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To study the consumer behaviour about IDBI bank and its products and the competitive advantage of IDBI Bank with respect to the other banks

IDBI BANK LIMITED 36 AMAR ENCLAVES, EAST MODEL TOWN,

GT ROAD, GHAZIABAD

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ACCMAN INSTITUTE OF MANAGEMENT, Greater

Noida.

Certificate

This is to be certified that MR VIJENDRA KUMAR MAHATO AND

MONALISHA GUPTA, students of POST GRADUATE DIPLOMA

IN MANAGEMENT from ACCMAN INSTITUTE OF

MANAGEMENT, Greater Noida has under taken two month project

program from 1th of May 2009 to 30th

of June 2010.

With the bank and for the bank he/she offered the project title

“Awareness of the people towards IDBI Bank and

competitive advantage of IDBI Bank with respect to other

banks.”, and given his/her all efforts. His/her contribution through this

project is really commendable.

Dated: - 30/06 /2010

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ACKNOWLEDGEMENT

There are number of people to acknowledge and thank for their

contributions to this Project. Here is a consideration of all those esteemed

people who provided not only their valuable time but also their views and

transferred their knowledge and experiences, which further enhanced the

project and made it more than what it would have been.

We would also like to thank our Mentor Mr Abhishek Pandey who

provided his valuable guidance, which has helped us in enhancing the

quality of the project report and also to deans for arranging organization

study for all students. Also, please accept sincere apologies along with a

thank you who have contributed but their names have not been included.

Thank You…

Yours faithfully,

MONALISHA GUPTA

MR VIJENDRA KUMAR MAHATO

ACCMAN INSTITUTE OF MANAGEMENT

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DECLARATION

We students of PGDM here by declare that, all the information, facts,

figures in this report is ours own findings and experience. We also here by

declare that all the facts, figures and information given in this report is

absolutely correct.

This information has been used for purely academics purpose.

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CONTENTS History of IDBI Bank 5

Overview of development banking 6

IDBI Today 11

Vision statement 11

Products and services offered 12

Milestones 20

Theoretical perspectives 24

Research methodology 26

Research methodology used 34

Observations 39

Competitive advantages of IDBI Bank with other

bank

SWOT Analysis

TOWS Matrix

IFAs

EFAs

SFAs

CSFA

56

57

58

59

60

61

62

Comparative study of IDBI Bank with other bank 63

Findings 65

Recommendations 66

Questionnaire 67

References 69

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History

IDBI was set up under Act of Parliament as a wholly owned subsidiary of Reserve

Bank of India in July 1964. In February 1976, the ownership of IDBI was transferred

to government of India.

In January 1992 IDBI accessed domestic retail debt market for the first time with

innovative Deep Discount Bonds and registered path breaking success. In December

1993, IDBI set up IDBI Capital Market Services Ltd as a wholly owned subsidiary to

offer a broad range of financial services, including Bond Trading, Equity Broking,

Client Asset Management and Depository Services. In September 1994, in response

to RBI‟s policy of opening up domestic banking sector to private participation, IDBI

in association with SIDBI set up IDBI Bank Ltd.

Overview of development banking in India

The concept of development banking rose only after Second World War, Successive

of the Great Depression in 1930‟s. The demand for reconstruction funds for the

affected nations compelled in setting up a world wide institution for reconstructions.

As a result the IBRD was set up in 1945 as a world wide institution for development

and reconstruction. This concept has been widened all over the world and resulted in

setting up of large number of banks around the world which has coordinated the

developmental activities of different nations with different objectives among the

world.

The course of development of financial institutions and market during the post

independence period was largely guided by the process of planned development

pursued in India with emphasis on mobilisation of savings and channelizing

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investment to meet plan priorities. At the time of Independence in 1947, India had a

fairly well-developed banking system. The adoption of bank dominated financial

development strategy was aimed at meeting the sectoral credit needs, particularly of

agriculture and industry. Towards this end, the Reserve Bank concentrated on

regulating and developing mechanisms for institution building. The commercial

banking network was expanded to cater to the requirements of general banking and

for meeting the short-tem working capital requirements of industry and agriculture.

Specialised development financial institutions (DFIs) such as the IDBI, NABARD,

NHB and SIDBI, etc., with majority ownership of the Reserve Bank were set up to

meet the long term financing requirements of industry and agriculture.

The early history of Indian banking and finance was marked by strong governmental

regulation and control. The roots of the national system were in the State Bank of

India Act of 1955, which nationalised the former Imperial bank of India and its seven

associate banks. In the early days, this national system operated along side of a large

private banking system. Banks were limited in their operational flexibility by the

government‟s desire to maintain employment in the banking system and were often

drawn into troublesome loans in order to further the government‟s social goals.

The financial institutions in India were set under the strong control of both central

and state governments, and the Governments utilized these institutions foe the

achievements in planning and development of the nation as a whole. The all India

financial institutions can be classified under four heads according to their economic

importance that are:

All India Development Banks,

Specialized Financial Institutions,

Investment Institutions,

State level Institutions.

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Over the years, IDBI has enlarged its basket of products and services, covering

almost the entire spectrum of industrial activities, including manufacturing and

services. IDBI provides financial assistance, both in rupee and foreign currencies, for

green-field projects as also for expansion, modernisation and diversification

purposes.

In the wake of financial sector reforms unveiled by the Government since 1992, IDBI

evolved an array of fund and fee-based services with a view to providing an

integrated solution to meet the entire demand of financial and corporate advisory

requirements of its clients. IDBI also provides indirect financial assistance by way

of rediscounting of bills of exchange arising out of sale of indigenous machinery on

deferred payments terms.

IDBI has played a pioneering role, particularly in the pre-reform era (1964-91), in

catalysing broad based industrial development in the country in keeping with its

Government-ordained „development banking‟ charter. In pursuance of this mandate,

IDBI‟s activities transcended the confines of pure long term lending to industry and

encompassed, among others, balanced industrial growth through development of

backward areas, modernization of specific industries, employment generation,

entrepreneurship development along with support services for creating a deep and

vibrant domestic capital market, including development of opposite institutional

framework.

In September 2003, IDBI diversified its business domain further by acquiring the

entire shareholding of Tata Finance Limited in Tata Home Finance Ltd., signalling

IDBI‟s foray into the retail finance sector. The fully-owned housing finance

subsidiary has since been renamed „IDBI Home finance Limited‟. In view of the

signal changes in the operating environment, following initiation of reforms since the

early nineties, Government of India has decided to transform into commercial bank

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without eschewing its secular development finance obligations. The migration to the

new business model of commercial banking, with its gateway to low cost current,

savings bank deposits, would help overcome most of the limitations of the current

business model of development finance while simultaneously enabling it to diversify

its client/ asset base. Towards this end, the IDBI (Transfer of undertaking and repeat)

Act 2003 was passed by Parliament in December 2003. The act provides for repeal of

IDBI Act, corporatisation of IDBI (with majority Government holding; current

share: 53%) and transformation into a commercial bank. The provisions of the Act

have come into force from July 2, 2004 in terms of a Government Notifications to

this effect. The Notification facilitated, formation, incorporation and registration of

Industrial Development Bank Of India Ltd., as a company under the Companies Act,

1956 and a deemed Banking Company under the Banking Regulation Act 1949 and

helped in obtaining requisite regulatory and statutory clearances, including those

from RBI. IDBI would commence banking business being transacted under IDBI Act,

1964 from October 1, 2004, the „Appointed Date‟ notified by the Central

Government.

IDBI has firmed up the infrastructure, technology platform and reorientation of its

human capital to achieve a smooth transition.

On July 29, 2004, the Board of Directors of IDBI Bank accorded in principle

approval to the merger of IDBI Bank with the Industrial Development Bank of India

ltd., to formed incorporated under the Companies Act, 1956 pursuant to the IDB

(Transfer of Undertaking and Repeat) Act, 2003 (53 0f 2003), subject to the approval

of shareholders and other regulatory and statutory approvals. A mutually gainful

proposition with positive implications for all stakeholders and clients, the merger

process is expected to be completed during the current financial year ending March

31, 2005.

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IDBI would continue to provide the extant products and services as part of its

development finance role even after its conversion into a banking company. In

addition, the new entity would also provide an array of wholesale and retail banking

products, designed to suit the specific needs cash flow requirements of corporate and

individuals. In particular, IDBI would leverage the strong corporate relationship built

up over the years to offer customised and total financial solutions for all corporate

business needs, single-window appraisal for term loans and working capital finance,

strategic advisory and “Hand-holding” support at the implementation phase of

projects, among others.

IDBI‟s transformation into a commercial bank would provide a gateway to low cost

deposits like Current and Saving Bank deposits. This would have a positive impact

on the Bank‟s overall cost of funds and facilitate lending at more competitive rates to

its clients. The new entity would offer various retail products, leveraging upon its

existing Suvidha Flexi Bonds Schemes. In the emerging scenario, the new IDBI

hopes to realize its mission of positioning itself as a one stop super-shop and most

preferred brand for providing total financial and banking solutions to corporate and

individuals, capitalising on its intimate knowledge of the Indian industry and client

requirements and large retail base on the liability side.

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IDBI TODAY

The Industrial Development Bank Of India Limited commonly known by its

acronym IDBI is one of the India‟s leading public sector bank. It is currently the

tenth largest development bank in the world. Some of the institutions built by

IDBI are The National Stock Exchange of India (NSE), The National Securities

Depository Services Ltd. (NSDL) and the Stock Holding Corporation of India

(SHCIL) .Today, IDBI has a network of more than 720 branches, and 1210 ATM‟s

and spread over the following: Metro: - 213

Urban: 285

Semi urban: 148

Rural: 74

VISION STATEMENTS

“To be trusted partner in progress by leveraging quality human capital and setting

global standards of excellence to build the most valued financial conglomerate”

“One of the key differentiators that IDBI Bank found in Finacle universal banking

solution was its new generation technology and its use of the web paradigm. With

features life Straight-Through-Processing, 24*7 banking, e-Xtensibility tool kit,

Finacle has indeed proved to be the right choice. With Finacle powering our core

banking operations, we have been able to bring down our End of Day processing

time by more than 80%”

Sanjay Sharma, Vice President & Head Product Development Group, IDBI bank.

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THE BANK, ITS PRODUCTS

AND SERVICES

IDBI have been providing many services to its customers. It divides its services into

two divisions:

1. Retailing Banking Services.

2. Corporate Banking Services.

The following are the Retailing Banking Services

Deposits

The bank provides normal Saving Bank Accounts, Current Accounts, Fixed

Deposits, and Pension Accounts. But it also provides special accounts like

Suvidha plus Fixed Deposits and Sabka Accounts.

Loans

The bank provides various loans like:

1. Home Loans.

2. Loan against home.

3. Educational loans.

4. Personal loans.

5. Security loans.

Easy Payments

Bank provides its customers with a facility of easy bill payments. It provides

facility of payment of tax, Stamp Duty, Easy Fill, Online Transfer, etc.

Money Transfer

Sending money within India has never been simple, convenient, fast and safe.

IDBI‟s Card to Card Money Transfer facility; a first of its kind money transfer

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service in India is the absolute way to send money anywhere, anytime to any

Visa Debit or Credit cardholder in India. Bank‟s customers can now transfer

money from their bank account or Visa card to any other Visa debit or credit

card across the country through this service.

Saving account

1. No frills Sabka account (AQB Rs 250)

2. Basic saving account (AQB Rs 5000)

Tier A cities Rs.5000 (Metro and Urban)

Tier B cities Rs 2500 (Semi Urban)

3. Super Shakti women‟s saving account (AQB Rs 5000): Initial account

Rs 1000 and AQB 5000 and free zero balance for kid account.

4. Galaxy silver saving account (AQB Rs 25000): Initial amount of Rs

25000 and 1 lakh PAP per month available.

5. Power plus saving account (AQB Rs 50000): Minimum balance of Rs

50000 or a zero balance saving account by maintaining an FD of Rs 7.5

lakhs with the bank.

6. Preferred account (AQB 75000)

7. Royale account (AQB 100000)

General services

1. Quarterly Interest

2. Personalised chequebook

3. Pap chequebook

4. Any branch banking

5. DD and Outstation cheque collection

6. Extended banking hours and secondary banking

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7. Lockers

8. Free net banking

9. Free phone banking

10. Free mobile banking

11. Free statement by e-mail and courier

12. International debit cum ATM card.

Additional services

1. Investment advisory service

2. Demat account

3. World currency card

4. Gift card

5. Card to card money transfer.

Special services

1. Grouping of account.

2. Free sweep in facility.

3. Overdraft facility.

Current account

1. Easy access (AQB-zero) account opening 5000

2. Basic current account (AQB Rs 10000)

3. Trade plus account (AQB Rs 25000)

4. Universal account (AQB Rs 100000)

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5. Bronze current account (AQB Rs 100000)

6. Bronze plus current account (AQB Rs 100000)

7. Silver current account (AQB Rs 3 lakh)

8. Gold current account (AQB Rs 5 lath)

9. Gold plus (MAB Rs 1000000)

FACILITIES PROVIDED BY BANK

Easy Payment:-

Bank provides its customers with a facility of easy bill payments. It provides

facility of payment of tax, Stamp Duty, Easy Fill, Online Transfer, etc.

Money Transfer:-

Sending money within India has never been this simple, convenient, fast and

safe. IDBI‟s Card to Card Money transfer facility, a first-of-its-kind money

transfer service in India is the absolute way to send money to any money

anywhere, anytime to any Visa Debit or Credit cardholder in India. Bank‟s

customers can now transfer money from their Bank account or Visa card to any

other debit or credit across the country through this service.

Funds can be transferred to any debit or credit card in India.

Sender needs to know only the card number of the beneficiary.

Can be accessed using ATM, Internet Banking or through the branch.

Funds will be transferred within 2-3 working days.

Cheaper, faster and more convenient than Demand Drafts, telegraphic transfers

and Payable-at-par cheques.

No geographical limitations within India.

Beneficiary location need not be known.

Payments of credit card bills.

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Transfer Funds

People can now use Internet banking, ATMS or branches for transferring money

across the country. The only information need to know is the 16-digit card number of

the transferee. To carry out a transfer, simply log on to IDBI‟s Internet Banking at

www.idbibank.com, or visit the nearest IDBI ATM or branch and transfer the

required amount. The money is directly credited into the recipient‟s card, no matter

where he is.

INVESTMENT

The bank believes that all investors share a common goal, regardless of their

objectives: superior and sustained returns with a tight control over risk. Meeting long-

term investment goal is dependent on a number of factors: such as investment capital,

expected rate of return, inflation, taxes and your investment time horizon. To meet

public requirements, the bank offer investment options based on risk tolerance and

return expectations. Relationship Managers are equipped to advice customers the

various investment avenues after thoroughly understanding investment profile.

Mutual Funds

Mutual Funds offer simple and effective way to diversify investment without the

hassles of tracking individual stocks on a daily basis.

Capital Gain Bonds

Invest your long-term capital gains on sale of your asset in the specified assets.

NRI a/c

Being an NRI (non-resident Indian) and privy to special benefits and privileges in

India, it‟s only but natural to expect world class levels- is it banking or any other

service. The bank offer basic NRI banking products like Non Resident Rupee

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Checking Account, Non Resident Rupee Term Deposits and Foreign Currency Non

Resident Deposit.

Non-Resident External (NRE)

Reparable account for your investment needs access your account anytime, anywhere

with Internet Banking, shop at more than 8.3 million locations and withdraw funds in

140 countries.

Non-Resident Ordinary (NRO)

An account for your local income and expenses, access your account at more than

250 ATM‟s across the country, pay your bills in India from anywhere in the world.

Phone Banking

At IDBI, the bank endeavour to raise the bar to meet the rising requirements of their

customers, by providing quality products and services to suit varied banking needs.

Their phone banking service is yet another, technology and customer centric step in

that direction.

IDBI‟s phone banking service enables customers to access authentic,

instantaneous information on their account balances and transactions. The service is

available totally free of cost round the clock, 365 days a year.

SMS BANKING

Business is on the move and so are the people who conduct it. For customers to enjoy

banking convenience while on the move, IDBI is here with its SMS banking

initiatives permit them to access their account and carry out various banking

transactions and inquires.

Account Alert

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With Account alert, customer‟s bank account transaction informs will be

delivered to them automatically, wherever they are. No more visiting the bank

branch or ATM to check routine things like account balances, cheques

clearance, verification of ATM transactions, bill payment verifications, etc.

Accounts Alerts allow customer to monitor finely any type of activity on their

accounts, and be notified by e-mail or cell phone SMS as and they are

executed.

Gold card

The card can be used transact at IDBI ATMs and 13000 VISA/Plus ATMs in

India and for making purchases at 1.2 lakh visa locations. It is having

international validity. The Gold card can also be used abroad to make

purchases at 13 million merchant locations and withdraw local currency at 8.5

lakh Visa/ Plus ATMs. Customers can withdraw cash up to Rs 75000 and make

purchases worth Rs 75000 in a day. IDBI has tied up with various merchant

establishments by making purchases through the Gold Debit Card.

Debit cum credit card

This card enables customers to access their IDBI Account from anywhere in

the world, anytime of the day or night. It not only lets them withdraw money

from any of their ATMS (Automated Teller Machines) and their associated

bank‟s ATMs, but also empowers them to shop, dine and travel without the

worry of carrying cash with them all the time.

Platinum debit cum atm card:

With this card the customer can withdrew up to 1 lath and make purchase

worth Rs 200000 per day.

Gift Card

The IDBI gift card allows customer‟s loved one to purchase goods and services

at over 1.8 Lac merchant establishments in India that accept Visa cards. No

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headaches of being bound to specific stores with gift vouchers. The Gift card

can be used more than one giving you the flexibility to shop at will from

different stores and at different times.

World Currency Card

The World Currency Card is a prepaid multi currency card that provides you

the convenience of making purchases and withdrawing cash while travelling

almost anywhere abroad. The Card does away with the in convenience of

carrying travellers cheques, is much safer than carrying foreign currency and is

more economical than credit cards.

Safe Deposit

The Safe Deposit locker facility offers invaluable safety for customer‟s

valuables. They also have an offer a variety of sizes to fit their requirements.

The deposit lockers can be operated at their convenience during their extended

banking hours. They provide the maximum safety to customer‟s valuables that

are placed in their safe Deposits lockers. For opening a locker all you have to

do is:

Open a saving bank account with Rs 5,000.

Pay a onetime administrative charge (non-refundable) including legal

fees/stamp paper charges.

Pay only one year‟s rent in advance upfront. No additional fixed deposit

required.

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Milestones

July 1964: Set up under an Act of Parliament as a wholly-owned subsidiary of

Reserve Bank of India.

February 1976: Ownership transferred to Government of India. Designated

Principal Financial Institution for co-coordinating the working of institutions at

national and State levels engaged in financing, promoting and developing

industry.

March 1982: International Finance Division of IDBI transferred to Export-

Import Bank of India, established as a wholly-owned corporation of

Government of India, under an Act of Parliament.

April 1990: Set up Small Industries Development Bank of India (SIDBI)

under SIDBI Act as a wholly-owned subsidiary to cater to specific needs of

small-scale sector. In terms of an amendment to SIDBI Act in September 2000,

IDBI divested 51% of its shareholding in SIDBI in favor of banks and other

institutions in the first phase. IDBI has subsequently divested 79.13% of its

stake in its erstwhile subsidiary to date.

January 1992: Accessed domestic retail debt market for the first time with

innovative Deep Discount Bonds; registered path-breaking success.

December 1993: Set up IDBI Capital Market Services Ltd. as a wholly-owned

subsidiary to offer a broad range of financial services, including Bond Trading,

Equity Broking, Client Asset Management and Depository Services. IDBI

Capital is currently a leading Primary Dealer in the country.

September 1994: Set up IDBI Bank Ltd. in association with SIDBI as a

private sector commercial bank subsidiary, a sequel to RBI's policy of opening

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up domestic banking sector to private participation as part of overall financial

sector reforms.

October 1994: IDBI Act amended to permit public ownership up to 49%.

July 1995: Made Initial Public Offer of Equity and raised over Rs.2000 crore,

thereby reducing Government stake to 72.14%.

March 2000: Entered into a JV agreement with Principal Financial Group,

USA for participation in equity and management of IDBI Investment

Management Company Ltd., erstwhile a 100% subsidiary. IDBI divested its

entire shareholding in its asset management venture in March 2003 as part of

overall corporate strategy.

March 2000: Set up IDBI Intech Ltd. as a wholly-owned subsidiary to

undertake IT-related activities.

June 2000: A part of Government shareholding converted to preference

capital, since redeemed in March 2001; Government stake currently 58.47%.

August 2000: Became the first All-India Financial Institution to obtain ISO

9002:1994 Certification for its treasury operations. Also became the first

organization in Indian financial sector to obtain ISO 9001:2000 Certification

for its forex services.

March 2001: Set up IDBI Trusteeship Services Ltd. to provide technology-

driven information and professional services to subscribers and issuers of

debentures.

February 2002: Associated with select banks/institutions in setting up Asset

Reconstruction Company (India) Limited (ARCIL), which will be involved

with the Strategic management of non-performing and stressed assets of

Financial Institutions and Banks.

September 2003: IDBI acquired the entire shareholding of Tata Finance

Limited in Tata Home finance Ltd, signaling IDBI's foray into the retail

finance sector. The housing finance subsidiary has since been renamed 'IDBI

Home finance Limited'.

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December 2003: On December 16, 2003, the Parliament approved The

Industrial Development Bank (Transfer of Undertaking and Repeal Bill) 2002

to repeal IDBI Act 1964. The President's assent for the same was obtained on

December 30, 2003. The Repeal Act is aimed at bringing IDBI under the

Companies Act for investing it with the requisite operational flexibility to

undertake commercial banking business under the Banking Regulation Act

1949 in addition to the business carried on and transacted by it under the IDBI

Act, 1964.

July 2004: The Industrial Development Bank (Transfer of Undertaking and

Repeal) Act 2003 came into force from July 2, 2004.

July 2004: The Boards of IDBI and IDBI Bank Ltd. take in-principle decision

regarding merger of IDBI Bank Ltd. with proposed Industrial Development

Bank of India Ltd. in their respective meetings on July 29, 2004.

September 2004: The Trust Deed for Stressed Assets Stabilization Fund

(SASF) executed by its Trustees on September 24, 2004 and the first meeting

of the Trustees was held on September 27, 2004.

September 2004: The new entity "Industrial Development Bank of India" was

incorporated on September 27, 2004 and Certificate of commencement of

business was issued by the Registrar of Companies on September 28, 2004.

September 2004:Notification issued by Ministry of Finance specifying SASF

as a financial institution under Section 2(h)(ii) of Recovery of Debts due to

Banks & Financial Institutions Act, 1993.

September 2004:Notification issued by Ministry of Finance on September 29,

2004 for issue of non-interest bearing GoI IDBI Special Security, 2024,

aggregating Rs.9000 crore, of 20-year tenure.

September 2004: Notification for appointed day as October 1, 2004, issued by

Ministry of Finance on September 29, 2004.

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September 2004: RBI issues notification for inclusion of Industrial

Development Bank of India Ltd. in Schedule II of RBI Act, 1934 on

September 30, 2004.

October 2004: Appointed day - October 01, 2004 - Transfer of undertaking of

IDBI to IDBI Ltd. IDBI Ltd. commences operations as a banking company.

IDBI Act, 1964 stands repealed.

January 2005: The Board of Directors of IDBI Ltd., at its meeting held on

January 20, 2005, approved the Scheme of Amalgamation, envisaging merging

of IDBI Bank Ltd. with IDBI Ltd. Pursuant to the scheme approved by the

Boards of both the banks, IDBI Ltd. will issue 100 equity shares for 142 equity

shares held by shareholders in IDBI Bank Ltd. EGM has been convened on

February 23, 2005 for seeking shareholder approval for the scheme.

December 2005: The Industrial Development Bank of India Limited opened

its new data centre at Belapur in Navi Mumbai.

April 2006: BSE inducts IDBI BANK as Clearing Bank.

January 2007: REL ropes in IDBI Bank for Rosa Power Project.

June 2007: IDBI Bank is planning to re-enter the mutual fund business.

December 2007: KURNOOL S. ANDI, Chief General Manager of IDBI

Bank Limited , formally inaugurated the branch of the bank at Gowri Gopal

Hospital Complex in Andhra Pradesh.

March 2008: IDBI Bank Ltd. Posted a net profit of Rs. 1,718.30 million for

the First Quarter.

August 2008: IDBI Bank revives plan to sell mortgage subsidiary. IDBI Bank

had valued IDBI Home Finance at Rs.351 crore, which was lowered at Rs. 333

crore in the early January.

September 2008: IDBI Bank mulls merger of home loan subsidiary.

November 2008: IDBI Bank is one of the largest banks in India with assets of

over 1, 30,694 Crores and deposit base of INR 72,998 crore. It is a profitable

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venture with profit before tax of INR 822 crore. These figures are for financial

year 2007-2008.

April 2009: IDBI Bank Q4 net rises 28% to Rs. 314 crore.

April 2009: IDBI Bank to apply to SEBI for mutual fund license.

June 2009: IDBI Bank net up 8% to Rs. 172 crore. While advances increased

by 25% to Rs. 97,955 crore compared with Rs. 78,115 crore at the end June

2008.

July 2009: IDBI Bank net profit rose 7.56 % to Rs. 171.83 crore in Qtr.

ending June 2009 for the financial year 2008-2009 compare to Rs. 159.76 crore

in quarter ending June 2008. Total operating income rose 43.33% to Rs.

3,463.30 crore in quarter ending June 2009 for the financial year 2008-2009

compared to Rs. 2,416.24 crore in Qtr. ending June2008.

August 2009: IDBI Bank has announced the repayment of its 11.5% SLR

Bonds, 2009 on September 26, 2009.

MAY 2010: IDBI launched its first mutual fund known as IDBI NIFTY

INDEX FUND on May 3, 2010.

THEORETICAL PERSPECTIVE

Consumer behaviour is the study of when, why, how, and where people do or do

not buy products. It blends elements from psychology, sociology, social anthropology

and economics. It attempts to understand the buyer decision making process, both

individually and in groups. It studies characteristics of individual consumers such as

demographics and behavioural variables in an attempt to understand people's wants.

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It also tries to assess influences on the consumer from groups such as family, friends,

reference groups, and society in general.

Customer behaviour study is based on consumer buying behaviour, with the customer

playing the three distinct roles of user, payer and buyer. Relationship marketing is an

influential asset for customer behaviour analysis as it has a keen interest in the re-

discovery of the true meaning of marketing through the re-affirmation of the

importance of the customer or buyer. A greater importance is also placed on

consumer retention, customer relationship management, personalization,

customization and one-to-one marketing. Social functions can be categorized into

social choice and welfare functions.

MARKET SEGMENTATION

Market segmentation is a concept in eco and marketing. A market segment is a

sub-set of a market made up of people or organizations sharing one or more

characteristics that cause them to demand similar product and/or services based on

qualities of those products such as price or function. A true market segment meets all

of the following criteria: it is distinct from other segments (different segments have

different needs), it is homogeneous within the segment (exhibits common needs); it

responds similarly to a market stimulus, and it can be reached by a market

intervention. The term is also used when consumers with identical product and/or

service needs are divided up into groups so they can be charged different amounts.

These can broadly be viewed as 'positive' and 'negative' applications of the same idea,

splitting up the market into smaller groups.

While there may be theoretically 'ideal' market segments, in reality every

organization engaged in a market will develop different ways of imagining market

segments, and create Product differentiation strategies to exploit these segments. The

market segmentation and corresponding product differentiation strategy can give a

firm a temporary commercial advantage.

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TYPES OF SEGMENTATION

1. Demographic

2. Geographic

3. Physiographic

4. Behavioural

RESEARCH METHODLOGY

This is a limited study which takes into consideration the responses of 102

people. This data can be exported to take in the trends across the country. The

significance for the industry lies in studying these trends that emerge from the

study. It is a rapidly changing and evolving sector. People are only beginning

to wake up to its vast possibilities. A study like this attempt to guide the future

of the industry based on current trends.

SAMPLING PLAN

The research is primarily both exploratory as well as descriptive in nature. The

sources of information are both primary and secondary. A well-structured

questionnaire was prepared and personal interviews were conducted to collect

the customer‟s perception and buying behaviour, through this questionnaire.

SAMPLING METHODLOGY

Sampling Technique: Initially, a rough draft was prepared keeping in mind the

objective of the research.

The final Questionnaire was arrived only after certain important changes were

done. Thus our sampling came out to be judgemental and continent.

27 | P a g e

Sampling Unit:

The respondents who were asked fill out the questionnaire are the sampling

unit. These comprise of employees of MNC, Govt. Employees and Self

Employed, business man‟s etc.

Sample Size:

The sample size was restricted to only 102, which comprised of mainly peoples

from different regions GHAZIABAD.

Sampling Area:

The research was done in Raj Nagar, Kavi Nagar, Gandhinagar, Nayi Basti,

Vijay Nagar, Model Town, Navyug Market, Sona Trade centre, and Shastri

Nagar locality.

RESEARCH DESIGN

Research design is a conceptual structure with research conducted. There is no

unique method, which can entirely eliminate the elements of undertaking. But

research methodology more than any other procedure can minimize the degree

of uncertainty. Thus it reduces the probability of making a wrong choice

amongst alternative courses of action.

Thus the research design implies a framework or blueprint for conducting the

marketing research project. It specifies the details of the procedures necessary

28 | P a g e

for obtaining the information needed to structure and/or solve marketing

research problems. This includes within framework:

Defining the information needed.

Determine the phases applicable e.g. Exploratory, Descriptive or Casual.

Constructing a Questionnaire.

Specifying the sampling process and sample size.

Developing a plan for data analysis.

This is particularly significant in the light of increasing competition & growing

size, which make the task of choosing the best course of action difficult for any

business enterprises. It is imperative that any type of organization in the

present environment needs systematic supply of information coupled with tools

of analysis for making sound decisions, which involve risk. Exploratory

method of research was chosen because its helps in collecting, summarizing,

analysing, interpreting, and presenting data, with new ideas & in the effective

manner.

For this structured questionnaire was the research instrument used for the

research works. Keeping the above definitions in mind we arrived at the

conclusion that our research which is directed towards finding out

CONSUMER BEHAVIOUR TOWARDS IDBI BANK AND COMPETITIVE

ADVANTAGES IF IDBI BANK WITH OTHER BANKS so our research was

“Exploratory Research”

DATA COLLECTION

The communication instrument has to be as versatile as possible so that it

provides us with the most accurate of all information. It is an exceptionally

practical way to gather opinions, knowledge and behavioural intentions. Verbal

responses cannot be relied on as its essential weakness lies in the respondent‟s

refusal to accept it at a latter date. It is also possible that the respondent may

29 | P a g e

intentionally provide false information; hence the instrument used should be

such that the respondent found little scope for deviation.

As our research attempted to find out the investment alternatives available in

the market and the investment pattern of the people is an “Exploratory

Research”

We included the following type of questions:

Research question

Investigate question

Our main objective required from the instrument designed was to help us

obtain the information.

DATA COLLECTION METHODS

The collection of data was done both primary and secondary sources.

Primary Data:

It was collected through survey conducted. The questionnaire was prepared &

persons were requested to answer, they were also personally interviewed.

The data collection was totally original & did not exist before. Thus the data

collected was totally reliable.

Through the survey we obtained primary data from the reader through the

following method-

Observation method

Questionnaire

Secondary Data:

30 | P a g e

The data, which already exist in the nature, is called as secondary data. It

provides a starting point for research & offers the advantage of low cost &

ready availability.

The historic literature & other information regarding the company profile &

investment options available in the market were taken from secondary sources

which includes-

o Brochures of different organizations which are providing

investment alternatives

o Newspapers and Magazines.

SAMPLE DESIGN

A sample design is a definite plan for obtaining a sample from a given population. It

refers to the technique or the procedure the researcher would adopt in selecting items

for the sample. Sample design may as well lay down the number of items to be

included in the sample size i.e.; the size of sample. Sample design is determined

before data are collected. There are many sample designs from which a researcher

can choose. Some designs are relatively more precise and easier to apply than other.

Researcher must select/prepare a sample design that should be reliable and

appropriate for his research study.

The various steps that are involved in the process of sampling design can be

illustrated through the following chart.

Steps of sampling:

1. Selection of Universe:

31 | P a g e

The first step in developing any sample design is to clearly define the set of

object, to study the universe. The universe can be either finite or infinite.

This is finite universe comprising of the GHAZIABAD city. All the public in

the city are included in it.

2. Sample Units:

A decision has to be taken concerning sampling unit before selecting the

sample. There can be any sample unit but it was not possible to find out the

total universe while surveying so the sample unit was confined.

The sampling units include most of the Existing as well as fresh customer of

GHAZIABAD city.

3. Source list:

It is also known as sampling frame from which sample is to drawn. It contains

the name of all items of a universe.

4. Sample Size:

Sample size covered was 102 people in GHAZIABAD city.

5. Sampling Procedure:

Finally the samples were taken and careful examination was done & the items

for the sample were taken. It was seen that there is no systematic bias and

sampling error.

We have applied the above procedure to our research, which is given as below:

32 | P a g e

Method used for Research : Survey Method

Sampling Extent: GHAZIABAD city.

Sampling Frame Distribution: Residents of GHAZIABAD.

Sampling: Random.

Sampling Size: 102

Data Collection Technique: Informal Interviewing & filling of questionnaires by

common persons.

METHODS OF DATA COLLECTION

The method of data collection is done by two ways-:

1. Primary Data and

2. Secondary Data.

The primary data are those which are collected fresh and for the first time, and

thus happen to be original in character.

The secondary data, on the other hand are those which have already been

collected by someone else and which have already been passed through

statistical process.

And in our study we have done through primary data.

COLLECTION OF PRIMARY DATA

We collect primary data during the course of doing experiments in an

experimental research but in case we do research of the descriptive type and

perform surveys, weather sample surveys or census surveys, then we can

obtain primary data either through observation or through direct

communication with respondents in one form or another or through personal

interviews.

INTERVIEW METHOD

33 | P a g e

The interview method of collecting data involves presentation of oral-verbal

stimuli and reply in terms of oral-verbal responses. This method can be used

through personal interviews and, if possible through telephone interviews.

(a) Personal interviews: - Personal interview method requires a person known

as the interviewer asking question generally in a face-to face contact to the

other person. This sort of interviews may be in the form of direct personal

investigation or it may be indirect oral investigations. In the case of direct

personal investigation the interviewer has to collect the information

personally from the sources concerned. He has to be on the spot and has to

meet people from whom data have to be collected. The method of

collecting information through personal interviews is usually carried out in

a structured way. As such we call the interviews as structured interviews.

Such interviews involve the use of a set of predetermined questions of

highly standardized techniques of recording.

Some of the merits of personal interview are:

Personal information can as well as be obtained easily under this

method.

Samples can be controlled more effectively as there arises no

difficulty of the missing returns, non-response generally remains very

low.

(b) Telephone interviews: - This method of collecting information consists

in contacting respondents on telephone itself. It is not a very widely used

method, but plays important part in industrial surveys, particularly in

developed regions. Some of the merits are:-

It is faster than other method i.e., a quick way of obtaining

information.

It is cheaper than personal interviewing method.

34 | P a g e

Replies can be recorded without causing embarrassment to

respondents.

Representative and wider distribution of sample is possible.

RESEARCH METHOD USED

Conclusive Research is used when the objective is clear.

Descriptive Research because our purpose was to collect data for

definite purpose.

We have to find out behaviour of people regarding different financial

products.

SIX MAJOR STEPS OF MARKETING RESEARCH PROCESS

1. IDENTIFICATION THE PROBLEM

35 | P a g e

This step is always the first of the marketing research steps. At this point, the problem

will have been recognized by at least one level of management, and internal

discussions will have take plan. Sometimes, further definition of the issue or problem

is needed, and for that there are several tools you can use. The most common tools

are internal and external secondary research. Secondary research intelligence consists

of information that was collected for another purpose, but can be useful for other

purposes.

Examples of internal secondary research are sales revenues, sales forecasts, customer

demographics, purchase patterns, and other information that has been collected about

the customer. Often referred to as data mining, this information can be critical in

diagnosing the problem for further exploration and should be leveraged when

available and appropriate. The amount of internal secondary information that can be

applied is typically limited.

External secondary research is typically far more available, especially since the

internet age. Most external secondary information is produced via research conducted

for other purposes, financial performance data, expert opinions and analysis,

corporate executive interviews, legal proceedings, competitive intelligence firms, etc.

Leading sources for external secondary research resources include:

Newspaper / Magazines Articles

Television

Newsletters

Competitive Intelligence Firms

Industry Reports

Trade Associations

2. DEVELOPING YOUR APPROACH

36 | P a g e

Once your problem is better defined, you can move onto developing

marketing research approach, which will generally be around a defined set

of objectives. Developing your approach should consist of honestly assessing

you and your team‟s market research skills, establishing a budget,

understanding your environment and its influencing factors, developing and

analysis model, and formulating hypothesis.

SKILL ANALYSIS

Is there in-house market research available to meet projects needs?

Is the in-house market research expertise available during the given

timeframe?

What parts of the market research process can be handled internally?

BUDGET ANALYSIS

Is this a strategic problem/ issue or a tactical one?

Where will the budget come from, and can it be shared between

departments?

Who are those most likely to benefit from research, and likely those

most willing to fund the project?

In what timeframe will budget be available?

ENVIRONMENT

What is the overall economic environment?

What is the economic environment relative to your products / services?

What is the governmental environment (regulatory, etc.)?

BUDGET ANALYSIS

Is this a strategic problem/issue or a tactical one?

37 | P a g e

Is it an Rs 20000 project or Rs 200000 project- what is the information

worth?

Where will the budget come from, and can it be shared between

departments?

Who are those most likely to benefit from the research, and likely those

most willing to fund the project?

In what timeframe will budget be available?

3. MARKET RESEARCH DESIGN

Market research design is the most encompassing of all steps in the

marketing research process, requiring the greatest amount of thought, time and

expertise- and is the point at which those less experienced with market research

will obtain assistance from an internal market research expert or perhaps

partner with an external marketing research provider.

Since the intelligence eventually gained from the research is so closely related

to the selected marketing research design, this is the single most important step

in the research process and the step most vulnerable to common marketing

research errors.

Marketing research design includes secondary information analysis, qualitative

research, methodology selection, question measurement & scale selection,

questionnaire design, sample design and size and determining data analysis to

be used.

Elements of Marketing Research Design include:

The Questionnaire Design Process

Measuring & Scaling

Sampling Size Calculator

Basic Statistical Testing

38 | P a g e

Survey Questionnaire Examples

4. COLLECTION OF DATA

Marketing research data collection (often called survey field) is the point at

which the finalized questionnaire (survey instrument) is used in gathering

information among the chosen sample segments. There are a variety of data

collection methodologies to consider.

Selecting which is the most appropriate marketing research data collection

methodology for a particular research project takes place during steps 2 & 3 of

the marketing research process.

Marketing research data collection typically begins with testing the final

questionnaire with a small portion of the respondent sample to make sure it is

gathering information correctly. Then data collection can be fairly automatic

throughout the remainder of the marketing research data collection process. When

quota groups and /or sample subgroups are being screened for, data collection will

require more oversight, maintenance time and cost. Regardless of data collection

process often takes from 25% to 50% of the total time needed to complete a research

project.

39 | P a g e

OBSERVATIONS

40 | P a g e

AGE GROUP OF RESPONDENT

AGE GROUP AGE

15-25 14

25-35 43

35-45 22

45-55 14

55-65 6

65-75 3

TOTAL 102

0

5

10

15

20

25

30

35

40

45

AGE

15-25

25-35

35-45

45-55

55-65

65-75

FINDINGS

During the survey the maximum age group covered was 25-35 and the

minimum age group covered was 65-75

41 | P a g e

BANK’S IN WHICH THE RESPONDENT

WERE MAINTAINING THEIR ACCOUNT

F

INDINGS:

1. Main players were ICICI Bank and PNB bank in Ghaziabad as compared to

others.

2. Others (syndicate, kotak Mahindra, UBI )

BANK'S RESPONSES

ICICI BANK 16

SBI 11

PNB 18

BOI 4

AXIS 7

IDBI 11

HDFC 12

BOB 12

OTHERS 25

42 | P a g e

AWARENESS OF PUBLIC ABOUT IDBI BANK

IN GHAZIABAD

94%

6%

RESPONSES

YES NO

FINDINGS:

According to the survey the people of Ghaziabad (nearly about 94% are aware

and only 6% were not aware of IDBI Bank)

43 | P a g e

RESPONDENTS PERCEPTION ABOUT IDBI

BANK

50%

7%

26%

17%

RESPONSES

PRIVATE

SEMI PRIVATE

PUBLIC

DON’T KNOW

Findings

1. Around 50% respondents felt that the Bank was private.

2. 26 % of the respondents were aware about the Bank and they knew it as a

Public bank.

3. Around 17% were not able to say anything and 7 % thought that it is a semi-

private bank.

44 | P a g e

PUBLIC EXPECTATION IN A BANK

PARAMETERS RESPONDENT

Customer service and relationship management 81

Accessibility 35

Variety of products and services 18

Trusted name 5

All 9

Findings

1. Majority of the respondents wanted good customer care and relationship

management in a bank as compared to variety of products and services.

2. Only 5% of them only saw a good brand name in a bank.

45 | P a g e

KNOWLEDGE ABOUT THE NEWLY

LAUNCHED NIFTY INDEX FUND

0

50

100

YES

NO

2478

RES

PO

NSE

S

Findings

78 % respondents were not aware about the Nifty Index Fund due to lack of

promotion.

Only 24 % were of aware about it and these were mainly the existing

customers.

46 | P a g e

CHANNELS PREFFERED BY RESPONDENTS

TO ACCESS BANK

BRANCH OFFICE

ONLINE/INTERNET

MOBILE/TELEBANKING

ATM'S

82

24

5

50

RESPONSES

Findings

Mainly the business man‟s opted branch for their transactions.

And small retail investors generally opted for online/internet or ATM‟s as per

their convenience.

Very less people were interested in mobile /telebanking.

47 | P a g e

MARKET SHARE OF IDBI BANK WITH OTHER

BANK FOR NEW ACCOUNT

0

5

10

15

20

25

30

IDBI SBIHDFC

ICICIPNB

AXISBOB

OTHERS

RESPONSES

Findings

The market share of IDBI Bank is less as compared to the other banks in

Ghaziabad and the major players are ICICI Bank, HDFC Bank and PNB Bank.

Generally the people were interested in ICICI Bank and PNB Bank for opening

their new account.

48 | P a g e

TRUST OF PEOPLE TOWARDS IDBI BANK IN

TERMS OF SECURITY

0

5

10

15

20

25

30

35

1 2 3 4 5 6 7

34

5 4

22

6

13

18

RESPONSES

DEFINITELY NOT DEFINITELY WILL

Findings

People generally trust nationalised banks but people of Ghaziabad were not

interested in IDBI bank because they thought that it was a private bank.

And also many people said that the bank has not done anything (promotion and

advertisement) to make them aware of it products and features and origin.

49 | P a g e

MAXIMUM PROMOTIONAL CAMPAIGN DONE

BY BANKS IN GHAZIABAD ACCORDING TO

RESPONDENTS

0

5

10

15

20

25

30

15

28

19

11 12

8

2 3 3 5

3 2

RESPONSES

BANKS

Findings

According to survey the maximum promotional activities was done

by ICICI Bank, SBI and PNB as compared to IDBI, HDFC and

BOB.

And many of the respondents said that people from the major players

visited them frequently and told about their new product or services

but this activity was not done by the IDBI bank.

50 | P a g e

ACCESSIBILITY OF BRANCH AND ATM’S

ACCORDING TO PUBLIC

69

33

0

10

20

30

40

50

60

70

80

90

RESPONSES

51 | P a g e

RATING ABOUT IDBI BANK

0

20

40

60

Findings:

In terms of services and customer relationship the people gave average rate to

IDBI Bank.

52 | P a g e

PEOPLE WHO HAVE SEEN PROMOTIONAL

CAMPAIGN OF IDBI BANK

40

60

RESPONSES

YES

NO

Findings

60 % of the respondents had not seen any promotional campaign recently

40 % of them had seen the advertisement of IDBI but of the 40 % many of

them said that IDBI should increase the frequency of the advertisement and

also use other promotion techniques.

53 | P a g e

BEST SERVICES GIVEN BY BANK

ACCORDING TO PUBLIC

0

5

10

15

20

25

30

SBIHDFC IDBI PNB

ICICIAXIS

OTHERS

15 16

8

14

29

3

25

RESPONSES

RESPONSES

Findings

1. According to the Ghaziabad public the best service was given by ICICI Bank

followed by HDFC Bank and SBI.

2. Many of the respondents were not the customers of IDBI Bank, so they were

not able to tell about the services offered by the bank.

54 | P a g e

AWARENESS ABOUT THE SPECIAL

PRODUCT LIKE PREFFERED AND ROYAL

BANK ACCOUNTS.

Findings

People were not much aware of IDBI Bank, so they were also not aware about

the special product of IDBI Bank.

Also among the existing customers, not everyone among them was aware of all

the products of the bank.

According to the data provided above only 18% were about but 86% were not

aware of the products.

55 | P a g e

AWARENESS OF ALTERNATE CHANNELS

OF BANKS

0 5 10 15 20 25 30 35 40

MOBILE BANKING

INTERNET

SMS BANKING

PAYMATE SERVICE

ALL OF THE ABOVE

RESPONSES

Findings

Generally the banks of Ghaziabad provided only SMS alerts, but people were

also interested in other channels like mobile banking (bank on move), internet

banking (mostly the business man‟s) and some of the people‟s also wanted pay

mate services by their banks.

Due to constraint of time people generally not prefer to go to the branch for

their transaction and they want the more convenient methods.

56 | P a g e

COMPETITVE ADVANTAGE OF IDBI BANK

WITH OTHER BANKS

A. Swot analysis

B. Tows matrix

C. Internal factor analysis

D. External factor analysis

E. Success factor analysis

F. Critical success factor analysis

57 | P a g e

SWOT ANALYSIS OF IDBI BANK

STRENGTHS WEAKNESS

1. Growing Network of more than 720

branches

2. Planned to open 200 new branches in

smaller cities.

3. Customized product for every type of

customers.

4. Backed by government and has the

positive factor of speed, accuracy, etc.

5. It is the only bank which has 53%

stake of government of India and 47%

others.

6. Got grant of Rs 3119 crore from Rs

6211 crore in 5 public sector banks.

1. It has low proximity because it has

only around 720 branches all over

India as compared to other banks.

2. Generally, the people are not aware

that it is public bank or private bank.

3. Advertisement is unable to

demonstrate about the different

product.

4. Frequency of advertisement is very

low and thus its impact is very low

on customers.

5. Branding-: While it is certainty a

global company IDBI came late to

the games on receding to perform an

integrated marketing strategy and

capitalized on its global brand.

OPPORTUNITIES

THREATS

1. It should also target low net customers

and rural market more efficiently.

2. It should pay more attention on

product publicity.

3. Build more interest of consumers in a

product category.

4. In the global market.

1. Main threats from PSU Banks

because they are imitating

private banks like SBI, PNB.

2. Also it has threat from private

players such as HDFC, ICICI,

AXIS bank, etc.

3. Threat of new entrants such as

from MNC‟s bank like HSBC,

STANDARD CHARTERED

ACCOUNTANT, YES BANK,

KOTAK MAHINDRA services

and products.

58 | P a g e

TOWS MATRIX OF IDBI BANK

IFAS

EFAS

STRENGTHS WEAKNESS

OPPORTUNITIES SO- STRATEGY

1. It should establish its

branches not in the cities but

also in the rural market.

2. The new branches which are

proposed to be opened

should be done, paying more

attention on product

category.

3. It has variety of product in its

basket but people are not

aware of this so this hurdle

should be removed with

publicity.

WO- STRATEGY

1. It should target low

customers and rural market

more efficiently because its

proximity is very low.

2. With the product publicity, it

should also focus that

customers are aware that it is

a public bank.

3. More focus should be given

to make aware about the

different product and

frequency should be

increased, so that consumers

do not forget about the same.

THREATS ST- STRATEGY

1. The new branches proposed

to be opened should be

opened should be opened

where the private players are

not present (this should be

done by market survey).

2. Threats from the MNCs can

be removed by the

introduction of more

customized product and

better facilities.

WT- STRATEGY

1. As it came late in the market,

its branding was low, so it

should pay more and more

attention on its advertisement

and promotion to remain in

its Cut-Throat environment.

59 | P a g e

INTERNAL FACTOR ANALYSIS OF IDBI BANK

LIMITED

INTERNAL STRATEIGIC FACTORS WEIGHT RATING WEIGHTED

SCORE

STRENGTHS

7. Growing Network of more than 720

branches

8. Planned to open 200 new branches in

smaller cities.

9. Customized product for every type of

customers.

10. Backed by government and has the positive

factor of speed, accuracy, etc.

11. It is the only bank which has 53% stake of

government of India and 47% others.

WEAKNESSES

6. It has low proximity because it has only

around 720 branches all over India as

compared to other banks.

7. Generally, the people are not aware that it

is public bank or private bank.

8. Advertisement is unable to demonstrate

about the different product.

9. Frequency of advertisement is very low

and thus its impact is very low on

customers.

10. Branding-: While it is certainty a global

company IDBI came late to the games on

receding to perform an integrated

marketing strategy and capitalized on its

global brand.

.15

.10

.10

.05

.10

.15

.15

.10

.05

.05

4

3.5

2.5

3

4

3.5

3

2.5

3.5

2

0.6

0.35

0.25

0.15

0.4

0.525

0.45

0.25

0.175

.10

1 3.25

Outstanding Above avg.

Average below average poor

5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0

60 | P a g e

EXTERNAL FACTOR ANALYSES SUMMARY

External Factors Weight

Rating

Weighted

Score

OPPURTUNITIES

5. It should also target low net

customers and rural market

more efficiently.

6. It should pay more attention

on product publicity.

7. Build more interest of

consumers in a product

category.

THREATS

4. Main threats from PSU

Banks because they are

imitating private banks

like SBI, PNB.

5. Also it has threat from

private players such as

HDFC, ICICI, AXIS bank,

etc.

6. Threat of new entrants

such as from MNC’s.

.17

.16

.15

.19

.16

.17

3.5

4

3.8

2.5

3

4

0.455

0.48

0.38

0.225

0.18

0.6

1 2.32

61 | P a g e

SUCCESS FACTOR ANALYSIS OF IDBI BANK LIMITED

STRATEGIC FACTORS

W

EI

G

HT

RATI

NG

WEI

GHT

ED

SCO

RE

SH

O

RT

IN

TE

R

M

ED

IA

TE

LONG C

O

M

M

E

N

T

S

1. (S1)Planned to open 200 new

branches in smaller cities.

2. (S2)Customized product for

every type of customers.

3. (W1)It has low proximity

because it has only around 720

branches all over India as

compared to other banks.

4. (W2)Generally, the people are

not aware that it is public bank

or private bank.

5. (O)It should also target low net

customers and rural market

more efficiently.

6. (O)It should pay more attention

on product publicity.

7. (T)Main threats from PSU

Banks because they are

imitating private banks like

SBI, PNB.

8. (T)Also it has threat from

private players such as HDFC,

ICICI, AXIS bank, etc

.15

.10

.05

.10

.10

.15

.10

.16

4.0

2.5

2.0

3.5

4.0

3.5

2.0

3.0

.60

.25

.1

.35

.40

.525

.20

.45

1 2.875

62 | P a g e

Critical success factors according to

the observation

Key success

factor

Banking

Sector

(weight)

IDBI Weighted

score of

IDBI

PNB Weighted

score of

PNB

ICICI Weighted

score of

ICICI

SBI Weighted

score of

SBI

Demographic

factor

.25 2.5 0.625 3.5 .875 3.0 .75 4.0 1

Higher

disposable

income

.20 2.5 0.5 3.5 0.7 3.0 .60 3.5 0.7

Increasing

interest of the

global

investors

.10 3.0 .3 3.1 .31 3.2 .32 3.5 .35

Trust in terms

of security

.15 2.2 .33 4 0.6 3.5 .525 4.5 .675

Customization

in terms of

their product

category

.30 4.0 1.2 2.5 .75 3.0 0.9 2.7 .81

1 2.955 3.23 3.095 3.535

63 | P a g e

COMPARATIVE STUDIES OF IDBI BANK WITH

OTHER BANKS (ICICI, AXIS,HDFC, SBI BANK)

PARTICULARS IDBI ICICI AXIS BANK HDFC SBI

NOMENCLATURE

PREFFERED ACCOUNT

PRIVILEGE A/C PRIORITY ACCOUNT

PREFFERED A/C RICH SAVING A/C

PRODUCT COMPARABLE WITH IDBI

TITANIUM ONE PREFFERED RICH

AQB CHARGES

RS. 1 LAC FOR SAVING BANK OR 15 LAC FOR FFD/TD LINKED WITH THE ACCOUNT

MINIMUM RS 5 LAC AS TRV (TOTAL RELATIONSHIP VALUE AND RS 75000 AS AQB)

RS 1 LAC IN SAVING BANK

RS 75000 IN SALARY A/C

RS 5 LAC IN COMBINATION OF SAVING PLUS TERM DEPOSIT OF A/C RS 10 LAC

RS 2 LAC IN SAVING

RS 5 LAC IN CURRENT

AVERAGE BALANCE OF 15 LAC ACROSS SAVING, CURRENT AND TD DEPOSIT A/C

25000 IN SAVING AND 10000 IN MULTI OPTION DEPOSIT

CHARGES FOR NON MAINTENANCE OF AQB

NIL A/C TO BE DOWNGRADED ON 2

ND

QUARTERLY DEPOSIT

RS 150 /QUARTER IF QAB IS BETWEEN 75000 TO 50000

RS 250/QUARTER IF QAB IS BETWEEN 25000 TO 10000. 750/QUARTER IF QAB FALLS BELOW 10000

IF LESS THAN 1 LAC TO 50000/QUARTER RS 750.

IF LESS THAN 50000 THEN 1000 WILL BE CHARGED

NIL IN THE QUARTER OF THE REGISTRATION. ONE MONTH NOTICE IS GIVEN. BEYOND THIS THE A/C IS DOWNGRADED

RS 500 / QUARTER

CASH WITHDRAWN AT NON HOME BRANCH

RS 1 LAC PER DAY

GREATER THAN 1 LAC 0.325% OF THE AMOUNT WITHDRAWN IS RECOVERED AS CHARGES

WAIVED OFF ( MAX WITHDRAWL LIMIT SELF 50000/DAY, THIRD PART 15000/DAY)

RS 1 LAC/DAY

GREATER THAN 1 LAC 2.5/1000 WILL BE CHARGED

CHARGEABLE, BUT WAIVER AUTHORITY OF RS 2000/ ANNUM PER CUSTOMER IS GIVEN TO THE BH

25% CONCESSION IS GIVEN IN THEIR CHARGES

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CHEQUE COLLECTION CHARGES

FREE FREE ONLY COURIER CHARGES ARE RECOVERED

CHARGEABLE BUT WAIVER AUTHORITY OF 2000/ANNUM IS GIVEN TO BH

RECOVERY OF OUT OF POCKET EXPENSES

PAP CHEQUE BOOK

FREE FREE FREE FREE ONLY 25 LEAVES PER ANNUM

LOCKER DISCOUNT

50% WAIVER NO NO 50 % WAIVER NO

WOMAN A/C

5000 IN TIER A

2500 IN TIER B

A/c opening charges 10000

10000 IN URBAN

7500 IN SEMI URBAN

5000 RURAL

CURRENT A/C

25000

50000

100000

300000

500000

1000000

0

TRADE PLUS

SPECIAL

-------------------

SILVER

------------

BASIC

EASY ACESS

CLASSIC

PREMIUM

GOLD

GOLD PLUS

PLATINUM

-------------

PRIVILEGE

BUSINESS ADVANTAGE

-------------------

BUSINESS CLASSIC

----------------

BUSINESS PRIVILEGE

CHANNEL ONE

BUSINESS GLOBAL

PREMIUM

TRADE

PLUS

------------

MAX

-------------

APEX

--

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FINDINGS

1. Survey was done both on existing customers as well as general public.

2. The survey revealed that most of the people of Ghaziabad were maintaining

their account in ICICI Bank followed by PNB and SBI.

3. 94% people only knew the IDBI Bank by its name but they did not know

whether it is a public or private Bank.

4. The survey also concluded that 50% of the respondents knowing that IDBI

Bank was a private and only 26% knew it as a public Bank.

5. Some of the existing customers were also not aware that the Bank was public

Bank.

6. Most of the people expected better customer service and relationship

management more than the variety of the product and services offered by the

banks

7. As majority of the respondents were not the customer of the bank they were

unaware of the newly launched Nifty Index Fund.

8. The people of Ghaziabad opted branch for their routine transaction then

alternate channels (like ATM, Mobile banking, Tele Banking, Internet).

9. Market share of IDBI Bank is less as compared to other banks in Ghaziabad

and the major players are ICICI, HDFC Bank, SBI Bank, PNB Bank.

10. The people of Ghaziabad said that the maximum promotional activity was

done by ICICI Bank followed by PNB and SBI.

11. Due to lack of promotional campaign the people were not aware about the bank

and its products. Even the existing customers were not aware about the other

products of IDBI.

12. Most of the respondents rated IDBI Bank in average category, comparing in

terms of its service with other banks.

13. 60% of the respondents had not seen any promotional campaign; only 40%

said that they had seen the advertisement.

14. The study revealed that the majority of people of Ghaziabad mainly trusted

Nationalized Bank such as PNB, SBI, and IDBI more than private players.

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RECOMMENDATIONS

1. Firstly the people should be made aware that IDBI bank is public bank, not a

private bank because most of the respondent said so.

2. Also the frequency of the advertisement should also be increased, to remain in

the cut throat environment and also people generally see the advertisement

and compare different product of the banks and are interested in the products

offered and also the bank should also sponsor some sports events which gives

high impact on the mind-set of the customer.

3. The new 300 branches proposed to be opened should be opened with more

customized products and also it should not only target high net worth

customers. And areas like Vasundhara, Indirapuram, etc. of Ghaziabad should

be targeted because there is availability of lack of banks.

4. The people think that the IDBI bank accounts opening charges are very high

(for e.g., they think that if a new account can be opened with Rs 1000 than

why they would spend Rs 5000. So the bank should consider in this regard.

5. More resources should be allocated in the market of Ghaziabad as there is big

untapped market in Ghaziabad, so it becomes necessary for IDBI bank for

taking an edge over the competitors.

6. A short advertising campaign and other local events in Ghaziabad have

produced good results in a short span of times, so to gain long term benefits is

very necessary for IDBI bank to carry on this campaign with more intensity.

7. As Government is the majority share holder in the shares of IDBI bank, which

makes this bank more reliable than other private banks, this thing can be used

in the favour of IDBI bank by making people aware about this fact and

winning their faith.

8. Also the advertisement of IDBI does not reveal anything about the product of

IDBI bank. So the advertisement should also contain information about the

product category of the bank.

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SL NO.-

A Govt. of India owned Bank

NAME

AGE SEX: MALE FEMALE

ADDRESS:

CITY PIN ODE

CONTACT NO. OCCUPATION

1. In which Bank are you maintaining your account? ------------------------------------------------

2. Are you aware of IDBI BANK Limited?

Yes No

3. IDBI BANK is a

Private Bank Semi Private

Public Bank Don’t Know

4. What you would look for in a bank?

Customer Service and Relationship Mangement Accessibility (ATMs, Branch network)

Variety of product and services Trusted Name

5. How would you rate IDBI bank?

Excellent Not Very Good Poor

Good Average

6. Which channels do you use to access the IDBI bank?

Branch/Office Online /Internet Mobile/Telebanking

ATM Other

7. Have you heard about the IDBI Nifty Index Fund (Mutual Fund)?

Yes No

If yes mention the source of the information

8. How many products Baskets of IDBI Bank are you aware of?

Super Shakti women’s account Doctor’s Account

Power Plus saving account Galaxy Silver account

Senior Citizen Account Super saving account

IDBI Fortis IDBI Paisabuilder

9. If given options to choose, which bank will you opt for saving account?

IDBI BANK

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IDBI Bank ICICI bank

SBI PNB

HDFC Axis Bank

Reasons

10. How likely are you to recommend the IDBI Bank to a friend? (circle the number )

Definitely will not definitely will

1 2 3 4 5 6 7

11. Which are the statements best describes your opinion towards the IDBI Bank?

Easy availability of Branch and ATMs

Difficulty in finding Branch and ATMs

Personalized customer services & Relationship Management (Customer Care)

New Generation Govt. Bank

12. Do you think IDBI Bank need more promotional activities?

Yes No

If yes then how

13. Are you aware of alternate channels of IDBI Bank?

Mobile Banking Internet Banking

SMS Banking All of the Above

Pay Mate Service

14. Have you seen any promotional campaign of IDBI?

Yes No

15. Are you aware of the Special products of IDBI like a) Preferred Account and b) Royale Account

Yes No

16. Would you suggest any changes for IDBI Bank in the following fields?

Availability Charges ATMs

Net banking Customer Services & Relationship Management

17. Which Bank according to you provides best services?

State Bank of India (SBI) HDFC Bank

IDBI PNB

ICICI Bank AXIS Bank

(Any other please Specify…………………………………………………………………………….)

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REFERENCES

www.idbibank.com

The Economics times

The Times of India

www.quickmba.com

Research methodology by C.R.Kothari

Thank you………