MAJOR RESEARCH PROJECT REPORT
ON “A COMPARATIVE STUDY ON PERFORMANCE AND CUSTOMER SATISFACTION OF SBI AND ICICI BANK IN RAJASTHAN STATE”
In Partial Fulfillment of Master of Business Administration Session 2010-2012
FACULTY OF MANAGEMENT STUDIES Mohan Lal Sukhadia University (New Campus) Udaipur Project Supervisor: Dr. Meera Mathur Asso. Prof., FMS Udaipur (2010-2012) Submitted by: Manoj Kumar Sharma MBA Part 2
CERTIFICATE FROM FACULTY
May 29, 2012
This is to certify that , of Faculty of Management Studies, M.L.S.U, Udaipur has completed her 15 days Major Research Project on the topic “COMPARATIVE STUDY ON PERFORMANCE AND CUSTOMER SATISFACTION OF SBI AND ICICI BANK IN RAJASTHAN STATE” as a part of curriculum for MBA part 2 Semester 4, under my supervision and she has completed her work satisfactorily.
Dr. Meera Mathur Faculty, FMS Udaipur
DECLARATION I hereby declare that project titled “A COMPARATIVE STUDY ON PERFORMANCE AND CUSTOMER SATISFACTION OF SBI AND ICICI BANK IN RAJASTHAN STATE” is an original piece of research work carried out by me under the guidance and supervision of Prof . The information has been collected from genuine &authentic sources. The work has been submitted in partial fulfillment of the requirement of MBA course to our college.
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CONTENTS
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CERTIFICATE FROM FACULTY DECLARATION ACKNOWLEDGEMENT EXECUTIVE SUMARRY
Chapter 1: INTRODUCTION • • • Need and Scope of the Project Project details Rationale of study
Chapter 2: THEORETICAL FRAMEWORK • • • • The Concept Of Customer Satisfaction The structure of Indian banking system SBI profile, product and services ICICI Bank Ltd. Profile ,products & services The Literature Review
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Chapter 3: RESEARCH METHODOLOGY • • • • • Introduction Research Objectives Research Design Universe Data source
Chapter 4: FINDINGS AND ANALYSIS • Various factors of consideration Facility Level of SBI & ICICI Value Added Services
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Product Ratings REFERRING ICICI0SBI TO OTHER CUSTOMERS Relationship with ICICI/SBI Best Insurance Product OTHER MAJOR SERVICES GOVERNMENT BUSINESS SCHEMES GOVERNMENT TAX COLLECTION AWARNESS AND SATISFACTION LEVEL OF VARIOUS LOANS LOCKER FACILITY AVAILING CUSTOMER RELATIONAL SHIP BETWEEN BANKER & CUSTOMER OPINION ABOUT THE CHARGES LEIVED IS MANAGER AVAILABLE FOR ANY CLARIFICATION DRAWBACKS/ PROBLEM WITHIN ICICI/SBI
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Chapter 5: SWOT ANALYSIS SBI SWOT ANALYSIS ICICI SWOT ANALYSIS
Chapter 6: RECOMMENDATIONS AND CONCLUSION
ANNEXURES REFERENCES
ACKNOWLEDGEMENT “Perseverance inspiration and motivation have always played a key role in success of any venture”. I hereby express my deep sense of gratitude to all the personalities involved directly and indirectly in my project work. In order to complete any project successfully, functional environment & proper guidance of the expert on the subject is inevitable. I would like to extend my sincere thanks to the employed, businessmen, professional & any other respondents who have extended their active cooperation while going through the survey on Private and National Bank. I am very grateful my mentor and guide Dr. Meera Mathur for providing me a great guidance leading to enhancement in my excellence and finishing of this research work. Without the guidance and critical assessment of Meera Mam it could not have been possible for me to come with such great research work. Due to Meera Mam’s valuable guidance this research project has become a great learning path for me. I am really indebted to my faculty of MBA department and our Director Prof.P.K.Jain who has always been a source of guidance, inspiration and motivation. However, I accept the sole responsibility for any possible errors of omission and would be extremely grateful to the readers of this project report if they bring such mistakes to my notice.
Last but not the least I would thank God for HIS blessings, my parents and classmates also for their valuable suggestions and support in my project report.
Manoj Kumar Sharma
EXECUTIVE SUMARRY Project study enables to understand a practical project in order to study, analyze, interpret and report on management aspects. It helps to get knowledge about various practical aspects of the industry. Under this project I have critically studied the key issues and trends of SBIsand ICICI which leads to their customer satisfaction over one another in Rajasthan , through a mailed questionnaire. Customers, Employees of various industrial sectors such as Telecom, Information Technology, FMCG,Financial Services etc. have been covered. Various aspects of Project are summarized as below: Title of Project: This project was carried on topic, “A COMPARATIVE STUDY ON PERFORMANCE AND CUSTOMER SATISFACTION OF SBI AND ICICI BANK IN RAJASTHAN STATE” Rational To maintain performance becomes very mandatory for any bank in today’s volatile marketing area and performance can only be achieved if the customers are satisfied with the product and services offered. It has become more critical in today's times, as most of the customers look at a long-term beneficial relationship with the banking company. Customer satisfaction is prima facie the need of hour. The comparative study of SBI AND ICICI will serve best for the retention of old customers and attracting potent future customers which in turn will be fruitful to generate higher profitability. Research Methodology: (a) Objectives
1. To draw the comparative analysis of ICICI BANK Ltd with SBI in terms of performance and customer satisfaction 2. To identify the major attributes of customer satisfaction at SBI and ICICI. (b) Research Design The research would be an analytical and descriptive one. The data collected would be both primary and secondary. The method of primary data collection would be MAILED questionnaires, interviews and the sampling method would be non-probability convenience sampling. (c) Universe The study is restricted to the customers of SBI AND ICICI in Rajasthan. (e) Data Source The secondary data: Collected from various libraries, various journals, magazines, World Wide Web and other sources. Primary data: Obtained through mailing a questionnaire to respondents. The data will be analyzed and appropriate statistical tools will be used to get results. Major Findings and Conclusion: SBI stands for State Bank of India. It is a public sector institution (government owned), with a huge customer base all over India. It has 5 associate banks operating under its SBI name. It has over thirteen thousand branches across India and in some selected international countries and a 56,000 ATM network across India. The Standard Bank of India ‘inherited’ the Bank of Calcutta, which was founded in 1806, and has been in existence for over two hundred years. On the other hand, the ICICI is a private sector bank (privately owned), with a relatively smaller clientele base. It is one of the major banks in India (precisely the second largest), but much smaller than the SBI. It has 950 branches, with 3,500 branches across India. The bank has deposits of Rs 1.65 lakh crore compared to SBI’s Rs 3.8 lakh crore (accumulated in a period of twelve years), racking up a net worth of Rs 22,000 against Rs 27,000 for the State Bank of India.
This represents Rs 9 crore business generated by each ICICI employee per year, compared to Rs 3 crore worth of business per employee of the ICICI. While the State Bank pays 4.7 percent on deposits, and earns less on advances, the ICICI pays 0.7 less (4 percent), while earning more on advances, and thus earns 0.4 percent more on assets than the SBI. This is no surprise, as there’s seemingly limitless access to funds from the government for the state owned SBI. To conclude, although the SBI has generally performed well in the past, in recent years, the ICICI has seen very good performance, almost edging out the SBI in every aspect, especially financially. The financial years between 2001-2002 and 2010, and 2012, saw very strong gains for the ICICI bank. Its deposits grew by 200 percent, five times more than the SBI’s, and while SBI’s revenue grew by 30 percent and the ICICI bank’s revenue grew by seven times that percentage. This trend means that ICICI’s growth will eventually overtake SBI’s in the future, in terms of deposits. But when it comes to customer satisfaction, SBI still leads the banking sector with maximum satisfied customers in hand.
CHAPTER 1: INTRODUCTION AN OVERVIEW: This chapter initiates with the discussion on the need and scope of the project, further incorporating the Project Details and ending up with the Rationale of Study to impart the reader with a broad outline of the Project.
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NEED AND SCOPE OF THE PROJECT PROJECT DETAILS RATIONALE OF STUDY
NEED AND SCOPE OF THE PROJECT
NEED OF THE PROJECT: To identify the satisfaction level of customer towards different types of service attributes,products offered by SBI AND ICICI by identifying their critical factors. To study about the banks and their customized products and services. To study the experience and expectations of the existing customers. To study to improve the current standards of services.
To study the scope of introducing new types of services. To study about the business tactics followed to stand against the competitors.
SCOPE OF THE PROJECT: This Study will help us to understand the customer satisfaction about banking services and products. This study will help banks to understand, how a customer selects, organizes and interprets the Quality of service and product offered by banks. The market is more aware and realistic about investment and returns from financial products. In this background this study tries to analyze the customer satisfaction towards banking services and products in general and of SBI and ICICI in general.
PROJECT DETAILS Title of Project: “A COMPARATIVE STUDY ON PERFORMANCE AND CUSTOMER SATISFACTION OF SBI AND ICICI BANK IN RAJASTHAN STATE” Project Type: Marketing Concept Project Supervisor: Dr. Meera Mathur Project objectives: 1. To draw the comparative analysis of ICICI BANK Ltd with SBI in terms of performance and customer satisfaction 2. To identify the major attributes of customer satisfaction at SBI and ICICI.
RATIONALE OF STUDY An unsatisfied customer is a major drawback for any banking industry. Therefore, to maintain performance becomes very mandatory for any bank in today’s volatile marketing area and performance can only be achieved if the customers are satisfied with the product and services offered. It has become more critical in today's times, as most of the customers look at a long-term beneficial relationship with the banking company. Customer satisfaction is prima facie –the need of hour. The comparative study of SBI AND ICICI will serve best for the retention of old customers and attracting potent future customers which in turn will be fruitful to generate higher profitability.
CHAPTER 2: THEORETICAL FRAMEWORK AN OVERVIEW: The chapter begins with an explanation of the concept of customer satisfaction, further elaborating the banking industry, SBI AND ICICI PROFILE on the whole and an understanding of its practical application, ending up with The Literature Review. • • • • • The Concept Of Customer Satisfaction The structure of Indian banking system SBI profile, product and services ICICI Bank Ltd. Profile ,products & services The Literature Review
The Concept of Customer Satisfaction The modern concepts of marketing realized that measuring consumer needs or behavior was not enough.´ CONSUMER SATISFICATION´ should be the core and then the correct perception on which marketing policies of our organization should be built.³Management must think of itself not as producing products but as providing customer creating value satisfaction. ‘Customer satisfaction has a vital role in sustaining and improving hold on the market. Brief descriptions about the various measures that are needed to improve customer orientation have also been dealt with. Consider the fact today’s customer face a plenitude of products in every category. Customer will be having high and raising expectation of quality and service. In the face of their vast choices, the customer will gravitate to the offering that the best meet their individual needs and expectation. They will buy one of the bases of their perception value. Therefore it is not surprising that today’s winning companies are those succeed best in satisfying indeed delighting their target customer. They pay extreme attention to quality and service to meeting and even exceeding customer expectation. They complete vigorously and at the co-operated smartly with their strategy partners in their supply and distribution chain. They pursue efficiently and yet are responsible and flexible. Customer satisfaction is the outcome felt by buyers who have expectation. Customers are satisfied when their expectation are met and delighted when their expectations are exceeded. Satisfied customers remain loyal longer, buy more, and are less sensitive and talk favorable about the company. From this it is clear that the satisfied customer will be less sensitive towards the fluctuating price and offensive marketing typically cost more than defensive marketing, because it requires much effort and cost to induce satisfied customers to switch away from their current suppliers. We should also consider the fact that ³the cost of attracting a new customer may be five times the cost of keeping the current customer happy.´ Therefore the companies are intending in developing stronger bones and loyalty with their customers. DEFINITION OF CUSTOMER SATISFACTION Customer satisfaction refers to the extent to which customers are happy with the products and services provided by a business. Customer satisfaction levels can be measured using survey techniques and questionnaires
DEFINITIONS: Definition 1: Customer satisfaction is equivalent to making sure that product and service performance meets customer expectations. Definition 2: Customer satisfaction is the perception of the customer that the outcome of a business transaction is equal to or greater than his/her expectation. Definition 3: Customer satisfaction occurs when acquisition of products and/or services provides a minimum negative departure from expectations when compared with other acquisitions. Gaining high levels of customer satisfaction is very important to a business because satisfaction customers are most likely to be loyal and to make repeat orders and to use a wide range of services offered by a business There are many factors which lead in high levels of customer satisfaction including. Products and services which are customer focused and hence provide high levels of value for money. What is clear about customer satisfaction is that customers are most likely to appreciate the goods and services that they buy if they are made to feel special. This occurs when they feel that the products and services that they buy have been specially produced for them or for people like them. BENEFITS OF CUSTOMER SATISFACTION The importance of customer satisfaction and support is increasingly becoming a vital business issue as organization realize the benefits of Customer Relationship Management (CRM) for providing effective customer service. Professionals working within customer focused business or those running call centers or help desks, need to keep informed about the latest customer satisfaction techniques for running a valuable customer service function. From small customer service departments to large call centers, the importance of developing a valued relationship with customers using CRM is essential to support customer and long-term business growth. What Do Customers Want? Before we begin to create tools to measure the level of satisfaction, it is important to develop a clear understanding of what exactly the customer wants. We need to know what our customers expect from the products and services we provide. Customer expectations have two types ±
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Expressed Implied
Expressed Customer Expectations are those requirements that are written down in the contract and agreed upon by both parties for example, product specifications and delivery requirements. Supplier’s performance against these requirements is most of the items directly measurable. Implied Customer Expectations are not written or spoken but are the ones the customer would you expect the supplier to meet nevertheless. For example, a customer would expect the service representative who calls on him to be knowledgeable and competent to solve a problem on the spot. There are many reasons why customer expectations are likely to change overtime. Process improvements, advent of new technology, changes in customers’ priorities, improved quality of service provided by competitors are just a few examples. The customer is always right. Supplier’s job is to provide the customer what he/she wants, when he/she wants it. Customer satisfaction is customers’ perception that a supplier has met or exceeded their expectations. 3.3 WHAT CONSTITUTES SATISFACTION? We cannot create customer satisfaction just by meeting customers’ requirements fully because these have to be met in any case. However failing short is certain to create dissatisfaction. Major Attributes of customer satisfaction in banking industry Can be summarized as: Product quality Premium outflow Return on Investment Services Responsiveness and ability to resolve complaints and reject reports. Overall communication, accessibility and attitude. WHAT ARE THE TOOLS? Customer expectations can be identified using various methods such as: Periodic contract reviews Market research, Telephonic interviews, Personal visits, warranty, records, Informal discussions, and satisfaction surveys. Depending upon the customer base and available resources, I can choose a method that is most effective in measuring the customer’s perceptions. The purpose of the exercise is to identify priorities for improvements. I develop a method or combination of methods that helps to continually improve service.
3.4 CUSTOMER SATISFACTION SURVEYS
Formal survey has emerged as by far the best method of periodically the customer satisfaction. The surveys are not marketing tools but an information gaining tool. Enough homework needs to be before embarking on the actual survey. This includes: Defining Objectives of the Survey Design Survey approach Develop questionnaires and forms administer Survey (Email, Telephone or Post) Method of compiling data and analyzing the findings format of the report to present the findings there is no point in asking irrelevant questions on a customer satisfaction questionnaire. The basic purpose is to find out what we are doing right or wrong. Where is the scope for improvement, where do we stand vis-à-vis other suppliers. How we can serve the customer better? A customer satisfaction measurement survey should at least identify the following objectives: Importance to customers (Customers priorities) Customers perception of supplier’s performance your performance relative to customers priorities. Priorities for improvement survey forms should be easy to fill out with minimum amount of time and efforts on customer’s part. They should be designed to actively encourage the customer to complete the questions. Yet they must provide accurate data should also be sufficiently reliable for management decision making. This can be achieved by incorporating objective type questions where customer has to rate´ on scale of say 1 to 10. For repeated surveys, you could provide the rating that was previously accorded by the customer. This works like a reference point for the customer. Space should always be provided for the customers own opinions this enables them to state any additional requirements or report any shortcomings that are not covered by the objective questions. Normally, we deal various personnel at various levels in the customers.
Depending upon the customer base and available resources, we can choose a method that is most effective in measuring the customer’s perceptions. The purpose of the exercise is to identify priorities for improvements. We must develop a method or combination of methods that helps to continually improve service. 3.4 CUSTOMER SATISFACTION SURVEYS Formal survey has emerged as by far the best method of periodically the customer satisfaction. The surveys are not marketing tools but an information²gaining tool. Enough homework needs to be before embarking on the actual survey. This includes:
? Defining Objectives of the Survey ? Design Survey approach ? Develop questionnaires and forms Administer Survey (Email, Telephone or Post)Method
of compiling data and analyzing the findings format of the report to present the findings there is no point in asking irrelevant questions on a customer satisfaction questionnaire. The basic purpose is to find out what we are doing right or wrong. Where is the scope for improvement, where do we stand vis-à-vis other suppliers. How we can serve the customer better?
? A customer satisfaction measurement survey should at least identify the following objectives:
Importance to customers (Customers priorities)Customers perception of suppliers performance Your performance relative to customers priorities. Priorities for improvement survey forms should be easy to fill out with minimum amount of time and efforts on customer’s part. They should be designed to actively encourage the customer to complete the questions. Yet they must provide accurate data should also be sufficiently reliable for management decision making. This can be achieved by incorporating objective type questions where customer has to³rate´ on scale of say 1 to 10. For repeated surveys, you could provide the rating that was previously accorded by the customer. This works like a reference point for the customer. Space should always be provided for the customers own opinions this enables them to state any additional requirements or report any shortcomings that are not covered by the objective questions. Normally, we deal various personnel at various levels in the customers. 6. Organization²the buyer, user, receiving inspector, finance and purchase person etc. surveying a number of respondents for each customer gives a complete perspective of customer satisfaction. It may be necessary to device a different questionnaire for each of them. Respondents must be provided a way to express the importance they attach to various survey parameters. Respondents should be asked to give a weighting factor, again on a rating scale of say, 1 to 10, for each requirement. This gives a better indication of relative importance of each parameter towards overall customer satisfaction and makes it easier for suppliers to prioritize their action plans by comparing the performance rating (scores) with importance rating (weighing).
The structure of Indian banking system Today, the Indian Banking System is known the world over for its robustness. The Reserve Bank of India is the central/apex Bank which regulates the functioning of all banks operating within the country.
Structure of Indian Banking Industry
The banking system, largely, comprises of scheduled banks (banks that are listed under the Second Schedule of the RBI Act, 1934). Unscheduled banks form a very small component (function in the form of Local Area Bank). Scheduled banks are further classified into commercial and cooperative banks, with the basic difference in their holding pattern. Cooperative banks are cooperative credit institutions that are registered under the Cooperative Societies Act and work according to the cooperative principles of mutual assistance.
Major Players in the Indian Banking Industry
Public Sector Banks (SBI and associates + Nationalised banks) control more than 74-75% of the total credit and deposits businesses in India whereas Private Sector Banks around 1718%.
How does the industry work? Here is the analysis…
The banking industry in India is highly regulated. Few important regulations are mentioned in the diagram below:
The core operating income of a bank is interest income (comprises 75-85% in the total income of almost all Indian Banks). Besides interest income, a bank also generates fee-based income in the form of commissions and exchange, income from treasury operations and other income from other banking activities. As banks were assigned a special role in the economic development of the country, RBI has stipulated that a portion of bank lending should be for the development of under-banked and under-privileged sections, which is called the priority sector. Current rules stipulate that domestic banks should lend 40% and the foreign banks should lend 32% of their net credit to the priority sector. On the cost sides, the major items for a bank are interest paid on different types of deposits, bonds issued and borrowings, and provisioning cost for Nonperforming Assets (NPAs).
The banking business can be broadly categorized into Retail Banking, Wholesale or Corporate Banking, Treasury Operations and Other Banking Activities.
Retail banking segment is the highest margin business as compared to other business segments in the banking industry. Currently, ICICI Bank is the largest players in this segment in India.
Other major players in this segment are SBI, PNB, HDFC Bank, etc. Wholesale banking segment in India is largely dominated by large Indian banks – SBI, ICICI Banks, PNB, BoB, etc.
SBI profile, product and services State Bank of India is the largest state-owned banking and financial services company in India. The Bank provides banking services to the customer. In addition to the banking services, the Bank through their subsidiaries, provides a range of financial services, which include life insurance, merchant banking, mutual funds, credit card, factoring, security trading, pension fund management and primary dealership in the money market. The Bank operates in four business segments, namely Treasury, Corporate/ Wholesale Banking, Retail Banking and Other Banking Business. The Treasury segment includes the investment portfolio and trading in foreign exchange contracts and derivative contracts. The Corporate/ Wholesale Banking segment comprises the lending activities of Corporate Accounts Group, Mid Corporate Accounts Group and Stressed Assets Management Group. The Retail Banking segment consists of branches in National Banking Group, which primarily includes personal banking activities, including lending activities to corporate customers having banking relations with branches in the National Banking Group. SBI provides a range of banking products through their vast network of branches in India and overseas, including products aimed at NRIs. The State Bank Group, with over 16,000 branches, has the largest banking branch network in India. The State bank of India is the 10th most reputed company in the world according to Forbes. The bank has 156 overseas offices spread over 32 countries. They have branches of the parent in Colombo, Dhaka, Frankfurt, Hong Kong, Johannesburg, London and environs, Los Angeles, Male in the Maldives, Muscat, New York, Osaka, Sydney, and Tokyo. They have offshore banking units in the Bahamas, Bahrain, and Singapore, and representative offices in Bhutan and Cape Town. State Bank of India was incorporated in the year 1955. The Bank traces their ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta, making them the oldest commercial bank in the Indian Sub-continent. The Government of India nationalized the Imperial Bank of India in the year 1955, with the Reserve Bank of India taking a 60% stake, and name was changed to State Bank of India. In the year 2001, the SBI Life Insurance Company was started by
the Bank. They are the only Bank that have been permitted 74% stake in the insurance business. The Bank's insurance subsidiary 'SBI Life Insurance Company' is a joint venture with Cardiff S.A in which Credit holds 26% of the stake. During the year 2005-06, the bank introduced 'SBI e-tax' an online tax payments facility for direct and indirect tax payment. They also launched the centralized pension processing. The Bank made a partnership with Tata Consultancy Services for setup C-Edg Technologies and consulting services to the banking, financial services and insurance industry. The bank was noted as 'The most preferred bank' in a survey by TV 18 in association with AC Nielsen-ORG Marg. Also, the Bank was voted as 'The most preferred housing loan provider' in AWAAZ consumer awards for the year 2006. In the customer loyalty survey 2006-07 conducted by 'Business World', the Bank was ranked number one in all parameters of customer satisfaction, service orientation, customer care/ call center, customer loyalty and home loans. SBI Funds was judged 'Mutual fund of the year' by CNBC/TV18/CRISL. The Bank introduced new products and services such as web-based remittance, instant fund transfer, online-trading and comprehensive cash management. During the year 2007-08, the Bank launched 965 branches all over the country. They inaugurated a new state-of-the art Dealing Room with online connectivity to all active forex intensive Branches at Corporate Centre in Mumbai. They launched a new product, Construction Equipment Loan to cater to construction Companies. Also, they introduced new products such as SBI Reverse Mortgage Loan and SBI Home Plus in the areas of Home Loans. During the year, the RBI transferred their entire shareholding in the Bank representing 59.73% of the issued capital of the Bank to the Government of India. The Bank acquired 92.03% of equity of Global Trade Finance Ltd. Consequently, GTFL became a subsidiary of the Bank. They signed an MoU with the Indian railways for installing ATMs at 682 railway stations. In March 2008, the Bank opened their 10,000th branch and became only the second bank in the world to have more than 10,000 branches after China's ICBC. During the year 2008-09, the company launched Import factoring, a new product in association with SBI Factors & Commercial Services Ltd. They increased the number of branches for retail sale of gold coins from 250 to 518. Also, they re-launched Gold Deposit Scheme at 50 branches to mobilize gold from domestic market for deployment as metal loans to jewelers. During the year, the Bank opened their 11,111th Branch at Sonapur (Kamrup District) in Assam. They introduced three new products viz., SBI Special Home Loan, SBI Happy Home Loan and SBI Lifestyle in response to the stimulus package announced by the Government of India. Also, they entered into an exclusive arrangement with TATA Motors for handling the booking process of TATA 'Nano' cars. During the year, the Bank launched on their web-site an on-line application form for registering Auto Loan enquiries and expeditiously monitoring and
converting these leads into Auto Loans. Also, they launched 'e-invest' for the ASBA (applications supported by blocked accounts) to aid investors for their equity subscriptions, IPO and Rights applications. During the year, the Bank set up a custodial services company namely SBI Custodial Services Pvt. Ltd., in joint venture with Society General, France. They signed letter of intent for setting up of joint venture Company for undertaking General Insurance Business. Also, they divested 10% equity stake in its wholly owned subsidiary SBI Pension Fund Pvt. Ltd at cost in favour of its subsidiaries. In October 2008, the Bank signed a MoU with State General Reserve Fund (SGRF) of Oman, for a general purpose private equity fund. During the year, State Bank of Saurashtra (SBS), a wholly owned subsidiary of the Bank, amalgamated with the Bank with effect from August 13, 2008. They signed a joint venture agreement with Insurance Australia Group for undertaking General Insurance business. Also, they signed a joint venture agreement with Macquarie Capital Group, Australia and IFC, Washington for setting up an Infrastructure fund of USD 3 billion for investing in various infrastructure projects in India. During the year 2009-10, the Bank opened 1,049 branches, out of which branches were opened in metro and urban areas with a view to increase the Bank's reach and be more accessible to customers. In July 2009, SBI introduced 'SBI Loan to Affluent Pensioners' enabling the government pensioners to avail personal loans up to Rs. 3 lakh. During the year, the Bank designed a special package, the Defense Salary Package, for personnel of the three Armed Forces i.e. the Army, Navy and Air Force who maintain their Salary accounts with them. As of March 2010, the Bank had 12,496 branches and 21,485 Group ATMs. In June 2009, the company increased their shareholding in Nepal SBI Bank Ltd to 55.02% and thus Nepal SBI Bank Ltd became a subsidiary of the Bank with effect from June 14, 2009. In May 2010, the Bank selected consortium of Elavon Incorporation, USA and Visa International, USA as their joint venture (JV) partner for Merchant Acquiring Business. They set up a wholly owned subsidiary, namely SBI Payment Services Pvt Ltd for conducting Merchant Acquiring Business. In August 2010, State Bank of Indore was amalgamated with the Bank as per the scheme of amalgamation approved by the Central Board. During the year 2010-11, the Bank introduced 2 new products, namely 'Pushpa Ullas' and 'Arthias Plus' on pilot basis. They made substantial progress in establishing itself as a leading PE fund player of the country. Also, they also signed a Joint Venture agreement with State General Reserve Fund (SGRF) of Sultanate of Oman, a sovereign entity, to set up a general purpose private equity fund with an initial corpus of USD 100 mn, expandable further to USD 1.5 bn. During the year, the Bank opened 576 new branches besides merger of 470 branches of erstwhile State Bank of Indore. Also, they opened 14 foreign offices during the year, taking the total to 156. In July 1, 2010, the Bank launched their 'Green Channel Counter' at select branches across the
country. In General Insurance business, the Bank launched limited operations in April 2010 for the Corporate and Mid Corporate customers based at Mumbai, and it was expanded to six other major locations in July 2010. In the Retail segment, the Bank launched their Long Term Home Insurance business at Mumbai in October 2010, which was gradually extended to cover 56 RACPCs and RASMECCs. General Insurance SME business was launched on a pilot basis in Mumbai and Chennai in February 2011. During the first quarter of the financial year 2011-12, the Government of India issued the 'Acquisition of State Bank of India Commercial & International Bank Ltd. vide notification dated July 29, 2011. Consequent to the said notification, the undertaking of State Bank of India Commercial & International stands transferred to and vest in State Bank of India with effect from July 29, 2011. List of Directors on the Central Board of State Bank of India (As on 25th January 2012) Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Name Shri Pratip Chaudhuri Shri Hemant G. Contractor Shri Diwakar Gupta Shri A. Krishna Kumar Shri Dileep C. Choksi Shri S. Venkatachalam Shri D. Sundaram Shri Parthasarathy Iyengar Shri Jyoti Bhushan Mohapatra Shri G. D. Nadaf Shri Rashpal Malhotra Shri Deepak Ishwarbhai Amin Shri D. K. Mittal Dr. Subir V. Gokarn Designation Chairman Managing Director Managing Director Managing Director Director Director Director Director Workmen Employee Director Officer Employee Director Director Director Director Director Under Section of SBI Act 1955 19 (a) 19 (b) 19 (b) 19 (b) 19 (c) 19 (c) 19 (c) 19 (c) 19 (ca) 19 (cb) 19 (d) 19 (d) 19 (e) 19 (f)
ICICI profile, product and services ICICI Bank is India's second-largest bank with total assets of Rs. 4,062.34 billion (US$ 91 billion) at March 31, 2011 and profit after tax Rs. 51.51 billion (US$ 1,155 million) for the year ended March 31, 2011. The Bank has a network of 2,752 branches and 9,225 ATMs in India, and has a presence in 19 countries, including India.
ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries in the areas of investment banking, life and non-life insurance, venture capital and asset management. The Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has established branches in Belgium and Germany. ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE). Board Members Mr. K. V. Kamath, Chairman Mr. Sridar Iyengar Dr. Swati Piramal Mr. Homi R. Khusrokhan Mr. Arvind Kumar Mr. M.S. Ramachandran Dr. Tushaar Shah Mr. V. Sridar
Ms. Chanda Kochhar, Managing Director & CEO
Mr. N. S. Kannan, Executive Director & CFO Mr. K. Ramkumar, Executive Director Mr. Rajiv Sabharwal, Executive Director
The Literature Review
CHAPTER 3: RESEARCH METHODOLOGY AN OVERVIEW: The Chapter begins with an introduction to the process of research methodology, further mentioning the Research Objectives, Research Design and The Universe for considering the sample and the various Data Sources. • • • • • INTRODUCTION RESEARCH OBJECTIVES RESEARCH DESIGN UNIVERSE DATA SOURCE
INTRODUCTION
Research is a scientific and systematic search for pertinent information on a specific topic. It is an art of scientific investigation. The search for knowledge through objective and systematic method of finding solution to a problem is Research. The purpose of research is to discover answers to questions through the application of scientific procedures. The main aim is to find out the truth which is hidden and has not been discovered yet.
OBJECTIVES OF RESEARCH
1. To draw the comparative analysis of ICICI BANK Ltd with SBI in terms of performance and customer satisfaction 2. To identify the major attributes of customer satisfaction at SBI and ICICI.
RESEARCH DESIGN The research is done through non-probabilistic convenient sampling. The data collected would be both primary and secondary. The method of primary data collection would be mailed questionnaires, interviews and the sampling method would be non-probability convenience sampling The study undertaken is of Descriptive and analytical one. Research Instrument: Evaluation of Indian organizations to explore key issues and trends of employer branding was done through mail responses to a structured questionnaire from various customers of SBI AND ICICI in Rajasthan. ? Questionnaire is structured with close-ended questions. ? Simple English language was opted to prepare multiple-choice questions. ? Name and employment of the respondent were asked to give a personal touch.
Sampling: Sample Design Sample Size Sample Unit : : : Non-probabilistic convenience sampling 300 Various customers of SBI AND ICICI in Rajasthan. UNIVERSE The study is restricted to the customers of SBI and ICICI in state of Rajasthan. DATA SOURCE Primary Data: Through mailed Questionnaire to various respondents working as employees in different organizations across India. Major number of respondents are FMS alumni group and friends group working in various sectors like IT, telecom, FMCG, Financial Services etc. Secondary Data: Through various journals, magazines, news-papers, books and Internet (world wide web).
CHAPTER 4: FINDINGS AND ANALYSIS
AN OVERVIEW: The chapter begins with statement of various factors of consideration for findings and further elaborates findings and analysis of each factor separately. VARIOUS FACTORS OF CONSIDERATION
• • • •
•
Facility Level of SBI & ICICI Quality of Value Added Services Product Ratings REFERRING ICICI / SBI TO OTHER CUSTOMERS Relationship with ICICI/SBI Best Insurance Product OTHER MAJOR SERVICES GOVERNMENT BUSINESS SCHEMES GOVERNMENT TAX COLLECTION AWARNESS AND SATISFACTION LEVEL OF VARIOUS LOANS LOCKER FACILITY AVAILING CUSTOMER RELATIONAL SHIP BETWEEN BANKER & CUSTOMER OPINION ABOUT THE CHARGES LEIVED IS MANAGER AVAILABLE FOR ANY CLARIFICATION DRAWBACKS/ PROBLEM WITHIN ICICI/SBI EASE TO BANK UPON
• • • • • • • • • • •
Considering above mentioned various factors responsible for the formation of successful customer satisfaction, the opinion of respondents is obtained about the strength of each factor in the two powerful banking organizations. These findings are illustrated ahead:
1. FINDINGS ON QUALITY OF VALUE ADDED SERVICES Quality of valueadded services SBI Excellent Good Average Bad Total 180 100 20 0 300 60 33.33 6.66 0 100 Frequency of Response Percentage (%) Frequency of Response ICICI 100 120 80 0 300 Percentage (%)
33.33 40 26.66 0 100
2. FINDINGS ON Product Ratings
Quality of valueadded services
Frequency of Response
Percentage (%) SBI
Frequency of Response ICICI 100 90 80 30 300
Percentage (%)
Excellent Good Average Bad Total
200 100 0 0 300
66.67 33.33 0 0 100
33.33 30 26.67 10 100
3.FINDINGS ON REFERRING ICICI / SBI TO OTHER CUSTOMERS
Quality of valueadded services
Frequency of Response
Percentage (%) SBI
Frequency of Response ICICI
Percentage (%)
Excellent Good Average Bad Total
220 60 20 0 300
73.33 20 6.67 0 100
100 110 70 20 300
33.33 36.67 23.33 6.67 100
4.FINDINGS ON Relationship with ICICI/SBI Quality of valueadded services SBI Excellent Good Average 190 80 10 63.33 26.67 3.33 Frequency of Response Percentage (%) Frequency of Response ICICI 110 80 70 Percentage (%)
36.67 26.67 23.33
Bad Total
20 300
6.67 100
40 300
13.33 100
5. FINDINGS ON Best Insurance Product
Quality of valueadded services
Frequency of Response
Percentage (%) SBI
Frequency of Response ICICI 70 100 50 80
Percentage (%)
Excellent Good Average Bad
100 80 90 30
33.33 26.67 30 10
23.33 33.33 16.67 26.67
Total
300
100
300
100
6 FINDINGS ON OTHER MAJOR SERVICES
Quality of other major services
Frequency of Response
Percentage (%) SBI
Frequency of Response ICICI 110 70 50 70 300
Percentage (%)
Excellent Good Average Bad Total
150 80 60 10 300
50 26.67 20 3.33 100
36.67 23.33 16.67 23.33 100
7. FINDINGS ON GOVERNMENT BUSINESS SCHEMES GOVERNMENT BUSINESS SCHEMES Excellent Good Average Bad Total SBI 170 60 40 30 300 56.67 20 13.33 10 100 Frequency of Response Percentage (%) Frequency of Response ICICI 120 50 70 60 300 40 16.67 23.33 20 100 Percentage (%)
8FINDINGS ON GOVERNMENT TAX COLLECTION GOVERNMENT TAX COLLECTION Excellent Good Average Bad Total SBI 150 60 70 20 300 50 20 23.33 6.67 100 Frequency of Response Percentage (%) Frequency of Response ICICI 80 100 70 50 300 26.67 33.33 23.33 16.67 100 Percentage (%)
9 FINDINGS ON AWARNESS AND SATISFACTION LEVEL OF VARIOUS LOANS AWARNESS AND SATISFACTI ON LEVEL OF VARIOUS LOANS Excellent Good Average Bad Total 160 120 90 30 300 53.33 40 30 10 100 120 110 50 20 300 40 36.67 16.67 6.66 100 SBI Frequency of Response Percentage (%) Frequency of Response ICICI Percentage (%)
10 FINDINGS ON LOCKER FACILITY AVAILING CUSTOMER
LOCKER FACILITY AVAILING CUSTOMER Excellent Good Average Bad Total 100 60 120 20 300 33.33 20 40 6.67 100 SBI Frequency of Response Percentage (%) Frequency of Response ICICI 110 50 80 60 300 36.67 16.67 26.66 20 100 Percentage (%)
11.FINDINGS ON RELATIONAL SHIP BETWEEN BANKER & CUSTOMER RELATIONAL SHIP BETWEEN BANKER & CUSTOMER Excellent Good Average Bad Total 130 60 40 70 300 43.33 20 13.33 23.33 100 SBI Frequency of Response Percentage (%) Frequency of Response ICICI 100 110 70 20 300 33.33 36.67 23.33 6.67 100 Percentage (%)
12FINDINGS ON OPINION ABOUT THE CHARGES LEVIED OPINION ABOUT THE CHARGES LEVIED Excellent Good Average Bad Total SBI 90 110 80 20 300 30 36.67 26.67 6.66 100 Frequency of Response Percentage (%) Frequency of Response ICICI 40 70 120 70 300 13.33 23.33 40 23.33 100 Percentage (%)
13 FINDINGS ON MANAGER AVAILABLITY FOR ANY CLARIFICATION
MANAGER AVAILABLITY SBI Excellent Good Average Bad Total 120 70 50 60 300 40 23.33 16.67 20 100 Frequency of Response Percentage (%) Frequency of Response ICICI 140 110 40 10 300 Percentage (%)
46.67 36.67 13.33 3.33 100
14.FINDINGS ON ABILITY DRAWBACKS/ PROBLEM WITHIN ICICI/SBI
ABILITY TO IMROVE DRAWBACKS/ PROBLEM WITHIN ICICI/SBI Excellent Good Average Bad Total
Frequency of Response
Percentage (%) SBI
Frequency of Response ICICI
Percentage (%)
140 60 20 80 300
46.67 20 6.67 26.66 100
150 110 30 10 300
50 36.67 10 3.33 100
15FINDINGS ON EASE TO BANK UPON Ease TO BANK UPON SBI Excellent Good Average Bad Total 250 50 0 0 300 83.33 16.67 0 0 100 Frequency of Response Percentage (%) Frequency of Response ICICI 100 110 70 20 300 Percentage (%)
33.33 36.67 23.33 6.67 100
CHAPTER 5: SWOT ANALYSIS
AN OVERVIEW: The chapter covers the swot analysis of SBI AND
ICICI to enable
to understand the performance of both the banks in terms of customer satisfaction. SWOT is an acronym for the internal Strengths and Weaknesses of a firm and the environmental Opportunities and Threats facing that firm. SWOT analysis is a widely used technique through which managers create a quick overview of a company’s strategic situation. The technique is based on the assumption that an effective strategy derives from a sound “fit” between a firm’s internal resources (strengths and weaknesses) and its external situation (opportunities and threats). A good fit maximizes a firm’s strengths and opportunities and minimizes its weaknesses and threats. Accurately applied, this simple assumption has powerful implications for the design of a successful strategy.”
STRENGTHS
1) Online Services: ICICI Bank provides online services of all it’s banking facilities. It also provides D-Mart account facilities on-line, so a person can access his account from anywhere he is.[D-Mart is a dematerialized account opened by a salaried person for purchase &sale of shares of different companies. 2) Advanced Infrastructure: Branches of ICICI Bank are well equipped with advanced technology to provide the customers with taster banking services. All the computerized machines are located in suitable manner & are very useful to the customers & staff of the bank. 3) Friendly Staff: The staff of ICICI Bank in all branches is very friendly & helpful for customers in all cases. They provide faster services along with bonding & personal relationship with the customers. 4)24 hrs. Banking services:
Compared to other bank ICICI bank provides long hrs. of services to the customers. This service is one of its kinds & is very helpful for the customers who are in urgent need of money.
5) Other Facilities to the Customers & Employees: ICICI Bank also provides other facilities like drinking water facilities, proper sitting arrangements to the customers. And there are also proper ventilation & sanitary facilities for the employees of the bank.
6) Late night ATM services: ICICI bank provides late night ATM services to the customers. The ATM centers of ICICI bank works even after 11:00pm. at night in certain branches.
Weakness
1) High Bank Service Charges:
ICICI bank charges highly to customers for the services provided by them when compared to other bank & that are why it is only in the reach of higher class of society.
2) Less Credit Period:
ICICI bank provides credit facilities but only upto limited period. Even when the credit period is not over it sends reminder letters to the customers which may annoy them. OPPORTUNITIES
1) Bank –Insurance services:
The bank should also provide insurance services. That means the bank can have a tie-up with a insurance company. The bank will advertise & promote the different policies introduced by the insurance company & convince their customers to buy insurance policies.
2) Increase in percentage of Returns on increase: The bank should provide higher returns on deposits in comparison of the present situation. This will also up to large extent help the bank earn profits & popularity.
.3) Recruit professionally guided students: Bank & Insurance is a special non-aid course where the students specialize in the functioning & services of the bank & also are knowledge about various tax policies. The bank can recruit these students through tie-ups with colleges. Such students will surely prove as an asset to the bank.
3) Associate with social cause:
The bank can also associate itself with social causes like providing relief aid patients, funding towards natural calamities. But this falls in the 4th quadrant so the bank should neglect it.
1) Bank –Insurance services:
The bank should also provide insurance services. That means the bank can have a tie-up with a insurance company. The bank will advertise & promote the different policies introduced by the insurance company & convince their customers to buy insurance policies. 2) Increase in percentage of Returns on increase: The bank should provide higher returns on deposits in comparison of the present situation. This will also upto large extent help the bank earn profits & popularity.3) Recruit professionally guided students: Bank & Insurance is a special non-aid course where the students specialize in the functioning & services of the bank & also are knowledge about various tax policies. The bank can recruit these students through tie-ups with colleges. Such students will surely prove as an asset to the bank.4) Associate with social cause: The bank can also associate itself with social causes like providing relief aid patients, funding towards natural calamities. But this falls in the 4th quadrant so the bank should neglect it. THREATS
1) Competition:
ICICI Bank is facing tight competition locally as well as internationally. Bank like CITI Bank, HSBC, ABM, Standered Chartered, HDFC also provide equivalent facilities like ICICI do and also ICICI do not have consistency in its international operation. SBI SWOT ANALYSIS
State Bank of India State Bank of India (SBI) is the leading commercial bank in India, offering services such as retail banking, commercial banking, international banking and treasury operations. The bank is an integral part of State Bank Group, which includes 5 other banks and offers additional services such as mutual funds and insurance. The bank primarily operates in India. It is headquartered in Mumbai, India and employs about 179,205 people.
Strengths Brand name Market Leader Wide Distribution Network Government Owned Diversified Portfolio Strong domestic market position sustaining reach and customer confidence Strong capital position helping pursue growth initiatives SBS merger further hastens SBI and its associate banks merger and helping defend its leadership position
WEAKNESSES Minor hindrances Hierarchical management Lags modernization Reduction in the asset quality increasing non performing asset’s ratio Susceptible to political interventions SBI could be the highest beneficiary from the increasing adoption of E-transactions Investments in information technology will decrease transaction costs of SBI New business initiative will expand the market share and increase the revenues Growth in general insurance industry will help increasing the market share
Threats Advent of MNC banks CRM Private banks venturing into the rural Employee Strike Opening of Indian banking sector in 2010-12 will cause intense competition Global economic slowdown could reduce demand for banking services in India
OPPORTUNITYMATRIX:
THREAT MATRIX FOR SBI
CHAPTER 6: RECOMMENDATIONS AND CONCLUSION AN OVERVIEW: The chapter consists of recommendations suggested by the researcher on the basis of his findings and analysis of various facts for the building of an effective employer brand, followed by the conclusion of whole research project.
SBI stands for State Bank of India. It is a public sector institution (government owned), with a huge customer base all over India. It has 5 associate banks operating under its SBI name. It has over thirteen thousand branches across India and in some selected international countries, and a 56,000 ATM network across India. The Standard Bank of India ‘inherited’ the Bank of Calcutta, which was founded in 1806, and has been in existence for over two hundred years. On the other hand, the ICICI is a private sector bank (privately owned), with a relatively smaller clientele base. It is one of the major banks in India (precisely the second largest), but much smaller than the SBI. It has 950 branches, with 3,500 branches across India. The bank has deposits of Rs 1.65 lakh crore compared to SBI’s Rs 3.8 lakh crore (accumulated in a period of twelve years), racking up a net worth of Rs 22,000 against Rs 27,000 for the State Bank of India. This represents Rs 9 crore business generated by each ICI CI employee per year, compared to Rs 3 crore worth of business per employee of the ICICI. While the State Bank pays 4.7 percent on deposits, and earns less on advances, the ICICI pays 0.7 less (4 percent), while earning more on advances, and thus earns 0.4 percent more on assets than the SBI. This is no surprise, as there’s seemingly limitless access to funds from the government for the state owned SBI.
ICICI has been able to use technology to provide value-added service to its customers during the last few years. For ICICI, technology is an integral part of their business. However, their overall progress could have been smoother but for certain internal and extraneous factors and also a pressure on spreads due to a competitive market E-banking has become a necessary survival weapon and is fundamentally changing the banking industry worldwide. Today, the click of the mouse offers customers banking services at a much lower c o s t a n d a l s o e m p o w e r s t h e m w i t h u n p r e c e d e n t e d f r e e d o m i n c h o o s i n g v e n d o r s f o r t h e i r financial service needs. No country today has a choice- whether to implement E-banking or not given the global and
competitive nature of the economy. ICICI have to upgrade and constantly think of new innovative customized packages and services to remain competitive. The invasion o f banking by technology has created an information age and c o m m o d i t i z a t i o n o f b a n k i n g services. ICICI have come to realize that survival in the new e-economy depends on delivering some or all of their banking services on the Internet while continuing to support their traditional Page. Infrastructure: The rise of E-banking is redefining business relationships and the most successful banks will be those that can truly strengthen their relationship with their customers. Without any d o u b t , t h e i n t e r n a t i o n a l s c o p e o f E - b a n k i n g p r o v i d e s n e w g r o w t h p e r s p e c t i v e s a n d I n t e r n e t business is a catalyst for new technologies and new business processes.
To conclude, although the SBI has generally performed well in the past, in recent years, the ICICI has seen very good performance, almost edging out the SBI in every aspect, especially financially. The financial years between 2008-2009 and 2010, and 2012, saw very strong gains for the ICICI bank. Its deposits grew by 200 percent, five times more than the SBI’s, and while SBI’s revenue grew by 30 percent, the ICICI bank’s revenue grew by seven times that percentage. This trend means that ICICI’s growth will eventually overtake SBI’s in the future, in terms of deposits. But when it comes to customer satisfaction, SBI still leads the banking sector with maximum satisfied customers in hand. Summary The SBI is a government owned bank (public sector), while ICICI is a privately owned ban k(private sector). 2. The SBI is much older (more than 200 years old) and more established than the ICICI, which is less than 25 years old. 3. The SBI does not limit daily international transfer amounts, while the ICICI limits daily transfer to $5000 a day. 4. The SBI bank pays a higher percentage on deposits than the ICICI bank
5 ICICI’s growth will eventually overtake SBI’s in the future, in terms of deposits. But when it comes to customer satisfaction, SBI still leads the banking sector with maximum satisfied customers in hand. .
Internet (world wide web) www.rbi.org.in www.moneycontrol.com www.nseindia.com www.icicibank.com www.sbi.com www.google.com
Wikipedia (free encyclopedia on internet) Economic times Business world.
doc_817627762.doc
ON “A COMPARATIVE STUDY ON PERFORMANCE AND CUSTOMER SATISFACTION OF SBI AND ICICI BANK IN RAJASTHAN STATE”
In Partial Fulfillment of Master of Business Administration Session 2010-2012
FACULTY OF MANAGEMENT STUDIES Mohan Lal Sukhadia University (New Campus) Udaipur Project Supervisor: Dr. Meera Mathur Asso. Prof., FMS Udaipur (2010-2012) Submitted by: Manoj Kumar Sharma MBA Part 2
CERTIFICATE FROM FACULTY
May 29, 2012
This is to certify that , of Faculty of Management Studies, M.L.S.U, Udaipur has completed her 15 days Major Research Project on the topic “COMPARATIVE STUDY ON PERFORMANCE AND CUSTOMER SATISFACTION OF SBI AND ICICI BANK IN RAJASTHAN STATE” as a part of curriculum for MBA part 2 Semester 4, under my supervision and she has completed her work satisfactorily.
Dr. Meera Mathur Faculty, FMS Udaipur
DECLARATION I hereby declare that project titled “A COMPARATIVE STUDY ON PERFORMANCE AND CUSTOMER SATISFACTION OF SBI AND ICICI BANK IN RAJASTHAN STATE” is an original piece of research work carried out by me under the guidance and supervision of Prof . The information has been collected from genuine &authentic sources. The work has been submitted in partial fulfillment of the requirement of MBA course to our college.
Place:
Signature:
Date:
Name of the student:
CONTENTS
? ? ? ?
CERTIFICATE FROM FACULTY DECLARATION ACKNOWLEDGEMENT EXECUTIVE SUMARRY
Chapter 1: INTRODUCTION • • • Need and Scope of the Project Project details Rationale of study
Chapter 2: THEORETICAL FRAMEWORK • • • • The Concept Of Customer Satisfaction The structure of Indian banking system SBI profile, product and services ICICI Bank Ltd. Profile ,products & services The Literature Review
•
Chapter 3: RESEARCH METHODOLOGY • • • • • Introduction Research Objectives Research Design Universe Data source
Chapter 4: FINDINGS AND ANALYSIS • Various factors of consideration Facility Level of SBI & ICICI Value Added Services
• •
• •
•
Product Ratings REFERRING ICICI0SBI TO OTHER CUSTOMERS Relationship with ICICI/SBI Best Insurance Product OTHER MAJOR SERVICES GOVERNMENT BUSINESS SCHEMES GOVERNMENT TAX COLLECTION AWARNESS AND SATISFACTION LEVEL OF VARIOUS LOANS LOCKER FACILITY AVAILING CUSTOMER RELATIONAL SHIP BETWEEN BANKER & CUSTOMER OPINION ABOUT THE CHARGES LEIVED IS MANAGER AVAILABLE FOR ANY CLARIFICATION DRAWBACKS/ PROBLEM WITHIN ICICI/SBI
• • • • • • • • • •
Chapter 5: SWOT ANALYSIS SBI SWOT ANALYSIS ICICI SWOT ANALYSIS
Chapter 6: RECOMMENDATIONS AND CONCLUSION
ANNEXURES REFERENCES
ACKNOWLEDGEMENT “Perseverance inspiration and motivation have always played a key role in success of any venture”. I hereby express my deep sense of gratitude to all the personalities involved directly and indirectly in my project work. In order to complete any project successfully, functional environment & proper guidance of the expert on the subject is inevitable. I would like to extend my sincere thanks to the employed, businessmen, professional & any other respondents who have extended their active cooperation while going through the survey on Private and National Bank. I am very grateful my mentor and guide Dr. Meera Mathur for providing me a great guidance leading to enhancement in my excellence and finishing of this research work. Without the guidance and critical assessment of Meera Mam it could not have been possible for me to come with such great research work. Due to Meera Mam’s valuable guidance this research project has become a great learning path for me. I am really indebted to my faculty of MBA department and our Director Prof.P.K.Jain who has always been a source of guidance, inspiration and motivation. However, I accept the sole responsibility for any possible errors of omission and would be extremely grateful to the readers of this project report if they bring such mistakes to my notice.
Last but not the least I would thank God for HIS blessings, my parents and classmates also for their valuable suggestions and support in my project report.
Manoj Kumar Sharma
EXECUTIVE SUMARRY Project study enables to understand a practical project in order to study, analyze, interpret and report on management aspects. It helps to get knowledge about various practical aspects of the industry. Under this project I have critically studied the key issues and trends of SBIsand ICICI which leads to their customer satisfaction over one another in Rajasthan , through a mailed questionnaire. Customers, Employees of various industrial sectors such as Telecom, Information Technology, FMCG,Financial Services etc. have been covered. Various aspects of Project are summarized as below: Title of Project: This project was carried on topic, “A COMPARATIVE STUDY ON PERFORMANCE AND CUSTOMER SATISFACTION OF SBI AND ICICI BANK IN RAJASTHAN STATE” Rational To maintain performance becomes very mandatory for any bank in today’s volatile marketing area and performance can only be achieved if the customers are satisfied with the product and services offered. It has become more critical in today's times, as most of the customers look at a long-term beneficial relationship with the banking company. Customer satisfaction is prima facie the need of hour. The comparative study of SBI AND ICICI will serve best for the retention of old customers and attracting potent future customers which in turn will be fruitful to generate higher profitability. Research Methodology: (a) Objectives
1. To draw the comparative analysis of ICICI BANK Ltd with SBI in terms of performance and customer satisfaction 2. To identify the major attributes of customer satisfaction at SBI and ICICI. (b) Research Design The research would be an analytical and descriptive one. The data collected would be both primary and secondary. The method of primary data collection would be MAILED questionnaires, interviews and the sampling method would be non-probability convenience sampling. (c) Universe The study is restricted to the customers of SBI AND ICICI in Rajasthan. (e) Data Source The secondary data: Collected from various libraries, various journals, magazines, World Wide Web and other sources. Primary data: Obtained through mailing a questionnaire to respondents. The data will be analyzed and appropriate statistical tools will be used to get results. Major Findings and Conclusion: SBI stands for State Bank of India. It is a public sector institution (government owned), with a huge customer base all over India. It has 5 associate banks operating under its SBI name. It has over thirteen thousand branches across India and in some selected international countries and a 56,000 ATM network across India. The Standard Bank of India ‘inherited’ the Bank of Calcutta, which was founded in 1806, and has been in existence for over two hundred years. On the other hand, the ICICI is a private sector bank (privately owned), with a relatively smaller clientele base. It is one of the major banks in India (precisely the second largest), but much smaller than the SBI. It has 950 branches, with 3,500 branches across India. The bank has deposits of Rs 1.65 lakh crore compared to SBI’s Rs 3.8 lakh crore (accumulated in a period of twelve years), racking up a net worth of Rs 22,000 against Rs 27,000 for the State Bank of India.
This represents Rs 9 crore business generated by each ICICI employee per year, compared to Rs 3 crore worth of business per employee of the ICICI. While the State Bank pays 4.7 percent on deposits, and earns less on advances, the ICICI pays 0.7 less (4 percent), while earning more on advances, and thus earns 0.4 percent more on assets than the SBI. This is no surprise, as there’s seemingly limitless access to funds from the government for the state owned SBI. To conclude, although the SBI has generally performed well in the past, in recent years, the ICICI has seen very good performance, almost edging out the SBI in every aspect, especially financially. The financial years between 2001-2002 and 2010, and 2012, saw very strong gains for the ICICI bank. Its deposits grew by 200 percent, five times more than the SBI’s, and while SBI’s revenue grew by 30 percent and the ICICI bank’s revenue grew by seven times that percentage. This trend means that ICICI’s growth will eventually overtake SBI’s in the future, in terms of deposits. But when it comes to customer satisfaction, SBI still leads the banking sector with maximum satisfied customers in hand.
CHAPTER 1: INTRODUCTION AN OVERVIEW: This chapter initiates with the discussion on the need and scope of the project, further incorporating the Project Details and ending up with the Rationale of Study to impart the reader with a broad outline of the Project.
• • •
NEED AND SCOPE OF THE PROJECT PROJECT DETAILS RATIONALE OF STUDY
NEED AND SCOPE OF THE PROJECT
NEED OF THE PROJECT: To identify the satisfaction level of customer towards different types of service attributes,products offered by SBI AND ICICI by identifying their critical factors. To study about the banks and their customized products and services. To study the experience and expectations of the existing customers. To study to improve the current standards of services.
To study the scope of introducing new types of services. To study about the business tactics followed to stand against the competitors.
SCOPE OF THE PROJECT: This Study will help us to understand the customer satisfaction about banking services and products. This study will help banks to understand, how a customer selects, organizes and interprets the Quality of service and product offered by banks. The market is more aware and realistic about investment and returns from financial products. In this background this study tries to analyze the customer satisfaction towards banking services and products in general and of SBI and ICICI in general.
PROJECT DETAILS Title of Project: “A COMPARATIVE STUDY ON PERFORMANCE AND CUSTOMER SATISFACTION OF SBI AND ICICI BANK IN RAJASTHAN STATE” Project Type: Marketing Concept Project Supervisor: Dr. Meera Mathur Project objectives: 1. To draw the comparative analysis of ICICI BANK Ltd with SBI in terms of performance and customer satisfaction 2. To identify the major attributes of customer satisfaction at SBI and ICICI.
RATIONALE OF STUDY An unsatisfied customer is a major drawback for any banking industry. Therefore, to maintain performance becomes very mandatory for any bank in today’s volatile marketing area and performance can only be achieved if the customers are satisfied with the product and services offered. It has become more critical in today's times, as most of the customers look at a long-term beneficial relationship with the banking company. Customer satisfaction is prima facie –the need of hour. The comparative study of SBI AND ICICI will serve best for the retention of old customers and attracting potent future customers which in turn will be fruitful to generate higher profitability.
CHAPTER 2: THEORETICAL FRAMEWORK AN OVERVIEW: The chapter begins with an explanation of the concept of customer satisfaction, further elaborating the banking industry, SBI AND ICICI PROFILE on the whole and an understanding of its practical application, ending up with The Literature Review. • • • • • The Concept Of Customer Satisfaction The structure of Indian banking system SBI profile, product and services ICICI Bank Ltd. Profile ,products & services The Literature Review
The Concept of Customer Satisfaction The modern concepts of marketing realized that measuring consumer needs or behavior was not enough.´ CONSUMER SATISFICATION´ should be the core and then the correct perception on which marketing policies of our organization should be built.³Management must think of itself not as producing products but as providing customer creating value satisfaction. ‘Customer satisfaction has a vital role in sustaining and improving hold on the market. Brief descriptions about the various measures that are needed to improve customer orientation have also been dealt with. Consider the fact today’s customer face a plenitude of products in every category. Customer will be having high and raising expectation of quality and service. In the face of their vast choices, the customer will gravitate to the offering that the best meet their individual needs and expectation. They will buy one of the bases of their perception value. Therefore it is not surprising that today’s winning companies are those succeed best in satisfying indeed delighting their target customer. They pay extreme attention to quality and service to meeting and even exceeding customer expectation. They complete vigorously and at the co-operated smartly with their strategy partners in their supply and distribution chain. They pursue efficiently and yet are responsible and flexible. Customer satisfaction is the outcome felt by buyers who have expectation. Customers are satisfied when their expectation are met and delighted when their expectations are exceeded. Satisfied customers remain loyal longer, buy more, and are less sensitive and talk favorable about the company. From this it is clear that the satisfied customer will be less sensitive towards the fluctuating price and offensive marketing typically cost more than defensive marketing, because it requires much effort and cost to induce satisfied customers to switch away from their current suppliers. We should also consider the fact that ³the cost of attracting a new customer may be five times the cost of keeping the current customer happy.´ Therefore the companies are intending in developing stronger bones and loyalty with their customers. DEFINITION OF CUSTOMER SATISFACTION Customer satisfaction refers to the extent to which customers are happy with the products and services provided by a business. Customer satisfaction levels can be measured using survey techniques and questionnaires
DEFINITIONS: Definition 1: Customer satisfaction is equivalent to making sure that product and service performance meets customer expectations. Definition 2: Customer satisfaction is the perception of the customer that the outcome of a business transaction is equal to or greater than his/her expectation. Definition 3: Customer satisfaction occurs when acquisition of products and/or services provides a minimum negative departure from expectations when compared with other acquisitions. Gaining high levels of customer satisfaction is very important to a business because satisfaction customers are most likely to be loyal and to make repeat orders and to use a wide range of services offered by a business There are many factors which lead in high levels of customer satisfaction including. Products and services which are customer focused and hence provide high levels of value for money. What is clear about customer satisfaction is that customers are most likely to appreciate the goods and services that they buy if they are made to feel special. This occurs when they feel that the products and services that they buy have been specially produced for them or for people like them. BENEFITS OF CUSTOMER SATISFACTION The importance of customer satisfaction and support is increasingly becoming a vital business issue as organization realize the benefits of Customer Relationship Management (CRM) for providing effective customer service. Professionals working within customer focused business or those running call centers or help desks, need to keep informed about the latest customer satisfaction techniques for running a valuable customer service function. From small customer service departments to large call centers, the importance of developing a valued relationship with customers using CRM is essential to support customer and long-term business growth. What Do Customers Want? Before we begin to create tools to measure the level of satisfaction, it is important to develop a clear understanding of what exactly the customer wants. We need to know what our customers expect from the products and services we provide. Customer expectations have two types ±
• •
Expressed Implied
Expressed Customer Expectations are those requirements that are written down in the contract and agreed upon by both parties for example, product specifications and delivery requirements. Supplier’s performance against these requirements is most of the items directly measurable. Implied Customer Expectations are not written or spoken but are the ones the customer would you expect the supplier to meet nevertheless. For example, a customer would expect the service representative who calls on him to be knowledgeable and competent to solve a problem on the spot. There are many reasons why customer expectations are likely to change overtime. Process improvements, advent of new technology, changes in customers’ priorities, improved quality of service provided by competitors are just a few examples. The customer is always right. Supplier’s job is to provide the customer what he/she wants, when he/she wants it. Customer satisfaction is customers’ perception that a supplier has met or exceeded their expectations. 3.3 WHAT CONSTITUTES SATISFACTION? We cannot create customer satisfaction just by meeting customers’ requirements fully because these have to be met in any case. However failing short is certain to create dissatisfaction. Major Attributes of customer satisfaction in banking industry Can be summarized as: Product quality Premium outflow Return on Investment Services Responsiveness and ability to resolve complaints and reject reports. Overall communication, accessibility and attitude. WHAT ARE THE TOOLS? Customer expectations can be identified using various methods such as: Periodic contract reviews Market research, Telephonic interviews, Personal visits, warranty, records, Informal discussions, and satisfaction surveys. Depending upon the customer base and available resources, I can choose a method that is most effective in measuring the customer’s perceptions. The purpose of the exercise is to identify priorities for improvements. I develop a method or combination of methods that helps to continually improve service.
3.4 CUSTOMER SATISFACTION SURVEYS
Formal survey has emerged as by far the best method of periodically the customer satisfaction. The surveys are not marketing tools but an information gaining tool. Enough homework needs to be before embarking on the actual survey. This includes: Defining Objectives of the Survey Design Survey approach Develop questionnaires and forms administer Survey (Email, Telephone or Post) Method of compiling data and analyzing the findings format of the report to present the findings there is no point in asking irrelevant questions on a customer satisfaction questionnaire. The basic purpose is to find out what we are doing right or wrong. Where is the scope for improvement, where do we stand vis-à-vis other suppliers. How we can serve the customer better? A customer satisfaction measurement survey should at least identify the following objectives: Importance to customers (Customers priorities) Customers perception of supplier’s performance your performance relative to customers priorities. Priorities for improvement survey forms should be easy to fill out with minimum amount of time and efforts on customer’s part. They should be designed to actively encourage the customer to complete the questions. Yet they must provide accurate data should also be sufficiently reliable for management decision making. This can be achieved by incorporating objective type questions where customer has to rate´ on scale of say 1 to 10. For repeated surveys, you could provide the rating that was previously accorded by the customer. This works like a reference point for the customer. Space should always be provided for the customers own opinions this enables them to state any additional requirements or report any shortcomings that are not covered by the objective questions. Normally, we deal various personnel at various levels in the customers.
Depending upon the customer base and available resources, we can choose a method that is most effective in measuring the customer’s perceptions. The purpose of the exercise is to identify priorities for improvements. We must develop a method or combination of methods that helps to continually improve service. 3.4 CUSTOMER SATISFACTION SURVEYS Formal survey has emerged as by far the best method of periodically the customer satisfaction. The surveys are not marketing tools but an information²gaining tool. Enough homework needs to be before embarking on the actual survey. This includes:
? Defining Objectives of the Survey ? Design Survey approach ? Develop questionnaires and forms Administer Survey (Email, Telephone or Post)Method
of compiling data and analyzing the findings format of the report to present the findings there is no point in asking irrelevant questions on a customer satisfaction questionnaire. The basic purpose is to find out what we are doing right or wrong. Where is the scope for improvement, where do we stand vis-à-vis other suppliers. How we can serve the customer better?
? A customer satisfaction measurement survey should at least identify the following objectives:
Importance to customers (Customers priorities)Customers perception of suppliers performance Your performance relative to customers priorities. Priorities for improvement survey forms should be easy to fill out with minimum amount of time and efforts on customer’s part. They should be designed to actively encourage the customer to complete the questions. Yet they must provide accurate data should also be sufficiently reliable for management decision making. This can be achieved by incorporating objective type questions where customer has to³rate´ on scale of say 1 to 10. For repeated surveys, you could provide the rating that was previously accorded by the customer. This works like a reference point for the customer. Space should always be provided for the customers own opinions this enables them to state any additional requirements or report any shortcomings that are not covered by the objective questions. Normally, we deal various personnel at various levels in the customers. 6. Organization²the buyer, user, receiving inspector, finance and purchase person etc. surveying a number of respondents for each customer gives a complete perspective of customer satisfaction. It may be necessary to device a different questionnaire for each of them. Respondents must be provided a way to express the importance they attach to various survey parameters. Respondents should be asked to give a weighting factor, again on a rating scale of say, 1 to 10, for each requirement. This gives a better indication of relative importance of each parameter towards overall customer satisfaction and makes it easier for suppliers to prioritize their action plans by comparing the performance rating (scores) with importance rating (weighing).
The structure of Indian banking system Today, the Indian Banking System is known the world over for its robustness. The Reserve Bank of India is the central/apex Bank which regulates the functioning of all banks operating within the country.
Structure of Indian Banking Industry
The banking system, largely, comprises of scheduled banks (banks that are listed under the Second Schedule of the RBI Act, 1934). Unscheduled banks form a very small component (function in the form of Local Area Bank). Scheduled banks are further classified into commercial and cooperative banks, with the basic difference in their holding pattern. Cooperative banks are cooperative credit institutions that are registered under the Cooperative Societies Act and work according to the cooperative principles of mutual assistance.
Major Players in the Indian Banking Industry
Public Sector Banks (SBI and associates + Nationalised banks) control more than 74-75% of the total credit and deposits businesses in India whereas Private Sector Banks around 1718%.
How does the industry work? Here is the analysis…
The banking industry in India is highly regulated. Few important regulations are mentioned in the diagram below:
The core operating income of a bank is interest income (comprises 75-85% in the total income of almost all Indian Banks). Besides interest income, a bank also generates fee-based income in the form of commissions and exchange, income from treasury operations and other income from other banking activities. As banks were assigned a special role in the economic development of the country, RBI has stipulated that a portion of bank lending should be for the development of under-banked and under-privileged sections, which is called the priority sector. Current rules stipulate that domestic banks should lend 40% and the foreign banks should lend 32% of their net credit to the priority sector. On the cost sides, the major items for a bank are interest paid on different types of deposits, bonds issued and borrowings, and provisioning cost for Nonperforming Assets (NPAs).
The banking business can be broadly categorized into Retail Banking, Wholesale or Corporate Banking, Treasury Operations and Other Banking Activities.
Retail banking segment is the highest margin business as compared to other business segments in the banking industry. Currently, ICICI Bank is the largest players in this segment in India.
Other major players in this segment are SBI, PNB, HDFC Bank, etc. Wholesale banking segment in India is largely dominated by large Indian banks – SBI, ICICI Banks, PNB, BoB, etc.
SBI profile, product and services State Bank of India is the largest state-owned banking and financial services company in India. The Bank provides banking services to the customer. In addition to the banking services, the Bank through their subsidiaries, provides a range of financial services, which include life insurance, merchant banking, mutual funds, credit card, factoring, security trading, pension fund management and primary dealership in the money market. The Bank operates in four business segments, namely Treasury, Corporate/ Wholesale Banking, Retail Banking and Other Banking Business. The Treasury segment includes the investment portfolio and trading in foreign exchange contracts and derivative contracts. The Corporate/ Wholesale Banking segment comprises the lending activities of Corporate Accounts Group, Mid Corporate Accounts Group and Stressed Assets Management Group. The Retail Banking segment consists of branches in National Banking Group, which primarily includes personal banking activities, including lending activities to corporate customers having banking relations with branches in the National Banking Group. SBI provides a range of banking products through their vast network of branches in India and overseas, including products aimed at NRIs. The State Bank Group, with over 16,000 branches, has the largest banking branch network in India. The State bank of India is the 10th most reputed company in the world according to Forbes. The bank has 156 overseas offices spread over 32 countries. They have branches of the parent in Colombo, Dhaka, Frankfurt, Hong Kong, Johannesburg, London and environs, Los Angeles, Male in the Maldives, Muscat, New York, Osaka, Sydney, and Tokyo. They have offshore banking units in the Bahamas, Bahrain, and Singapore, and representative offices in Bhutan and Cape Town. State Bank of India was incorporated in the year 1955. The Bank traces their ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta, making them the oldest commercial bank in the Indian Sub-continent. The Government of India nationalized the Imperial Bank of India in the year 1955, with the Reserve Bank of India taking a 60% stake, and name was changed to State Bank of India. In the year 2001, the SBI Life Insurance Company was started by
the Bank. They are the only Bank that have been permitted 74% stake in the insurance business. The Bank's insurance subsidiary 'SBI Life Insurance Company' is a joint venture with Cardiff S.A in which Credit holds 26% of the stake. During the year 2005-06, the bank introduced 'SBI e-tax' an online tax payments facility for direct and indirect tax payment. They also launched the centralized pension processing. The Bank made a partnership with Tata Consultancy Services for setup C-Edg Technologies and consulting services to the banking, financial services and insurance industry. The bank was noted as 'The most preferred bank' in a survey by TV 18 in association with AC Nielsen-ORG Marg. Also, the Bank was voted as 'The most preferred housing loan provider' in AWAAZ consumer awards for the year 2006. In the customer loyalty survey 2006-07 conducted by 'Business World', the Bank was ranked number one in all parameters of customer satisfaction, service orientation, customer care/ call center, customer loyalty and home loans. SBI Funds was judged 'Mutual fund of the year' by CNBC/TV18/CRISL. The Bank introduced new products and services such as web-based remittance, instant fund transfer, online-trading and comprehensive cash management. During the year 2007-08, the Bank launched 965 branches all over the country. They inaugurated a new state-of-the art Dealing Room with online connectivity to all active forex intensive Branches at Corporate Centre in Mumbai. They launched a new product, Construction Equipment Loan to cater to construction Companies. Also, they introduced new products such as SBI Reverse Mortgage Loan and SBI Home Plus in the areas of Home Loans. During the year, the RBI transferred their entire shareholding in the Bank representing 59.73% of the issued capital of the Bank to the Government of India. The Bank acquired 92.03% of equity of Global Trade Finance Ltd. Consequently, GTFL became a subsidiary of the Bank. They signed an MoU with the Indian railways for installing ATMs at 682 railway stations. In March 2008, the Bank opened their 10,000th branch and became only the second bank in the world to have more than 10,000 branches after China's ICBC. During the year 2008-09, the company launched Import factoring, a new product in association with SBI Factors & Commercial Services Ltd. They increased the number of branches for retail sale of gold coins from 250 to 518. Also, they re-launched Gold Deposit Scheme at 50 branches to mobilize gold from domestic market for deployment as metal loans to jewelers. During the year, the Bank opened their 11,111th Branch at Sonapur (Kamrup District) in Assam. They introduced three new products viz., SBI Special Home Loan, SBI Happy Home Loan and SBI Lifestyle in response to the stimulus package announced by the Government of India. Also, they entered into an exclusive arrangement with TATA Motors for handling the booking process of TATA 'Nano' cars. During the year, the Bank launched on their web-site an on-line application form for registering Auto Loan enquiries and expeditiously monitoring and
converting these leads into Auto Loans. Also, they launched 'e-invest' for the ASBA (applications supported by blocked accounts) to aid investors for their equity subscriptions, IPO and Rights applications. During the year, the Bank set up a custodial services company namely SBI Custodial Services Pvt. Ltd., in joint venture with Society General, France. They signed letter of intent for setting up of joint venture Company for undertaking General Insurance Business. Also, they divested 10% equity stake in its wholly owned subsidiary SBI Pension Fund Pvt. Ltd at cost in favour of its subsidiaries. In October 2008, the Bank signed a MoU with State General Reserve Fund (SGRF) of Oman, for a general purpose private equity fund. During the year, State Bank of Saurashtra (SBS), a wholly owned subsidiary of the Bank, amalgamated with the Bank with effect from August 13, 2008. They signed a joint venture agreement with Insurance Australia Group for undertaking General Insurance business. Also, they signed a joint venture agreement with Macquarie Capital Group, Australia and IFC, Washington for setting up an Infrastructure fund of USD 3 billion for investing in various infrastructure projects in India. During the year 2009-10, the Bank opened 1,049 branches, out of which branches were opened in metro and urban areas with a view to increase the Bank's reach and be more accessible to customers. In July 2009, SBI introduced 'SBI Loan to Affluent Pensioners' enabling the government pensioners to avail personal loans up to Rs. 3 lakh. During the year, the Bank designed a special package, the Defense Salary Package, for personnel of the three Armed Forces i.e. the Army, Navy and Air Force who maintain their Salary accounts with them. As of March 2010, the Bank had 12,496 branches and 21,485 Group ATMs. In June 2009, the company increased their shareholding in Nepal SBI Bank Ltd to 55.02% and thus Nepal SBI Bank Ltd became a subsidiary of the Bank with effect from June 14, 2009. In May 2010, the Bank selected consortium of Elavon Incorporation, USA and Visa International, USA as their joint venture (JV) partner for Merchant Acquiring Business. They set up a wholly owned subsidiary, namely SBI Payment Services Pvt Ltd for conducting Merchant Acquiring Business. In August 2010, State Bank of Indore was amalgamated with the Bank as per the scheme of amalgamation approved by the Central Board. During the year 2010-11, the Bank introduced 2 new products, namely 'Pushpa Ullas' and 'Arthias Plus' on pilot basis. They made substantial progress in establishing itself as a leading PE fund player of the country. Also, they also signed a Joint Venture agreement with State General Reserve Fund (SGRF) of Sultanate of Oman, a sovereign entity, to set up a general purpose private equity fund with an initial corpus of USD 100 mn, expandable further to USD 1.5 bn. During the year, the Bank opened 576 new branches besides merger of 470 branches of erstwhile State Bank of Indore. Also, they opened 14 foreign offices during the year, taking the total to 156. In July 1, 2010, the Bank launched their 'Green Channel Counter' at select branches across the
country. In General Insurance business, the Bank launched limited operations in April 2010 for the Corporate and Mid Corporate customers based at Mumbai, and it was expanded to six other major locations in July 2010. In the Retail segment, the Bank launched their Long Term Home Insurance business at Mumbai in October 2010, which was gradually extended to cover 56 RACPCs and RASMECCs. General Insurance SME business was launched on a pilot basis in Mumbai and Chennai in February 2011. During the first quarter of the financial year 2011-12, the Government of India issued the 'Acquisition of State Bank of India Commercial & International Bank Ltd. vide notification dated July 29, 2011. Consequent to the said notification, the undertaking of State Bank of India Commercial & International stands transferred to and vest in State Bank of India with effect from July 29, 2011. List of Directors on the Central Board of State Bank of India (As on 25th January 2012) Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Name Shri Pratip Chaudhuri Shri Hemant G. Contractor Shri Diwakar Gupta Shri A. Krishna Kumar Shri Dileep C. Choksi Shri S. Venkatachalam Shri D. Sundaram Shri Parthasarathy Iyengar Shri Jyoti Bhushan Mohapatra Shri G. D. Nadaf Shri Rashpal Malhotra Shri Deepak Ishwarbhai Amin Shri D. K. Mittal Dr. Subir V. Gokarn Designation Chairman Managing Director Managing Director Managing Director Director Director Director Director Workmen Employee Director Officer Employee Director Director Director Director Director Under Section of SBI Act 1955 19 (a) 19 (b) 19 (b) 19 (b) 19 (c) 19 (c) 19 (c) 19 (c) 19 (ca) 19 (cb) 19 (d) 19 (d) 19 (e) 19 (f)
ICICI profile, product and services ICICI Bank is India's second-largest bank with total assets of Rs. 4,062.34 billion (US$ 91 billion) at March 31, 2011 and profit after tax Rs. 51.51 billion (US$ 1,155 million) for the year ended March 31, 2011. The Bank has a network of 2,752 branches and 9,225 ATMs in India, and has a presence in 19 countries, including India.
ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries in the areas of investment banking, life and non-life insurance, venture capital and asset management. The Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has established branches in Belgium and Germany. ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE). Board Members Mr. K. V. Kamath, Chairman Mr. Sridar Iyengar Dr. Swati Piramal Mr. Homi R. Khusrokhan Mr. Arvind Kumar Mr. M.S. Ramachandran Dr. Tushaar Shah Mr. V. Sridar
Ms. Chanda Kochhar, Managing Director & CEO
Mr. N. S. Kannan, Executive Director & CFO Mr. K. Ramkumar, Executive Director Mr. Rajiv Sabharwal, Executive Director
The Literature Review
CHAPTER 3: RESEARCH METHODOLOGY AN OVERVIEW: The Chapter begins with an introduction to the process of research methodology, further mentioning the Research Objectives, Research Design and The Universe for considering the sample and the various Data Sources. • • • • • INTRODUCTION RESEARCH OBJECTIVES RESEARCH DESIGN UNIVERSE DATA SOURCE
INTRODUCTION
Research is a scientific and systematic search for pertinent information on a specific topic. It is an art of scientific investigation. The search for knowledge through objective and systematic method of finding solution to a problem is Research. The purpose of research is to discover answers to questions through the application of scientific procedures. The main aim is to find out the truth which is hidden and has not been discovered yet.
OBJECTIVES OF RESEARCH
1. To draw the comparative analysis of ICICI BANK Ltd with SBI in terms of performance and customer satisfaction 2. To identify the major attributes of customer satisfaction at SBI and ICICI.
RESEARCH DESIGN The research is done through non-probabilistic convenient sampling. The data collected would be both primary and secondary. The method of primary data collection would be mailed questionnaires, interviews and the sampling method would be non-probability convenience sampling The study undertaken is of Descriptive and analytical one. Research Instrument: Evaluation of Indian organizations to explore key issues and trends of employer branding was done through mail responses to a structured questionnaire from various customers of SBI AND ICICI in Rajasthan. ? Questionnaire is structured with close-ended questions. ? Simple English language was opted to prepare multiple-choice questions. ? Name and employment of the respondent were asked to give a personal touch.
Sampling: Sample Design Sample Size Sample Unit : : : Non-probabilistic convenience sampling 300 Various customers of SBI AND ICICI in Rajasthan. UNIVERSE The study is restricted to the customers of SBI and ICICI in state of Rajasthan. DATA SOURCE Primary Data: Through mailed Questionnaire to various respondents working as employees in different organizations across India. Major number of respondents are FMS alumni group and friends group working in various sectors like IT, telecom, FMCG, Financial Services etc. Secondary Data: Through various journals, magazines, news-papers, books and Internet (world wide web).
CHAPTER 4: FINDINGS AND ANALYSIS
AN OVERVIEW: The chapter begins with statement of various factors of consideration for findings and further elaborates findings and analysis of each factor separately. VARIOUS FACTORS OF CONSIDERATION
• • • •
•
Facility Level of SBI & ICICI Quality of Value Added Services Product Ratings REFERRING ICICI / SBI TO OTHER CUSTOMERS Relationship with ICICI/SBI Best Insurance Product OTHER MAJOR SERVICES GOVERNMENT BUSINESS SCHEMES GOVERNMENT TAX COLLECTION AWARNESS AND SATISFACTION LEVEL OF VARIOUS LOANS LOCKER FACILITY AVAILING CUSTOMER RELATIONAL SHIP BETWEEN BANKER & CUSTOMER OPINION ABOUT THE CHARGES LEIVED IS MANAGER AVAILABLE FOR ANY CLARIFICATION DRAWBACKS/ PROBLEM WITHIN ICICI/SBI EASE TO BANK UPON
• • • • • • • • • • •
Considering above mentioned various factors responsible for the formation of successful customer satisfaction, the opinion of respondents is obtained about the strength of each factor in the two powerful banking organizations. These findings are illustrated ahead:
1. FINDINGS ON QUALITY OF VALUE ADDED SERVICES Quality of valueadded services SBI Excellent Good Average Bad Total 180 100 20 0 300 60 33.33 6.66 0 100 Frequency of Response Percentage (%) Frequency of Response ICICI 100 120 80 0 300 Percentage (%)
33.33 40 26.66 0 100
2. FINDINGS ON Product Ratings
Quality of valueadded services
Frequency of Response
Percentage (%) SBI
Frequency of Response ICICI 100 90 80 30 300
Percentage (%)
Excellent Good Average Bad Total
200 100 0 0 300
66.67 33.33 0 0 100
33.33 30 26.67 10 100
3.FINDINGS ON REFERRING ICICI / SBI TO OTHER CUSTOMERS
Quality of valueadded services
Frequency of Response
Percentage (%) SBI
Frequency of Response ICICI
Percentage (%)
Excellent Good Average Bad Total
220 60 20 0 300
73.33 20 6.67 0 100
100 110 70 20 300
33.33 36.67 23.33 6.67 100
4.FINDINGS ON Relationship with ICICI/SBI Quality of valueadded services SBI Excellent Good Average 190 80 10 63.33 26.67 3.33 Frequency of Response Percentage (%) Frequency of Response ICICI 110 80 70 Percentage (%)
36.67 26.67 23.33
Bad Total
20 300
6.67 100
40 300
13.33 100
5. FINDINGS ON Best Insurance Product
Quality of valueadded services
Frequency of Response
Percentage (%) SBI
Frequency of Response ICICI 70 100 50 80
Percentage (%)
Excellent Good Average Bad
100 80 90 30
33.33 26.67 30 10
23.33 33.33 16.67 26.67
Total
300
100
300
100
6 FINDINGS ON OTHER MAJOR SERVICES
Quality of other major services
Frequency of Response
Percentage (%) SBI
Frequency of Response ICICI 110 70 50 70 300
Percentage (%)
Excellent Good Average Bad Total
150 80 60 10 300
50 26.67 20 3.33 100
36.67 23.33 16.67 23.33 100
7. FINDINGS ON GOVERNMENT BUSINESS SCHEMES GOVERNMENT BUSINESS SCHEMES Excellent Good Average Bad Total SBI 170 60 40 30 300 56.67 20 13.33 10 100 Frequency of Response Percentage (%) Frequency of Response ICICI 120 50 70 60 300 40 16.67 23.33 20 100 Percentage (%)
8FINDINGS ON GOVERNMENT TAX COLLECTION GOVERNMENT TAX COLLECTION Excellent Good Average Bad Total SBI 150 60 70 20 300 50 20 23.33 6.67 100 Frequency of Response Percentage (%) Frequency of Response ICICI 80 100 70 50 300 26.67 33.33 23.33 16.67 100 Percentage (%)
9 FINDINGS ON AWARNESS AND SATISFACTION LEVEL OF VARIOUS LOANS AWARNESS AND SATISFACTI ON LEVEL OF VARIOUS LOANS Excellent Good Average Bad Total 160 120 90 30 300 53.33 40 30 10 100 120 110 50 20 300 40 36.67 16.67 6.66 100 SBI Frequency of Response Percentage (%) Frequency of Response ICICI Percentage (%)
10 FINDINGS ON LOCKER FACILITY AVAILING CUSTOMER
LOCKER FACILITY AVAILING CUSTOMER Excellent Good Average Bad Total 100 60 120 20 300 33.33 20 40 6.67 100 SBI Frequency of Response Percentage (%) Frequency of Response ICICI 110 50 80 60 300 36.67 16.67 26.66 20 100 Percentage (%)
11.FINDINGS ON RELATIONAL SHIP BETWEEN BANKER & CUSTOMER RELATIONAL SHIP BETWEEN BANKER & CUSTOMER Excellent Good Average Bad Total 130 60 40 70 300 43.33 20 13.33 23.33 100 SBI Frequency of Response Percentage (%) Frequency of Response ICICI 100 110 70 20 300 33.33 36.67 23.33 6.67 100 Percentage (%)
12FINDINGS ON OPINION ABOUT THE CHARGES LEVIED OPINION ABOUT THE CHARGES LEVIED Excellent Good Average Bad Total SBI 90 110 80 20 300 30 36.67 26.67 6.66 100 Frequency of Response Percentage (%) Frequency of Response ICICI 40 70 120 70 300 13.33 23.33 40 23.33 100 Percentage (%)
13 FINDINGS ON MANAGER AVAILABLITY FOR ANY CLARIFICATION
MANAGER AVAILABLITY SBI Excellent Good Average Bad Total 120 70 50 60 300 40 23.33 16.67 20 100 Frequency of Response Percentage (%) Frequency of Response ICICI 140 110 40 10 300 Percentage (%)
46.67 36.67 13.33 3.33 100
14.FINDINGS ON ABILITY DRAWBACKS/ PROBLEM WITHIN ICICI/SBI
ABILITY TO IMROVE DRAWBACKS/ PROBLEM WITHIN ICICI/SBI Excellent Good Average Bad Total
Frequency of Response
Percentage (%) SBI
Frequency of Response ICICI
Percentage (%)
140 60 20 80 300
46.67 20 6.67 26.66 100
150 110 30 10 300
50 36.67 10 3.33 100
15FINDINGS ON EASE TO BANK UPON Ease TO BANK UPON SBI Excellent Good Average Bad Total 250 50 0 0 300 83.33 16.67 0 0 100 Frequency of Response Percentage (%) Frequency of Response ICICI 100 110 70 20 300 Percentage (%)
33.33 36.67 23.33 6.67 100
CHAPTER 5: SWOT ANALYSIS
AN OVERVIEW: The chapter covers the swot analysis of SBI AND
ICICI to enable
to understand the performance of both the banks in terms of customer satisfaction. SWOT is an acronym for the internal Strengths and Weaknesses of a firm and the environmental Opportunities and Threats facing that firm. SWOT analysis is a widely used technique through which managers create a quick overview of a company’s strategic situation. The technique is based on the assumption that an effective strategy derives from a sound “fit” between a firm’s internal resources (strengths and weaknesses) and its external situation (opportunities and threats). A good fit maximizes a firm’s strengths and opportunities and minimizes its weaknesses and threats. Accurately applied, this simple assumption has powerful implications for the design of a successful strategy.”
STRENGTHS
1) Online Services: ICICI Bank provides online services of all it’s banking facilities. It also provides D-Mart account facilities on-line, so a person can access his account from anywhere he is.[D-Mart is a dematerialized account opened by a salaried person for purchase &sale of shares of different companies. 2) Advanced Infrastructure: Branches of ICICI Bank are well equipped with advanced technology to provide the customers with taster banking services. All the computerized machines are located in suitable manner & are very useful to the customers & staff of the bank. 3) Friendly Staff: The staff of ICICI Bank in all branches is very friendly & helpful for customers in all cases. They provide faster services along with bonding & personal relationship with the customers. 4)24 hrs. Banking services:
Compared to other bank ICICI bank provides long hrs. of services to the customers. This service is one of its kinds & is very helpful for the customers who are in urgent need of money.
5) Other Facilities to the Customers & Employees: ICICI Bank also provides other facilities like drinking water facilities, proper sitting arrangements to the customers. And there are also proper ventilation & sanitary facilities for the employees of the bank.
6) Late night ATM services: ICICI bank provides late night ATM services to the customers. The ATM centers of ICICI bank works even after 11:00pm. at night in certain branches.
Weakness
1) High Bank Service Charges:
ICICI bank charges highly to customers for the services provided by them when compared to other bank & that are why it is only in the reach of higher class of society.
2) Less Credit Period:
ICICI bank provides credit facilities but only upto limited period. Even when the credit period is not over it sends reminder letters to the customers which may annoy them. OPPORTUNITIES
1) Bank –Insurance services:
The bank should also provide insurance services. That means the bank can have a tie-up with a insurance company. The bank will advertise & promote the different policies introduced by the insurance company & convince their customers to buy insurance policies.
2) Increase in percentage of Returns on increase: The bank should provide higher returns on deposits in comparison of the present situation. This will also up to large extent help the bank earn profits & popularity.
.3) Recruit professionally guided students: Bank & Insurance is a special non-aid course where the students specialize in the functioning & services of the bank & also are knowledge about various tax policies. The bank can recruit these students through tie-ups with colleges. Such students will surely prove as an asset to the bank.
3) Associate with social cause:
The bank can also associate itself with social causes like providing relief aid patients, funding towards natural calamities. But this falls in the 4th quadrant so the bank should neglect it.
1) Bank –Insurance services:
The bank should also provide insurance services. That means the bank can have a tie-up with a insurance company. The bank will advertise & promote the different policies introduced by the insurance company & convince their customers to buy insurance policies. 2) Increase in percentage of Returns on increase: The bank should provide higher returns on deposits in comparison of the present situation. This will also upto large extent help the bank earn profits & popularity.3) Recruit professionally guided students: Bank & Insurance is a special non-aid course where the students specialize in the functioning & services of the bank & also are knowledge about various tax policies. The bank can recruit these students through tie-ups with colleges. Such students will surely prove as an asset to the bank.4) Associate with social cause: The bank can also associate itself with social causes like providing relief aid patients, funding towards natural calamities. But this falls in the 4th quadrant so the bank should neglect it. THREATS
1) Competition:
ICICI Bank is facing tight competition locally as well as internationally. Bank like CITI Bank, HSBC, ABM, Standered Chartered, HDFC also provide equivalent facilities like ICICI do and also ICICI do not have consistency in its international operation. SBI SWOT ANALYSIS
State Bank of India State Bank of India (SBI) is the leading commercial bank in India, offering services such as retail banking, commercial banking, international banking and treasury operations. The bank is an integral part of State Bank Group, which includes 5 other banks and offers additional services such as mutual funds and insurance. The bank primarily operates in India. It is headquartered in Mumbai, India and employs about 179,205 people.
Strengths Brand name Market Leader Wide Distribution Network Government Owned Diversified Portfolio Strong domestic market position sustaining reach and customer confidence Strong capital position helping pursue growth initiatives SBS merger further hastens SBI and its associate banks merger and helping defend its leadership position
WEAKNESSES Minor hindrances Hierarchical management Lags modernization Reduction in the asset quality increasing non performing asset’s ratio Susceptible to political interventions SBI could be the highest beneficiary from the increasing adoption of E-transactions Investments in information technology will decrease transaction costs of SBI New business initiative will expand the market share and increase the revenues Growth in general insurance industry will help increasing the market share
Threats Advent of MNC banks CRM Private banks venturing into the rural Employee Strike Opening of Indian banking sector in 2010-12 will cause intense competition Global economic slowdown could reduce demand for banking services in India
OPPORTUNITYMATRIX:
THREAT MATRIX FOR SBI
CHAPTER 6: RECOMMENDATIONS AND CONCLUSION AN OVERVIEW: The chapter consists of recommendations suggested by the researcher on the basis of his findings and analysis of various facts for the building of an effective employer brand, followed by the conclusion of whole research project.
SBI stands for State Bank of India. It is a public sector institution (government owned), with a huge customer base all over India. It has 5 associate banks operating under its SBI name. It has over thirteen thousand branches across India and in some selected international countries, and a 56,000 ATM network across India. The Standard Bank of India ‘inherited’ the Bank of Calcutta, which was founded in 1806, and has been in existence for over two hundred years. On the other hand, the ICICI is a private sector bank (privately owned), with a relatively smaller clientele base. It is one of the major banks in India (precisely the second largest), but much smaller than the SBI. It has 950 branches, with 3,500 branches across India. The bank has deposits of Rs 1.65 lakh crore compared to SBI’s Rs 3.8 lakh crore (accumulated in a period of twelve years), racking up a net worth of Rs 22,000 against Rs 27,000 for the State Bank of India. This represents Rs 9 crore business generated by each ICI CI employee per year, compared to Rs 3 crore worth of business per employee of the ICICI. While the State Bank pays 4.7 percent on deposits, and earns less on advances, the ICICI pays 0.7 less (4 percent), while earning more on advances, and thus earns 0.4 percent more on assets than the SBI. This is no surprise, as there’s seemingly limitless access to funds from the government for the state owned SBI.
ICICI has been able to use technology to provide value-added service to its customers during the last few years. For ICICI, technology is an integral part of their business. However, their overall progress could have been smoother but for certain internal and extraneous factors and also a pressure on spreads due to a competitive market E-banking has become a necessary survival weapon and is fundamentally changing the banking industry worldwide. Today, the click of the mouse offers customers banking services at a much lower c o s t a n d a l s o e m p o w e r s t h e m w i t h u n p r e c e d e n t e d f r e e d o m i n c h o o s i n g v e n d o r s f o r t h e i r financial service needs. No country today has a choice- whether to implement E-banking or not given the global and
competitive nature of the economy. ICICI have to upgrade and constantly think of new innovative customized packages and services to remain competitive. The invasion o f banking by technology has created an information age and c o m m o d i t i z a t i o n o f b a n k i n g services. ICICI have come to realize that survival in the new e-economy depends on delivering some or all of their banking services on the Internet while continuing to support their traditional Page. Infrastructure: The rise of E-banking is redefining business relationships and the most successful banks will be those that can truly strengthen their relationship with their customers. Without any d o u b t , t h e i n t e r n a t i o n a l s c o p e o f E - b a n k i n g p r o v i d e s n e w g r o w t h p e r s p e c t i v e s a n d I n t e r n e t business is a catalyst for new technologies and new business processes.
To conclude, although the SBI has generally performed well in the past, in recent years, the ICICI has seen very good performance, almost edging out the SBI in every aspect, especially financially. The financial years between 2008-2009 and 2010, and 2012, saw very strong gains for the ICICI bank. Its deposits grew by 200 percent, five times more than the SBI’s, and while SBI’s revenue grew by 30 percent, the ICICI bank’s revenue grew by seven times that percentage. This trend means that ICICI’s growth will eventually overtake SBI’s in the future, in terms of deposits. But when it comes to customer satisfaction, SBI still leads the banking sector with maximum satisfied customers in hand. Summary The SBI is a government owned bank (public sector), while ICICI is a privately owned ban k(private sector). 2. The SBI is much older (more than 200 years old) and more established than the ICICI, which is less than 25 years old. 3. The SBI does not limit daily international transfer amounts, while the ICICI limits daily transfer to $5000 a day. 4. The SBI bank pays a higher percentage on deposits than the ICICI bank
5 ICICI’s growth will eventually overtake SBI’s in the future, in terms of deposits. But when it comes to customer satisfaction, SBI still leads the banking sector with maximum satisfied customers in hand. .
Internet (world wide web) www.rbi.org.in www.moneycontrol.com www.nseindia.com www.icicibank.com www.sbi.com www.google.com
Wikipedia (free encyclopedia on internet) Economic times Business world.
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