Business strategy for banks

Introduction

A business strategy describes how a particular business intends to succeed

in its chosen market place against its competitors. It therefore represents the
best attempt that the management can make at defining and securing the
future of that business. A business strategy should provide clear answers to
the questions:

1. What is the scope of the business (or offering) to which this strategy
applies?

2. What are the current and future needs of customers and potential
customers of this business?

3. What are the distinctive capabilities or unique competence that will give
us competitive advantage in meeting these needs now and in the future?

4. What in broad terms needs to be done to secure the future of our business?

These questions should have been addressed during the process of strategy
formulation. The processes and techniques and processes described in Part
III may have contributed to answering them. In this chapter, we are
concerned with some of the practical issues that arise when thinking and
analysis leads into action and commitment.
We are concerned also with what makes the difference between good and
indifferent business strategies.
We suggest that a good business strategy will meet six tests of quality:

1. It will be correctly scoped.

2. It will be appropriately documented.
3. It will address real customer needs.
4. It will exploit genuine competencies.
5. It will contribute to competitive advantage.
6. It will lay the ground for implementation.

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The scope of business strategy

Each separates ‘businesses should have its own business strategy so that a
multiple business enterprise will have a number of separate business
strategies. This raises the practical question of how to define the scope for
each such business. Mathur and Kenyon (1997) have examined this question
rigorously. They suggest that there should be a separate competitive strategy
for each ‘offering’ defined as the unit of customer choice. The unit of
customer choice depends on what the customer is comparing when he or she
makes the buying decision.

Content of a business strategy

There is a tendency for strategy documents to be too long. It should be

possible to read the whole document at a sitting and find it easy to
understand. However, the document should give clear answers to the
questions posed above, concisely and persuasively. Key facts and
summarized analysis should support the answers. It may be appropriate to
refer to more detailed documents or to include telling details.

Strategy content
It would be wrong to be too prescriptive in terms of the format for a business
strategy document but the five headings below are likely to be included:

1. Statement of strategic intent for the business

This should describe in general terms the business as it expects to become in

the future. It should outline in practical and tangible terms how this future is
different from the present. Clearly, the strategic intent for the business has to
relate to the strategic intent for the enterprise as a whole and be coherent
with any other corporate Strategies.

2. Principal findings of strategic assessment

Typically, the strategic assessment will have involved detailed analyses of

both the external business environment and the capabilities of the enterprise.
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Only the most important or most surprising results need to be recorded.

However, this section should provide a reasoned assessment of current status
and future prospects of the business if present strategies were to be
continued. This then makes the case for change in business terms.

3. Strategic choices which have been made and supporting rationale

This section has to summarize the options that have been identified and the
choices made. The reasons for preferring one direction to another have to be
spelt out and must be persuasive. The rationale for strategic choice should be
based on a rigorous analysis of the basis of competitive advantage and how
that will relate to the demonstrable capabilities of the enterprise. It is also
desirable to show how the choice matches the strategic intent of the
enterprise as a whole.

4. Statement of goals and objectives

The overall goal is to realize the strategic intent of the business. More
measurable supporting goals are also very valuable. Objectives should not
all be financial. It is important that some objectives set measures that relate
to the fundamental nature of the business and to meeting customer and
stakeholder needs.

5. Outline of strategic initiatives

This section will outline the principal actions to be undertaken to make the
strategy happen.

Meeting the real needs of customers

The needs of customers are one major driver of business strategy. It is

essential to understand the needs and to identify how to satisfy these needs
more fully, more exactly, or more profitably than competitors. Business
strategy is therefore about beating competitors in meeting customer needs;
beating competitors for other purposes may be fun but it is a distraction. It
follows from this that a deep analysis and understanding of customers’ needs
is essential to produce a good business strategy. It is necessary to understand
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the nature and scope of customers’ needs, how these needs differ between
different groups or individuals, and how these needs are changing. It is
normally the responsibility of the marketing function to understand these
needs. Business strategy is therefore market driven and likely to have very
heavy involvement of marketing people. This does not, however, mean that
a business strategy is the same thing as a marketing strategy. Business
strategy is also heavily influenced by strategic intent, by financial and
human constraints, and in fact by everything that makes the chief
executive’s job different from the marketing director’s.

Types of Business Strategies

There are several types of business strategies implemented in business

environment. The following types of strategies have been recommended by
management experts:
1. Stability Strategy:
An organization that has a stable environment, limited number of
products, customers, suppliers and competitors, minimum need for special
skills and so on may follow what is called the ‘Stability Strategy’. Such an
organization is satisfied with its existing level of activities and wants the
same to continue.

2. Growth Strategy:
An organization that wants to raise its level of performance may adopt what
is called the ‘Growth Strategy’. The following measures are usually adopted
by such an organization:

(i) Development of new products for the existing markets.

(ii) Creation of new uses for the existing products, and

(iii) Development of new products for new markets.

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3. Vertical Integration Strategy:

A business enterprise itself may decide to produce the raw materials needed
for production to ensure continuous supply. On the other hand, it may also
decide to start its own sales outlets to serve its customers better. In either
case, the strategy is known as the ‘Vertical Integration Strategy’.

4. Merger Strategy:
It is also possible that identical business units may combine to rationalize
production and sales and thereby derive the benefits of economics of large-
scale operations. This is what is known as the ‘Merger Strategy’.

5. Product Elimination Strategy:

A business unit may also eliminate products that have become unpopular
with the buyers and bring only losses. Such unsuccessful products also
damage the image of the business. Thus, the ‘Product Elimination Strategy’
may be adopted by a firm to avoid loss of profits as well as reputation.

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Six Strategies to Accelerate Business Banking Sales Now

Six strategies to retune and restore power to your bank's sales engine.

1. Target sales efforts

When times are slow, sales team standards go lower. Salespeople sell to
"everybody" whether or not they are a good fit for the bank, saying, "If we
don't sell to them, somebody else will," or "If I don't sell to them, I won't
make quota." When bank credit standards are high, sales team members can
freeze or give up, saying, "The Loan Center isn't approving anything, or they
change their standards week by week, so why bother?"

Both statements may be true, but they aren't good guides to profitable sales
growth. In many companies, the top 10-20 percent of customers generates 80
percent or more of profits and sales, while the bottom 20-40 percent may be
marginally profitable or unprofitable.

Targeting your sales efforts is a better strategy, in both lean times and good.
Ask yourself and your sales team:

• Do you know who your most profitable (and credit-worthy) accounts

are and why they are profitable? What are the demographics of these
accounts?
• What are the industries, situations, or companies that need the value
you offer? What is your value proposition to them (and it may be
different for specific industries)?
• What specific companies or buying centers within those industries and
companies are you targeting? How are you applying your value
proposition to them?

Then, ask your salespeople the really difficult question: May I see your plan
for attacking these industries and companies? In our experience, most
salespeople have not developed written plans for their businesses, and most
do not have written plans of any length for their top five accounts. If 80
percent of your revenue per salesperson is coming from their top five
accounts, your sales future is at risk.

Action steps:

• Define your value proposition clearly.

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• Define the buyers who are "in" your sales and credit target zones and
those who are "out" of it.
• Align yourself or your sales team members to deliver the best value to
"in target zone" buyers and focus yourself on them through planning
and active strategy coaching.
• Discourage or don't pay incentive compensation for sales that come
from "out of target zone" buyers.

2. Position and differentiate value

Once your sales people open conversations with your target customers and
prospects, you must make sure they can articulate your value proposition
and differentiate it from other banks' propositions. If your bank's credit
standards are more stringent than other banks' standards, this is particularly
important.

Value, in this context, means a change in your customers' business

operations (revenue, costs, risks, time) or feelings about themselves or their
businesses. A "features-advantages-values" assessment will help you and
your salespeople understand and communicate your bank's value.

Action steps:

• Write statements describing what's different about your staff,

products, and work methods and what value those differences create
for your clients.
• Validate with your clients that they see it the same way and that they
will pay for the value either through the fees they pay or the loyalty
they afford you (e.g. by staying with the bank or by giving you first
look and last look at any new opportunity).
• Make sure your salespeople can deliver short statements that describe
your bank's value, distinguish that value from other banks' values, and
demonstrate their own personal value to your clients and prospects.

3. Boost sales capacity

Notice this says "boost capacity," not "hire more salespeople." Particularly
in lean times, sales managers want to reduce costs by reducing headcount,
particularly administrative headcount. Inevitably, they ask salespeople to
take on more and more administrative work, expecting somehow that sales
efforts will continue unabated.
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Research indicates that the average business-to-business salesperson

dedicates less than 30 percent of his or her time to conversations with
prospects and customers. Meanwhile, they spend somewhere between 30-40
percent of their time on administrative tasks, and the balance on servicing
and traveling to and from their accounts. If this is true in your bank, you're
paying your salespeople to be unproductive, and you're making it worse if
you're firing $20-an-hour sales support staff. The numbers may suggest you
might consider hiring more support staff.

Suppose one of your salespeople generates $450,000 of gross profit per year
in 15 hours per week of selling time (30 percent of 50 hours). That's $600
gross profit per selling hour (assuming a 50-week year). If you increase the
sales rep's effective selling time by two hours per week, you could generate
$60,000 in additional gross profit, more than enough to pay for a full-time
administrator for that sales rep.

Action steps:

• Determine time spent on specific tasks and gross profit per selling
hour for all sales reps.
• If profit per selling hour is greater than cost of an administrator per
hour, consider hiring administrative support.
• Design your fulfillment and account management processes to reduce
demands on your sales peoples' time. Eliminate steps that do not add
value to clients.

4. Increase activity discipline

Most sales managers manage most salespeople based on results. Salespeople

love this: "Don't worry about how I do it, boss, just measure my results."
There are several problems with this approach:

• You lose the opportunity to understand the relationships between

activities and results that would help you understand your sales teams'
efficiency and effectiveness.
• You lose opportunities to coach salespeople to higher levels of
performance.
• You lose any hope of consistency in the market.
• You lose sales opportunities.
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Why do you lose sales opportunities? Because salespeople, in general, look

for low-hanging fruit and stop reaching out to buyers who aren't ready to
buy now. For example, check to see how many attempts are needed to book
an appointment with a prospect; we'd expect that the number would be
between three and seven attempts. If your sales activity discipline is low,
we'd also expect that your salespeople will stop calling for appointments
after two or three attempts.

Action steps:

• Develop a success model that connects activities to results.

• Create benchmarks that define the path to success (activities, work in
process and results).
• Coach and manage to the success path benchmarks.

5. Grab market mindshare

Many companies compete for less than 10 percent of the business available
to them because their salespeople aren't aware of or haven't contacted the
prospects and aren't engaged with them when they're ready to make a
change. As a result, prospects feel no connection to your salespeople or your
bank when they're ready to change.

Maintaining prospects' and customers' top-of-mind awareness of your bank

requires a series of "touches" throughout the year. These may be phone calls,
e-mails, encounters at networking or community events, letters, or face-to-
face calls. Once you have identified your targets, touch them consistently
and relentlessly. This includes the touches needed to obtain appointments
and maintain top-of-mind awareness after initial contact.

To ensure that you and your salespeople are focusing your touches on the
best targets, tier your prospects and customers and determine how many
touches are appropriate for each tier. For example, you might determine:

• Six to eight touches per year for high potential/most profitable

prospects, of which two or three should be face to face.
• Four to six touches for medium potential prospects and top tier clients.
• Two to four touches for low potential prospects and low and medium
tier clients.
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To maximize your sales team's efficiency, use automated software to

generate letters or emails, and use support staff to manage the paperwork.

6. Pay for performance

The number one mistake in sales compensation is paying salespeople for not
selling or for underperformance. Fixing this mistake is usually beyond the
scope of team leaders, within the scope of line-of-business leaders or
segment leaders, and so time-consuming (working with HR, handling all of
the legal issues) that many sales leaders fiddle with the incentive
compensation plan without making major changes.

That said: If salespeople can earn what they need without doing what you
want them to, you won't get what you want. You can't make salespeople earn
more than they want to earn. To fix this problem (these are the steps I
recommend, but I'm not saying it's easy), think about compensation in three
levels: need to survive (pay rent, etc.), want (important add-ons like fancier
vacations, private lessons for the kids, etc.) and dream (the obscenely fast
car, the BIG house, etc.). Then:

• Define the outcomes you want very clearly.

• Connect incentive compensation to outcomes you want.
• Set base and incentive compensation at goal to cover "need to
survive" plus a little "want."
• Set additional compensation (performance above goal) to cover some
portion of "want."
• For extraordinary performance (you define this), set incentive
compensation to cover "want" and some percentage of "dream."

A frequently asked question is how much of "need to survive" should you

put at risk? There's no right answer to this. However, if you want your
salespeople to pay attention to client relationships, service and internal
paperwork or activities, pay a base compensation and communicate and
enforce expectations of activity and outcomes you expect for the base.
Placing 15-25 percent at risk is fairly common in these settings.

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Communication Strategy for Banks

These are turbulent times. Even though the economy seems to be

rebounding, banking and finance businesses are still not running at their
typical pace. It's an environment ripe for change. If you are rebranding,
opening new markets or party to an acquisition or merger, your
communication strategy can make all the difference in not only maintaining
your customer relationships through the change but also set up for long term
growth.

The goal of any communication strategy at this time should be to reassure

and build trust in the new bank in order to protect the existing customer
base. This is especially true when a bank gets taken over by the FDIC. In
this situation, customers have already started withdrawing their money. And
those customers that remain are a high attrition risk. The communication
tactics listed below are all easy to execute at a low-cost. They need to
happen immediately after the bank changes ownership. Time is of the
essence.

• Send each customer a formal letter signed by both the out-going bank
president as well as the new bank president explaining the transition
and introducing customers to new bank branch personnel. If the
change is due to an FDIC take-over, the FDIC will also send a form
letter. However, this letter is typically not customer-friendly. Rather,
it is legal speak and can be perceived by customers as confusing and
harsh.
• There will be operational questions from customers about getting new
checks/debit cards, etc. These changes should be listed out very
clearly in an FAQ that is customer friendly and minimizes bank-
speak. The FAQs should be available online as well as in hard copy
with the letter of introduction or when customers visit the branch.
• The Branch Manager should be present and visible throughout the
transition period to welcome customers who visit the branch. In an
FDIC take-over situation, typically FDIC representatives will be at the
bank the first few days after the take-over to explain the situation. To

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ensure long term success and protect the customer base, a

representative from the new bank should be there as well.
• Hold an open house to welcome customers and invite discussion with
customers. Serve food and beverages.
• Make available a "back-pocket" retention offer. If customers are
taking their money out, arm tellers and personal bankers with a rate
offer to get them to keep their deposits at the bank.
• Develop copy points for the staff so they are comfortable talking with
customers about the situation. Transitions can be very complicated
and confusing to the staff as well as to customers. Make sure branch
staffers are is clear on how to respond to customers' questions to
minimize the potential of miscommunication and false rumors.
• Identify customers that have recently left and invite them back with a
special rate offer. This could be done by call-downs or via direct mail.
• Identify top customers of the bank (highest deposits, multiple
accounts, etc) and have the new branch manager personally call them
to notify them of the change.
• Ensure that messaging is consistent across all marketing channels (in-
branch and online). If the bank failed, their website should be
redirected to the new bank's website with a special flash page
explanation of the transition, welcoming customers to the new bank.
Online access to accounts should not be interrupted. Ensure that
messaging is consistent across all channels.
• Make all customer-oriented transition information like FAQs
available online.
• Create a special email address for customers to contact with questions
and concerns. Ensure that these questions are answered in a timely
manner and are consistent with other communications. Create an
escalation procedure for those issues that are more complex.
• Outdoor temporary signage (sandwich boards, easels) should welcome
customers with old and new logo. Lobby signage should reinforce the
transition.

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CRM STRATEGY
Importance of CRM

Customer relationship management is a broad approach for creating,

maintaining and expanding customer relationships. CRM is the business
strategy that aims to understand, anticipate, manage and personalize the
needs of an organization’s current and potential customers. At the heart of a
perfect strategy is the creation of mutual value for all parties involved in the
business process. It is about creating a sustainable competitive advantage by
being the best at understanding, communicating, and delivering and
developing existing customer relationships in addition to creating and
keeping new customers. So the concept of product life cycle is giving way to
the concept of customer life cycle focusing on the development of products
and services that anticipate the future need of the existing customers and
creating additional services that extend existing customer relationships
beyond transactions.
Present and Future of CRM in banking

Bank merely an organization it accepts deposits and lends money to the

needy persons, but banking is the process associated with the activities of
banks. It includes issuance of cheque and cards, monthly statements, timely
announcement of new services, helping the customers to avail online and
mobile banking etc. Huge growth of customer relationship management is
predicted in the banking sector over the next few years. Banks are aiming to
increase customer profitability with any customer retention. This paper deals
with the role of CRM in banking sector and the need for it is to increase
customer value by using some analytical methods in CRM applications. It is
a sound business strategy to identify the bank’s most profitable customers
and prospects, and devotes time and attention to expanding
account relationships with those customers through individualized
marketing, pricing, discretionary decision making.
In banking sector, relationship management could be defined as having and
acting upon deeper knowledge about the customer, ensure that the customer
such as how to fund the customer, get to know the customer, keep in tough
with the customer, ensure that the customer gets what he wishes from
service provider and understand when they are not satisfied and might leave
the service provider and act accordingly.

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CRM in banking industry entirely different from other sectors, because

banking industry purely related to financial services, which needs to create
the trust among the people. Establishing customer care support during on
and off official hours, making timely information about interest payments,
maturity of time deposit, issuing credit and debit cum ATM card, creating
awareness regarding online and e-banking, adopting mobile request etc are
required to keep regular relationship with customers.
The present day CRM includes developing customer base. The bank has to
pay adequate attention to increase customer base by all means, it is possible
if the performance is at satisfactory level, the existing clients can
recommend others to have banking connection with the bank he is
operating. Hence asking reference from the existing customers can develop
their client base. If the base increased, the profitability is also increase.
Hence the bank has to implement lot of innovative CRM to capture and
retain the customers.
There is a shift from bank centric activities to customer centric activities are
opted. The private sector banks in India deployed much innovative strategies
to attract new customers and to retain existing customers. CRM in banking
sector is still in evolutionary stage, it is the time for taking ideas from
customers to enrich its service. The use of CRM in banking has gained
importance with the aggressive strategies for customer acquisition and
retention being employed by the bank in today’s competitive milieu. This
has resulted in the adoption of various CRM initiatives by these banks.
Steps to follow
The following steps minimize the work regarding adoption of CRM strategy.
These are: Identification of proper CRM initiatives
Implementing adequate technologies in order to assist CRM initiative
Setting standards (targets) for each initiative and each person involved in
that circle Evaluating actual performance with the standard or benchmark
Taking corrective actions to improve deviations, if any
Customer Relationship Management is concerned with attracting,
maintaining and enhancing customer relationship in multi service
organizations. CRM goes beyond the transactional exchange and enables the
marketer to estimate the customer’s sentiments and buying intentions so that
the customer can be provided with products and services before the starts
demanding. Customers are the backbone of any kind of business activities,
maintaining relationship with them yield better result
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Banking of Tomorrow

The emerging trends in the banking sector, especially in the HR area. All of
you as HR managers will surely agree that HR development and
management cannot be seen in isolation but in the context of the business
and operational environment. The high level of competition in the market,
increased awareness and quality consciousness of the people, changing
social values, increasing emphasis on good corporate governance, etc. have
influenced the changes in the environment in a significant way. Yet, today, if
there has been a sea change in the way banking business, both retail and
otherwise, is conducted across the country and even beyond, it is primarily
due to rapid advancement in technology. I would, therefore, like to spend a
while exploring how technology has changed the face of banking and the
shape of things to come in the foreseeable future before identifying the HR
related issues.
Over the last three decades or so, there has been a remarkable increase in the
size, spread and activities of banks in India. The number of bank branches
rose considerably during this period. The business profile of banks has
transformed dramatically to include non-traditional activities like merchant
banking, mutual funds, new financial services and products, personal
investment counseling, etc. The entry of new banks intensified the
competition to attract and retain customers. Computerisation was inevitable
both in the interest of customer service and operational efficiency.
The Rangarajan Committee report in the early 1980s perhaps served as the
first blueprint for computerization and mechanization of banks in the
country. Since then banks have traveled a long way through various phases

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viz. from Automatic Ledger Posting Machines (ALPMs) to Total Branch

Automation to ATMs, mobile ATMs, internet banking, etc. Today, banks
are vying with each other to offer their customers not just Anytime Banking
but Anywhere Anytime Banking. All these advancements primarily aimed
at providing better and more innovative services to customers.
With a view to bringing about improvements in the systemic efficiency of
the banking sector, the Reserve Bank of India has taken quite a few
initiatives in the recent years.
The introduction of MICR technology for cheque processing introduced
initially in the metropolitan cities in the late 1980s was one such initiative.
The establishment of the INFINET (Indian Financial Network) was another
major initiative of RBI. This was prompted by the perceived need for a
robust means of communication not only between branches of banks or
across different banks but also with the constituents of banks. The INFINET,
which has been functional for over 3 years now, is an efficient and cost-
effective communication backbone for the Banking and Financial Sector. It
offers an exclusive, safe and secure communication network for the use of
the banking sector. The network is managed by the Institute for
Development Research in Banking Technology (IDRBT) at Hyderabad.
Today, banking requires decision making on the basis of empirical data and
it is imperative that information managers use the best available means for
information transfer on real time basis. The INFINET provides the required
infrastructure and it remains to be seen as to how best the banks exploit its
potential.
One of the areas which could derive considerable benefit from the advances
in computing and communication technology and in which the Reserve
Bank is playing a key role relates to payment and settlement systems. As
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you are all aware, payments in India are largely cash based although there
are non-cash based payments as well. The usage of electronic means of
funds movement and settlement is slowly but surely acquiring importance.
The Electronic Clearing Services (ECS) – both Debit Clearing and Credit
Clearing has helped eliminate avoidable paper instruments in respect of
large volume but relatively small value payments of repetitive nature. The
Electronic Fund Transfer (EFT) system has facilitated remittance of funds
from one bank branch to an account in another bank branch at a different
centre quickly and securely
To have secured and safe transfers the Structured Financial Messaging
Solution (SFMS) – an application which would be riding on the INFINET
communication backbone has been introduced by RBI. SFMS would have
adequate security measures incorporated including that of PKI - Public Key
Infrastructure, with encryption software comparable to some of the best
implementations in the world. The message formats used in SFMS are very
similar to those used by SWIFT, resulting in ease of usage by banking
community in the country. This secure messaging backbone can be used for
a number of intra-bank applications also.
The Centralised Funds Management System (CFMS), the Centralised Public
Debt Office (PDO) project comprising the Negotiated Dealing System
(NDS) and the Securities Settlement System (SSS), the Real Time Gross
Settlement System (RTGS) are a few other products which are slated to
assume a significant role in the near future.
The initiatives that I have mentioned have a cascading effect on the
functioning of banks. It is essential that all the banks are equipped with
synchronous computer systems. The proliferation of a variety of platforms –
relating to hardware, operating systems, software and application software
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has resulted in many banks having different platforms; it has thus become
essential to have interfaces, which would ensure seamless integration across
different systems. While the central inter-bank applications developed and
provided by the Reserve Bank would have well tested Application
Programme Interfaces (APIs) which would achieve this objective, banks
would have to get their internal software ready for this purpose.
Various other forms of electronic based payments have also been slowly
making their viz., Credit cards, ATMs, Stored Value cards, Shared
Payment Network Services (SPNS), etc. and I am sure you are aware of the
role of technology in respect of these.

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HRM Strategy
Banks are adopting and adapting to technological tools to further their
businesses. This new technology is transforming the skill structure in
banking.
1. What then exactly is the impact of technology on the human resources
employed in banking?
2. How should an HR Manager in a bank respond to this fast changing
scenario?
For the first question, we do have some answers thanks to a study by OECD
on the impact of technology on human resources in banking companies in
France, Japan, Germany, Sweden and the United States of America. In the
study, the authors compared the old competencies with the emerging new
competencies and the findings were as follows :
Changing Competencies
Old Competencies New Competencies
1 Ability to operate in well Ability to operative in ill-defined and
defined and stable ever changing environment.
.
environment
2 Capacity to deal with Capacity to deal with routine and
repetitive straight-forward abstract work process
.
and concrete work process
3 Ability to operate in a Ability to handle decisions and
supervised work environment responsibilities
.
4 Isolated work Group work, Interactive work
.
5 Ability to operative within System-wide understanding, ability to
narrow geographical and time operative within expanding
.
horizons geographical and time horizons
6 Broad unspecified knowledge Specialized knowledge
.
7 Procedural competencies Customer assistance oriented
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. competencies.
- Human Resource Management in Banks –

These new and enhanced skills would require new knowledge and
behavioral adjustments in respect of existing human resources.
How should an HR Manager in a bank respond to this fast changing
scenario? In this context, the training system will emerge as an important
tool of intervention. The training system in the banking industry has a strong
structural base. However, in the past the training activities have been more
ritualistic due to absence of a strategic link between training and human
resources development. Today, it is important that the training function is
made an effective organizational intervention by establishing a clear policy
of training and development within the framework of total human resource
development. The training establishments need to be actively involved in the
total training process starting from the identification of training needs,
evaluation of training effectiveness and the benefits of training to the end-
users viz. the internal and external customers.

The core function of HRD in the banking industry is to facilitate

performance improvement, measured not only in terms of financial
indicators of operational efficiency but also in terms of the quality of
financial services provided. Factors like skills, attitudes and knowledge of
the human capital play a crucial role in determining the competitiveness of
the financial sector. The quality of human resources indicates the ability of
banks to deliver value to customers. Capital and technology are replicable
but not the human capital which needs to be valued as a highly valuable
resource for achieving that competitive edge. The primary emphasis needs

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to be on integrating human resource management strategies with the

business strategy. HRM strategies include managing change, creating
commitment, achieving flexibility and improving teamwork. The other
processes representing the overt aspects of HRM, viz. recruitment,
placement, performance management are complementary.

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MARKETING STRATEGY

Marketing approach in banking sector had taken significance after 1950 in

western countries and then after 1980 in Turkey. New banking
perceptiveness oriented toward market had influenced banks to create new
market. Banks had started to perform marketing and planning techniques in
banking in order to be able to offer their new services efficiently. Marketing
scope in banking sector should be considered under the service marketing
framework. Performed marketing strategy is the case which is determination
of the place of financial institutions on customers’ mind. Bank marketing
does not only include service selling of the bank but also is the function
which gets personality and image for bank on its customers’ mind. On the
other hand, financial marketing is the function which relates uncongenitalies,
differences and non similar applications between financial institutions and
judgement standards of their customers.

The reasons for marketing scope to have importance in banking and for
banks to interest in marketing subject can be arranged as:

Product
 Product variety
 Quality
 Design
 Features
 Brand Name
 Packaging

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 Sizes
 Services

Price
 List price
 Discounts
 Allowances
 Payment period
 Credit cards

Promotion
 Sales promotion
 Advertising
 Sales force
 Public relations
 Direct marketing

Place

 Channels

 Coverage

 Assortments

 Locations

 Inventory

 Transport

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THE MARKETING MIX IN BANKING SECTOR SERVICE

Recently, banks are in a period that they earn money in servicing beyond
selling money. The prestige is get as they offer their services to the masses.
Like other services, banking services are also intangible. Banking services
are about the money in different types and attributes like lending, depositing
and transferring procedures. These intangible services are shaped in
contracts. The structure of banking services affects the success of institution
in long term. Besides the basic attributes like speed, security and ease in
banking services, the rights like consultancy for services to be compounded
are also preferred.

PRICE
The price which is an important component of marketing mix is named
differently in the base of transaction exchange that it takes place. Banks have
to estimate the prices of their services offered. By performing this, they keep
their relations with extant customers and take new ones. The prices in
banking have names like interest, commission and expenses. Price is the sole
element of marketing variables that create earnings, while others cause
expenditure. While marketing mix elements other than price affect sales
volume, price affect both profit and sales volume directly. Banks should be
very careful in determining their prices and price policies. Because mistakes
in pricing cause customers’ shift toward the rivals offering like wise
services.

DISTRIBUTION

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The complexities of banking services are resulted from different kinds of

them. The most important feature of banking is the persuasion of customers
benefiting from services. Most banks’ services are complex in attribute and
when this feature joins the intangibility characteristics, offerings take also
mental intangibility in addition to physical intangibility. On the other hand,
value of service and benefits taken from it mostly depend on knowledge,
capability and participation of customers besides features of offerings. This
is resulted from the fact that production and consumption have non separable
characteristics in those services. Most authors argue that those features of
banking services makes personal interaction between customer and bank
obligatory and the direct distribution is the sole alternative. Due to this
reason, like preceding applications in recent years, branch offices use
traditional method in distribution of banking services.

PROMOTION

One of the most important element of marketing mix of services is

promotion which is consist of personal selling, advertising, public relations,
and selling promotional tools.

PERSONAL SELLING
Due to the characteristics of banking services, personal selling is the way
that most banks prefer in expanding selling and use of them. Personal selling
occurs in two ways. First occurs in a way that customer and banker perform
interaction face to face at branch office. In this case, whole personnel, bank
employees, chief and office manager, takes part in selling. Second occurs in
a way that customer representatives go to customers’ place. Customer
representatives are specialist in banks’ services to be offered and they shape
the relationship between bank and customer.

ADVERTISING

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Banks have too many goals which they want to achieve. Those goals are for
accomplishing the objectives as follows in a way that banks develop
advertising campaigns and use media.
1. Conceive customers to examine all kinds of services that banks offer
2. Increase use of services
3. Create well fit image about banks and services
4. Change customers’ attitudes
5. Introduce services of banks
6. Support personal selling
7. Emphasize well service

Advertising media and channels that banks prefer are newspaper, magazine,
radio, direct posting and outdoor ads and TV commercials. In the selection
of media, target market should be determined and the media that reach this
target easily and cheaply must be preferred.

Banks should care about following criteria for selection of media.:

1. Which media the target market prefer

2. Characteristics of service
3. Content of message
4. Cost
5. Situation of rivals

PUBLIC RELATIONS

Public relations in banking should provide;

1. Establishing most effective communication system

2. Creating sympathy about relationship between bank and customer

3. Giving broadest information about activities of bank.

It is observed that the banks in Turkey perform their own publications,

magazine and sponsoring activities.

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RELATIONSHIP MARKETING
It was mentioned that close relationship was established between producer
and customer in service sector. In addition to this, life cycle of a customer
relationship was also mentioned under the product outline. According to the
researchers, maintaining the relationship for extant customer increases the
profit of firms. It should be emphasized that this fact has an importance for
service sector

SELLING PROMOTIONAL TOOLS

Another element of the promotion mixes of banks is improvement of selling.
Mostly used selling improvement tools are layout at selling point, rewarding
personnel, seminaries, special gifts, premiums, contests.

INTERNAL MARKETING
Especially in service sector like external relations, internal relations also
have significance. It requires finding and keeping successful personnel. For
personnel of the organization to be considered their own goals and service
situation, values of the organization are sold to them. The communication
techniques carried out for customers are also performed for the personnel in
internal marketing and this two techniques go together. For example, the ads
that aim creating firm’s image should be prepared with regarding to
audience which is composed of firm’s personnel.

NETWORK MARKETING
This approach takes the organization as a sequence which involves producer
and customer that market services to each other in the organization. In this
structure, the activities of departments that compose organization would be
more focused on market. This will also affect the structure of organization.

DEVELOPMENT IN MARKETING SCOPE AT THE ASPECT OF

SERVICE MARKETING

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Marketing scope develops day to day. These developments carry special

significance for service sector in which customer and service producer
interact closely.
TECHNOLOGY STRATEGY

1. Technology will bring fundamental shift in the functioning of banks. It

would not only help them bring improvements in their internal functioning
but also enable them to provide better customer service. Technology will
break all boundaries and encourage cross border banking business. Banks
would have to undertake extensive Business Process Re-Engineering and
tackle issues like

a) how best to deliver products and services to customers

b) designing an appropriate organizational model to fully capture the

benefits of technology and business process changes brought about.

c) how to exploit technology for deriving economies of scale and how to

create cost efficiencies, and

d) how to create a customer - centric operation model.

2. Entry of ATMs has changed the profile of front offices in bank branches.
Customers no longer need to visit branches for their day to day banking
transactions like cash deposits, withdrawals, cheque collection, balance
enquiry etc. E-banking and Internet banking have opened new avenues in
“convenience banking”. Internet banking has also led to reduction in
transaction costs for banks to about a tenth of branch banking.

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3. Technology solutions would make flow of information much faster, more

accurate and enable quicker analysis of data received. This would make the
decision making process faster and more efficient. For the Banks, this would
also enable development of appraisal and monitoring tools which would
make credit management much more effective. The result would be a
definite reduction in transaction costs, the benefits of which would be shared
between banks and customers.

4. While application of technology would help banks reduce their operating

costs in the long run, the initial investments would be sizeable. IT spent by
banking and financial services industry in USA is approximately 7% of the
revenue as against around 1% by Indian Banks. With greater use of
technology solutions, we expect IT spending of Indian banking system to go
up significantly.

5 One area where the banking system can reduce the investment costs in
technology applications is by sharing of facilities. We are already seeing
banks coming together to share ATM Networks. Similarly, in the coming
years, we expect to see banks and FIs coming together to share facilities in
the area of payment and settlement, back office processing, data
warehousing, etc. While dealing with technology, banks will have to deal
with attendant operational risks. This would be a critical area the Bank
management will have to deal with in future.

6. Payment and Settlement system is the backbone of any financial market

place.

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The present Payment and Settlement systems such as Structured Financial

Messaging System (SFMS), Centralised Funds Management System
(CFMS), Centralised Funds Transfer System (CFTS) and Real Time Gross
Settlement System (RTGS) will undergo further fine-tuning to meet
international standards. Needless to add, necessary security checks and
controls will have to be in place. In this regard, Institutions such as IDRBT
will have a greater role to play.

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RISK MANAGEMENT STRATEGY

1. Risk is inherent in any commercial activity and banking is no exception to this

rule. Rising global competition, increasing deregulation, introduction of
innovative products and delivery channels have pushed risk management to the
forefront of today’s financial landscape . In the regulated banking environment,
banks had to primarily deal with credit or default risk. As we move into a perfect
market economy, we have to deal with a whole range of market related risks like
exchange risks, interest rate risk, etc. Operational risk, which had always existed
in the system, would become more pronounced in the coming days as we have
technology as a new factor in today’s banking. Traditional risk management
techniques become obsolete with the growth of derivatives and off-balance sheet
operations, coupled with diversifications. The expansion in E-banking will lead to
continuous vigilance and revisions of regulations.

2. Building up a proper risk management structure would be crucial for the banks
in the future. Banks would find the need to develop technology based risk
management tools. The complex mathematical models programmed into risk
engines would provide the foundation of limit management, risk analysis,
computation of risk-adjusted return on capital and active management of banks’
risk portfolio. Measurement of risk exposure is essential for implementing
hedging strategies.

3. Under Basel II accord, capital allocation will be based on the risk inherent in
the asset. The implementation of Basel II accord will also strengthen the
regulatory review process and, with passage of time, the review process will be

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more and more sophisticated. Besides regulatory requirements, capital

allocation would also be determined by the market forces. External users of
financial information will demand better inputs to make investment decisions.
More detailed and more frequent reporting of risk positions to banks’
shareholders will be the order of the day. There will be an increase in the growth
of consulting services such as data providers, risk advisory bureaus and risk
reviewers. These reviews will be intended to provide comfort to the bank
managements and regulators as to the soundness of internal risk management
systems.

4. Risk management functions will be fully centralized and independent from the
business profit centres. The risk management process will be fully integrated
into the business process. Risk return will be assessed for new business
opportunities and incorporated into the designs of the new products. All risks –
credit, market and operational and so on will be combined, reported and
managed on an integrated basis. The demand for Risk Adjusted Returns on
Capital (RAROC) based performance measures will increase. RAROC will be
used to drive pricing, performance measurement, portfolio management and
capital management.

5. Risk management has to trickle down from the Corporate Office to branches or
operating units. As the audit and supervision shifts to a risk based approach
rather than transaction orientation, the risk awareness levels of line functionaries
also will have to increase. Technology related risks will be another area where
the operating staff will have to be more vigilant in the coming days.

6. Banks will also have to deal with issues relating to Reputational Risk as they
will need to maintain a high degree of public confidence for raising capital and
other resources. Risks to reputation could arise on account of operational lapses,
opaqueness in operations and shortcomings in services. Systems and internal
controls would be crucial to ensure that this risk is managed well.

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7. The legal environment is likely to be more complex in the years to come.

Innovative financial products implemented on computers, new risk management
software, user interfaces etc., may become patentable. For some banks, this
could offer the potential for realizing commercial gains through licensing.

8. Advances in risk management (risk measurement) will lead to transformation

in capital and balance sheet management. Dynamic economic capital
management will be a powerful competitive weapon. The challenge will be to put
all these capabilities together to create, sustain and maximise shareholders’
wealth. The bank of the future has to be a total-risk-enabled enterprise, which
addresses the concerns of various stakeholders’ effectively.

9. Risk management is an area the banks can gain by cooperation and sharing of
experience among themselves. Common facilities could be considered for
development of risk measurement and mitigation tools and also for training of
staff at various levels. Needless to add, with the establishment of best risk
management systems and implementation of prudential norms of accounting and
asset classification, the quality of assets in commercial banks will improve on the
one hand and at the same time, there will be adequate cover through
provisioning for impaired loans. As a result, the NPA levels are expected to
come down significantly.

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IT business strategy for bank’s

After the Japanese "Financial Industry Big Bang" and recession in the
1990s, Japanese banks faced many challenges: significant “bad debt” losses,
new players entering the banking business, and fewer good corporate
customers. Many banks have had to change their cost structures and business
model to survive.
One of the largest regional banks in the southern part of Japan made a
strategic decision to consolidate small regional banks to compete with mega-
banks. The mega-banks were expanding their markets from metropolitan to
regional areas to find good corporate and individual customers.
But the bank was not sure whether or not the consolidation of IT systems
would be more costly than the business benefit.

Challenge
A.T. Kearney was engaged to assess the bank’s consolidation strategy -
encompassing both the business and IT strategies. The project’s three
primary objectives included:

1. Clarification of strategic issues for IT and business, regarding the

consolidation of small banks
2. Basic IT and business strategy for consolidating additional banks in
the near future
3. Reduced IT costs for the first stage of consolidation

Approach
The project teams, which included A.T. Kearney consultants, employed a

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structured approach to address the interrelated issues between business and

IT strategies:

• Prioritized each business system based on the current level of

functionality and business value before and after consolidation
• Established benchmarks of IT cost structures supporting each business
system in the Japanese banking industry
• Analyzed zero-based approaches to establish a scenario for minimized
IT consolidation cost and maximized business consolidation values
• For each variant in the scenario, clarified the "best and why"
• Defined key elements of business and IT strategies for future
consolidation to minimize cost and maximize strategic value

Results
Using IT as the consolidation scenario, the teams completed projects for
over 50 business sub-systems, providing the bank a joint IT / business
consolidation strategy. At the same time, the project achieved significant
savings with more than 10 percent reduction of consolidation cost, for over
$30 million.
In addition, the teams developed metrics for implementing and supporting
the bank’s future consolidation strategy. And with the bank’s the next
consolidation, it is likely to become the top regional bank in Japan – based
on the new IT / business strategy.

Internet Banking (E-Banking)

Internet banking (or E-banking) means any user with a personal computer
and a browser can get connected to his bank -s website to perform any of the
virtual banking functions. In internet banking system the bank has a
centralized database that is web-enabled. All the services that the bank has
permitted on the internet are displayed in menu. Any service can be selected
and further interaction is dictated by the nature of service. The traditional
branch model of bank is now giving place to an alternative delivery channels
with ATM network. Once the branch offices of bank are interconnected
through terrestrial or satellite links, there would be no physical identity for
any branch.
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It would a borderless entity permitting anytime, anywhere and anyhow

banking.
The network which connects the various locations and gives connectivity to
the central office within the organization is called intranet. These networks
are limited to organizations for which they are set up. SWIFT is a live
example of intranet application.

Internet banking in India

The Reserve Bank of India constituted a working group on Internet Banking.

The group divided the internet banking products in India into 3 types based
on the levels of access granted. They are:

 Information Only System: General purpose information like interest

rates, branch location, bank products and their features, loan and
deposit calculations are provided in the banks website. There exist
facilities for downloading various types of application forms. The
communication is normally done through e-mail. There is no
interaction between the customer and bank's application system. No
identification of the customer is done. In this system, there is no
possibility of any unauthorized person getting into production systems
of the bank through internet.

 Electronic Information Transfer System: The system provides

customer- specific information in the form of account balances,
transaction details, and statement of accounts. The information is still
largely of the 'read only' format. Identification and authentication of
the customer is through password. The information is fetched from the
bank's application system either in batch mode or off-line. The
application systems cannot directly access through the internet.

 Fully Electronic Transactional System: This system allows bi-

directional capabilities. Transactions can be submitted by the
customer for online update. This system requires high degree of
security and control. In this environment, web server and application
systems are linked over secure infrastructure. It comprises technology

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covering computerization, networking and security, inter-bank

payment gateway and legal infrastructure.

 Automated Teller Machine (ATM): ATM is designed to perform

the most important function of bank. It is operated by plastic card with
its special features. The plastic card is replacing cheque, personal
attendance of the customer, banking hours restrictions and paper
based verification. There are debit cards. ATMs used as spring board
for Electronic Fund Transfer. ATM itself can provide information
about customers account and also receive instructions from customers
- ATM cardholders. An ATM is an Electronic Fund Transfer terminal
capable of handling cash deposits, transfer between accounts, balance
enquiries, cash withdrawals and pay bills. It may be on-line or 0ff-
line. The on-line ATM enables the customer to avail banking
facilities from anywhere. In off-line the facilities are confined to that
particular ATM assigned. Any customer possessing ATM card issued
by the Shared Payment Network System can go to any ATM linked to
Shared Payment Networks and perform his transactions.

 Credit Cards/Debit Cards: The Credit Card holder is empowered to

spend wherever and whenever he wants with his Credit Card within
the limits fixed by his bank. Credit Card is a post paid card. Debit
Card, on the other hand, is a prepaid card with some stored value.
Every time a person uses this card, the Internet Banking house gets
money transferred to its account from the bank of the buyer. The
buyers account is debited with the exact amount of purchases. An
individual has to open an account with the issuing bank which gives
debit card with a Personal Identification Number (PIN). When he
makes a purchase, he enters his PIN on shops PIN pad. When the card
is slurped through the electronic terminal, it dials the acquiring bank
system - either Master Card or VISA that validates the PIN and finds
out from the issuing bank whether to accept or decline the
transactions. The customer can never overspend because the system
rejects any transaction which exceeds the balance in his account. The
bank never faces a default because the amount spent is debited
immediately from the customers account.

 Smart Card: Banks are adding chips to their current magnetic stripe
cards to enhance security and offer new service, called Smart Cards.
Smart Cards allow thousands of times of information storable on
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magnetic stripe cards. In addition, these cards are highly secure, more
reliable and perform multiple functions. They hold a large amount of
personal information, from medical and health history to personal
banking and personal preferences.

Core Banking Solutions

Core Banking Solutions is new jargon frequently used in banking circles.

The advancement in technology especially internet and information
technology has led to new way of doing business in banking. The
technologies have cut down time, working simultaneously on different
issues and increased efficiency. The platform where communication
technology and information technology are merged to suit core needs of
banking is known as Core Banking Solutions. Here computer software is
developed to perform core operations of banking like recording of
transactions, passbook maintenance, interest calculations on loans and
deposits, customer records, balance of payments and withdrawal are done.
This software is installed at different branches of bank and then
interconnected by means of communication lines like telephones, satellite,
internet etc. It allows the user (customers) to operate accounts from any
branch if it has installed core banking solutions. This new platform has
changed the way banks are working. Now many advanced features like
regulatory requirements and other specialised services like share (stock)
trading are being provided.

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Mobile Banking

Mobile banking (also known as M-Banking, mbanking, SMS Banking etc.)

is a term used for performing balance checks, account transactions,
payments etc. via a mobile device such as a mobile phone. Mobile
banking today (2007) is most often performed via SMS or the Mobile
Internet but can also use special programs called clients downloaded to
the mobile device. Mobile Banking Services:

Account Information

Payments, Deposits, Withdrawals, and Transfers

Investments (Portfolio management services, Real-time stock quotes,

personalized alerts and notifications on security
prices)

Real Time Gross Settlement (RTGS)

RTGS is an electronic settlement system of Reserve Bank of

India without involvement of papers. To facilitate an Efficient, Secure,
Economical, Reliable and Expeditious System of Fund transfer and clearing
in the Banking sector throughout India. Real time gross settlement systems
(RTGS) are a funds transfer mechanism where transfer of money takes place
from one bank to another on a "real time" and on "gross" basis. Settlement in
"real time" means payment transaction is not subjected to any waiting
period. The transactions are settled as soon as they are processed. "Gross
settlement" means the transaction is settled on one to one basis without
bunching with any other transaction. Once processed, payments are final and
irrevocable.

Electronic Clearing Service

Electronic Clearing Service is another technology enhancement happened in

the banking industry. The customer willing to use this facility are required to

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fill in the mandate form from the corporate/any utility service institution for
ECS mode of credit and debit. The customer needs to prepare the payment
date and submit it to the “sponsor Bank” and after that every thing happened
[Link] customer can there by make payments as well as receive all
incomes electonically.

REGULATORY AND LEGAL ENVIRONMENT

1. The advent of liberalization and globalization has seen a lot of changes in the
focus of Reserve Bank of India as a regulator of the banking industry. De-
regulation of interest rates and moving away from issuing operational
prescriptions have been important changes. The focus has clearly shifted from
micro monitoring to macro management. Supervisory role is also shifting more
towards off-site surveillance rather than on-site inspections. The focus of
inspection is also shifting from transaction-based exercise to risk-based
supervision. In a totally de-regulated and globalised banking scenario, a strong
regulatory framework would be needed. The role of regulator would be critical
for:

a) ensuring soundness of the system by fixing benchmark standards for

capital adequacy and prudential norms for key performance

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parameters.
b) adoption of best practices especially in areas like risk-management,
provisioning, disclosures, credit delivery, etc.
c) adoption of good corporate governance practices.
d) creation of an institutional framework to protect the interest of
depositors.
e) regulating the entry and exit of banks including cross-border
institutions.

Further, the expected integration of various intermediaries in the financial system

would add a new dimension to the role of regulators. Also as the co-operative
banks are expected to come under the direct regulatory control of RBI as against
the dual control system in vogue, regulation and supervision of these institutions
will get a new direction.
Some of these issues are addressed in the recent amendment Bill to the Banking
Regulation Act introduced in the Parliament.

2 .The integration of various financial services would need a number of legislative

changes to be brought about for the system to remain contemporary and
competitive. The need for changes in the legislative framework has been felt in
several areas and steps have been taken in respect of many of these issues,
such as,

i) abolition of SICA / BIFR setup and formation of a National Company

Law Tribunal to take up industrial re-construction.
Ii) enabling legislation for sharing of credit information about borrowers
among lending institutions.

Integration of the financial system would change the way we look at banking
functions. The present definition of banking under Banking Regulation Act

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would require changes, if banking institutions and non-banking entities are to

merge into a unified financial system

3. While the recent enactments like amendments to Debt Recovery Tribunal

(DRT) procedures and passage of Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI
Act) have helped to improve the climate for recovery of bank dues, their
impact is yet to be felt at the ground level. It would be necessary to give
further teeth to the legislations, to ensure that recovery of dues by creditors is
possible within a reasonable time. The procedure for winding up of
companies and sale of assets will also have to be streamlined.

4. In the recent past, Corporate Debt Restructuring has evolved as an

effective voluntary mechanism. This has helped the banking system to take
timely corrective actions when borrowing corporates face difficulties. With
the borrowers gaining confidence in the mechanism, it is expected that CDR
setup would gain more prominence making NPA management somewhat
easier. It is expected that the issue of giving statutory backing for CDR
system will be debated in times to come.

5. In the emerging banking and financial environment there would be an

increased need for self-regulation. This is all the more relevant in the context
of the stated policy of RBI to move away from micro-management issues.
Development of best practices in various areas of banks’ working would
evolve through self-regulation rather than based on regulatory prescriptions.

6. Role of Indian Banks’ Association would become more pronounced as a

self regulatory body. Development of benchmarks on risk management,
corporate governance, disclosures, accounting practices, valuation of assets,
customer charter, Lenders’ Liability, etc. would be areas where IBA would be

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required to play a more proactive role. The Association would also be

required to act as a lobbyist for getting necessary legislative enactments and
changes in regulatory guidelines.

7. HR practices and training needs of the banking personnel would assume

greater importance in the coming days. Here again, common benchmarks
could be evolved.

Talking about shared services, creation of common database and conducting

research on contemporary issues to assess anticipated changes in the
business profile and market conditions would be areas where organizations
like Indian Banks’ Association are expected to play a greater role.

8. Evolution of Corporate Governance being adopted by banks, particularly

those who have gone public, will have to meet global standards over a period
of time. In future, Corporate Governance will guide the way Banks are to be
run. Good Corporate Governance is not a straight jacketed formula or
process; there are many ways of achieving it as international comparisons
demonstrate, provided the following three basic principles are followed:-

a) Management should be free to drive the enterprise forward with the

minimum interference and maximum motivation.

b) Management should be accountable for the effective and efficient use of

this freedom. There are two levels of accountability – of management to
the Board and of the Board to the Shareholders. The main task is to
ensure the continued competence of management, for without adequate
and effective drive, any business is doomed to decline. As stated by
[Link], President, World Bank – “Corporate governance is about
promoting corporate fairness, transparency and accountability”.

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c) In order to enlist the confidence of the global investors and international

market players, the banks will have to adopt the best global practices of
financial accounting and reporting. This would essentially involve
adoption of judgmental factors in the classification of assets, based on
Banks’ estimation of the future cash flows and existing environmental
factors, besides strengthening the capital base accordingly.

9. When we talk about adoption of International accounting practices and

reporting formats it is relevant to look at where we stand and the way ahead.
Accounting practices being followed in India are as per Accounting Standards set
by the Institute of Chartered Accountants of India (ICAI). Companies are required
to follow disclosure norms set under the Companies Act and SEBI guidelines
relating to listed entities. Both in respect of Accounting Practices and disclosures,
banks in India are guided by the Reserve bank of India guidelines issued from
time to time. Now these are, by and large, in line with the Accounting Standards
of ICAI and other regulatory bodies. It is pertinent to note that Accounting
Standards of ICAI are based on International Accounting Standards (IAS) being
followed in a large number of countries. Considering that US forms 40% of the
financial markets in the world compliance with USGAAP has assumed greater
importance in recent times. Many Indian banks desirous of raising resources in
the US market have adopted accounting practices under USGAAP and we
expect more and more Indian Financial entities to move in this direction in the
coming years.

There are certain areas of differences in the approach under the two main
international accounting standards being followed globally. Of late, there have
been moves for convergence of accounting standards under IAS and USGAAP
and this requires the standard setters to agree on a single, high-quality answer.
Discussions in the accounting circles indicate that convergence of various
international accounting standards into a single global standard would take place
by 2007.

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In the Indian context, one issue which is likely to be discussed in the coming
years is the need for a common accounting standard for financial entities. While
a separate standard is available for financial entities under IAS, ICAI has not so
far come out with an Indian version in view of the fact that banks, etc. are
governed by RBI guidelines. It is understood that ICAI is seized of the matter. It
is expected that banks would migrate to global accounting standards smoothly in
the light of these developments, although it would mean greater disclosure and
tighter norms.

BASEL II HOW GEARED ARE BANKS??

BASEL II is a new capital adequacy frame work applicable to

scheduled commercial banks in India, as mandated by the RBI.. The Basel
capital accord (BASEL II) guideline promulgated by the BIS to establish
Capital adequacy requirements and supervisory standards for banks and
structured by three pillars.
In a nut-shell, BASEL II –

 Provide effective assessment method

 Incorporates Sensitivity to banks.
 Makes better business standards
 Reduce losses to the banks

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The 3-Pillar Approach of BASEL II

BASEL II
CAPITAL
ACCORD

Pillar I pillar II pillar III

Minimum Supervisory Market

Capital Review Discipline &
Requirement Process Disclosure

Strengthening & safeguarding Financial Systems

ENHANCING COMPETITIVE EQUALITY

The BASELII is designed to facilitate a more comprehensive, sophisticated

and risk sensitive approach for banks to calculate regulatory capital. The
basic objective of BASEL II is to create an international standard.

CHANGES IN THE STRUCTURE OF BANKS

The financial sector reforms ushered in the year 1991 have been well
calibrated and timed to ensure a smooth transition of the system from a
highly regulated regime to a market economy. The first phase of reforms
focused on modification in the policy framework, improvement in financial
health through introduction of various prudential norms and creation of a
competitive environment. The second phase of reforms started in the latter
half of 90s, targeted strengthening the foundation of banking system,
streamlining procedures, upgrading technology and human resources
development and further structural changes. The financial sector reforms
carried out so far have made the balance sheets of banks look healthier and
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helped them move towards achieving global benchmarks in terms of

prudential norms and best practices.

Under the existing Basel Capital Accord, allocation of capital follows

a one-size-fit-all approach. This would be replaced by a risk based
approach to capital allocation. While regulatory minimum capital
requirements would still continue to be relevant and an integral part of the
three pillar approach under Basel II, the emphasis is on risk based approach
relying on external ratings as well as internal rating of each asset and capital
charge accordingly. The internal risk based approach would need substantial
investments in technology and development of MIS tools. For a rating tool
for internal assessment to be effective, past data for 3 to 5 years would be
required and as such, Indian banking system will have to build up the
capabilities for a smooth migration to the new method.

Another aspect which is included in Basel II accord is a provision for capital

allocation for operational risk. This is a new parameter and even
internationally evaluation tools are not yet fully developed. This would be
another area where banking system will have to reckon additional capital
needs and functioning of its processes.

The financial sector reforms have brought in the much needed competition
in the market place. The competition to the existing banks came mainly
from the techno-savvy private sector banks. In the coming years, we expect
to see greater flow of foreign capital to come into the Indian banking sector.
Opening up of banking sector to global players would see banks facing
global competition.
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Technology is expected to be the main facilitator of change in the financial

sector. Implementation of technology solutions involves huge capital
outlay. Besides the heavy investment costs, technology applications also
have a high degree of obsolescence. Banks will need to look for ways to
optimize resources for technology applications. In this regard, global
partnerships on technology and skills sharing may help.

The pressure on capital structure is expected to trigger a phase of

consolidation in the banking industry. Banks could achieve consolidation
through different ways. Mergers and acquisitions could be one way to
achieve this. In the past, mergers were initiated by regulators to protect the
interests of depositors of weak banks. In recent years, market led mergers
between private banks have taken place. It is expected that this process
would gain momentum in the coming years. Mergers between public sector
banks or public sector banks and private banks could be the next logical
thing / development to happen as market players tend to consolidate their
position to remain in competition.

Consolidation could take place through strategic alliances / partnerships.

Besides helping banks to achieve economy of scale in operations and
augment capital base, consolidation could help market players in other ways
also to strengthen their competitiveness. The advantage could be in
achieving better segmentation in the market. Strategic alliances and
collaborative approach, as an alternative to mergers and acquisitions, could
be attempted to reduce transaction costs through outsourcing, leverage
synergies in operations and avoid problems related to cultural integration. If
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consolidation is taken too far, it could lead to misuse of dominant market

positions. Rapid expansion in foreign markets without sufficient knowledge
of local economic conditions could increase vulnerability of individual
banks.

Public Sector Banks had, in the past, relied on Government support for
capital augmentation. However, with the Government making a conscious
decision to reduce its holding in Banks, most Banks have approached the
capital market for raising resources. This process could gain further
momentum when the government holding gets reduced to 33% or below. It
is expected that pressures of market forces would be the determining factor
for the consolidation in the structure of these banks. If the process of
consolidation through mergers and acquisitions gains momentum, we could
see the emergence of a few large Indian banks with international character.
There could be some large national banks and several local level banks.

Opening up of the financial sector from 2005, under WTO, would see a
number of Global banks taking large stakes and control over banking entities
in the country. They would bring with them capital, technology and
management skills. This will increase the competitive spirit in the system
leading to greater efficiencies. Government policy to allow greater FDI in
banking and the move to amend Banking Regulation Act to remove the
existing 10% cap on voting rights of shareholders are pointers to these
developments.

The cooperative banks have played a crucial part in the development of the
economy. The primary agricultural societies which concentrate on short-
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term credit and rural investment credit institutions supported by District /

State level cooperative banks have played a crucial role in the credit delivery
in rural areas. The Urban Cooperative Banks have found their own niche in
urban centres. These institutions in the cooperative sector need urgent
capital infusion to remain as sound financial entities. Cooperative sector
comes under State jurisdiction while commercial banking operations are
regulated by the Reserve Bank of India. The duality in control had
weakened the supervisory set up for these institutions. It is expected that
certain amendments to the Banking Regulation Act introduced recently in
the Parliament with the objective of strengthening the regulatory powers of
the Reserve Bank of India would pave the way for strengthening of
cooperative / financial institutions. It is expected that these banks would
upgrade skills of their staff and improve the systems and procedures to
compete with commercial bank entities.

Consolidation would take place not only in the structure of the banks, but
also in the case of services. For instance, some banks would like to shed
their non-core business portfolios to others. This could see the emergence of
niche players in different functional areas and business segments such as
housing, cards, mutual funds, insurance, sharing of their infrastructure
including ATM Network, etc.

Rationalization of a very large network of branches, which at present has

rendered the system cost ineffective and deficient in service would take
place. Most of the banks would have adopted core-banking solutions in a
fully networked environment. Back office functions would be taken away

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from branches to a centralized place. While brick and mortar branches

would continue to be relevant in the Indian scenario, the real growth driver
for cost cutting would be virtual branches viz., ATMs, Internet Banking,
mobile banking, kiosks etc., which can be manned by a few persons and run
on 24 x 7 basis to harness the real potential of these technological utilities,
there will be strategic alliances / partnership amongst banks and this
phenomenon has already set in.

As we move along, the concept of branch banking will undergo changes.

Banks will find that many of the functions could be outsourced more
profitably without compromising on the quality of service. Specialized
agencies could come forward to undertake Marketing and delivery functions
on behalf of banks. This could see banking products being sold outside the
four walls of a branch. Banks would then concentrate on developing new
products and earning fee based income.

The composition of bank staff will change. As total computerization will

render a part of the workforce surplus, banks will go for a rightsizing
exercise. Some may resort to another round of VRS to shed excess flab
while some other may go for re-deployment to strengthen marketing arms.
With greater use of technology and outsourcing of services in different
areas, the manpower recruitment will mostly be in specialized areas and
technology applications. With commitment shifting from the organization to
the profession, we could see greater lateral movement of banking personnel.
Training and skill development will, however, continue to be key HR
functions. With the age profile of staff undergoing changes, banks will have

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to focus on leadership development and succession planning. Knowledge

management will become a critical issue.

Management structure of banks will also undergo drastic changes in the

coming years. Instead of the present pyramid structure, the banks will
move towards reduction in tiers to ultimately settle for a flat structure.
Product-wise segmentation will facilitate speedier decision-making.

CAMEL TOOL FOR MEASURING THE PERFORMANCE

OF BANKS

An international bank-rating system where bank supervisory authorities rate

institutions according to six factors.

The six factors are represented by the acronym "CAMELS." The six factors
examined are as follows:

C - Capital adequacy reflects the overall financial condition of a

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bank & also the ability of the management to meet the need for additional
capital.

A - Asset quality to ascertain the component of non

performing assets as a percentage of the total asset

M - Management quality to measure the efficiency of the management

E – Earnings to assess the quality of income

generated by core activity

L – Liquidity to measure the ability of a bank to

meet the demand from demand deposits in a particular year.

Green Growth Strategy – Indian Cooperative Banks*

Recently NABARD, a premier Development Finance Organisation of the

Government, has launched an Environmental Promotional Assistance
Scheme (EPA) for undertaking activities related to environment protection
aimed at sustainable and environment friendly agriculture and rural
development with a focus on demonstration of replicable eco-friendly
technologies. Cooperative banks Green Growth financing will have to be
tied up with agencies like NGOs, Universities and Research Institutions for
implementing environment protection programmes in order to ensure

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technological support and farm guidance and extension services to the

farmers for optimum results and benefits.

The cooperative rural credit and banking sector in India with a membership
of about 180 million is a major player in agricultural credit operations. The
banks need to sensitize the farmers and create an awareness for environment
friendly green growth agriculture, which is sustainable. Besides adoption of
appropriate replicable technologies for eco-friendly growth of agriculture,
the cooperative banks have to evolve a sustainable growth model for
financing environment friendly but economically beneficial products for
watershed development, production of organic fertilisers, bio-gas for
cooking, renewable energy through solar, wind, bio-mass, etc. for meeting
power needs, rural housing by use of local resources and such other financial
products for village resource management and employment generation.

The various products / activities cooperative banks have financed or propose

to finance under the strategic plan and programme will broadly cover :
 Water – Micro-watershed development and post-watershed
development, management of water resources, conservation and
augmentation of water resources and development of minor irrigation.
 Forestry – Farm and social forestry, nursery, fodder cultivation, etc.
 Fertilisers – Promotion of organic fertiliser (green manure) and
conversion of waste into organic manure, vermi-composting for
minimising off-farm inputs like chemical fertiliser and other agro-
chemicals – both for productivity and health.
 Pesticides – replacing harmful chemical pesticides by natural and eco-
friendly pest management – to prevent water pollution and soil
degradation.
 Renewable energy – energy conservation and renewable energy
generation which process does not result in emission of green house
gasses – use major renewable energy sources like solar and wind
which are locally available and are everlasting.
 Bio-energy – non-conventional energy resources like Bio-gas and
smokeless wood burning stoves for conservation of fossil fuels like
kerosene and firewood. Use of animal waste and kitchen waste for
producing Methane gas mostly for cooking at houses and for
community purposes.

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 Housing – Rural housing, which is cost effective and promotes use of

local resources – less dependence on cement, steel, etc. as also on
conventional energy which pollute environment by installation of
renewable energy sources for heating, cooking and lighting.

The strategic green growth credit policy, plan and products to be

implemented by the cooperatives banks will have the following four major
components :
i) An appropriate credit policy and products which promotes
sustainable growth of agriculture and rural economy.
ii) An awareness programme of education and training on eco-
friendly green growth model which includes demonstratable effect
of technologies.
iii) Technologies and its application supported by banking credit
products which enhances economic benefits and quality of life
without disturbing eco-systems.
iv) Coordinated approach for development of agricultural economy
with other agencies for supportive services including farm
guidance.

The strategic Plan and products broadly outlined to be implemented by

cooperative banks aims at sustainable development of agriculture and the
rural economy which is eco-friendly protects environment and preserves bio-
diversity. Any such credit policy and related service products of
cooperatives should demonstrate tangible economic benefits to the farmers
besides improving the quality of life. Adoption of low cost technologies,
use of locally available resources and generating employment potential in
the rural sector are other major objectives. Awareness campaign,
dissemination of information, demonstration of technologies which
promotes green growth are some of the promotional activities to be
undertaken jointly in coordination with other Government agencies and
NGOs concerned with agriculture and rural development, farmers welfare
and protection of environment and prevention of global warming. In this
great task of promoting green growth and protecting our earth, every
individual has a role to play so also the cooperative banks which serve the
common man, mostly the farmer, in the Indian context.

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PRODUCT INNOVATION AND PROCESS RE-

ENGINEERING

1. With increased competition in the banking Industry, the net interest margin of
banks has come down over the last one decade. Liberalization with Globalization
will see the spreads narrowing further to 1-1.5% as in the case of banks
operating in developed countries. Banks will look for fee-based income to fill the
gap in interest income. Product innovations and process re-engineering will be
the order of the day. The changes will be motivated by the desire to meet the
customer requirements and to reduce the cost and improve the efficiency of
service. All banks will therefore go for rejuvenating their costing and pricing to
segregate profitable and non-profitable business. Service charges will be decided

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taking into account the costing and what the traffic can bear. From the earlier
revenue = cost + profit equation i.e., customers are charged to cover the costs
incurred and the profits expected, most banks have already moved into the profit
=revenue - cost equation. This has been reflected in the fact that with cost of
services staying nearly equal across banks, the banks with better cost control are
able to achieve higher profits whereas the banks with high overheads due to
under-utilisation of resources, un-remunerative branch network etc., either
incurred losses or made profits not commensurate with the capital employed.
The new paradigm in the coming years will be cost = revenue - profit.

2. As banks strive to provide value added services to customers, the market will
see the emergence of strong investment and merchant banking entities. Product
innovation and creating brand equity for specialized products will decide the
market share and volumes. New products on the liabilities side such as forex
linked deposits, investment-linked deposits, etc. are likely to be introduced, as
investors with varied risk profiles will look for better yields. There will be more
and more of tie-ups between banks, corporate clients and their retail outlets to
share a common platform to shore up revenue through increased volumes.

3. Banks will increasingly act as risk managers to corporate and other

entities by offering a variety of risk management products like options,
swaps and other aspects of financial management in a multi currency
scenario. Banks will play an active role in the development of derivative
products and will offer a variety of hedge products to the corporate sector
and other investors. For example, Derivatives in emerging futures market
for commodities would be an area offering opportunities for banks. As the
integration of markets takes place internationally, sophistication in trading
and specialized exchanges for commodities will expand. As these changes
take place, banking will play a major role in providing financial support to

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such exchanges, facilitating settlement systems and enabling wider

participation.

4. Bancassurance is catching up and Banks / Financial Institutions have

started entering insurance business. From mere offering of insurance
products through network of bank branches, the business is likely to expand
through self-designed insurance products after necessary legislative changes.
This could lead to a spurt in fee-based income of the banks.

5. Similarly, Banks will look analytically into various processes and

practices as these exist today and may make appropriate changes therein to
cut costs and delays. Outsourcing and adoption of BPOs will become more
and more relevant, especially when Banks go in for larger volumes of retail
business. However, by increasing outsourcing of operations through service
providers, banks are making themselves vulnerable to problems faced by
these providers. Banks should therefore outsource only those functions that
are not strategic to banks’ business. For instance, in the wake of
implementation of 90 days’ delinquency norms for classification of assets,
some banks may think of engaging external agencies for recovery of their
dues and in NPA management.

6. Banks will take on competition in the front end and seek co-operation in
the back end, as in the case of networking of ATMs. This type of co-
opetition will become the order of the day as Banks seek to enlarge their
customer base and at the same time to realize cost reduction and greater
efficiency.

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S.W.O.T analysis on banking industry

The rise of retail lending in emerging economies like India has been of
recent origin. Asia Pacific’s vast population, combined with high savings
rates, explosive economic growth, and underdeveloped retail banking
services, provide the most significant growth opportunities for banks. Banks
will have to serve the retail banking segment effectively in order to utilize
the growth opportunity.

Banking strategies are presently undergoing various transformations, as the

overall scenario has changed over the last couple of years. Till the recent
past, most of the banks had adopted fierce costcutting measures to sustain
their competitiveness. This strategy however has becomeobsolete in the new
light of immense growth opportunities for banking industry. Most
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bankersare now confident about their high performance in terms of organic

growth and in realising highreturns. Nowadays, the growth strategies of
banks revolve around customer [Link] customer relationship
management can only lead to fulfilment of long-term, as well as,
short-term objectives of the bankers. This requires, efficient and accurate
customer databasemanagement and development of well-trained sales force
to develop and sustain long-termprofitable customer relationship.

The banking system in India is significantly different from that of the other
Asian nations, because of the country’s unique geographic, social, and
economic characteristics. Though the sector opened up quite late in India
compared to other developed nations, like the US and the UK, the
profitability of Indian banking sector is at par with that of the developed
countries and at times even better on some parameters. For instance, return
on equity and assets of the Indian banks are on par with Asian banks, and
higher when compared to that of the US and the UK. Banks in India are
mainly classified into Scheduled Banks and Non-Scheduled Banks.
Scheduled Banks are the ones, which are included in the second schedule of
the RBI Act 1934 and they comply with the minimum statutory
requirements. Non-Scheduled Banks are joint stock banks, which are not
included in the second Schedule of the RBI Act 134, on account of the
failure to comply with the minimum requirements for being scheduled.

STRENGTH

■ Indian banks have compared favourably on growth, asset quality and

profitability with other regional banks over the last few years. The banking
index has grown at a compounded annual rate of over 51 per cent since April
2001 as compared to a 27 per cent growth in the market index for the same
period.

■ Policy makers have made some notable changes in policy and regulation
to help strengthen the sector. These changes include strengthening prudential
norms, enhancing the payments system and integrating regulations between
commercial and co-operative banks.

■ Bank lending has been a significant driver of GDP growth and

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employment.

■ Extensive reach: the vast networking & growing number of branches &
ATMs. Indian banking system has reached even to the remote corners of the
country.

■ The government's regular policy for Indian bank since 1969 has paid rich
dividends with the nationalisation of 14 major private banks of India.

■ In terms of quality of assets and capital adequacy, Indian banks are

considered to have clean, strong and transparent balance sheets relative to
other banks in comparable economies in its region.

■ India has 88 scheduled commercial banks (SCBs) - 27 public sector banks

(that is with the Government of India holding a stake)after merger of New
Bank of India in Punjab National Bank in 1993, 29 private banks (these do
not have government stake; they may be publicly listed and traded on stock
exchanges) and 31 foreign banks. They have a combined network of over
53,000 branches and 17,000 ATMs. According to a report by ICRA Limited,
a rating agency, the public sector banks hold over 75 percent of total assets
of the banking industry, with the private and foreign banks holding 18.2%
and 6.5% respectively.

■ Foreign banks will have the opportunity to own up to 74 per cent of Indian
private sector banks and 20 per cent of government owned banks.

WEAKNESS

■ PSBs need to fundamentally strengthen institutional skill levels especially

in sales and marketing, service operations, risk management and the overall
organisational performance ethic & strengthen human capital.

■ Old private sector banks also have the need to fundamentally strengthen
skill levels.

■ The cost of intermediation remains high and bank penetration is limited to

only a few customer segments and geographies.

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■ Structural weaknesses such as a fragmented industry structure, restrictions

on capital availability and deployment, lack of institutional support
infrastructure, restrictive labour laws, weak corporate governance and
ineffective regulations beyond Scheduled Commercial Banks (SCBs), unless
industry utilities and service bureaus.

■ Refusal to dilute stake in PSU banks: The government has refused to

dilute its stake in PSU banks below 51% thus choking the headroom
available to these banks for raining equity capital.

■ Impediments in sectoral reforms: Opposition from Left and resultant

cautious approach from the North Block in terms of approving merger of
PSU banks may hamper their growth prospects in the medium term.

OPPORTUNITY

■ The market is seeing discontinuous growth driven by new products and

services that include opportunities in credit cards, consumer finance and
wealth management on the retail side, and in fee-based income and
investment banking on the wholesale banking side. These require new skills
in sales & marketing, credit and operations.

■ banks will no longer enjoy windfall treasury gains that the decade-long
secular decline in interest rates provided. This will expose the weaker banks.

■ With increased interest in India, competition from foreign banks will only
intensify.

■ Given the demographic shifts resulting from changes in age profile and
household income, consumers will increasingly demand enhanced
institutional capabilities and service levels from banks.

■ New private banks could reach the next level of their growth in the Indian
banking sector by continuing to innovate and develop differentiated business
models to profitably serve segments like the rural/low income and
affluent/HNI segments; actively adopting acquisitions as a means to grow
and reaching the next level of performance in their service platforms.

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Attracting, developing and retaining more leadership capacity

■ Foreign banks committed to making a play in India will need to adopt

alternative approaches to win the “race for the customer” and build a value-
creating customer franchise in advance of regulations potentially opening up
post 2009. At the same time, they should stay in the game for potential
acquisition opportunities as and when they appear in the near term.
Maintaining a fundamentally long-term value-creation mindset.

■ reach in rural India for the private sector and foreign banks.

■ With the growth in the Indian economy expected to be strong for quite
some timeespecially in its services sector-the demand for banking services,
especially retail banking, mortgages and investment services are expected to
be strong.

■ the Reserve Bank of India (RBI) has approved a proposal from the
government to amend
the Banking Regulation Act to permit banks to trade in commodities and
commodity derivatives.

■ Liberalisation of ECB norms: The government also liberalised the ECB

norms to permit financial sector entities engaged in infrastructure funding to
raise ECBs. This enabled banks and financial institutions, which were earlier
not permitted to raise such funds, explore this route for raising cheaper funds
in the overseas markets.

■ Hybrid capital: In an attempt to relieve banks of their capital crunch, the

RBI has allowed them to raise perpetual bonds and other hybrid capital
securities to shore up their capital. If the new instruments find takers, it
would help PSU banks, left with little headroom for raising equity.
Significantly, FII and NRI investment limits in these securities have been
fixed at 49%, compared to 20% foreign equity holding allowed in PSU
banks.

THREATS

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■ Threat of stability of the system: failure of some weak banks has often
threatened the stability of the system.

■ Rise in inflation figures which would lead to increase in interest rates.

·
■ Increase in the number of foreign players would pose a threat to the PSB
as well as the private players.

Conclusion

Banking sector has gone through a metamorphosis change in its concept

perception and outlook quantitative expansion with quality has been a
phenomenon in the operations of the banking system bank being a service
selling show has to meet the need of the customers which vary from place to
place, time to time and purpose to purpose and also at the same time it has to
sustain the tough competition coming from all the four ends.

An increase in the income and saving of the urban population has raised
hopes for banking institutions to fill up the gaps by catering to the need of
the potential customers and also penetrate into new target markets like rural

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sectors through its innovative financial products like micro finance and
banks is doing the same and this has been proved by so many awards it has
achieved in the recent past.

Bank has proved its existence through introducing various innovative

schemes and that also are considered as competitive in present market.

In this span of time, they have also come up with new business strategies so
as to compete in this fiercely competitive market where every next day a
new scheme is introduced so as to grab the market share.

It follows a centralized system, so as to bring synchronization in the decision

making process which helps the organization to create better strategies so as
to focus on the overall functioning and growth prospects of the bank.

At the same time it can be concluded that they need to focus on the human
resources in order to achieve the maximum market share

BIBLIOGRAPHY
INTERNET:

 [Link]

 [Link]

 [Link]

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 [Link]

 [Link]

NEWS PAPER

 ECONOMICS TIMES

 BUSINESS STANDARD

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