram Dist.) and Muvattupuzha (Ernakulam
Dist.).
- 80,00,000 No. of equity shares of Rs 10 each issued at a prem. of Rs 40
per share.
1996 - The bank had offered 80 lacs equity shares of Rs.10/- each at a
36
premium of Rs.40/- on each share aggregating to Rs.40 crores.
- The bank entered into leasing business.

- New branches of the bank were opened at Karur (Tamilnadu),
Dasarahalli (Bangalore), Chembur Mumbai (Maharashtra), T. Nagar
Chennai (Tamilnadu) and Valancherry (Kerala).
- 82,35,545 No. of equity shares of Rs 10 each issued at a prem. of Rs 40

per share allotted through public issue.
1997 - The bank is celebrating the 70th year of service to the nation. The
Bank's corporate philosophy is `service to the poor and needy'.
- The Bank opened five more branches during the year at Surat,
Ahmedabad, Fort Mumbai, Service Branch at Chennai and Industrial
Finance Branch at Kochi. The Bank also opened five Extension Counters
including the one at Guruvayur.
- 11 branches were fully computerised during the year thereby totalling
the fully computerised branches to 26. Back offices of five branches were
also computerised.
- The Investment Information and Credit Rating Agency has rated the
bank's bond issue with a `LA' rating , indicating adequate safety.
- The Trichur-based Dhanalakshmi Bank has been granted a full-fledged
foreign exchange licence by the Reserve Bank of India (RBI).
The bank had made a public issue of 80,00,000 equity shares of Rs.10
each at a premium of Rs.40 per share in February, 1996. Prior to the
public issue, the shares of the bank were spread over 18,000 shareholders.
1998 - Dhanalakshmi Bank has launched two new deposit schemes --

Dhanam Plus and Dhanam Double Plus -- in Bangalore.
- The bank had offered 82 lakh shares at a premium of Rs. 40 per share
through the public issue.
1999 - DHANALAKSHMI Bank, which has computerised 70 per cent of

its business transactions, is now globally accessible on the Internet and
37
can be visited at http://www.dhanbank.com, an official release from the

bank has said.
- THE Dhanam Kisan card will be launched by Dhanalakshmi Bank on
October 28.
- Thrissur-based Dhanalakshmi Bank proposes to introduce Web-based
banking services in the new millennium.
2000 - The new rates for domestic deposits had become effective April
22 and for NRE/NRNR deposits from May 1.
- The Kerala-based Dhanalakshmi Bank has received clearance from the

RBI to allot shares on a pro rata basis to the subscribers of its public issue
held in 1996.
- The Bank has opened seven-day banking in select branches in
Thiruvananthapuram, Ernakulam and Bangalore.
2001--Dhanalakshmi Bank inaugurated its first ATM Centre in Chennai

at Anna Nagar on August 23
-Dhanalakshmi Bank has opens its first ATM in bangalore
2002 -Dhanalakshmi Bank introduces new home loan scheme called

Dhanam platinum jubilee home loan advantage
-The Dhanlakshmi Bank Ltd has fixed February 16, 2002 as the record
date for the purpose of issue of four equity shares of Rs 10/- each at a
premium of Rs 5/- per share on rights basis for every three existing equity
shares held.
-Ties up with MetLife India to distribute life insurance products of
MetLife India
2003 -Dhanalakshmi Bank sets up 3 branches in Thrissur -Unveils co-

branded product DhanLife with MetLife India, makes foray into
insurance
-Ties up with United India Insurance Co. in order to market insurance
products via all the bank's branches
-Mr B Muthuswamy, Managing Director and CEO has resigned and the
charge handed over to Mr K A Menon, Executive Director.
38
-Dhanalakshmi Bank inaugurates its Mumbai Treasury Department on

Oct 29
- Dhanalakshmi Bank has taken over a 18,000 square feet property of
Pentasoft Technologies under Securitisation Act
2004-Dhanalakshmi Bank introduces new bill payment services

-Dhanalakshmi Bank takes possession of part of Devaki Hospital
-Dhanalakshmi Bank unveils new loan scheme for 2 wheelers
-Dhanalakshmi Bank Ltd has informed that Sri TR Madhavan has been
appointed as its Managing Director & Chief Executive Officer at the
Board Meeting held on February 23, 2004.
- Launches heath insurance scheme in association with United India
Insurance company
-Delist from Madras Stock Exchange (MSE) with effect from September
7, 2004
2005 - Dhanalakshmi Bank joins IDRBT managed ATM network

-Dhanalakshmi Bank inks rupee-drawing agreement with Oman firm
-Dhanalakshmi Bank appoints Mr Prasad as new CEO
-Dhanalakshmi Bank unveils new housing loan product
2007- Dhanalakshmi Bank Ltd has appointed Mr. K Srikanth Reddy as

Additional Director, at the Board meeting held on October 29, 2007.
2008 - Dhanalakshmi Bank Ltd has appointed Mr. S Santhanakrishnan as

Additional Director, at the Board meeting held on June 30, 2008.
-The company has issued rights in the ratio of 1:1 at a premium of Rs.
52/-Per Share.
2009 - Dhanalakshmi Bank has appointed Mr Bipin Kabra as Chief

Financial Officer (CFO), who has over 16 years of experience in financial
services industry. His past assignments include stints in ICICI as well as
SBI and Reliance group. Prior to joining the Dhanalakshmi Bank, he was
associated with Zee group. He has spent considerable period in banking,
insurance, merchant banking and treasury.
39
BUINESS OVERVIEW
Dhanlaxmi Bank has reported an 11.8 per cent rise in net profit at Rs.
26.06 crore in the 12 months ended 31 March 2011, against Rs.23.30
crore, a growth of 11.8 per cent. Total income rose to Rs.1,053.19 crore
from Rs.625.56 crore. The financial year 2011 was a year for
consolidation for the Bank. On all parameters, including important ones
such as business growth, net interest margin and NPA control, it was a
good year. Net interest margin for the year was around 2.7 percent. The
bank's loan-book witnessed a sharp growth largely on account of a greater
thrust on the retail segment and diversification across regions, the release
said. The bank's total income increased from Rs 182.40 crore in the
quarter ended 31 March 2010 to Rs. 342.2 crore, recording a growth of
87.6 per cent. Non-interest income rose from Rs. 31.9 crore to Rs. 46.1
crore as a result of a focused thrust on fee-based business.
Dhanlaxmi Bank has deployed technology widely. It has introduced

Centralised Banking Solution (CBS) on the Flexcube Platform at all its
branches for extending anywhere/anytime/anyhow banking to its clientele
through multiple delivery channels. The bank has set-up a Data Centre in
Bangalore, to keep the networked system operational round the clock. A
Disaster Recovery Centre is also operational at Thrissur for meeting
various contingencies.
Name change
The bank has also changed its name from Dhanalakshmi Bank to
„Dhanlaxmi‟ Bank which will have a new corporate identity. FITCH, a
leading international branding and design consultancy had designed the
new identity for the bank.
40
Partnerships
The bank is a depository participant of NSDL (National Security

Depository Limited) offering Demat services through select branches.
Bank is offering Online trading in association with Destimoney
securities. It has partnered AGS Infotech for installation of ATMs. It
offers VISA branded debit and credit cards to customers. It is also
offering insurance services through Bajaj Allianz Life Insurance
company as their Bancassurance partner.
Credit cards
In March, 2010, the bank launched Dhanlaxmi Bank Platinum and Gold
Credit cards.
ACHIEVEMENTS
 Serviced business worth Rs. 21,595 crores as on 31 March 2011,
comprising deposits of Rs. 12,530 crores and advances of Rs. 9,065
crores.
 Earned a net profit of Rs. 26.1 crores for the financial year ended 31st
March 2011, with a capital adequacy ratio of 11.8% (Basel II) during
the same period.
 Put in place the Real Time Gross Settlement (RTGS) and National
Electronic Fund Transfer (NEFT) systems to facilitate large value
payments and settlements online in real time, on a transaction-by-
transaction basis.
 Set up NRI Boutiques (Relationship Centres) across nine locations in
Kerala and Tamil Nadu, with plans to open specialized NRI outlets at
potential locations with emphasis on impeccable service levels.
 Bank is a major player in micro credit in Kerala and the Bank's
outstanding under micro credit was Rs. 266 crores at the end of March
2011.
 Attained ISO 9001-2000 certification for the Bank's corporate office
at Trissur and industrial finance branch at Kochi.
41
FINANCIAL INCLUSION INITIATIVES

 Surpassed the RBI's benchmark of priority sector lending of 40%
by advancing Rs. 2565.86 crores as at March end 2011, accounting
for 50.90% of net bank credit of net bank credit.
 Surpassed RBI's recommended norm of 18% advances with respect
to agricultural credit by lending Rs.922.27 crores as as at March
end 2011, accounting for 18.30% of net bank credit of net bank
credit.
 Outstanding of Rs. 814.29 crores were under weaker sections,
accounting 16.15% of net bank credit of net bank credit as against
the RBI benchmark of 10% as at March end 2011. • Outstanding in
the area of micro credit totaled Rs. 336.23 crores as at March end
2011.
 Kissan Credit Cards for Rs. 3.91 crores were issued to 1200
farmers as at March end 2011.
 Opened 1,09,711 „no-frills‟ accounts with outstanding of Rs. 26.05
crores as at March end 2011, as part of financial inclusion
initiatives.
42
CHAPTER:-3
ORGANIZATIONAL
DESIGN, BUSINESS
LEVEL FUNCTIONS
& PROCESSES
43
ORGANIZATIONAL STRUCTURE:
MATRIX ORGANIZATIONAL STRUCTURE
The matrix organization is an attempt to combine the advantages of the

pure functional structure and the product organizational structure. This
form is identically suited for companies, such as construction, that are
“project-driven”.
In a matrix organization, each project manager reports directly to the

vice president and the general manager. Since each project represents a
potential profit centre, the power and authority used by the project
manager come directly from the general manager.
Information sharing is mandatory in such an organization, and several

people may be required for the same piece of work. However, in general,
the project manager has the total responsibility and accountability for the
success of the project. The functional departments, on the other hand,
have functional responsibility to maintain technical excellence on the
44
project. Each functional unit is headed by a department manager whose

prime responsibility is to ensure that a unified technical base is
maintained and that all available information can be exchanged for each
project.
The basis for the matrix organization is an endeavor to create synergism

through shared responsibility between project and functional
management. Other advantages of a pure matrix organizational form, to
project management, include:
 Because key people can be shared, the project cost is minimized

 Conflicts are minimal, and those requiring hierarchical referrals are
more easily resolved
 There is a better balance between time, cost and performance
 Authority and responsibility are shared
 Stress is distributed among the team
One advantage of a matrix structure is that it facilitates the use of highly

specialized staff and equipment. Rather than duplicating functions as
would be done in a simple product department structure, resources are
shared as needed. In some cases, highly specialized staff may divide their
time among more than one project. In addition, maintaining functional
departments promotes functional expertise, while at the same time
working in project groups with experts from other functions fosters cross-
fertilization of ideas.
The disadvantages of a matrix organization arise from the dual reporting

structure. The organization's top management must take particular care to
establish proper procedures for the development of projects and to keep
communication channels clear so that potential conflicts do not arise and
hinder organizational functioning. In theory at least, top management is
responsible for arbitrating such conflicts, but in practice power struggles
between the functional and product manager can prevent successful
implementation of matrix structural arrangements.
45
BUSINESS MIX OF DHANLAXMI BANK:-

BUSINESS MIX
MICRO/AGRI,
11%
RETAIL, 13%
TAG, 14%
WBG, 62%
RETAIL TAG WBG MICRO/AGRI
Graph:-2.1 BUSINESS MIX OF DHANLAXMI BANK
GEOGRAPHICAL BUSINESS MIX
80%
70%
70%
60% 56%
50% 44%
40%
30%
30%
20%
10%
0%
31/03/2009 KERALA 15/02/2010
NON KERALA
Graph:-2.2 GEOGRAPHICAL BUSINESS MIX OF DHANLAXMI BANK
46
STRATEGICAL ASPECTS OF DHAN BANK:-
1. MARCH TOWARDS PAN INDIA EXPANSION:-
Dhanalakshmi Bank Ltd. (Dhanbank) has vision to be one of the top 5

Indian private banks in the near future. To attain this goal, Dhanbank
has huge expansion plans to tap the potential lying in other places
outside Kerala. Dhanbank is expected to open up 66 new branches
and 389 new ATMs in the current financial year. Dhanbank will
convert its 26 extension counters into full fledge branches in the
current year, taking the total no. of branches to 273 in the current
year. Dhanbank is expected to have 400 branches & 600 ATMs by the
end of FY2010-11.
GRAPH:-2.3 NETWORKING ANALYSIS

 Dhanbank has got a contract with a German company, AGS, to
handle its new ATM opening based on “only opex no capex”
model. As per this model, AGS would be responsible for setting
up new ATMs at strategic locations and to maintain the ATMs.
Cost incurred to Dhanbank would be on number of
transactions
 Dhanbank has 65% of its branches in state of Kerala. Out of the

new branches few would be located in rural areas of Kerala and
other would be mainly in Maharashtra & Gujarat & Northern
areas, as these areas has the highest portion of deposits and
loan off-take, from the total business of Indian banks. Opening
of new rural branches would help Dhanbank to tap the huge
potential lying in the rural areas.
47
 Dhanbank is expecting to add 900-1000 accounts daily after

achieving the 273 branches target. This would help to bring in
more CASA deposits.
2. Brand Transformation:
 Dhanbank is in process to strengthen its brand in the market.

Ogilvy & Mather and Fitch have been appointed as marketing
consultants; this would help the bank to reach to the new
customers and to strengthen its brand image in the market.
 Dhanbank has appointed Ogilvy & Mather as its agency for the
banking business to chart out a new brand proposition and
communication strategy. O&M, India’s leading communication
agency will help the Bank to design and implement a
comprehensive go-to market communication approach. The
agency will help the Bank in its endeavor to create an entirely
new customer experience and to incorporate a young and
contemporary look across all customer touch-points.
3. Margins heading north:
Improvement in margins might be seen in the near future on the

basis of:
 Increase in CASA: Increase in number of branches is

expected to bring in 900 to 1000 accounts daily; this would
help to grow the CASA deposits. Dhanbank targets to achieve
CASA of 30% in medium span of time. As CASA deposits are
low cost deposits this would lead to lower cost of deposits.
48
GRAPH:-2.4- INCREASE IN CASA
 Increase in NRI deposits: At present out of the total

deposits, the NRI deposits are approx. 6%. Dhanbank has its
major presence in Kerala and this area has huge potential of
NRI deposits. Dhanbank plans to tap as much NRI deposits as
possible, as these are low cost deposits. A special NRI deposit
handling team is setup to tap this category of deposits
 Yield on Investments: In FY2008-09, yield on investments

went down as Dhanbank had major holding in T-bills. Now
Dhanbank plans to invest in the government securities, this is
expected to increase the yield on investments, as the govt.
securities yield better returns than T-bills.
 Repricing of deposits to decrease cost of deposits: In the

present low interest rate scenario, Dhanbank is to benefit
from the repricing of deposits. This will decrease the cost.
Repricing could continue benefiting bank up to 1 year.
4. Venture into new business segments:
Fee & Commission based business would be the focus of Dhanbank.

This category of income leads to higher ROE & EPS as it does not
require capital expenditure and it leads to regular stream of income.
Dhanbank has taken various initiatives to increase its other income
sources. With the increasing number of branches and deeper reach to
retail clients would be a catalyst for the income from Fee &
commission based income.
49
 Insurance distribution: Dhanbank has got into a tie up with

Bajaj Allianz for its Life Insurance & general insurance product
distribution. A special team of 300 marketing officers is set-up
for insurance distribution business.
 Mutual fund distribution: As part of their wealth

management, Dhanbank intends to distribute leading mutual
fund schemes. Professional would be joining for MF product
distribution and the bank would have a similar strategy as in
case of its insurance distribution business.
 Other Products: Dhanbank is expected to come up with new

products like gold coins, Travelers cheques, and forex services.
The bank plans to offer 3in1 account whereby the customer
would be provided with the routine banking relationship
(Savings A/C) along with Demat A/C and a trading platform.
 AMC: Dhanbank is planning to get into Asset Management

business. It is planning to enter the asset management business
by buying into an existing fund, the investment is likely to be
around Rs15-20 Cr. to buy stake in an existing AMC.
 Venture Capital: The bank is also looking at setting up a

wholly-owned venture capital firm soon. Bank would put in
about Rs.2000 Cr. in VC to invest in new start ups. The
expected annual return from VC business is approx. 25%.
50
PRODUCT SUITE:-
Following chart shows the various products and services offered by
DHAN LAXMI BANK-
Figure:-2- PRODUCT SUITE OF DHAN BANK
PRODUCTS AND SERVICES OF DHAN BANK:-
1. Personal Banking
 Accounts:- Saving Account, Current Account, Term Deposit

 Loans:-Personal Loans, Home Loans, Auto Loans, Other Loans
 Depository Services
 Locker Facilities
 Forex Services:- Foreign Currency Cash, Cheque Deposits,
Foreign Currency DD, Remittances.
51
2. Corporate Banking
 Cash Management (CMS)

 Credit:- Industrial Advance, Trade Advance, Import Export,
Agriculture Assistance
 Salary Account
 Forex & Trade:-Forex Services, Export Services, Import
Services
3. NRI Banking
 Accounts & Deposits:- NRE Account, NRO Account, Recurring

& TD, FCNRY FD, Returning NRIs
 Money Transfer:-Draft Drawing, Rupee Drawing, Money
Transfer, Overseas Corresp.
 NRI Home Loan
 Investments:-Portfolio, Repatriation, Non-repatriation,
Immovable properties.
52
4. Micro (SME) & Agri-Banking
 Dhanam Kissan Vahana

 Kissan Card
 Agri gold Loan
 Micro Credit - MFI
 Micro Credit - SHGs
5. Financial Planning
TABLE 2.1
Table showing competitor analysis vs. Dhanlaxmi Bank
53
S.N FEATURE ICICI HDFC AXIS YES DHANLAX

o. BANK BANK BANK BANK MI
1 AVERAGE VARY AS PER VARY AS VARY AS VARY AS VARY AS PER
MONTHLY PRODUCT PER PER PER PRODUCT
BALANCE PRODUCT PRODUCT PRODUC
T
2 DEBIT FREE FREE FREE FREE FREE
CARD
FACILITY
3 MOBILE CHARGEABL CHARGEAB CHARGEABL CHARGEA FREE
BANKING E LE E BLE
4 RTGS/NEFT ON CHARGE ON CHARGE ON CHARGE ON BOTH 5-5
BASIS BASIS BASIS CHARGE FREE PER
BASIS MONTH
5 COLLECTIO Rs. 50 PER Rs. 50 PER Rs. 50 PER Rs. 50 FREE 5
N OF CHEQUE CHEQUE CHEQUE PER OUTSTATION
OUTSTATIO CHEQUE CHEQUES PER
N CHEQUES MONTH
6 DERMAND AS PER RBI AS PER RBI AS PER RBI AS PER 5 D.D. FREE
DRAFT NORMS NORMS NORMS RBI PER MONTH
NORMS
7 INTERNET FREE FREE FREE FREE FREE
BANKING
8 SALARY YES YES YES YES YES

ACCOUNT
9 SWEEP IN IN SOME NO NO NO YES,FREE

AND ACCOUNTS
AWEEP
OUT
FACILITY
10 STOP CHARGEABL CHARGEAB CHARGEABL CHARGEA FREE TO SOME
PAYMENT E LE E BLE EXTENT
11 PAY CHARGED AS CHARGED CHARGED CHARGE 5-25 P. O

ORDERS PER NORMS AS PER AS PER D AS PER .FREE PER
NORMS NORMS NORMS MONTH
12 BILL PYT YES YES YES YES YES
FACILITY
13 INTEREST 7% 7.5% 7.25% 7% 7.75%
ON FD <1.5
YR
14 ANY YES YES YES YES YES

BRANCH
BANKING
54
Table 2.2
Table showing features of competitors vs. Dhanlaxmi Bank
S.No FEATURE ICICI HDFC AXIS YES DHANLAXMI

. BANK BANK BANK BANK
1 MUTUAL YES,ICICI YES,HDFC YES YES THIRD PARTY
FUND DYNAMIC,ICI TOP 200 PRODUCTS
INVESTMENT CI GROWTH
etc.
2 GENERAL ICICI YES YES YES THIRD PARTY
INSURANCE LOMBARD PRODUCTS
3 LIFE ICICI LIFE YES YES YES THIRD PARTY
INSURANCE INSURANCE PRODUCTS
4 NRI BANKING YES YES YES YES YES
5 AGRI YES YES YES YES ONLY IN SOUTH
BANKING INDIA
6 HOME LOANS YES YES YES YES ONLY IN SOUTH
INDIA
7 CORPORATE YES YES YES YES YES
LOANS
8 OTHER YES YES YES YES ONLY IN SOUTH
CREDIT INDIA
SERVICES
9 CUSTOMER YES YES YES YES YES
CARE
DEPARTMENT
10 CREDIT CARD YES YES YES YES ONLY IN SOUTH
FACILITY INDIA
11 ONLINE YES YES YES YES YES, IN ALLIANCE
TRADING WITH
DESTIMONEY
SECURITIES LTD.
12 INTERNET YES YES YES YES YES
BANKING
13 MOBILE YES YES YES YES YES
BANKING
55
COMPETITOR ANALYSIS AT A GLANCE:-
Table:- 2.3
S.No. FEATURE ICICI HDFC AXIS YES DHANLA

BANK BANK BANK BANK XMI
1 BRANCHES 1544 1725 905 150 273
2 ATM 4816 4232 3894 216 453
3 MARKET 100,180. 94,942.22 52996 9762.04 1149.27

CAPITALIZA 00 .04
TION
IN CRORE Rs.
4 TOTAL 286,059.7 139,011.39 156,74 31,688.8 6,795.02
ASSETS 7 8.35 9
5 NET SALES 25,706.93 16,332.26 11,638. 2,369.71 534.57

IN CRORE Rs. 02
(RECENT)
6 NET PROFIT 4024.98 2244.94 2514. 477.74 23.30
IN CRORE Rs. 53
(RECENT)
56
MARKET SHARE ANALYSIS:-

Following table represents the current market capitalization of
different private commercial banks.
NAME OF COMPANY MARKET CAPITALIZATION PERCENTAGE
ICICI In crore Rs. 100,180.00 31%
HDFC 94,942.22 29%
AXIS 52,996.04 16%
YES 9,72.04 3%
DHANLAXMI 1149.27 .03%
OTHERS 63952.16 20.97%
TOTAL 322981.73 100%
Table:-2.4
MARKET SHARE ANALYSIS ON THE BASIS OF
MARKET CAPITALIZATION
31%
29%
20.97%
16%
3%
DHANLAXMI,
0.03%
ICICI HDFC AXIS YES DHANLAXMI OTHERS
Graph:- 2.5-MARKET SHARE ANALYSIS
Depiction:-ICICI is the market player of private commercial bank

segment with highest market share of 31%. HDFC and AXIS bank are
market followers with 29% & 16% market share respectively.
Dhanlaxmi has very low market share in the segment (=0.03%), rest
20% share is from others including INDUSIND BANK, BANK OF
RAJASTHAN, KOTAK MAHINDRA, FEDERAL BANK, KARNATAKA
BANK etc.
57
CHAPTER: - 4
DATA
ANALYSIS AND
INETERPRETATIO
N
58
4.1 TABLE SHOWING KIND OF BANKS OPTED BY CUSTOMERS

ON THE BASIS OF THEIR NEEDS:-
Table:- 4.1
KIND OF BANK NO. OF CUSTOMERS PERCENTAGE

PUBLIC SECTOR BANKS 35 35%
PRIVATE BANKS 55 55%
OTHERS 10 10%
Depiction:-The survey depicts that around 55% customers have

opted public sector banks, while 35% are the customers of private
banks. Rest 10% is from others including foreign banks and
cooperative banks customers.
Interpretation:- A large no. of customers still don’t have faith in

private banks, they still avail public sector nationalized banks for
their banking requirements. Private sector banks can target these
customers with better strategies.
59
CHART NO.: 4.1
CHART SHOWING KIND OF BANKS OPTED BY CUSTOMERS ON

THE BASIS OF THEIR NEEDS
KINDS OF BANKS OPTED

BY CUSTOMERS
55%
10%
35%
0%
PUBLIC SECTOR BANK CUSTOMERS PRIVATE BANK CUSTOMERS OTHERS
Chart no. -4.1
Interpretation:- A large no. of customers still don’t have faith in

private banks, they still avail public sector nationalized banks for
their banking requirements. Private sector banks can target these
customers with better strategies.
60
4.2 TABLE SHOWING CRITERIA OF SELECTING THE BANK FOR

BANKING REQUIREMENTS:-
Table:- 4 .2
SELECTION NO. OF PERCENTAGE

CRITERIA RESPONDENTS
REFERENCE 19 19%
PROXIMITY 30 30%
BRAND IMAGE 08 08%
PRODUCTS AND 22 22%
SERVICES
NETWORKING 21 21%
Depiction:-As per survey about 30% respondents selected their

bank on the basis of proximity of branch. Effective networking is the
reason of selecting the bank for 21% customers, while 19% and 22%
customers choosed their bank due to reference of known persons
and products and services of the bank respectively. Rest 8%
customers considered brand image of the bank while choosing it.
Interpretation:-Survey depicts that proximity and products and

services are the major factors which customer keeps in mind before
selecting the bank. Some of the respondents selected the bank
because it was referred to them by their relatives/friends etc.
61
CHART NO. 4.2
CHART SHOWING CRITERIA OF SELECTING THE BANK FOR

BANKING REQUIREMENTS
SELECTION CRITERIA AS PER SURVEY
21% 19%
REFERENCE
22% PROXIMITY
30%
BRAND IMAGE
8%
PRODUCTS AND
SERVICES
NETWORKING
Interpretation:-Survey depicts that proximity and products and

services are the major factors which customer keeps in mind before
selecting the bank. Some of the respondents selected the bank
because it was referred to them by their relatives/friends etc.
62
4.3 TABLE SHOWING SATISFACTION LEVEL OF PUBLIC SECTOR

BANK CUSTOMERS:-
Table:-4.3
SATISFACTION LEVEL NO. OF RESPONDENTS %

VERY SATISFIED 06 17%
SOMEWHAT SATISFIED 20 60%
SOMEWHAT 06 19%
DISSATISFIED
VERY DISSATISFIED 03 4%
Depiction:- Satisfaction level of public sector bank customers is

about 75% as per the survey.
Interpretation: - 25% respondents from public sector banks were

not satisfied with the services. Some of the reasons for this
dissatisfaction are as below:-
 Poor customer relationship management
 Complex procedures.
63
CHART NO. 4.3

CHART SHOWING SATISFACTION LEVEL OF PUBLIC SECTOR
BANK CUSTOMERS
SATISFACTION LEVEL
VERY
DISSATISFIED 4%
SOMEWHAT
DISSATISFIED 18%
SOMEWHAT
60%
SATISFIED
VERY 18%
SATISFIED
VERY SATISFIED SOMEWHAT SATISFIED

SOMEWHAT DISSATISFIED VERY DISSATISFIED
Interpretation: - 25% respondents from public sector banks were

not satisfied with the services. Some of the reasons for this
dissatisfaction are as below:-
 Poor customer relationship management
 Complex procedures.
64
4.4 TABLE SHOWING SATISFACTION LEVEL OF PRIVATE SECTOR

BANK CUSTOMERS:-
Table:- 4.4
SATISFACTION LEVEL NO. OF RESPONDENTS %

VERY SATISFIED 24 47%
SOMEWHAT SATISFIED 20 39%
SOMEWHAT DISSATISFIED 6 12%
VERY DISSATISFIED 5 2%
Depiction:- Survey depicts that 47% respondents from private bank

customers were very satisfied with the bank while around 40% were
somewhat satisfied.
Interpretation:- As per survey satisfaction level is higher in private

bank customers as compared to customers from public sector bank.
following are the reasons of dissatisfaction of private bank
customers:-
 Process delay.
 Service quality.
 Hidden charges.
 Behavior of the employees at branch.
65
Chart :-4.4
CHART SHOWING SATISFACTION LEVEL OF PRIVATE SECTOR

BANK CUSTOMERS
SATISFACTION LEVEL
VERY
DISSATISFIED 2%
SOMEWHAT
DISSATISFIED 12%
SOMEWHAT
39%
SATISFIED
VERY SATISFIED 47%
VERY SATISFIED SOMEWHAT SATISFIED

SOMEWHAT DISSATISFIED VERY DISSATISFIED
Interpretation:
As per survey satisfaction level is higher in private bank customers
as compared to customers from public sector bank. following are the
reasons of dissatisfaction of private bank customers:-
 Process delay.
 Service quality.
 Hidden charges.
 Behavior of the employees at branch.
66
4.5 RELATION BETWEEN SELECTION CRITERIA AND

SATISFACTION LEVEL:-
Table:-4.5
SELECTION NO. OF VERY SATISFIED PERCENTAGE

CRITERIA RESPONDENTS RESPONDENTS
REFERENCE 19 3 16%
PROXIMITY 30 6 20%
BRAND IMAGE 8 4 50%
PRODUCTS AND 22 12 54%
SERVICES
NETWORKING 21 5 23%
Depiction:-Survey depicts that those respondents who choosed their

bank on the basis products and services, 54% out of them were very
satisfied with their bank. Respondents who choosed their bank on
the basis of its brand image, 50% out of them were very satisfied.
Interpretation:-As per survey results there is a relation between

selection criteria and satisfaction level. A private commercial bank
has to be strong in terms of following factors for 100% customer
satisfaction:-
1. Brand image
2. Product differentiation
3. Network efficiency
67
CHART NO. 4.5
CHART SHOWING RELATION BETWEEN SELECTION CRITERIA

AND SATISFACTION LEVEL
ANALYSIS OF RELATIONSHIP BETWEEN

SELECTION CRITERIA AND
SATISFACTION LEVEL
100%
90%
80% 50% 46%
70%
84% 80% 77%
60%
50%
40%
30% 50% 54%
20%
16% 20% 23%
10%
0%
VERY SATISFIED OTHERS
Interpretation:-As per survey results there is a relation between

selection criteria and satisfaction level. A private commercial bank
has to be strong in terms of following factors for 100% customer
satisfaction:-
1. Brand image
2. Product differentiation
3. Network efficiency
68
4.6 DOES YOUR BANK GIVE YOU REGULAR UPDATES ABOUT

NEW PRODUCT AND SERVICES?
Table:- 4.6
REGULAR UPDATES NO. OF RESPONDENTS PERCENTAGE

YES 64 64%
NO 17 17%
SOMETIMES 19 19%
Depiction:- As per survey 65% respondents say their bank give them
regular updates on new products and services launched, while about
20% say their bank does not give them regular updates.
Interpretation:-Regularly updating the customer about new

products and services or any change in existing one is an effective
tool of service positioning.
69
CHART NO:-4.6
CHART SHOWING ANALYSIS OF REGULAR PRODUCT UPDATES

GIVEN BY A BANK
ANALYSIS OF REGULAR
PRODUCT UPDATES
0%
19%
17% YES
64% NO
SOMETIMES
Interpretation:- Regularly updating the customer about new

products and services or any change in existing one is an effective
tool of service positioning.
70
4.7 TABLE SHOWING MOBILE BANKING AND INTERNET

BANKING SERVICES: PATTERN OF USAGE
TABLE NO.: 4.7

USE OF MODERN YES NO SOMETIMES
WAY OF BANKING
NO. OF 37 46 17
RESPONDENTS
Depiction:- Survey depicts that only 35% respondents are using

mobile banking and internet banking service regularly, whereas
around 50% customers are still not using these services.
Interpretation:- The reason behind lacking no. of mobile and e-

banking users are :
 Hidden charges
 Unawareness.
 Complex procedures, etc
71
CHART NO:-4.7
CHART SHOWING MOBILE BANKING AND INTERNET BANKING

SERVICES: PATTERN OF USAGE
USE OF MOBILE AND INTERNET

BANKING
NO
46%
YES
37%
SOMETIMES
17%
0%
YES NO SOMETIMES
Interpretation: - The reason behind lacking no. of mobile and e-

banking users are :
 Hidden charges
 Unawareness.
 Complex procedures, etc
72
4.8 TABLE SHOWING AWARENESS ABOUT DHANLAXMI BANK IN

BANGALORE:-
TABLE NO. 4.8
AWARENESS LEVEL NO. OF RESPONDENTS PERCENTAGE

YES 37 37
NO 54 54
SOMEWHAT 9 9
Depiction:- As per survey 54% respondents said that they don’t

know about Dhanlaxmi bank . 37% respondents said that they know
about Dhanlaxmi bank through their personal sources.
Interpretation:- Awareness level of Dhanlaxmi Bank is not so high in

BANGALORE . Advertisement campaign has not started that’s why
people know about it through their personal sources.
73
CHART :-4.8
CHART SHOWING AWARENESS ABOUT DHANLAXMI BANK IN

BANGALORE
AWARENESS LEVEL OF
DHANLAXMI
SOMEWHAT 9%
NO 54%
YES 37%
YES NO SOMEWHAT
Interpretation:
Awareness level of Dhanlaxmi Bank is not so high in BANGALORE .

Advertisement campaign has not started that’s why people know
about it through their personal sources.
74
4.9 TABLE SHOWING RISK TAKING ABILITY WITH RESPECT TO

DIFFERENT INCOME LEVELS:-
Table:-4.9
RISK HIGH MODERATE LOW TOTAL
TAKING
ABILITY
INCOME
GROUP
VERY HIGH 6 4 2 12
HIGH 8 22 2 32
MIDDLE 6 32 18 56
Depiction:- Survey depicts that :-

 50% respondents from very high income group can take high
risk while investing, whereas around 35% respondents want to
invest in those options which are less risky. Around 15%
respondents from very this group wants to avoid risk while
investing their money’
 65%customers from high income group are interested in

investing those options having moderate risk whereas 20% can
go for high risk categorized investment options; rest 15%
wants to avoid the risk.
 55% customers from middle income group can take moderate
risk. Around 30% respondents want to avoid the risk of
investment, rest 10% can go for high risky investment options.
Interpretation:-
 As we go from very high income group to middle income group
risk taking ability decreases.
 Customers from middle income group want to avoid
investment in ULIPS, equity market and other equity market
linked investment options.
 Customers from very high income can take high risk while
investing their money as compared to respondents from other
income groups.
75
CHART NO. : 4.9
CHART SHOWING RISK TAKING ABILITY WITH RESPECT

TO DIFFERENT INCOME LEVELS
70
66%
60 57%
50%
50
40
34%
32%
30
25%
20
16%
11%
9%
10
0
VERY HIGH(>50000 HIGH(30000-50000 MIDDLE(<30000
MONTHLY) MONTHLY) MONTHLY)
HIGH MODERATE LOW
Interpretation:-
 As we go from very high income group to middle income group
risk taking ability decreases.
 Customers from middle income group want to avoid
investment in ULIPS, equity market and other equity market
linked investment options.
 Customers from very high income can take high risk while
investing their money as compared to respondents from other
income groups.
76
4.10 ANALYSIS OF RISK TAKING ABILITY IN INVESTMENT AT

DIFFERENT LEVELS OF AGE:-
Table:-4.10
RISK TAKING ABILITY <40 YEARS >40 YEARS

HIGH 15 5
MODERATE 26 31
AVOIDER 8 15
Depiction:- Survey depicts that:

 31% respondents from, 40 yrs age group wants to invest
money in high risky investment options. 50% wants to be in
moderate risk category.
 Only 10% respondents from >40 age group want to put their
money in high risk categorized options whereas around 30%
want to avoid risk.
Interpretation:- There is a relationship between risk taking ability

and age of the respondent. Risk taking ability decreases with
increasing age.
77
CHART NO.: 4.10

CHART SHOWING ANALYSIS OF RISK TAKING ABILITY IN
INVESTMENT AT DIFFERENT LEVELS OF AGE
RISK TAKING ABILITY

70%
61%
60%
50%
NO. OF RESPONDENTS
50%
HIGH RISK
40% TAKER
31% 29%
30%
MODERATE
RISK TAKER
19%
20% RISK AVOIDER
10%
10%
0%
<40 YEARS >40 YEARS
AGE GROUPS
Interpretation:
There is a relationship between risk taking ability and age of the

respondent. Risk taking ability decreases with increasing age.
78
Dhanlakshmi bank
Parent Company Government of India
Category Bank
Sector Banking and finance
Tagline/ Slogan Tan Man Dhan
USP Innovative Bank with integrity and social responsibility
STP
Segment Individual and Industry banking
Target Group Industrial Sector
Positioning Complete Banking solutions
SWOT Analysis
1. Varied Financial products for different customer

segments
2. Strategic tie-ups with leading players for various
products like insurance etc.
Strength
3. Schemes for social initiatives aligned with government
schemes
4. Has around 275 branches, 4400 employees and over 500
ATMs
1. Low presence across India as it is limited to a few states

Weakness 2. Marketing is very limited as compared to other banks
3. Lack of retail banking as compared to popular banks
1. Rural banking for higher penetration

Opportunity
2. International banking, where Indians are present
79
1. Economic slowdown
Threats 2. Highly competitive environment
3. Stringent Banking Regulations
Competition
1. Lakshmi Vilas Bank 4. ICICI Bank

Competitors 2. Karur Vyasa Bank 5. HDFC Bank
3. Federal Bank 6. Axis Bank
SWOT ANALYSIS
- Strong Network in South India - Late entry in to North, East & West
- Experience and Expertise Indian Markets
- Unlimited Transactions Through - Dhanlaxmi Bank Only Focused on
ATM From Any Bank Without Kerala & South India Earlier
Charge - Less No. of Branches and ATMs As
-ATM Card Can be Used Compared to Competitors
Internationally WEAKNESSES
- Attractive Fixed Deposit Rates
(10.25%)
STRENGTHS
- Expansion Option in North , East & - Big Players in the Industry

West India - A False Rumor of Reliance Taking
- Customers are Service-oriented Over the Bank
- Customers Keep Fluctuating From - Nationalized Banks are Growing
Banks to Banks Fast
- Economic Conditions In India
OPPORTUNITIES
- RBI’s Policy Regarding CRR
THREATS
80
FINANCIAL ANALYSIS
RATIO ANALYSIS
81
Mar '12 Mar '11 Mar10

Investment
Valuation Ratios
Face Value 10.00 10.00 10.00
Dividend Per Share -- 0.50 1.00
Operating Profit Per - -6.16 -2.80
Share (Rs) 23.33
Net Operating Profit / 166.2 108.54 87.51
Share (Rs) 4
Free Reserves Per 61.77 75.95 42.54
Share (Rs)
Profitability Ratios
Interest Spread 4.20 4.03 3.26
Adjusted Cash -5.70 3.93 5.27
Margin(%)
Net Profit Margin -7.56 2.49 3.73
Return on Long Term 141.3 80.56 95.83
Fund(%) 6
Return on Net - 3.08 5.29
Worth(%) 15.87
Adjusted Return on Net - 3.02 5.13
Worth(%) 16.02
Return on Assets 85.54 99.21 68.64
Excluding Revaluations
Return on Assets 85.54 99.21 68.64
Including Revaluations
82
Management
Efficiency Ratios
Interest Income / Total 9.78 8.27 8.17
Funds
Net Interest Income / 1.86 2.53 2.43
Total Funds
Non Interest Income / 0.78 1.09 0.92
Total Funds
Interest Expended / 7.92 5.74 5.74
Total Funds
Operating Expense / 3.23 3.00 2.69
Total Funds
Profit Before Provisions -0.79 0.48 0.51
/ Total Funds
Net Profit / Total Funds -0.80 0.23 0.34
Loans Turnover 0.16 0.13 0.14
Total Income / Capital 10.56 9.36 9.09
Employed(%)
Total Assets Turnover 0.10 0.08 0.08
Ratios
Asset Turnover Ratio 0.10 4.42 4.16
Profit And Loss
Account Ratios
Interest Expended / 82.24 70.75 73.71
Interest Earned
Other Income / Total 7.41 11.68 10.11
83
Income
Operating Expense / 30.60 32.04 29.64
Total Income
Balance Sheet
Ratios
Capital Adequacy Ratio 9.49 12.47 12.99
Advances / Loans 65.65 88.98 82.15
Funds(%)
Debt Coverage Ratios
Credit Deposit Ratio 73.24 71.69 67.97
Investment Deposit 32.88 28.87 29.79
Ratio
Cash Deposit Ratio 6.87 7.21 8.35
Total Debt to Owners 16.21 14.83 16.13
Fund
Financial Charges -0.07 0.11 1.11
Coverage Ratio
Financial Charges 0.92 1.06 1.09
Coverage Ratio Post
Tax
LEVERAGE
RATIOS
Current Ratio 0.04 0.04 0.03
Quick Ratio 23.94 38.70 13.66
Cash Flow
Indicator Ratios
84
Dividend Payout Ratio -- 19.10 32.18

Net Profit
Dividend Payout Ratio -- 11.95 22.31
Cash Profit
Earning Retention -- 80.50 66.80
Ratio
Cash Earning Retention -- 87.90 77.20
Ratio
Adjusted Cash Flow -- 304.61 215.78
Times
Mar Mar '11 Mar '10
'12
Earnings Per Share - 3.06 3.63
13.58
Book Value 85.54 99.21 68.64
85
CHAPTER-5
SUMMARY OF
FINDINGS,
SUGGESTIONS &
CONCLUSION
86
FINDINGS:-
 As per the survey conducted, it is noticed a good sector of the

people prefer to be customers of nationalized banks. This can
be very well explained by the fact that nationalized banks are
acquainted with the Government and ups and downs in
business will not affect the existence of the bank. Also the RBI
has good control over the working of these banks and there for
the customers have a sense of security in investing in these
banks. However it is also seen that a good percentage of people
also opt for private banks such as ICICI, HDFC, AXIS bearing in
mind the amount of experience they posses in the field of
banking.
 Survey results show that customers from private sector banks

are more satisfied as compared to customers from public
sector banks. it was found that there is a direct relationship
between brand image/product differentiation and satisfaction
of the customer.
 Customer demographic plays important role while preparing

penetration strategies.
 Dhanlaxmi has the retail products with unique features which

others don’t have, but some of the services it is selling in
alliance with third parties. Product line of Dhan Bank is not as
diversified in Jaipur as their competitors have.
 Market share of Dhan Bank is not as high as compared to ICICI,

HDFC, AXIS and YES BANK.
The reasons for above or in other words the hidden reason
for all of the is:
# Liberal credit
87
# Credit available in all the branches
# Head office instructions for lending
# No proper follow up
# Aiming for super profit
# Poor legal action
# Defect in cash recovery target/achievement
88
SUGGESTIONS & RECOMMENDATIONS:
 The bank should introduce new delivery channels via opening

more branches and ATMs in Bangalore to improve network
efficiency.
 Effective advertisement campaign can help the bank to

increase business in Bangalore. TV commercials, Hoardings
posters can be some of the mediums to increase the awareness
of Bank in Bangalore.
 Bank should launch the whole product line in Jaipur to emerge

its position in competition.
 Bank should target 5 km area around the branch office because

survey depicts that most of the customers selected their bank
on the basis of proximity.
 Bank should constantly innovate their products as per

customer requirements.
 Dhanlaxmi Bank should maintain the consistency in service

quality for total customer satisfaction.
 The bank should invest in funds more profitably as it also has

to pay interest on the deposits it accepts. Proper precautions
should be taken to avoid such situations in future
 Added efforts should be made to increase advances to total

deposits ratio as it is a source of income for the bank. The
advances made by the bank as a percentage of
its deposits has increased showing efficient utilization of its
funds
89
 The bank has not maintained its lending and borrowing rate,
this is not appreciable and the bank should maintain a good
and balanced lending and borrowing rate, in the stiff
competition the industry in going through.
 The organization has adopted some measures to reduce the

cost. Operational expenses have continuously decreased in the
last three financial years.
 A good monitoring system has been placed to keep a check on

the expenses.
 The bank has been increasing the earnings per share and the
profitability of the bank has been improving considerably. This
shows that the bank has been winning the confidence of the
customers
 The return on capital employed has an increasing trend. If the

return on capital employed is high, the financial institution
extends its fresh loans. It helps management for further
development of business in future and a high return satisfies
share holders.
 Return on capital employed of the company is satisfactory.
 The low debt equity ratio indicates that the claim of outsiders
is lesser than the share holders against the company‟s assets. It
gives higher margin of safety to the creditors at the time of
company‟s liquidation.
 The owners funds in case Dhanlaxmi Bank are more than the
outsiders funds in all the years which signifies that the long
term creditors are relatively less.
90
 The organization has to take preventive and be cautious

measures so that the Current assets to Networth ratio
increases at a constant rate and the company has a satisfactory
current assets to Networth ratio.
 From the current liabilities to Net worth Ratio we can see that
the liability base of the concern will not provide an adequate
cover for long-term creditors. Therefore the firm should take
preventive and cautious measures to reduce the ratio as if the
ratio keeps increasing; it would be difficult to obtain the long
term funds.
 The bank is in a quiet a good position to meet the contingent

expenditure due to its high liquidity position but its important
to see the profitability position of the bank. The bank may have
to carefully scrutinize its liquidity position and try to increase
the profitability
91
CONCLUSION
Banking system is changing in phase. From legendary used applications
banks need to divert and stay update with the latest technology In the
economy customer is the king, the bank needs to change is; business
strategies. Banking system is indispensible. To remain in the competition,
technology is must.
Dhanlaxmi Bank has been successful in satisfying its customers at the

ground level. The bank has made the platform on which the bank is
already in the process of its Business Review Process. Its standards are
heading towards the global market with a competitive edge of
technology.
Dhanlaxmi Bank is now among those few banks that are receiving World
Bank loans for their technology up gradation and infrastructure.
I have successfully been able to accomplish my objective of undertaking

the project.
From my research as indicated and my personal experience, I can state

that Dhanlaxmi Bank has been working towards a progressive and
healthy future towards the achievement of global banking standards by
making an attempt towards up gradation of its infrastructure and services
to cater its customers banking needs.
92
BIBLIOGRAPHY
http://www.moneycontrol.com/financials/dhanalakshmibank/results/quart
erly-results/DB01
http://www.dhanbank.com/aboutus/about_us.aspx
http://www.dhanbank.com/investor_relations/inv_financials.aspx
http://economictimes.indiatimes.com/dhanalakshmi-bank-
ltd/stocks/companyid-8970.cms
http://en.wikipedia.org/wiki/Dhanlaxmi_Bank
http://www.business-standard.com/india/news/dhanlaxmi-bank-to-raise-
rs-200-crore-by-early-january/198140/on
http://money.rediff.com/companies/Dhanlaxmi-Bank-Ltd/14030067
BOOKS, JOURNALS:-
 COMPANY BROCHURES
 ANNUAL REPORTES OF DHAN BANK
 BUSINESS ECONOMICS JOURNAL
 KOTHARI, C. R. ,RESEARCH METHODOLOGY
93
ANNEXURE:
QUESTIONNAIRE
1. NAME- 2. AGE
3. E-MAIL- 4. CONTACT
5. EDUCATION 6. MONTHLY INCOME
7. PROFESSION-
A) SALARIED B) SELF EMPLOYED
(………………………………………..)
C) OTHERS
Q. 1 WHICH BANK(S) YOU ARE USING FOR YOUR CURRENT

BANKING REQUIREMENTS?
………………………………………………………………………………………………………
……………………
Q. 2 WHICH BANKING PRODUCTS YOU ARE AVAILING?

A) SAVING ACCOUNT B) CURRENT ACCOUNT C) LOCKER
D) FIXED DEPOSIT E) CREDIT
Q.3 YOU CHOOSED YOUR BANK ON THE BASIS OF-

A) PROXIMITY B) NETWORKING C) PRODUCTS AND SERVICES
D) REFRENCES E) TIMING F) BRAND IMAGE
Q.4 DO YOU USE THE MODERN AND SMART WAY OF BANKING?

A) YES B) NO C) SOMETIMES
Q.5 DOES YOUR BANK GIVES YOU REGULAR UPDATES FOR NEW
PRODUCTS AND SERVICES?
A) YES B) SOMETIMES C) NO D) NEVER
Q. 6 HOW MUCH YOU ARE SATISFIED WITH THE SERVICES, YOUR

BANK IS PROVIDING TO YOU?
A) VERY SATISFIED B) SOMEWHAT SATISFIED
C)SOMEWHAT DISSATISFIED D) VERY DISSATISFIED
Q. 7 WOULD YOU LIKE TO GET SOME ADDITIONAL BENEFITS FROM
YOUR BANK?
A) YES B) NO
94
IF YES WHAT KIND OF?

...................................................................................................................
Q. 8 WHAT KIND OF INVESMENT YOU ARE INTO FOR SECURING

YOUR FUTURE?
A) FIXED DEPOSIT B) INSURANCE C) MUTUAL
FUNDS
D) SHARES/BONDS E) REAL ESTATES F) OTHERS
Q. 9 WHAT IS THE PURPOSE OF YOUR INVESTMENT

A) PROFITABILITY B) LIQUIDITY C) SECURITY
D) TAX BENEFIT
Q. 10 WHAT IS YOUR PREFERENCE FOR INVESTMENT, STARTING

FROM 1ST RANK TO SUBSEQUENT RANKINGS?
MUTUAL FUNDS (….) INSURANCE (….) GOLD
(….)
REAL ESTATE (….) SHARES/BONDS (….) FIXED
DEPOSITS (….)
Q.11 HOW MUCH YOU SPEND YEARLY TOWARDS INVESTMENT

ACTIVITIES?
A) LESS THAN 1 LAC B) B/W 1-2LACS
C) B/W 2-3 LACS D) MORE THAN 3 LACS
Q. 12 DO THE INSURANCE PLAN YOU ARE INTO COVERING YOUR

RISK PROPERLY?
A) NO B) YES
IF NO / YES, HOW?
.........................................................................................................
Q. 13 HAVE YOU EVER HEARD ABOUT DHANLAXMI BANK?
A) YES B) NO
IF YES, HOW DID YOU COME TO KNOW ABOUT THE BANK?
………………………………………………………………………………………………………
……………………………………
95

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Organizational Study of Dhanlaxmi Bank

“Retail banking is typical mass-market banking where individual

The Retail Banking environment today is changing fast. The

Present day tech-savvy bankers are now more looking at reduction in

Today’s retail banking sector is characterized by three basic

STRATEGIES FOR INCREASING RETAIL BANKING

 Constant product innovation to match the requirements of the

securities, mutual funds and insurance.

 Quality service and quickness in delivery

 Introduction of new delivery channels

 Tapping of unexploited potential and increasing the volume of

 Detail market research

 Business process outsourcing

present regime of falling interest and stiff competition, banks are

EMERGING ISSUES IN HANDLING RETAIL BANKING

Relationship Management (CRM) models for getting a 360 degree view

Retail Banking in India

Potential for Retail in India: Is sky the limit?

reflected in a change in the urban household income pattern. The direct

But how competitive are the players?

RESERVE BANK OF INDIA

REGIONA PUBLIC PRIVATE

SBI & OLD

FIGURE:-1 STRUCTRE OF INDIAN BANKING INDUSTRY

Scheduled banks comprise commercial banks and the co-operative banks.

public, repayable on demand or otherwise and withdraw able by

In addition, Banks are allowed to perform certain activities which are

The partition of India in 1947 adversely impacted the economies of

 In 1948, the Reserve Bank of India, India's central banking

However, despite these provisions, control and regulations, banks in India

In the early 1990s, the then Narsimha Rao government embarked on a

Currently, India has 96 scheduled commercial banks (SCBs) - 27 public

The industry is currently in a transition phase. On the one hand, the

With he growth in the Indian economy which is expected to be strong for

Investment is the part of services sector which is facing a tough

Customer Customer Customer

Bank Branch Bank Branch Bank Branch

Clearing Decision Clearing Decision Clearing Decision

Central clearing Central clearing

FIGURE:-2 Traditional banking structure

Telephone, Branch, Electronic Banking, etc.

Clearing systems Head Office Risk

Financial Statement Analysis :

 “Financial Statements Analysis is largely a study of relationship

among the various financial factors in a business as disclosed by a

single set of statements and a study of trends of these factors as

shown in a series of statements” this is according to Myer.

Analysis is the process of critically examining in detail accounting

information given in the financial statements. For the purpose of

financial analysis, individual items are studied, their

interrelationships with other related figures established, the data is

sometimes rearranged to have better understanding of the

information with the help of different techniques or tools for the

purpose. Analyzing financial statements is a process of evaluating

relationships between component parts of financial statements to

obtain a better understanding of firm‟s position and performance.

Objectives Of Analysis Of The Financial Statements :

 The present and future earnings capacity or profitability of the

 The operational efficiency of the concern as a whole and of its

various parts or departments.

benefit of the debenture holders and trade credit.

 The comparative study in regard to one firm with another firm or