CHAPTER: 1

INTRODUCTION TO THE INDUSTRY

BANKING IN INDIA

Without a sound and effective banking system in India it cannot have a healthy

economy. The banking system of India should not only be hassle free but it should be

able to meet new challenges posed by the technology and any other external and

internal factors. For the past three decades India's banking system has several

outstanding achievements to its credit. The most striking is its extensive reach. It is no

longer confined to only metropolitans or cosmopolitans in India. In fact, Indian

banking system has reached even to the remote corners of the country. This is one of

the main reasons of India's growth process.

HISTORY:

The first bank in India, though conservative, was established in 1786. From 1786 till

today, the journey of Indian Banking System can be segregated into three distinct

phases. They are as mentioned below:

· PHASE I - Early phase from 1786 to 1969 of Indian Banks

· PHASE II - Nationalization of Indian Banks and up to 1991

· PHASE III - Indian Financial & Banking Sector Reforms after 1991.

PHASE I:

The General Bank of India was set up in the year 1786. Next came Bank of Hindustan

and Bengal Bank.

[1]

The East India Company established

Bank of Bengal (1809),

Bank of Bombay(1840) and

Bank of Madras (1843) as independent units and called it Presidency Banks.

These three banks were amalgamated in 1920 and Imperial Bank of India

was established which started as private shareholders banks, mostly Europeans

shareholders. During the first phase the growth was very slow and banks also

experienced periodic failures between 1913 and 1948. There were approximately

1100 banks, mostly small. To streamline the functioning and activities of commercial

banks, the Government of India came up with The Banking Companies Act, 1949

which was later changed to Banking Regulation Act 1949 as per amending Act of

1965 (Act No.23 of 1965). Reserve Bank of India was vested with extensive powers

for the supervision of banking in India as the Central Banking Authority. During those

day’s public has lesser confidence in the banks. As an aftermath deposit mobilization

was slow. Abreast of it the savings bank facility provided by the Postal department

was comparatively safer. Moreover, funds were largely given to the traders.

PHASE II:

Government took major steps in this Indian Banking Sector Reform after

independence. In 1955, it nationalized Imperial Bank of India with extensive banking

facilities on a large scale especially in rural and semi-urban areas. Second phase of

nationalization Indian Banking Sector Reform was carried out in 1980 with seven

more banks. This step brought 80% of the banking segment in India under

Government ownership.

[2]

The following are the steps taken by the Government of India to Regulate Banking

Institutions in the Country:

· 1949: Enactment of Banking Regulation Act.

· 1955: Nationalization of State Bank of India.

· 1959: Nationalization of SBI subsidiaries.

· 1961: Insurance cover extended to deposits.

· 1969: Nationalization of 14 major banks.

· 1971: Creation of credit guarantee corporation.

· 1975: Creation of regional rural banks.

· 1980: Nationalization of seven banks with deposits over 200 crores.

After the nationalization of banks, the branches of the public sector bank India raised

to approximately 800% in deposits and advances took a huge jump by

11,000%.Banking in the sunshine of Government ownership gave the public implicit

faith and immense confidence about the sustainability of these institutions.

PHASE III

This phase has introduced many more products and facilities in the banking sector in

its reforms measure. In 1991, under the chairmanship of M Narasimham, a committee

was set up by his name which worked for the liberalization of banking practices.

The country is flooded with foreign banks and their ATM stations. Efforts are being

put to give a satisfactory service to customers. Phone banking and net banking is

introduced. The entire system became more convenient and swift. The financial

system of India has shown a great deal of resilience. It is sheltered from any crisis

triggered by any external macroeconomics shock as other East Asian Countries

suffered. This is all due to a flexible exchange rate regime, the Foreign Reserves are

[3]

high, the capital account is not yet fully convertible, and banks and their customers

have limited foreign exchange exposure.

BANKING STRUCTURE IN INDIA

[4]

Reserve bank of India (central bank & supreme monetary authority of the country)

New Private Banks (8)

Nationalized banks (19)Old Private Banks

(17)

State Bank of India & its Associates (8)

Urban Cooperative Banks (53)

State Cooperative Banks (31)

Regional Rural Banks (357)

Foreign banks in India (39)

Private sector (25)

Public sector (27)

Co-operatives bank

Scheduled banks

Commercial Banks

1.2 NATIONALIZED BANKS IN INDIA

Banking System in India is dominated by nationalized banks. The nationalization of

banks in India took place in 1969 by Mrs. Indira Gandhi the then prime minister. The

major objective behind nationalization was to spread banking infrastructure in rural

areas and make available cheap finance to Indian farmers. Fourteen banks were

nationalized in 1969.

Before 1969, State of India (SBI) was only public sector bank in India. SBI was

nationalized in 1955 under the SBI Act of 1955. The second phase of nationalization

of Indian banks took place in the year 1980. Seven more banks were nationalized with

deposits over 200 crores

1.3 PRIVATE BANKS

All the banks in India were earlier private banks. They were founded in the pre-

independence era to cater to the banking needs of the people. But after nationalization

of banks in 1969 public sector banks came to occupy dominant role in the banking

structure. Private sector banking in India received a fillip in 1994 when Reserve Bank

of India encouraged setting up to private banks as part of its policy of liberalization of

the Indian Banking Industry. Housing Development Finance Corporation Limited

(HDFC) was amongst the first to receive an ‘In principle’ approval from the Reserve

Bank of India (RBI) to set up a bank in the private sector.

Private Banks have played a major role in the development of Indian banking

industry. They have made banking more efficient and customer friendly. In the

process they have jolted public sector banks out of complacency and forced them to

become more competitive.

[5]

INTRODUCTION TO THE ORGANIZATION

Traded as BSE: 532215

LSE: AXBC

NSE: AXISBANK

Industry Banking, Financial services

Founded 1994 (as UTI Bank)

Headquarters Mumbai, Maharashtra, India

Key people Dr. Sanjiv Mishra (Chairman)

Shikha Sharma (MD & CEO)

Products Credit cards, consumer banking,

corporate banking, finance and

insurance, investment banking, mortgage

loans, private banking, private equity,

wealth management

Revenue 340 billion (US$5.5 billion) (2012)

Operating

income

94 billion (US$1.5 billion) (2012)

Net income 52 billion (US$840 million) (2012

Total assets 3.4 trillion (US$55 billion) (2012)

[6]

Employees 42,420 (on 31-March-2014)

COMPANY DESCRIPTION

AXIS BANK

Axis Bank India, the first bank to begin operations as new private banks in 1994 after

the Government of India allowed new private banks to be established. Axis Bank was

jointly promoted by the Administrator of the specified undertaking of the

Unit Trust of India (UTI-I)

Life Insurance Corporation of India (LIC)

General Insurance Corporation Ltd.

Also with associates viz. National Insurance Company Ltd., the New India Assurance

Company, The Oriental Insurance Corporation and United Insurance Company Ltd.

EVOLUTION:

UTI was established in 1964 by an Act of Parliament; neither did the Government of

India own it nor contributes any capital. The RBI was asked to contribute one-half of

its initial capital of Rs 5 crore, and given the mandate of running the UTI in the

interest of the unit-holders. The State Bank of India and the Life Insurance

Corporation contributed 15 per cent of the capital each, and the rest was contributed

by scheduled commercial banks which were not nationalized then. This kind of

structure for a unit trust is not found anywhere else in the world. Again, unlike other

unit trusts and mutual funds, the UTI was not created to earn profits.

In the course of nearly four decades of its existence, it (the UTI) has succeeded

phenomenally in achieving its objective and has the largest share anywhere in the

world of the domestic mutual fund industry. '' The emergence of a "foreign expert"

[7]

during the setting up of the UTI makes an interesting story. The announcement by the

then Finance Minister that the Government of India was contemplating the

establishment of a unit trust caught the eye of Mr. George Woods, the then President

of the World Bank. Mr. Woods took a great deal of interest in the Indian financial

system, as he was one of the principal architects of the ICICI, in which his bank, First

Boston Corporation Bank, had a sizeable shareholding. Mr. Woods offered, through

Mr. B.K. Nehru, who was India's Executive Director on the World Bank, the services

of an expert. The Centre jumped at the offer, and asked the RBI to hold up the

finalization of the unit trust.

Proposals till the expert visited India. The only point Mr. Sullivan made was that the

provision to limit the ownership of units to individuals might result in unnecessarily

restricting the market for units. While making this point, he had in mind the practice

in the US, where small pension funds are an important class of customers for the unit

trusts. The Centre accepted the foreign expert's suggestion, and the necessary

amendments were made in the draft Bill. Thus, began corporate investment in the

UTI, which received a boost from the tax concession given by the government in the

1990-91 Budget. According to this concession, the dividends received by a company

from investments in other companies, including the UTI, were completely exempt

from corporate income tax, and provided the dividends declared by the investing

company were higher than the dividends received.

The result was a phenomenal increase in corporate investment which accounted for 57

per cent of the total capital under US-64 scheme. Because of high liquidity the

corporate sector used the UTI to park its liquid funds. This added to the volatility of

the UTI funds. The corporate lobby which perhaps subtly opposed the establishment

of the UTI in the public sector made use of it for its own benefits later. The

[8]

Government-RBI power game started with the finalization of the UTI charter itself.

The RBI draft of the UTI charter stipulated that the Chairman will be nominated by it,

and one more nominee would be on the Board of Trustees. While finalizing the draft

Bill, the Centre changed this stipulation. The Chairman was to be nominated by the

Government, albeit in Consultation with RBI. Although the appointment was to be

made in consultation with the Reserve Bank, the Government could appoint a person

of its choice as Chairman even if the Bank did not approve of him.

Later on in 2002 the UTI was renamed to Axis Bank.

BUSINESS DESCRIPTION

The Bank's principal activities are to provide commercial banking services which

include merchant banking, direct finance, infrastructure finance, venture capital fund,

advisory, trusteeship, forex, treasury and other related financial services.

CORPORATE PROFILE

Axis Bank is the third largest private sector bank in India. Axis Bank offers the entire

spectrum of financial services to customer segments covering Large and Mid-

Corporates, SME, Agriculture and Retail Businesses.

The Bank has a large footprint of 1787 domestic branches (including extension

counters) and 10,363 ATMs spread across 1,139 centres in the country as on 31st

December 2012. The Bank also has 7 overseas branches / offices in Singapore, Hong

Kong, Shanghai, Colombo, Dubai, DIFC - Dubai and Abu Dhabi.

Axis Bank is one of the first new generation private sector banks to have begun

operations in 1994. The Bank was promoted in 1993, jointly by Specified

Undertaking of Unit Trust of India (SUUTI) (then known as Unit Trust of India),Life

[9]

Insurance Corporation of India (LIC), General Insurance Corporation of India (GIC),

National Insurance Company Ltd., The New India Assurance Company Ltd., The

Oriental Insurance Company Ltd. and United India Insurance Company Ltd. The

shareholding of Unit Trust of India was subsequently transferred to SUUTI, an entity

established in 2003.

With a balance sheet size of Rs.2,85,628 crores as on 31st March 2012, Axis Bank is

ranked 9th amongst all Indian scheduled banks. Axis Bank has achieved consistent

growth and stable asset quality with a 5 year CAGR (2007-12) of 31% in Total

Assets, 30% in Total Deposits, 36% in Total Advances and 45% in Net Profit.

The Corporate Office of Axis Bank is located at Axis House Mumbai. Axis House has

received the ‘Platinum’ rating awarded by the US Green Building Council for its

environment friendly facilities and reduction of carbon emission.

SUBSIDIARIES

The Bank has set up six wholly-owned subsidiaries:

Axis Securities and Sales Ltd. (Since renamed Axis Capital Ltd.) 

Axis Private Equity Ltd. 

Axis Trustee Services Ltd.

Axis Asset Management Company Ltd. 

Axis Mutual Fund Trustee Ltd. 

Axis U.K. Ltd.

CAPITAL STRUCTURE

The Bank has authorized share capital of Rs. 500 crores comprising 500,000,000

equity shares of Rs.10/- each. As on 31st March, 2012 the Bank has issued,

[10]

subscribed and paid-up equity capital of Rs. 413.20 crores, constituting 413,203,952

shares of Rs. 10/- each. The Bank’s shares are listed on the National Stock Exchange

and the Bombay Stock Exchange. The GDRs issued by the Bank are listed on the

London Stock Exchange (LSE).

DISTRIBUTION NETWORK

The Bank has a network of 1787 domestic branches (including extension counters)

and 10,363 ATMs across the country, as on 31st December 2012, the network of Axis

Bank spreads across 1,139 cities and towns, enabling the Bank to reach out to a large

cross-section of customers with an array of products and services. The Bank’s

overseas network consists of 4 branches in Singapore, Hong Kong, 

DIFC – Dubai and Colombo and 3 Representative offices at Shanghai, Dubai, and

Abu Dhabi.

[11]

Board of Directors

PERSON DESIGNATION

Dr. Sanjiv Misra Chairman

Shikha Sharma Managing Director & CEO

Som Mittal Director

Rohit Bhagat Director

Ireena Vittal Director

K. N. Prithviraj Director

V. R. Kaundinya Director

S. B. Mathur Director

Prasad Menon Director

Rabindranath Bhattacharyya Director

Prof. Samir K Barua Director

A.K. Dasgupta Director

Varadarajan Srinivasan ED, Corporate Banking

Somnath Sengupta ED, Corporate Center

Mission

Customer service and product innovation tuned to diverse needs of

individual and corporate clientele.

Continuous technology up gradating while maintaining human values.

Progressive globalization and achieving international standards.

Efficiency and effectiveness built on ethical practices.

[12]

Customer Satisfaction through providing quality service effectively and

efficiently.

VISION AND VALUES

Vision 2015

To be the preferred financial solutions provider excelling in customer delivery

through insight, empowered employees and smart use of technology

Core Values

Customer Centricity

Ethics

Transparency

Teamwork

Ownership

[13]

UNIT: AXIS BANK LIMITED

Jeevan Prakash Building

Sector 17-B

Chandigarh- 160017

Tel: 0172- 5062917

Registered Office

‘Trishul’, 3rd Floor, Opp. Samartheshwar Temple, Law Garden,

Ellis Bridge,

Ahmedabad – 380 006. Tel No. : 079 – 2640 9322 Fax No. : 079 – 2640 9321

Email: p.oza@axisbank.com/rajendra.swaminarayan@axisbank.com

Web site: www.axisbank.com

The Corporate Office

Axis Bank Limited,

Corporate Office,

Bombay Dyeing Mills Compound,

Pandurang Budhkar Marg,

Worli, Mumbai - 400 025

Tel: (022) 2425 2525

[14]

CHAPTER: 2

7P FRAME WORK IN AXIS BANK

Once the marketing strategy is developed, there is a "Seven P Formula" that should be

used to continually evaluate and reevaluate your business activities. These seven are:

Product,

Price

Promotion

Place

Process

Positioning

People, as products, markets, customers and needs change rapidly, company must

continually revisit these seven Ps to make sure you're on track and achieving the

maximum results possible for you in today's marketplace.

PRODUCT

To begin with, develop the habit of looking at your product as though you were an

outside marketing consultant brought in to help your company decide whether or

not it's in the right business at this time. Ask critical questions such as, "Is the current

product or service, or mix of products and services, appropriate and suitable for the

market and the customers of today?"

Develop a habit of assessing your business honestly and asking,

Are these the right products or services for our customers today?

Compared to your competitors, is your product or service superior

in some significant way to anything else available? If so, what is it? If

not, could you develop an area of superiority? Should you be offering

this product or service at all in the current market place?

[15]

Product variety, quality and its features.

Is there a market for the service on offer?

Is the market growing or shrinking?

Is the service new or established?

The competition prevailing in the market for the service on offer?

The USP of the product.

[16]

Products and Services on offered by

AXIS Bank

Accounts:

Easy Access Accounts

Prime Savings Account

Salary Account

Women’s Saving Account

Senior Privilege Account

Defense Salary Account

Trust & NGO Savings Account

Azzadi –No frills

RFC (D) Account

Pension savings Account.

Deposits:

Fixed Deposits

Recurring deposits

Encash 24

Tax Saver Fixed  Deposits

Loans:

Home loan

Personal loan

Loan Against Property

Loan Against Security

Car Loans

Study Loans

Two Wheeler  Loan

Consumer Loan

Investments:

Online Trading

Mutual Funds

Fixed Income

Depository Services

E Depository Services

Insurance:

Health Insurance

Family Health

Health Guard

Hospital Cash

[17]

PRICES

The second P in the formula is price. Develop the habit of continually examining and

reexamining the prices of the products and services you sell to make sure they're still

appropriate to the realities of the current market. Sometimes you need to lower your

prices. At other times, it may be appropriate to raise your prices. Many

companies have found that the profitability of certain products or services doesn't

justify the amount of effort and resources that go into producing them. By raising

their prices, they may lose a percentage of their customers, but the remaining

percentage generates a profit on every sale. Could this be appropriate for you?

Sometimes you need to change your terms and conditions of sale. Sometimes, by

spreading your price over a series of months or years, you can sell far more than you

are today, and the interest you can charge will more than make up for the delay

in cash receipts. Sometimes you can combine products and services together with

special offers and special promotions. Sometimes you can include free additional

items that cost you very little to produce but make your prices appear far more

attractive to your customers. In business, as in nature, whenever you experience

resistance or frustration in any part of your sales or marketing activities, be open to

revisiting that area. Be open to the possibility that your current pricing structure is not

ideal for the current market. Be open to the need to revise your prices, if necessary, to

remain competitive, to survive and thrive in a fast-changing market place.

AXIS bank has developed innovative strategies against its competitors with respect to

pricing by use of technology. The use of technology is the strategic differentiator for

AXIS bank that helps in cost minimization and creating efficiency for the customer.

The creation of centralized processing system linking all its branches has been a

major strategic move in this regard.

[18]

The pricing mechanism and features of various HDFC products are as follows: Home

Loans:

Floating rates:

For  loan of up to five years for amounts between Rs one lakh and Rs 50 lakh is

at9.25 per cent (9 per cent).

The rate for loans of 5 years and above up to 10 years is now at 9.75 per cent

(9.50 per cent).

The interest rate for above ten years now stands at 10.25 per cent (10 per cent)

Description of Charges Regular Savings Account

Minimum Average Quarterly

Balance

Rs 5000 (urban),

Rs 2500(Semi Urban),

Rs 1000 (Rural branch),

Rs 500 (student account)

Charges on non-maintenance thereof Rs750 per quarter(urban & semi urban)

Rs 500 (Rural branch),

Rs 250 (student account)

Cheque Book, Pass Book Issuance Free

Account Statements Free

Phone banking and Net banking Free

PROMOTION

The third habit in marketing and sales is to think in terms of promotion all the time.

Promotion includes all the ways you tell your customers about your products

[19]

or services and how you then market and sell to them. Small changes in the way you

promote and sell your products can lead to dramatic changes in your results. Even

small changes in your advertising can lead immediately to higher sales.

AXIS bank has devised an aggressive promotional strategy through its diversified

distribution mix which includes tied agencies and alternate channels like banks,

brokers, telemarketing, direct sales force, internet advertizing .

Some of the promotional activities undertaken are:

Cross Selling exercises

Organizing school level painting competitions in order to create awareness

about the environmental concerns and the wild life to promote kids advantage

account.

Wheels of fortune - This promo are targeted at all those customers who avail a

personal loan, car or a two wheeler loan. There will be lucky draw at the end

of the promo and the winners would get exotic prizes.

Personalized promos by sending mailers about various products on offer to all

those who come in contact during the mass promotion strategies.

The promotional strategies are carried out with an objective of positioning AXIS

bank as a one stop financial super market. The focus of the promotions are not just

confined to acquisition of new products but also extends to creating product

awareness, enhancing usage, and also provide value add to the customers for their

faith and loyalty. These promotions are scientifically designed based on data analysis

and data mining in order to have maximum impact on the target audience.

[20]

PLACE

The fourth P in the marketing mix is the place where your product or service is

actually sold. You can sell your product in many different places. Some companies

use direct selling, sending their salespeople out to personally meet and talk with the

prospect. Some sell by telemarketing. Some sell through catalogs or mail order. Many

companies use a combination of one or more of these methods. It refers to those

activities of the company that makes the product available to target consumers. It

includes geographic spread, distribution channels, dealer ships that facilitate network

establishment. Axis bank is widely spread in India and its core banking operations has

huge network– 

1281 branches and extension counters foreign offices – in Singapore, Hong

Kong, Shanghai and Dubai

6270 ATMs reaches out to 34 states and union territories across the country

AXIS bank owns a wholly owned distribution channel with dedicated workforce,

thereby lowering the operating costs. It uses its network base to good effect to sell

customized products. 

PROCESS

The fifth element in the marketing mix is the process. Develop the habit of standing

back and looking at every visual element in the process or service through the eyes of

a critical prospect. Remember, people from their first impression about you within the

first 30 seconds of seeing you or some element of your company. Small

improvements in the process or external appearance of your product or service can

often lead to completely different reactions from your customers. With regard to the

process of your company, your product or service, you should think in terms of

[21]

everything that the customer sees from the first moment of contact with your

company all the way through the purchasing process.

Process refers to the way your product or service appears from the outside. Packaging

refers to your people and how they dress and groom. It refers to your offices, your

waiting rooms, your brochures, your correspondence and every single visual element

about your company. Everything counts. Everything helps or hurts. Everything affects

your customer's confidence about dealing with you.

POSITIONING

The next P is positioning, the habit of thinking continually about how you are

positioned in the hearts and minds of your customers.

How do people think and talk about you when you're not present?

How do people think and talk about your company?

What positioning do you have in your market, in terms of the specific words

people use when they describe you and your offerings to others?

AXIS Bank has positioned its branches in all the strategic position so that it is easily

accessible to maximum customer. It has also come up with some phone banking

centre and centralized collection and payment hub.

CENTRALISED PHONE BANKING CENTRE

The Bank’s Centralized Phone Banking Centre provides customers across the country

Access to the Bank over the phone, handling multiple queries in about 7000 calls per

day.

[22]

CENTRALISED COLLECTION AND PAYMENT HUB

The Bank’s Centralized Collection and Payment Hub (CCPH) manages the entire

collection and payment activity under the Bank’s Cash Management Services (CMS)

across the country, handling on an average about Rs.5000 crores per month on the

collection front and aboutRs.1500 crores per month on the payment front.

PEOPLE

The final P of the marketing mix is people. Develop the habit of thinking in terms of

the people inside and outside of your business who are responsible for every element

of your sales and marketing strategy and activities. It's amazing how many

entrepreneurs and businesspeople will work extremely hard to think through every

element of the marketing strategy and the marketing mix, and then pay little attention

to the fact that every single decision and policy has to be carried out by a specific

person, in a specific way. Your ability to select, recruit, hire and retain the proper

people, with the skills and abilities to do the job you need to have done, is

more important than everything else put together. An essential ingredient to any

service provision is the use of appropriate staff and people. Recruiting the right staff

and training them appropriately in the delivery of service is essential if the

organization has to obtain competitive advantage. AXIS bank values its human

resources very highly and is on a constant endeavor to continuously develop its

human resources by laying strong emphasis on training development. It possesses a

highly motivated team of professionals and has the lowest employee turnover rate in

the industry.

[23]

PROMOTIONAL STRATERGIES

In early 1950's most of the markets were choking with surplus products on offer,

defying the theory "the best quality will always sell". The emergence of Branding as a

value in offering has kept many organizations leaders, and in survival. Branding is

termed as a part of offering, created in the mind of customer and consumer of superior

values that he or she perceives and ready to pay for. The brand can be associated with

superior product, superior services, and superior sales after services, or easy access. In

today's era with increasing competition, is that not important enough to revisit Brand

as a marketing offering (Product or Service).

BRAND NAME

UTI has officially announced the change of its name to ‘Axis Bank’. The

awareness campaign titled ‘UTI Bank is now Axis Bank; everything is the same

except the name’, has been created by O&M and is the brainchild of Sumanto

Chattopadhyay.

The decision to re-brand the bank emanated from the need to move out of a scenario

of brand confusion that is created by several shareholder-unrelated entities using the

UTI brand. On the creative point of view, the change of name from UTI Bank to Axis

Bank is precisely just a name change. Everything else about the brand remains the

same. Axis is a strong name with an international aura to it. It is very much in keeping

with UTI’s success story in the private banking arena.

MARKETING INITIATIVES

[24]

On the marketing initiatives, a multimedia campaign was unfolded on August 1 that

will go on for the next few weeks. It seeks to reassure customers that the change of

name will in no way affect the services offered by the bank. On the thought process

the creative platform adopted for the name change is based primarily on twins --

siblings whose names are different, but are identical in every other way. This

campaign will run on

Television

Outdoor 

Print

Radio and other 360-degree media.

Some interesting innovations are planned in the print medium. On radio, the name

change is being expressed in a slightly different manner, in keeping with the nature of

the medium.

SWOT ANALYSIS

STRENGTHS

Axis bank has been given the rating as one of top three positions in terms of

fastest growth in private sector banks

The bank has a network of 1,787 domestic branches and 10,363 ATMs

[25]

The bank has its presence in 971 cities and towns

The banks financial positions grow at a rate of 20% every year which is a

major positive sign for any bank.

The bank has a good image among urban population.

The bank is registering a good growth.

A huge portfolio of product and services.

Decent penetration in the rural areas.

One of the largest private sector financer in India for

Agriculture loans wiz Retail Agriculture & Corporate

Agriculture.

Knowledge of Indian market, High level of services, brand name.

WEAKNESSES

Gaps – Majorly they concentrated in corporate, wholesale banking, treasury

services, retail banking

Foreign branches constitute only 8% of total assets

Lesser no. of branches compared to its competitors

The share rates of AXIS bank is constantly fluctuating in higher margins

which makes investors in an uncomfortable position most of the time

There are lots of financial product gaps in terms of performance as well as

reaching out to the customer.

Image of the bank still under the shadow of the UTI debacle.

OPPORTUNITIES

[26]

Acquisitions to fill gap

No. of e-transactions increased from 0.7 million to around 2 million

Geographical expansion to rural market – 80% of them have no access to

formal lending.

Going to foreign markets and exploring the new economies.

46% use informal lending channels.

24% unregulated money lenders.

Now number of branches increased to 1787.

Since it’s a new age banking there are lot of opportunities to have the advance

technicalities in banking solutions compared to existing major players.

The assets in their international operations are growing at a very faster pace

with a growth rate of 9%.

The concept of ETM (Everywhere teller machine) by AXIS Bank had a good

response in terms of attracting new customers in personal banking segment

THREATS

RBI allowed foreign banks to invest up to 74% in Indian banking

Government schemes are most often serviced only by govern banks like

SBI ,Indian Banks, Punjab National Bank etc

ICICI and HDFC are imposing strong threats in terms of their expansion in

customer base by their aggressive marketing strategies.

New banking licenses issued by the Reserve Bank Of India

Foreign banks

[27]

Competitors 1.  SBI

2.  Punjab National Bank

3.  ICICI

FACTS & FINDINGS

‘COMPARATIVE ANALYSIS OF SAVING AND SALARY

PRODUCTS OF AXIS BANK WITH HDFC AND ICICI BANK’

ANALYSIS 1:

This analysis displays the division of sample according to the occupation. A total of

100 people were surveyed.

[28]

ANALYSIS-2

How the customers find salary and savings account provided by Axis Bank?

customersvery goodgoodsatisfactoryexellentpoor

ANALYSIS-3

Do customers have any other product of AXIS BANK other than savings and salary

account? (Like term deposit, mutual funds, insurance, home loan, car loan etc.)

THIRD PARTY PRODUCT

YESNO

ANALYSIS-4

Are the customers satisfied with their savings and salary account?

NO. OF PEOPLE

YESNO

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_

ANALYSIS-5

Which bank is better in providing services regarding transactions?

_

BANKS

AXIS BANKHDFC BANKICICI BANK

ANALYSIS-6

Which is better bank in ease of access (both branch & ATM)?

BANKS

AXIS HDFCICICI

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ANALYSIS-7

Which bank’s accounts provide greater flexibility?

BANKS

AXISHDFCICICI

ANALYSIS-8

Are you satisfied with the relationship manager’s service provided by Axis Bank?

Relationship Manager service

YESNO

ANALYSIS-9

Which channel you use to access your account?

HOW YOU ACCESS YOR ACCOUNT

DIRECT BRANCHMOBILE BANKINGNET BANKINGPHONE BANKING

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ANALYSIS-10

Which are the areas of improvement?

AREAS OF IMPROVEMENTUPDATESSERVICETECHNOLOGYRMPRODUCTS

FINDINGS

The bank has good relation with its customers. The customers are very

satisfied with the relationship manager service provided by Axis Bank.

The bank and its customers have a long term relationship. Axis Bank has the

tendency to retain its customers at any cost. They believe that the old customer

is more profitable instead of a new one that’s why they try to maintain good

and long term relations to their customers.

Less number of customer use mobile banking or net banking.

The accounts of axis bank (both salary & saving) provide great flexibility in

terms of offering.

The accounts of these three banks don’t have much difference in terms of

features but when it comes to service providing the Axis Bank gets an edge

because of their great customer services.

The axis bank has good number of branches and ATM’s that’s why it has

more ease of access.

The customers of Axis Bank are satisfied with their savings and salary

accounts.

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CHAPTER: 3

CASE STUDY -Axis bank youth account launch

Background:

Established in 1993, Axis Bank was one of the few private banks that began its

operations in 1994. Axis bank is the third largest private sector bank and offers a wide

portfolio of financial services. The bank has a wide outreach with more than 1,900

branches and 11,000 ATM’s present across the country. The Bank also has its

presence overseas with offices in Singapore, Hong Kong, Shanghai, Colombo, Dubai,

and Abu Dhabi.

Challenge:

Axis Bank wanted to create a desire among the youth for a product they did not want,

in a category they did not relate to and for a brand they did not care about.

Considering that more than half of the country’s population consisted of youth, Axis

Bank set its mind to winning them over. But it was no easy task.

Axis Bank was planning to launch a savings account product for youngsters, with

features like customized card designs, an intuitive mobile app, deals and offers via

partner establishments.

Traditionally, banking has never targeted young consumers; it is something which is

associated with parents and family. Youngsters have little knowledge and no interest

in what a bank has to say. Their view of banks is formed by the numerous sales-calls,

trying to sell them loans/ cards/ insurance, which are usually of no interest to them.

They are usually detached from banking activities. Axis Bank had an uphill task

ahead.

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Whatever little consideration they had for the category, was reserved for brands like

HDFC Bank and ICICI Bank. Axis Bank as a brand was nowhere in the reckoning in

their minds.

Objective: With the YOUTH savings account launch, the initial business objective

was to achieve 100,000 new sign-ups for the Axis Bank Youth Account in six months

with a limited media investment of INR 60,00,000 (Cost in advertising per acquisition

= INR 60).

The Big Idea: It’s All about YOU!

The idea was to create a product that would interact with the youth in their language:

Customized Debit Cards– Though the concept of customized cards was not new but

taking a step ahead, Axis Bank made the debit card unique, the way youngsters

customize their phone-skins and tattoos, to make sure theirs was one-of-a-kind. With

Axis Bank YOUTH account, young consumers could do the same to their card.

Intuitive Mobile App – For youngsters, a mobile phone is not just a communicating

device; it is a constant companion, entertainer and a lifestyle enabler. Considering the

affinity of youth towards mobile, Axis Bank created a special mobile app, which

facilitated banking transactions on smart-phones. It also allowed them to check their

account balance, recharge mobile phones, transfer money to a friend’s YOUTH

account without visiting a branch.

Pull money from parent’s linked Axis Bank Account –With the YOUTH Account, the

young customers could pull money from their parent’s linked Axis Bank Account

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using the YOUTH Mobile App. Parents could set a monthly limit on the amount of

money their kid could pull out from their account.

Great offers on the YOUTH Debit Card – The youth likes to shop smart. The YOUTH

Account offered them the best deals at their favorite hangout destinations that

included movies, apparel, mobile recharges.

Execution:

The youth today is always online. Among all media vehicles, internet is most popular

among them. It has approximately 43% reach in the given target group, which is

higher than that of radio and cinema. Social networking clearly stood out with 95% of

the youth using a social media site at least once every day. Given the reach of digital

among youth and the limited budgets at hand, Axis Bank decided to structure its

entire media strategy on the digital platform. The strategy revolved around the

following:

Introduce the product on DIGITAL

The product was first introduced to the Axis Bank fan base on Facebook.

It highlighted the key features of the new product in a manner that was different than

any of the existing communication being carried out by the bank – both visually and

in terms of style of communicating. This phase lasted for a week before the other

elements of the campaign started to kick in.

Engage with customers on DIGITAL

Go beyond traditional media formats on digital – Introduce gamification:

The product needed a campaign to communicate with the target group in an

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innovative way. To achieve this, Axis Bank came up with the idea and used

gamification in the financial services industry in India.

Creating an Information Destination – the YOUTH Account Microsite

Axis Bank created a special micro site for the YOUTH account

(www.axisbank.com/YOU) – which acted as the central repository of all information

on the product and the campaign. While it looked completely different from a regular

bank website, the brand felt it was essential to establish a connect with the audience.

Even the manner in which features of the account were communicated borrowed

from the language of the youth.

Pulling money online from their parents’ account became OMG (Online Money Gets

pulled);

Mobile fund transfers became WTF (Whoever Transfers Funds needs only mobile

numbers);

Card design gallery became GTG (Go To Gallery and design your card); and so on.

Create your YOUTH Card – a Do-It-Yourself Facebook application

The Customize your card‟ feature was brought to life with this Facebook app that

allowed YOU, the user, to design your own card. YOU could upload your favorite

picture, add effects and create your YOUTH Card design. And if YOU wanted that

card for real, all YOU had to do was walk in to the nearest Axis Bank branch with a

soft copy of the same and get the design on your YOUTH Account Debit Card.

Add on-ground legs to the campaign to strengthen engagement

Axis Bank partnered with Mood Indigo, a popular college festival that gave

youngsters a chance to experience the YOUTH Account. Special Wi-Fi enabled

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YOUTH Account zones were created.

The concept was further extended on ground by taking it to Sir JJ School of Arts in

Mumbai. Here, students from various disciplines were given the opportunity to

showcase their idea of the YOUTH Card. Over 150 students participated.

Promote the product on DIGITAL

Axis Bank continued to drive awareness through consistent communication on the

Axis Bank Facebook community and targeted mailers. The media plan delivered over

8.8 million ad impressions and over 76,000 clicks reaching out to a large segment of

the target group.

Results:

The campaign reached a total of over 2.2 million users on Facebook, and generated

over 30,000 likes. The sales target was exceeded by 44 percent and the 100,000

milestone was achieved in just three months.

RECENT NEWS ON AXIS BANK

Axis Bank to open 750 urban branches over next 2 years

Axis Bank has opened 250 branches in unbanked areas in FY 2014 as per the

regulatory requirement, which qualifies it to launch 750 more urban branches over the

next two fiscals.

India’s third largest private lender feels it is a misnomer to say that venturing deep

into the unbanked areas is a pain point, and asserted that this business will be

profitable in a few years.

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“The RBI said you could front-load your 25 per cent branches in unbanked areas and

carry forward the benefit over the next three years. We have already done so...This

year, we would have done about 300 unbanked branches,” Axis Bank Retail Banking

President Rajiv Anand told PTI. This gives the city-based bank the opportunity to

have over 750 branches in the better-performing areas in tier-I, II and III centers.

As part of its financial inclusion drive, RBI had in May 2013 allowed banks to front-

load their 25 per cent mandatory new branches in unbanked areas and carry forward

to open the remaining 75 per cent new branches in urban areas over the next three

years.

Axis Bank has around 2,300 branches, 52 per cent of them in the semi-urban, rural

and unbanked areas.

Asked about the financial implications of more rural branches, Anand said that this

will not hurt key ratios as the branches are small and operate at lower costs.

“This year, we would have done about 300 unbanked branches. They are relatively

low-cost.” The bank feels there is a big opportunity in rural areas and it is looking at

it beyond garnering deposits.

(This article was published on March 30, 2014)

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CHAPTER: 4

CONCLUSION

In this study I found that the bond of Axis Bank with its customers is very strong,

because Axis Bank mainly focuses on retaining their customers.

This study finds that however Axis Bank is not the leading private sector bank but its

vast range of products and availability of options make it one of the better banks in

India.

Axis Bank is one of the few clean (in terms of asset book), rapidly growing,

profitable, & competitive private-sector banks in India; thus it will be a major

beneficiary of the favorable banking environment. The Indian banking sector is in a

sweet spot: consumer and corporate lending is strong, asset quality is improving and

fee-income opportunities are growing. We expect this favorable environment to

continue in the medium term but recognize that a key challenge for banks will be

funding growth. Looking at its profile, I believe Axis Bank stands to gain

disproportionately from existing opportunities in the sector. The bank has strong

technology & products, an expanding distribution franchise, adequate scale, a strong

service culture, and management enterprise -features that should help it stay ahead of

the dominant government banks to win market share.

Private players such as Axis Bank that offer a multitude of delivery channels and have

an integrated technology platform could potentially achieve comparable distribution

reach in the top 200 cities to government banks with substantially fewer branches.

With a presence in the top 150 cities, I think Axis Bank is very well positioned to

rapidly reap the benefits of the expanded reach by scaling up its retail foray.

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RECOMMENDATION & SUGGESTIONS

Mostly service class persons prefer the axis bank in the comparison of

business and students and other class persons thus it needs to promote its

product and services that are offered mainly for the business class people and

students. Because these two class forms major users of the banking services.

Axis bank is normally not using properly for the current account so its

popularity ratio is quite down. This bank normally using for the long term

planning like saving and FD.

This bank is not investing more into the marketing sector so I will suggest that

some of the part of income it investing in the advertising and marketing sector.

Into the comparison of other bank its performance is quite good but not an

effective so this may be doing the rates were down with some other facilities.

The bank should focus on the semi urban and rural market because these

markets are very good opportunity for someone like Axis Bank which is in

growing face. Without expanding in these markets Axis Bank cannot be a

leading bank so they should focus on this market.

The bank should focus on mass banking in order to increase their market

share. They should launch such products which would be within the reach of

the lower middle class

The bank should pay more attention on giving updates and should increase the

level of service providing because the competitors of axis are better in this

area.

The bank should try to increase the use of technology like mobile and net

banking among its customers.

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BIBLIOGRAPHY

BOOKS:-

Philip Kotler’s Marketing Management. Twelfth edition

WEBSITES:-

http://pitchonnet.com/blog/2014/02/06/case-study-axis-banks-

youth-account-launch/

www.axisbank.com

http://en.wikipedia.org/wiki/Axis_Bank

http://economictimes.indiatimes.com/axisbankltd/

infocompanyhistory/companyid-9175.cms

http://www.thehindubusinessline.com/companies/axis-bank-to-

open-750-urban-branches-over-next-2-years/article5850960.ece?

ref=relatedNews

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