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A

PROJECT REPORT

ON

Employee Retention and Execution Process for ING Vysya Bank

Submitted in partial fulfillment of the requirement

of award of the degree of

MASTER OF BUSINESS ADMINISTRATION

Undersupervision of Submitted by

Mr. Amit Gupta Nitesh Kumar Saini

Operation Manager M.B.A IIInd Semester

ING VYSYA BANK ,Muzaffarnagar Roll No. 0827270053

SUBMITTED TO

Mahaveer Jain University (EDID), Bangalore

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CONTENTS

PAGE No.

CERTIFICATE .3

DECLARATION .4

ACKNOWLEDGEMENT 5

CHAPTER-1 INTRODUCTION ..6-17

CHAPTER-2 REVIEW OF RELATED LITERATURE ..18-38

CHAPTER-3 DESIGN OF STUDY .39-43

THE STUDY

OBJECTIVES OF THE STUDY

METHODOLODY

SCOPE OF THE STUDY

LIMITATION

CHAPTER-4 ANALYSIS OF DATA 44-65

CHAPTER-5 FINDINGS 66-68

LIMITATION.. 69-70

RECOMMENDATION 71-72

BIBLOGRAPHY 73

ANNEXURE 74-82

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CERTIFICATE

This is to certify that the Summer Training Project Report

entitled

being submitted by Mr. / Ms. .. in

partial fulfillment of the requirement for the degree of the Master of

Business Administration from U. P. Technical University, Lucknow, is an

independent original research work done by him/her under my

supervision and guidance.

Place: .. Director

Date:.. GNIT-MBA Institute

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DELARATION

I hereby to declare that the work for the Dissertation report entitled Employee

Retention and Execution Process for ING Vysya Bank am completely done by

me, based on my work conducted in ING VYYSA BANK, Bangalore.

I also declare that this project work has not been submitted to any other university

or Institution for the award of any degree, diploma, fellowship or other similar

title.

Admittedly, I have received suggestions and guidance from my guides for the

partial fulfillment of M.B.A.

(Deepika Agarwal)

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ACKNOWLEDGEMENT

If words are considered to be signs of gratitude then let these words Convey the

very same. My sincere gratitude to Mr., ING VYSYA BANK and giving necessary

directions on doing this project to the best of my abilities.

I am highly indebted to Mr. Branch Manager, who provided me with the

necessary information and also for the support extended out to me in the

completion of this report and his valuable suggestion and comments on bringing

out this report in the best way possible.

So in the same sequence at very first, I would like to acknowledge my parents

because of whom I got the existence in the world for the inception and the

conception of this project. Later on I would like to confer the flower of

acknowledgement to Ms. and other faculty members who taught me that how to

do project through appropriate tools and techniques. Because ING VYSYA BANK

has given me a chance to do my integrated project report., I would like to give

thanks Dr. (Head of Department)

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CHAPTER -1

INTRODUCTION

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INTRODUCTION

Banking system of a nation is the shadow of nations economy. A healthy and

profitable banking system is just like the backbone of nations economy. It is

necessary for a nation to achieve growth and remain stable in this global world and

global economy. The Indian banking system, with one of the largest banking

networks in the world, has witnessed a series of reforms over the past few years

like the deregulation of interest rates, dilution of the government stake in public

sector banks (PSBs) and the increased participation of private sector banks.

1.1 History of INDIAN BANKING SYSTEM

Banking in India originated in the last decades of the 18th century. The first banks

were The General Bank of India, which started in 1786, and the Bank of

Hindustan, both of which are now defunct The oldest bank in existence in India is

the State Bank of India, a government-owned bank that traces its origins back to

June 1806 and that is the largest commercial bank in the country. Allahabad Bank,

established in 1865 and still functioning today, is the oldest Joint Stock bank in

India.

Central banking is the responsibility of the Reserve Bank of India, which in 1935

formally took over these responsibilities from the then Imperial Bank of India,

relegating it to commercial banking functions. After India's independence in 1947,

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the Reserve Bank was nationalized and given broader powers. In 1969 the

government nationalized the 14 largest commercial banks; the government

nationalized the six next largest in 1980.

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

nationalized, and it became an institution owned by the Government of India.

In 1949, the Banking Regulation Act was enacted which empowered the

Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in

India."

The Banking Regulation Act also provided that no new bank or branch of an

existing bank could be opened without a license from the RBI, and no two

banks could have common directors

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1.2 Liberalization in INDIAN BANKING SYSTEM

In the early 1990s, the then government embarked on a policy of liberalization,

licensing a small number of private banks. These came to be known as New

Generation tech-savvy banks, and included Global Trust Bank (the first of such

new generation banks to be set up), which later amalgamated with Oriental Bank

of Commerce, Axis Bank(earlier as UTI Bank), ICICI Bank and HDFC Bank. This

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move, along with the rapid growth in the economy of India, revitalized the banking

sector in India, which has seen rapid growth with strong contribution from all the

three sectors of banks, namely, government banks, private banks and foreign banks

The next stage for the Indian banking has been setup with the proposed relaxation

in the norms for Foreign Direct Investment, where all Foreign Investors in banks

may be given voting rights which could exceed the present cap of 10%, at present

it has gone up to 49% with some restrictions.

The new policy shook the Banking sector in India completely. Bankers, till this

time, were used to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4%)

of functioning. The new wave ushered in a modern outlook and tech-savvy

methods of working for traditional banks. All this led to the retail boom in India.

People not just demanded more from their banks but also received more.

Currently (2009), banking in India is generally fairly mature in terms of supply,

product range and reach-even though reach in rural India still remains a challenge

for the private sector and foreign banks. In terms of quality of assets and capital

adequacy, Indian banks are considered to have clean, strong and transparent

balance sheets relative to other banks in comparable economies in its region. The

Reserve Bank of India is an autonomous body, with minimal pressure from the

government. The stated policy of the Bank on the Indian Rupee is to manage

volatility but without any fixed exchange rate-and this has mostly been true.

With the growth in the Indian economy expected to be strong for quite some time-

especially in its services sector-the demand for banking services, especially retail

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banking, mortgages and investment services are expected to be strong. One may

also expect M&As, takeovers, and asset sales.

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

banks (that is with the Government of India holding a stake), 31 private banks

(these do not have government stake; they may be publicly listed and traded on

stock exchanges) and 38 foreign banks. They have a combined network of over

53,000 branches and 17,000 ATMs. The public sector banks hold over 75 percent

of total assets of the banking industry, with the private and foreign banks holding

18.2% and 6.5% respectively.

1.3 The Origin of ING Group

ING group originated in 1990 from the merger between Nationale Nederlanden

the largest Dutch Insurance Company and NMB Post Bank Group. Combining

roots and ambitions, the newly formed company called Internationale Nederlanden

Group . Market circles soon abbreviated the name to I-N-G. The company

followed suit by changing the statutory name to ING Group. ING is a global

financial services company providing banking, investments, life insurance and

retirement services and operates in more than 50 countries.

PROFILE

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ING is a global financial institution of Dutch origin offering banking, investments,

life insurance and retirement services. ING serve more than 85 million private,

corporate and institutional customers in Europe, North and Latin America, Asia

and Australia. They draw on their experience and expertise, their commitment to

excellent service and their global scale to meet the needs of a broad customer base,

comprising individuals, families, small businesses, large corporations, institutions

and governments

STRATEGY

INGs overall mission is to help customers manage their financial future.

Capitalizing on changing customer preferences and building on our solid business

capabilities, INGs strategic focus is on banking, investments, life insurance and

retirement services. They provide retail customers with the products they need

during their lives to grow savings, manage investments and prepare for retirement

with confidence. With wide range of products, innovative distribution models and

strong footprints in both mature and developing markets, ING has the long-run

economic, technological and demographic trends on their side. ING aligns its

business strategy around a universal customer ideal: saving and investing for the

future should be easier. While steering the business through turbulent times, ING

will execute efforts across all its business lines to strengthen customer confidence

and meet their needs, preserve a strong capital position, further mitigate risks and

bring its costs in line with revenue expectations.

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COPERATE RESPOSIBILITY

ING wants to pursue profit on the basis of sound business ethics and respect for its

stakeholders. Corporate responsibility is therefore a fundamental part of INGs

strategy: ethical, social and environmental factors play an integral role in businessdecisions

1.4 FINANCIAL RESULTS

FY 2008 FY2007 FY2006 FY2005 FY2004

Income (in EUR milion)

Insurance operations 54,851 62,208 59,642 57,403 55,614

Banking operations 11,731 14,602 14,195 13,848 12,678

Total Income1 66,291 76,587 73,621 71,120 68,171

Operating Expenses

Insurance operations 5,422 5,515 5,275 5,195 4,746

Banking operations 10,303 9,967 9,087 8,844 8,795

Total operating expenses 15,725 15,481 14,362 14,039 13,541

Addition to loan loss provision Bankingoperations 1,280 125 103 88 465

Insurance result before tax -1,635 6,533 4,935 3,978 4,322

Banking result before tax 148 4,510 5,005 4,916 3,418

Total result before tax -1,487 11,043 9,940 8,894 7,740

Taxation -721 1,534 1,907 1,379 1,709

Minority interests -38 267 341 305 276

Net result -729 9,241 7,692 7,210 5,755

Figures per ordinary share (EUR)

Net result -0.36 4.32 3.57 3.32 2.71

Earnings 2) -0.56 4.32 3.57 3.32 2.71

Dividend 0.74 1.48 1.32 1.18 1.07

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Shareholders equity 8.55 17.73 17.78 16.96 12.95

Balance Sheet (in EUR billion)

Total assets 1,332 1.312 1,226 1,159 964Total equity 29 40 41 38 28

Shareholders equity 17 37 38 37 28

Capital Ratios (%)

ING Group debt/equity ratio 13.8% 9.5% 9.0% 9.4% 10.2%

Insurance capital coverage ratio 256% 244% 274% 255% 204%

Insurance debt/equity ratio 8.5% 13.6% 14.2% 13.4% 14.3%

Bank Tier-1 ratio 9.32% 7.39% 7.63% 7.32% 6.92%

Market capitalisation (in EUR billion) 15 60 74 65 49

Shares (in millions):

Outstanding 2,063 2,226 2,205 2,205 2,205

Preference shares outstanding - 16 63 87 87

Key Performance Indicators

- Net return on equity (ROE) -2.1% 24.2% 23.5% 26.6% 25.4%

- Net result growth -108% 20% 7% 25% n.a.

Insurance

- Value of new life business 1,023 1,113 807 805 632

- Internal rate of return 13.9% 14.3% 13.3% 13.2% 12.1%

- Combined ratio (non-life) 97% 97% 91% 95% 94%

Banking

- Cost/income ratio 87.8% 68.3% 64.0% 63.9% 69.4%

- RAROC after tax 1.2% 19.9% 19.7% 22.6% 14.5%

Assets under management (in EUR 551 643 600 547 492

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billion)

Staff (FTEs end of period) 124,661 124,634 119,801 116,614 112,195

The ING Vysya BANK Ltd.

ING Vysya Bank Ltd., is an entity formed with the coming together of erstwhile,

Vysya Bank Ltd, a premier bank in the Indian Private Sector and a global financial

powerhouse, ING of Dutch origin, during Oct 2002.

The origin of the erstwhile Vysya Bank was pretty humble. It was in the year 1930

that a team of visionaries came together to form a bank that would extend a helping

hand to those who weren't privileged enough to enjoy banking services.

ING and ING Vysya Life Insurance are headquartered at Bangalore, while the

corporate office of ING Investment Management is situated at Mumbai. The

synergies arising out of the three distinct but complimentary businesses are boundto be an asset to the group in the changing market dynamics of the future. The first

such signs are already visible on the horizon with combined products being

successfully launched by the different entities of the group in conjunction with

each other

It's been a long journey since then and the Bank has grown in size and stature to

encompass every area of present-day banking activity and has carved a distinctidentity of being India's Premier Private Sector Bank.

In 1980, the Bank completed fifty years of service to the nation and post 1985; the

Bank made rapid strides to reach the coveted position of being the number one

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private sector bank. In 1990, the bank completed its Diamond Jubilee year. At the

Diamond Jubilee Celebrations, the then Finance Minister Prof. Madhu Dandavate,

had termed the performance of the bank stupendous. The 75th anniversary, the

Platinum Jubilee of the bank was celebrated during 2005.

The long journey of seventy-five years has had several milestones

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1930 Set up in Bangalore

1948 Scheduled Bank

1985 Largest Private Sector Bank

1987 The Vysya Bank Leasing Ltd. Commenced

1988 Pioneered the concept of Co branding of Credit Cards

1990 Promoted Vysya Bank Housing Finance Ltd.

1992 Deposits cross Rs.1000 crores

1993 Number of Branches crossed 300

1996Signs Strategic Alliance with BBL., Belgium. Two National Awards by Gem &

Jewellery Export Promotion Council for excellent performance in Export Promotion

1998

Cash Management Services, & commissioning of VSAT. Golden Peacock Award - for

the best HR Practices by Institute of Directors. Rated as Best Domestic Bank in India

by Global Finance (International Financial Journal - June 1998)

2000State -of - the -art Date Centre at ITPL, Bangalore.

RBI clears setting up of ING Vysya Life Insurance Company

2001 ING-Vysya commenced life insurance business.

2002

The Bank launched a range of products & services like the Vys Vyapar Plus, the range

of loan schemes for traders, ATM services, Smartserv, personal assistant service, Save

& Secure, an account that provides accident hospitalization and insurance cover,

Sambandh, the International Debit Card and the mi-b@nk net banking service.

2002 ING takes over the Management of the Bank from October 7th , 2002

2002RBI clears the new name of the Bank as ING Vysya Bank Ltd, vide their letter of

17.12.02

2003Introduced customer friendly products like Orange Savings, Orange Current and

Protected Home Loans

2004 Introduced Protected Home Loans - a housing loan product

2005Introduced Solo - My Own Account for youth and Customer Service Line Phone

Banking Service

2006 Bank has networked all the branches to facilitate AAA transactions i.e. Anywhere,Anytime & Anyhow Banking

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Employee Retention:

Employee retention refers to the ability of an organization to retain its employees.

Employee retention can be represented by a simple statistic (for example, a

retention rate of 80% usually indicates that an organization kept 80% of its

employees in a given period). However, many consider employee retention as

relating to the efforts by which employers attempt to retain employees in their

workforce. In this sense, retention becomes the strategies rather than the outcome.

In a Business setting, the goal of employers is usually to decrease employee

turnover, thereby decreasing training costs, recruitment costs and loss of talent and

organisational knowledge. By implementing lessons learned from

key organizational behavior concepts employers can improve retention rates and

decrease the associated costs of high turnover. However, this isn't always the case.

Employers can seek "positive turnover" whereby they aim to maintain only thoseemployees who they consider to be high performers.

Retention Strategies

In order to retain employees and reduce turnover managers must meet the goals of

employees without losing sight of the organization's goals, thereby creating a "win-

win" situation. Valance and expectancy theories provided some of the earlier

guidance for retaining employees.

Valence is the degree to which the rewards offered by an organization align with

the needs employees seek to fulfill. High valence indicates that the needs of

employees are aligned well with the rewards system an organization offers.

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Conversely, low valence is a poor alignment of needs with rewards and can lead to

low job satisfaction and thereby increase turnover and decrease retention.

Expectancy theory details has several factors that can lead to high job satisfaction

and high retention rates for organizations. Increasing expectancy in an organization

can be done by training employees and thereby making them more confident in

their abilities. Increasing instrumentality within an organization will be part of

implementing an effective rewards system for attainment of specific goals and

accomplishments.[1]

However, while these theories may be valid they provide little practical assistant

for business managers or human resource practitioners. More modern studies

relating to employee engagement demonstrate that by developing a range of

strategies that address various drivers of engagement, many positive outcomes can

be achieved. These outcomes include higher profitability, improved customer

satisfaction, lower absenteeism and lower accident rates as well as higher

employee retention.

Retention and Motivation Theory

Retention has a direct and causal relationship with employee needs and motivation.

Applying a motivation theory model, such as Maslows Hierarchy of Needs, is an

effective way of identifying effective retention protocol.

Each of the five tiers of Maslows hierarchy of needs relates to optimal retention

strategy. Since Maslows introduction of his motivation model, organizations have

been employing strategies attempting to stimulate each of the five humanitarian

needs described above to optimize retention rates. When applied to the

organizational model, meeting the self-actualization and esteem needs of an

employee tend to correlate to better retention. Physiological, safety, and social

needs are important as well, however, and must be addressed to better the work

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environment. While implementing a retention strategy is ideal, successful

satisfying all five needs of employees is not only difficult, but also expensive. That

being said, managers who attempt to maximize employee need coverage tend to be

more concerned with employee satisfaction.

Maslow's hierarchy of needs

Maslow's hierarchy of needs is a theory in psychology, proposed by Abraham

Maslow in his 1943 paperA Theory of Human Motivation.[2] Maslow subsequently

extended the idea to include his observations of humans' innate curiosity. His

theories parallel many other theories of human developmental psychology, all of

which focus on describing the stages of growth in humans. Maslow use the terms

Physiological, Safety, Belongingness and Love, Esteem, and Self-Actualization

needs to describe the pattern that human motivations generally move through.

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Employee Strength of ING Vysya:

Physiological needs

For the most part, physiological needs are obvious they are the literal

requirements for human survival. If these requirements are not met, the human

body simply cannot continue to function.

Air, water, and food are metabolic requirements for survival in all animals,

including humans. Clothing and shelter provide necessary protection from the

elements. The intensity of the human sexual instinct is shaped more by sexual

competition than maintaining a birth rate adequate to survival of the species.

Safety needs

With their physical needs relatively satisfied, the individual's safety needs takeprecedence and dominate behavior. In the absence of physical safety due to war,

natural disaster, or, in cases of family violence, childhood abuse, etc. people

(re-)experience post-traumatic stress disorder and trans-generational trauma

transfer. In the absence of economic safety due to economic crisis and lack of

work opportunities these safety needs manifest themselves in such things as a

preference for job security, grievance procedures for protecting the individual from

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unilateral authority, savings accounts, insurance policies, reasonable disability

accommodations, and the like.

Safety and Security needs include:

Personal security Financial security

Health and well-being

Safety net against accidents/illness and their adverse impacts

Love and belonging

After physiological and safety needs are fulfilled, the third layer of human needs

are interpersonal and involve feelings of belongingness. The need is especially

strong in childhood and can over-ride the need for safety as witnessed in childrenwho cling to abusive parents. Deficiencies with respect to this aspect of Maslow's

hierarchy due to hospitalism, neglect, shunning, ostracism etc. can impact

individual's ability to form and maintain emotionally significant relationships in

general, such as:

Friendship

Intimacy

Family

Humans need to feel a sense of belonging and acceptance, whether it comes from alarge social group, such as clubs, office culture, religious groups, professional

organizations, sports teams, gangs, or small social connections (family members,

intimate partners, mentors, close colleagues, confidants). They need to love and be

loved (sexually and non-sexually) by others. In the absence of these elements,

many people become susceptible to loneliness, social anxiety, and clinical

depression. This need for belonging can often overcome the physiological and

security needs, depending on the strength of the peer pressure; an anorexic, for

example, may ignore the need to eat and the security of health for a feeling of

control and belonging.Esteem

All humans have a need to be respected and to have self-esteem and self-respect.

Esteem presents the normal human desire to be accepted and valued by others.

People need to engage themselves to gain recognition and have an activity or

activities that give the person a sense of contribution, to feel self-valued, be it in a

profession or hobby. Imbalances at this level can result in low self-esteem or

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an inferiority complex. People with low self-esteem need respect from others. They

may seek fame or glory, which again depends on others. Note, however, that many

people with low self-esteem will not be able to improve their view of themselves

simply by receiving fame, respect, and glory externally, but must first accept

themselves internally. Psychological imbalances such as depression can also

prevent one from obtaining self-esteem on both levels.

Most people have a need for a stable self-respect and self-esteem. Maslow noted

two versions of esteem needs, a lower one and a higher one. The lower one is the

need for the respect of others, the need for status, recognition, fame, prestige, and

attention. The higher one is the need for self-respect, the need for strength,

competence, mastery, self-confidence, independence and freedom. The latter one

ranks higher because it rests more on inner competence won through experience.

Deprivation of these needs can lead to an inferiority complex, weakness and

helplessness.

Maslow also states that even though these are examples of how the quest for

knowledge is separate from basic needs he warns that these two hierarchies are

interrelated rather than sharply separated (Maslow 97). This means that this level

of need, as well as the next and highest level, are not strict, separate levels but

closely related to others, and this is possibly the reason that these two levels of

need are left out of most textbooks.

Self-actualization

What a man can be, he must be. This forms the basis of the perceived need for self-

actualization. This level of need pertains to what a person's full potential is andrealizing that potential. Maslow describes this desire as the desire to become more

and more what one is, to become everything that one is capable of becoming.This

is a broad definition of the need for self-actualization, but when applied to

individuals the need is specific. For example one individual may have the strong

desire to become an ideal parent, in another it may be expressed athletically, and in

another it may be expressed in painting, pictures, or inventions.[11] As mentioned

before, in order to reach a clear understanding of this level of need one must first

not only achieve the previous needs, physiological, safety, love, and esteem, but

master these needs.

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