Aditi Sip Final

8/4/2019 Aditi Sip Final

1/44

1

CHAPTER 1: INTRODUCTION

1.1 Company Profile

Genesis

IndusInd Bank derives its name and inspiration from the Indus Valley civilization -a culture described by

National Geographic as 'one of the greatest of the ancient world' combining a spirit of innovation with

sound business and trade practices.

Mr. Srichand P. Hinduja, a leading Non-Resident Indian businessman and head of the Hinduja Group,

conceived the vision of IndusInd Bank -the first of the new-generation private banks in India -and through

collective contributions from the NRI community towards India's economic and social development,

brought our Bank into being.

The Bank, formally inaugurated in April 1994 by Dr. Manmohan Singh, Honorable Prime Minister of

India who was then the countrys Finance Minister, started with a capital base of Rs.1 , 000 million (USD

32 million at the prevailing exchange rate), of which Rs.600 million was raised through private placementfrom Indian Residents while the balance Rs.400 million (USD 13 million) was contributed by Non-

Resident Indians.

A New Era

IndusInd Bank, which commenced its operations in 1994, caters to the needs of both consumer and

corporate customers. It has a robust technology platform supporting multi-channel delivery capabilities.

The Bank believes in driving its business through technology. It has multi-lateral tie-ups with other banks

providing access to their ATMs for its customers. It enjoys clearing bank status for both major stock

exchanges - BSE and NSE - and three major commodity exchanges in the country - MCX, NCDEX, and

NMCE. It also offers DP facilities for stock and commodity segments. The Bank has been bestowed with

the mandate of being a Settlement Banker for six tea auction centers. In a pioneering initiative in 'Green

Banking' project, the Bank opened its first solar-power ATM in Maharashtra.


2/44

2

The Bank received a series of accolades commencing with the prestigious 'Technology Bank of the Year-

2009' award in the private and foreign bank category from the Indian Banks' Association (IBA). It has

also been recognized as the Bank with the Best Performance in Credit Quality at the FE Best Banks

Awards. Recently, CRISIL has reaffirmed its P1+ rating of IndusInd Bank's fixed deposits and certificates

of deposit program. Credit rating agency ICRA Ltd. has upgraded Lower Tier II Bonds rating of the Bank

to LAA- (pronounced L double A minus) rating with stable outlook from LA+ (pronounced L A plus)

rating with stable outlook.

1.2 Milestones

With over 16 years of Operating History

20102011

Most Improved Bank Performance of the Year awarded by Bloomberg UTV Financial Leadership

Awards 2011

Winner of Best Use of technology in training and e-Learning Initiatives awarded by IBA Banking

Technology Awards 2010

Runners up of Best Risk Management Initiatives awarded by IBA Banking Technology Awards 2010

Silver winner of Excellence in Business Process Management and Work flow in Australia and Asia

Region Global awards by Workflow Management Coalition and BPM.com, USA

Talisma User awards for Enterprise Adoption of CRM2010

Ranked 2nd in the fastest growing Bank (mid-size) category published in Indias Best Banks report

by Business World and PWC.

Excellence Award as the 2nd best New Generation Bank in Kerala for the second consecutive year

awarded by the State Forum of Bankers Clubs, Kerala

20092010

Awarded the "Best Priority Sector Bank" amongst the private sector banks by Duns & Bradstreet


3/44

3

Tier II Issueraised Rs. 4200 million in March 2010

Awarded the Technology Bank of the Year-2009 from IBA

Excellence Award, the 2nd best new generation bank in Kerala by the State Forum of Bankers Clubs,

Kerala

Recognized for 'Best Performance in Credit Quality' by inancial Express

Received the prestigious ISO 27001 certification for IT operations

20082009

QIP Issueraised Rs. 4803 million in August 2009

Regulatory clearance for 113 new branches are in place (as of June 30,2010)

Appointed as Clearing & Settlement Bank at 6 major Tea Auction centres

(includes 2 which were added in 2010)

Tied up with BONY Mellon for on line remittances from United States to India

20072008

GDR Issue - raised Rs 2,222 million; Ratings: ICRA Highest A1+ - CDs, Crisil P1+: CDs, FDs

New Launch/Rollout: Mid market Investment Bank, 3rd Party Distribution Platform, Warehouse Receipt

Finance

Awards/Recognition: The Smart Workplace - Economic Times, Best CSR Practice Company

BSE/NASSCOM

Extended microfinance to 300,000+ women by partnering leading MFIs like SKS Microfinance

Extensive IT initiatives

Became clearing/settlement bank for NSE currency futures exchange

New management team headed by Romesh Sobti inducted from ABN AMRO Bank NV

20062007

GDR - raised Rs 1,460 million, tied up with Cholamandalam MS for bank assurance

Signed an agreement with National Multi Commodity Exchange Ltd as clearing banker


4/44

4

20052006

Tied-up with Religare Securities for offering 3-in-1 account covering banking, depository & securities

trading

Tied up with Aviva Life Insurance for bank assurance

20042005

Signed an agreement with NCDEX as clearing banker

Opened its second representative office in London

20032004

Ashok Leyland Finance Ltd, a leading NBFC merged with the Bank (total 115 branches), opened

representative office in Dubai

20022003

IndusInd Enterprises & Finance Ltd, a NBFC & one of the promoters of the Bank amalgamated with the

Bank

Increased branch network to 53

20012002

Tie ups with exchange houses in Middle East and banks in the United States

19942000

IPO - raised Rs 1,800 million, became clearing bank to First Commodities Clearing Corporation of India

2000Became clearing/settlement bank for BSE/NSE

Raised Rs 1,000 million through preferential issue of shares

Incorporated in 1994; Promoted by a group of Non Resident Indians. Started operations with Rs 1000

Mn Capital


5/44

5

1.3 Brand

IndusInd Bank has been aggressive in its brand building program since last year. As a part of the brand

building exercise, the bank has taken many initiatives which have helped the brand connect up with the

customers & enhance the visibility quotient. IndusInd Bank had launched its first ever mass media

campaign in May-June 2009 along with its punch line Makes you feel richer and since then, the bank

has been consistent in communication through Television, Radio, and Outdoor & print advertising.

IndusInd Bank understands its customers money is not just money. It is the vehicle to realize their

dreams! Hence, the bank aims to ensure that the customers experience with the bank is pleasant and

enriching. That they get value for their money, enabling them to lead a richer, fuller, content life... For

this, the bank:

Offers a new level of banking better services, better understanding of unique needs and better

management of finances

Demystifies the banking process and makes it more accessible

Apart from fulfilling traditional banking responsibilities, advises customers on how and where to use

their money to get the best out of it

Projects an image of being a young, energetic, modern bank with values of dynamism, confidence and

progression

Further, as a banking partner, the bank also aims to help its customers discover how they can do more

things with their money.

1.4 IndusInd bank, Defence colony branch

The Bank, formally inaugurated in April 1994 by Dr. Manmohan Singh, Honourable Prime Minister of

India who was then the countrys Finance Minister, started with a capital base of Rs.1,000 million (USD

32 million at the prevailing exchange rate), of which Rs.600 million was raised through private placement

from Indian Residents while the balance Rs.400 million (USD 13 million) was contributed by Non-

Resident Indians. It caters to the needs of both consumer and corporate customers. It has a robust

technology platform supporting multi-channel delivery capabilities.


6/44

6

Since the last year bank has aggressively marketed itself. It has 48 branches in Delhi and it will increase

to 100 till December 2011.

Defence Colony is a posh locality situated in South Delhi, India. its central location from most parts of

the city ofDelhi, IndusInd bank is going to launch one of its branch in defence colony which is under

construction from past 6 months and is delayed from its schedule. Though the soft launch of the branch

has been done but for the actual launch there is still time. This branch will become the regional office of

IndusInd bank. The branch has a target to launch with 500 accounts which has already been achieved but

due to the delay in launch the bank has lost a bit of its reputation among the customers as the account

opening takes time because at present the bank is opening its accounts from its green park branch, from

where later the accounts will be transferred to defence colony branch.

The sample size of the research are 100 customers of Defence Colony branch.
http://en.wikipedia.org/wiki/South_Delhihttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Delhihttp://en.wikipedia.org/wiki/Delhihttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/South_Delhi


7/44

7

1.5 customer satisfaction

The definition of customer satisfaction has been widely debated as organizations increasingly attempt to

measure it. Customer satisfaction can be experienced in a variety of situations and connected to both

goods and services. It is a highly personal assessment that is greatly affected by customer expectations.

Satisfaction also is based on the customers experience of both contacts with the organization and

personal outcomes. Some researchers define a satisfied customer within the private sector as one who

receives significant added value to his/her bottom linea definition that may apply just as well to public

services. Customer satisfaction differs depending on the situation and the product or service. A customer

may be satisfied with a product or service, an experience, a purchase Decision, a salesperson, store,

service provider, or an attribute or any of these.

Some researchers completely avoid satisfaction as a measurement objective because itis too fuzzy an

idea to serve as a meaningful benchmark. Instead, they focus on thecustomers entire experience with an

organization or service contact and the detailed assessment of that experience. For example, reporting

methods developed for health care patient surveys often ask customers to rate their providers and

experiences in response to detailed questions such as, How well did your physicians keep you

informed?

These surveys provide actionable data that reveal obvious steps for improvement. Customer satisfaction

is a highly personal assessment that is greatly influenced by individual expectations.

Quality and service alone cant produce recurrent satisfaction. Satisfaction is a distinct and separate issue.

It is the customer's entire experience with us that determines his or her declaration of satisfaction. This

experience is not objective at all but totally subjective. It is the customer's call.

A customer is satisfied only if and when they say they are satisfied. Satisfaction is based upon the

customer's perception of the experience. This perception is his/her interpretation of the value received

played back against expectations. This declaration does not require any objective evidence. It can be a

declaration made with no reason. Our interactions with the customer, the promises made to the customer

in these conversations, and the customer's expectations generated in these conversations, and the actions

we take that are consistent with those expectations combine to produce a declaration of satisfaction

.Therefore it is essential we manage these aspects of our business in a proactive manner to excel at

Customer Satisfaction.


8/44

8

Why Measure Customer Satisfaction?

Customer satisfaction is tied directly to profitability. If your customers are happy, they tend to be loyal.

And if theyre loyal they not only buy more, they refer other customers. Well - established research by

Bain & Company found that, for many companies, an increase of 5% in customer retention can increase

profits by 25% to 95%. The same study found that it costs six to seven times more to gain a new customer

than to keep an existing one.

Moreover, one bad experience can outweigh a whole lot of good experiences. Because of e-mail and

instant messaging, that bad experience can quickly be broadcast to dozens, hundreds, or thousands of

other customers, magnifying its impact. So if your business is doing something that frustrates customers,

you need to know right away.

It is critical to give customers the opportunity to provide feedback about their overall satisfaction level

and specific likes and dislikes. It is equally important to consistently measure and monitor that input.

Without an effective customer satisfaction research program in place, your company will be losing

business, missing opportunities, and putting itself at a competitive disadvantage.

The methods chosen for measuring customer satisfaction depend on customer characteristics, time

availability, costs, and the information an organization hopes to gather. Many of the top performing

companies identified by the National performance review ( NPR) used sophisticated market research


9/44

9

techniques: Feedback was obtained through customer focus groups, customer usage and attitude surveys,

supplier and partner surveys, and detailed telephone ,mail, and personal interviews. In one case,

thousands of customer surveys were mailed out each week. Another company maintained a detailed

database containing all pertinent facts about its customers requirements.65 Common methods of

gathering customer satisfaction information in the commercial world include 1-800 numbers, comment

cards, telephone surveys, mail-based surveys, focus groups, group interviews, and direct contact between

customers and employees.

Recently, online surveysthrough pop-up windows, links, or email invitationshave become popular

with many companies. Each method or combination of methods has advantages and disadvantages.


10/44

10

CHAPTER 2: REVIEW OF THE LITERATURE

Michael conklin, zoomerang

This article tells us that customer satisfaction is tied directly to profitability. If customers are happy they

tend to be loyal and if they are loyal they not only buy more but also refer to other people also. The article

also tells us that a research by Brain and company(Harvard Business Review,2001) found that, for many

companies an increase in 5% of customer retention can increase profits by 25% to 95% .The same study

also found that its costs six to seven times more to gain a new customer than to keep an existing one.

Moreover, one bad experience can outweigh a whole lot of good experiences. Because of e-mail andinstant messaging, that bad experience can quickly be broadcast to dozens, hundreds, or thousands of

other customers, magnifying its impact. So if your business is doing something that frustrates customers,

you need to know right away.

It is critical to give customers the opportunity to provide feedback about their overall satisfaction level

and specific likes and dislikes. It is equally important to consistently measure and monitor that input.

Without an effective customer satisfaction research program in place, your company will be losing

business, missing opportunities, and putting itself at a competitive disadvantage.

Anjan Raichaudhuri

Customer satisfaction practices have acquired popularity during the last two decades. This is because

companies believe that it not only leads to customer loyalty , but also results In better profitability .At

present the real life observations indicate that in a number of instances customer satisfaction practices

seems to loose their effectiveness. for eg during 2000-01,the highly publicised scores of fiat sienna in the

indian market were similar to that of Hyundai Santro , while those of Tata Indica were much lower.

However fiat sienna was not a commercial success while santro and indica were.

In simple terms customer satisfaction is a measure of the gap between what customers wants and what he

thinks he gets. As competition intensifies, suppliers try to acquire market leadership not only by

exceeding them (customer delight).


11/44

11

Customer satisfaction survey should therefore, highlight the critical elements in the system-customer

expectation, perceived limitations in current purchases ,as well as, sources of delight. Unfortunately, most

CSS fall far short of the desired objectives for different reasons:

In many companies CSS started as an outcome of their quality management programme. Rather than being

an aid for strategic decisions, companies end up measuring what may cause customer dissatisfaction.

The problem is further accentuated by lengthy and complex quantitative questionnaire , which may be

useful in improving quality shortfalls but rarely shed light on customer expectations and delight.

Since many companies link customer satisfaction index with annual payment of incentives and rewards for

executives, CSS has become part of an internal appraisal system rather than an external customer

exploration exercise.

Thorsten henning-Thurau and alexander klee (December 1997)

The article proposes a conceptual model that extends the widespread view of a direct and linear

relationship between customer satisfaction and customer retention. Three theoretical conclusions can be

found regarding the relation between satisfaction and quality:

Quality is equated with the customers appraisal of a concrete product or service experience.

According to this approach there is no significant theoretical difference between satisfaction and quality

exists.

Customer satisfaction is modelled as an antecedent of quality.

Thus, satisfaction is regarded as a short term emotional state that results from an intrapersonal

comparison of the customers expectations with the evaluations of a single product or service.

Furthermore, the conducted analysis suggests that the traditional understanding of the customers product-

or service-related quality perception must be broadened for three aspects:

1. A competition-related perspective must be added.

2. The customers level of involvement has to be considered.

3. The quality construct has to be differentiated on the basis of changes of the customers internal

expectation standard.


12/44

12

Andreas Herrmann, Lan Xia, Kent B. Monroe, Frank Huber (2007):

The research contributes to the literature on satisfaction by incorporating the role of perceived price

fairness. Price has a larger influence on customer satisfaction judgements. It showed that price

perceptions directly influence satisfaction judgements as well as indirectly through perceptions of price

fairness. The paper links these two important concepts and demonstrated the influence of perceived price

fairness on satisfaction judgements empirically. It also implies that sellers should not avoid exploiting

their customers potential feelings of being exploited.

Explaining the procedure and offering information to consumers will enhance the transparency of the

price and perceived fairness which will lead to customer satisfaction judgements. The price transparency

may be particularly relevant when prices are increased or when the price structure is relatively complex.

When a seller explains how a price is derived and shows that price increases are due to uncontrollable

external factors such as an increase in raw

Material prices, the buyer is more likely to accept the price increase and perceive it fair or at least as

less unfair.

Rebekah Bennett, Sharyn Rundle-Thiele (2004):

Customer satisfaction is an important issue for marketing managers, particularly those in service

industries. However, it appears that achieving customer satisfaction is often the end goal , as evidenced by

the emphasis on customer satisfaction surveys. This paper proposes that this focus is due to the

assumption that satisfied customers are loyal customers and thus high levels of satisfaction will lead to

increased sales. As a result of this assumption, customer satisfaction is often used as a proxy for loyalty

and other outcomes. The authors empirically demonstrate that satisfaction is not the same as attitudinal

loyalty and that there are instances where satisfaction and attitudes in setting high risk where a high level

of decision making is involved. A sample of 267 businesses was surveyed on their satisfaction and

attitudinal loyalty levels towards an advertising service. The results indicate that satisfaction and loyalty

in a business services setting are different constructs, and that, while the relationship is positive, high

levels of satisfaction do not always yield high levels of loyalty.


13/44

13

Rodger Hallowell (February 1996):

The research illustrates the relationship of profitability to intermediate customer related outcomes that

managers can influence directly. The findings support that customer satisfaction is related to customer

loyalty , which in turn is related to profitability.

Method : OLS regression is used to examine the hypothesized relationships. To increase the internal

validity of the results , multiple measures of satisfaction , loyalty ,and profitability were examined

whenever possible.

Result: The results encourage the inference of relationships between customer satisfaction and customer

retention and between customer retention and profitability.

Rust and Zahorik(1991) examine the relationship of customer satisfaction to customer retention in retail

banking. Customer satisfaction is related to profit, a bank should try and satisfy every customer .There

could be an error in the interpretation. A banks population of customers undoubtedly contains individuals

who either cannot be satisfied, given the service levels and pricing the bank is capable of offering, or will

never be profitable, given their banking activity (their use of resources relative to the revenue they

supply). Any bank would be wise to target and serve only those customers whose needs it can meet better

than its competitors in a profitable manner. These are the customers who are most likely to remain withthat bank for long periods ,who will purchase multiple products and services, who will recommend

the bank to their friends and relations, and who may be the source of superior returns to the banks

shareholders.

Gilbert A. Churchill, JR., and Carol Surprenant (November 1982):

Satisfaction is a major outcome of marketing activity and serves to link processes culminating in purchaseand consumption with post purchase phenomena such as attitude change, repeat purchase, and brand

loyalty.

Conceptually, satisfaction is an outcome of purchase and use resulting from the buyers comparison of the

rewards and cost of the purchase in relation to the anticipated consequences.


14/44

14

Operationally, satisfaction is similar to attitudes in that it can be assessed as the sum of satisfactions with

the various attributes of the product or service. In the research paper author investigates whether it is

necessary to include disconfirmation as an intervening variable affecting satisfaction as is commonly

argued , or, whether the effect of disconfirmation is adequately captured by expectation and perceived

performance. The model in the research paper processes for two types of products , a durable and a non-

durable good. The results suggest that effects are different for the two products. For the non-durable good,

the relationships are as typically hypothesized. The results for durable goods are different in important

respects .finally, the direct performance-satisfaction relationship accounts for most of the variation in

satisfaction.

Harkiranpal Singh, Bukit Jalil (May 2006):

The Research summarises few important points on customer satisfaction, customer retention and

customer loyalty. It concludes that there are many factors that affect customer satisfaction. According to

Hakanson (1995) these factors include friendly employees, courteous employees, knowledgeable

employees, helpful employees, accuracy of billing, billing timeliness ,competitive pricing, service quality,

good value, billing clarity and retention. It gives strategic imperatives for building a loyal customer base:

Focus on key customers

Building closer ties with customers Proactively generate high level of customer satisfaction with every interaction.

Anticipate customer needs and respond to them before the competition does.

Create a value perception.

R.K. Uppal,(October 2010) :

Customer complaints are part of business life of any corporate entity. This is more so for banks becausethey are service organisations. As a service organisation, customer service and satisfaction should be the

prime concern of any bank. The bank believes that providing prompt and efficient service is essential not

only to attract new customers, but also to retain existing ones. The paper studies that maximum

complaints are in the public sector banks and are continuously increasing, and as such they adversely

affect customer satisfaction and performance .The complaints and all the activities performed by the

banks are in deposits, credit cards and housing loans.


15/44

15

Each and every bank should establish a customer care centre to solve the complaints of the customers

.Private sector and foreign banks are taking the lead in making customers happy. Moreover, Indian public

sector banks are still not taking the initiative in solving the complaints of their customers. Hence, RBI

should insist all the public sector banks to solve the complaints of the customers at the earliest. If the

banks will not look into solving the complaints their survival will become difficult.


16/44

16

CHAPTER 3: RESEARCH METHODS AND PROCEDURES

3.1 Purpose of the study

a) To analyse the importance of various factors, of IndusInd bank for customer satisfaction.

b) To analyse the importance of various factors while choosing a bank.

c) To find out the awareness of the benefits offered by IndusInd bank.

3.2 Research design

The research design will be Descriptive Research. The research is done to analyse the important factors

involved in customer satisfaction of the bank. For this a questionnaire has been designed which includes

both open ended and closed ended questions. Rank order scale and likert scale has also been used in the

questionnaire.

3.3 Participants

The participants of the study include the existing customers of Defence colony branch, they also include

the new walk- ins that are joining the Defence colony branch as new customers because the branch has

done only its soft launch as yet and is in process to launch. The sample size in the study are 100

customers.

3.4 Data collection

The data to be collected was primary data. A questionnaire was prepared to collect the data and it was

collected by the walk-in clients at the branch and also few personal visits were made to the clients with

the relationship manager.

3.5 Instruments use

The research instrument used was a questionnaire containing 11 questions. The questionnaire includes

open ended as well as close ended questions to analyze the important factors involved in customer

satisfaction of the bank.


17/44

17

CHAPTER 4: DATA ANALYSIS AND FINDINGS

4.1: Review of the methodology

The survey was intended to receive the answers for the research questions. The sample size of the

research was 100 customers and it was collected by questioning the walk in clients at the branch or by

personal visits made to them.

4.2: Result of the research questions

1: Occupation of the customer:

Figure 4.1 occupations of customers

Figure 4.1 represents in percentages the occupation of the customers for indusInd bank at Defence colony

branch.

Business: 40%

Service: 23%

Self-employed: 19%

Student: 15%

Housewives: 3%

Business

40%

Self Employeed

19%

House wife

3%

Service

23%

Student

15%

Occupation


18/44

18

This shows that most of the customers are business owners (40%) followed by service 23%, self-

employed 19%, student 15%, housewives 3%.

The customers are more from the business sector because the demographics of the area i.e. Defence

colony are such that big business owners live here. It is one of the posh areas in Delhi.

This is also one of the biggest advantage for the bank as it helps earning revenue , because it becomes

easy to pitch products like current accounts ,business loans, etc. also we are able to provide the customers

with facilities like customer credits and over drafts that earns the bank with interest., which leads to

revenue maximization.

2: Household income of the customer:

Figure 4.2: household income of the customers

Figure 4.2 represents in percentages the household income of the customers for IndusInd bank at Defence

colony branch.

Below 2, 00,000: 11%

2, 00,000-5, 00,000: 31%

5, 00,000-10, 00,000: 42%

Above 10, 00,000:16%

This shows that most of the customers household income falls between 5,00,000-10,00,000 i.e. 42%

followed by 2,00,000-5,00,000 -31% ,above 10,00,000-16%, below 2,00,000 -11%.

200000-500000

31%

500000-

1000000

42%

above 1000000

16%

below 2000000

11%

Income


19/44

19

This is because majority of the people in defence colony lie into high income groups having high standards

of living.

3: Time period of account:

Figure 4.3: time period of account

Figure 4.3 shows in number of years, the customers have an account with IndusInd bank.

0-2 years: 56%

2-5years:34%

More than 5 years: 10%

IndusInd Bank has been aggressive in its brand building program since last year. As a part of the brand

building exercise, the bank has taken many initiatives which have helped the brand to connect up with the

customers & enhance the visibility quotient. IndusInd Bank had launched its first ever mass media

campaign in May-June 2009 along with its punch line Makes you feel richer and since then, the bank

has been consistent in communication through Television, Radio, and Outdoor & print advertising. This is

why a larger ratio of people have accounts with IndusInd bank from 0-2 years as only now its presence is

felt in the markets also since the branch is new and new customers have joined in so the time period of

association is 0-2 years for many of the customers.

0-2 years

56%

2-5 years

34%

more than

5 years

10%

how long have an account with

Indusind Bank


20/44

20

4: Type of account with the bank:

Figure 4.4: type of account

Figure 4.4 shows in percentages the type of accounts the customers of IndusInd bank use.

Savings account: 65%

Current account: 35%

65% customers have savings account, this is because the bank at this point of time has enough locker

facility and the demand for locker is also high. Therefore, the bank provides locker facility to those who

have a saving account with the bank. Also the sale of third party products like insurance, investment

needs a saving account with the customer. One reason which adds on to it is that savings account also

include the salary accounts of the staff in them, hence it is far more than the current accounts.

current

35%

savings

65%

0%

type of account


21/44

21

5: Type of savings account:

Figure 4.5: type of savings account

Figure 4.5 shows in percentages the type of savings accounts the customers of IndusInd bank use.

Indus classic: 18%

Indus privilege: 45%

Indus maxima: 20%

Indus privilege plus: 2%

Indus multiplier: 15%

45% of the bank customers have Indus privilege savings account because it offers more value for money

while also giving the power to save and carry out hassle free transactions.

indus classic

18%

indus

maxima

savings

20%

indus

multiplier

15%

indus privilege

plus2%

indus privilege

45%

savings a/c


22/44

22

6: Type of current account:

Figure 4.6: type of current account

Figure 4.6 shows in percentages the type of current accounts the customers of IndusInd bank use.

Indus blue: 13%

Indus silver: 43%

Indus gold plus: 28%

Indus prestige: 13%

Indus EXIM: 3%

Indus escrow: 0%

Indus freedom: 0%

28% of the customers have Indus gold plus current account because it has all the banking requirements of

business into a special offer for value customers. It is a specialized product for retail wholesalers,

showroom owners, manufacturers, importers and exporters.

Indus blue13%

Indus EXIM

3%

Indus Gold Plus

28%Indus

Prestige

13%

Indus Silver

43%

Current A/C


23/44

23

7. Awareness of the benefits offered by the bank:

Figure 4.7: awareness of the benefits offered by the bank

Figure 4.7 shows in percentages the awareness of benefits offered by IndusInd bank.

Sweep in: 11%

Lending: 24%

International debit cards: 22%

ASBA: 1%

RTGS/NEFT: 42%

42% of the customers are aware of the RTGS/NEFT services offered by the bank followed by lending

services i.e. 24%, international debit cards 22%.This is because there are no charges for RTGS/NEFT

transactions and also because this is widely used.

ASBA

1%

Sweep in

11%

International

Debit cards

22%

lending services

24%

RTGS/NEFT

42%

Awareness


24/44

24

8: facilities offered by the bank

Figure 4.8: facilities offered

Figure 4.8 shows in percentages the facilities offered by IndusInd bank.

Accounts: 26%

Deposits: 15%

Loans: 10%

Debit cards: 18%

Investments: 8%

Insurance: 6%

DMAT: 7%

Credit card: 10%

26% of the customers use account facilities provided by the bank which includes saving accounts as well

as current accounts. Account facility is the highest because of the various additional benefits given to the

customers.

Accounts

26%

Credit Cards

10%

Debit Cards

18%

Deposits

15%

DMAT

7%

Insurance

6%

Investment

8%

Loans

10%Facilties


25/44

25

9: Point of interaction:

Figure 4.9: point of interaction with the bank

Figure 4.9 shows in percentages the point of interaction with the bank.

Bank branch: 36%

ATM: 47%

Net banking: 14%

Phone banking: 3%

Drop box: 0%

47% customers of IndusInd bank use ATM s as a point of interaction with the bank, followed by visits to

bank branches i.e. 36%,net banking 14% phone banking 3%.

A large number of customers use ATM facilities for IndusInd bank because of the easy availability, easy

accessibility and also it provides us the option of choosing the denomination of the notes we require.

Net banking is comparatively less due complexities involved in using as well as less awareness, also

people consider net banking and phone banking as risky.

ATM

47%

Bank Branch

36%

Net Banking

14%

Phone

Banking

3%

Point of Interaction


26/44

26

Now for the further analysis of the questionnaire (ques10 & 11) we use factor analysis, tool of SPSS

software.

FACTOR ANALYSIS:

This part of my project involves identification of significant attributes so that we are able to determine as

to what all factors the customers want from the bank. Factor analysis is a very useful method of reducing

complexity by reducing the number of variables being studied. Factor analysis is a good way of resolving

this confusion and identifying latent or underlying factor from an array of seemingly important variable,

as listed below. In a more general way factor analysis is a set of techniques which by analyzing

correlation between variables reduce their number into fewer factors which explain much of the original

data, more economically. Even though a subjective interpretation can result from a factor analysis output,

the procedure often provides an insight into relevant psychographic variables, and result in economical

use of data collection effort.

METHOD

There are two stages in factor analysis:

Stage 1 can be called the factor extraction process, is a rule of thumb based on the computation of an

eigen value, to determine how many factors to extract. The higher the Eigen value of a factor the higher is

the amount of variance explained by the factor. What we are attempting to do is to extract the least

number of factors possible which will maximize the explained variance. We can have as many factors as

there are original variables, but since the objective is to reduce the variables to a fewer number of factors,

we retain those with an eigen value of 1 or more.

Stage 2 is called rotation of principal components. This is optional, but important. After the number of

factor is decided upon the next task is to name the factors. This is done by the process of identifying

which factors are associated with which of the original variables. The factor matrix is used for this

purpose. The original factor matrix is unrotated and is part of stage 1. The rotated factor matrix comes in

stage 2 where the computer package performs a rotation and gives us a rotated factor matrix. The factor

matrix (rotated or unrotated) gives us the loading of each variable on each of the extracted factor. The

objective is to find variables which have a high loading on one factor, but low loading on the other factor.


27/44

27

If factor 1 is loading highly by variables 3,8 and 10, for example, it is assumed that factor 1 is a liner

combination of these three variables, and it is given a suitable name, representing the essence of the

original variable, of which it is a combination

Now we list all the variables that indicate how a bank is performing better for customer satisfaction and

variables important for choosing a bank.

Clean

Knowledge

Timely actions

Satisfaction

Lockers

Location of ATMS

Knowledge of product

Quality

Word of mouth

Advertisement


28/44

28

Table 4.1 communalities

Communalities

Initial Extraction

clean 1.000 .365

knowledge 1.000 .870

timely 1.000 .773

satisfactory 1.000 .783

lockers 1.000 .562

locationatm 1.000 .617

knowledgeofproduct 1.000 .726

quality 1.000 .710

wordofmouth 1.000 .815

advertisemnt 1.000 .742

Extraction Method: Principal Component Analysis.

Table 4.1communalities

The table here explains the amount of variance a variable shares with all the other variables being considered

The table also explains the proportion of variance explained by common factors.


29/44

29

Table 4.2

Total Variance Explained

Comp

onent

Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings

Total

% of

Variance Cumulative % Total

% of

Variance Cumulative % Total

% of

Variance Cumulative %

1 3.909 39.088 39.088 3.909 39.088 39.088 3.102 31.021 31.021

2 2.048 20.476 59.564 2.048 20.476 59.564 2.180 21.802 52.823

3 1.007 10.073 69.637 1.007 10.073 69.637 1.681 16.814 69.637

4 .827 8.270 77.907

5 .746 7.461 85.368

6 .608 6.076 91.444

7 .357 3.567 95.011

8 .217 2.173 97.184

9 .186 1.860 99.045

10 .096 .955 100.000


Table 4.2 Total variance explained

The purpose of principal Component Analysis is to derive a relatively small number of components that can

account for the variability found in a relatively large number of measures. This procedure, called Data

reduction is typically performed when a researcher does not want to include all the original measures in

Analysis but still wants to work with the information that they contain.


30/44

30

Table 4.3

In table 4.3 factor extraction has been done. The method used is principal component analysis (PCA).It is

used to derive a relatively small number of components that can account for the variability found in a

relatively large number of measures. This procedure, called data reduction, and is typically performed when aresearcher does not want to include all of the original measures in analyses but still wants to work with the

information that they contain.

Component Matrix

Component

1 2 3

1)clean -.024 .603 -.0112)knowledge .742 -.477 .304

3)timely .803 -.356 .037

4)satisfactory .717 .273 .442

5)lockers .593 .449 -.099

6)location tm .349 .420 .565

7)knowledge ofproduct

.610 -.557 -.208

8)quality .730 -.148 -.393

9)word-of-mouth .831 .301 -.184

10)advertisement .361 .674 -.396


3 components extracted.

Table 4.3 component matrix


31/44

31

Table 4.4

Rotated Component Matrixa

Component

1 2 3

clean -.400 .413 .186

knowledge .825 -.137 .414

timely .831 .120 .260

satisfactory .310 .297 .774

lockers .179 .650 .329

locationatm -.080 .156 .766

knowledgeofproduct .846 .019 -.096

quality .703 .460 -.059

wordofmouth .465 .708 .312

advertisemnt -.099 .854 .057


Rotation Method: Varimax with Kaiser Normalization.

Table 4.4 related component matrix

Rotated Component Matrix: For any given set of correlations and number of factors

there are actually an infinite number of ways that you can define your factors and still account for the

same amount of covariance in your measures. By rotating your factors you attempt to find a factor solution

that is equal to that obtained in the initial extraction but which has the simplest interpretation.

In rotating the factors, we would like each factor to have non zero or significant , loadings or coefficients for

only some of the variables. Likewise, we would like each variable to have non zero or significant loadings

with only a few factors , if possible with only one. If several factors have high loadings with the samevariable, it is difficult to interpret them. Rotation does not affect the communalities and the percentage of

total variance explained. However the percentage of variance accounted for by each factor does change .Inthe following table varimax procedure has been used for rotation of the factors. This is an orthogonal method

of rotation that minimizes the number of variables with high loadings on a factor, thereby enhancing theinterpretability of the factors.


32/44

32

INTERPRETATION OF COMPUTER OUTPUT

The output of the factor analysis is obtained by requesting principal components analysis and specifying a

rotation. In table 2, 3 and 4 we have the factor analysis for the problem, the unrotated factor matrix (table

3) the final statistics (table 2) comprising the communality for all 10 variables, and the eigen value of all

factor having eigen value of 1 or more than 1. We assume that we are extracting factor of eigen value 1 or

more, and have specified this in the request to the computer package while doing factor analysis.

The first step in the interpreting the output is to look at the factor extracted, their eigen value and the

cumulative percentage of variance (table 2). We see from cumulative percentage column that the five

factors together extracted together account for 69.367 percent of the total variance (information contained

in the original 10 variables). This is a good bargain because we are able to economise on the number of

variables (from 10 to 3), while we lost about 30 percent of the information content (70% is retained by the

3 factors extracted out of the 10 original variables).

Now the second task which follows is that of interpreting what these 3 extracted factors represent. This

we can accomplish by looking at table 3 and 4, the rotated and unrotated factor matrices.

Looking at table 4, the rotated factor matrix, we notice that variable 2,3and 7 have a loading of .825,.831and .846 on factor 1 (we look down the factor 1 column in table 4, and look for high loading close to

1). This suggests that factor 1 is a combination of these three variables. But if we look at table 3 the

unrotated factor matrix, a slightly different picture emerges. Here variable 3 also has a high loading on

factor 1, along with variables 9. It is left to the researcher which interpretation he wants to use as there is

no hard and fast rule. So we go with the rotated factor matrix, the related statement are Knowledge of the

teller, Timely and Knowledge of the product. We can combine these 3 variables into a factor called

SERVICE AND AWARENESS.

Now we attempt to interpret factor 2. We look at table 4 down the column for factor 2, and find the

variable 10 have loading of .854, but again if we look at table 3, the unrotated factor matrix, here none of

the variable has a high loading. Again we consider table 4. So we go with the rotated factor matrix, the

related statement are advertisement We can combine these variable into a factor called

PROMOTION


33/44

33

Looking at table 4, the rotated factor matrix, we notice that variable 4 and 6 have a loading of .774 & .766

on factor 3 (we look down the factor 3 columns in table 4, and look for high loading close to 1). This

suggests that factor 3 is a combination of these two variables. The unrotated factor matrix tells a different

picture but as already discussed it is the choice of the researcher to consider rotated or unrotated factor

matrix and we are considering the rotated factor matrix. The related statements are satisfaction, and

Location of ATM. We can combine these variables and name them CONVENIENCE.

So here we have our three main factors:

Service and awareness

Promotion

Convenience


34/44

34

CHAPTER 5: CONCLUSION AND RECOMMENDATIONS

5.1: Conclusion

40 % of the customers are from the business sector.

The majority of the customers have a household income between 2,00,000- 5,00,000.

Bank has recently started performing aggressively and has added many now branches to it as well new

customers have joined so there are more people who have an account with the bank from past 0-2 years.

Saving accounts are 30% more than current account this is because branch is new & the customers are

required to take saving account first to use other facilities provided by the bank.

Indus privilege is the most selling saving account as 45% of customers opted for it.

Indus silver is the most selling current account as 43% if customers opted for it.

RTGS/NEFT is the most known services offered by the bank as 42% of the customers are aware of it.

Account facility (savings and current) is the most availed by the customers.

ATMS are the most frequent point of interaction for the customers because of its easy accessibility and

the new concept of your own choice of notes denomination.

From the factor analysis we conclude that service and awareness, promotion and convenience are the

three major factors considered important for customer satisfaction and also for the choice of bank. For

providing the customers with the best facilities bank has started new concepts like, IndusInd bank is open

for all 365 days, they give us a choice of selecting the denomination of notes at ATMS also it provides us

with a 0 balance account upto one year.


35/44

35

In the present competitive banking environment, most of the banks offer the same or similar products

around the world and quality of services and satisfaction is a vital means to differentiate themselves in the

market place. Therefore, to be successful, retail banks must provide service to their customers that meets

or exceeds their expectations, and the present study will provide at least some sorts of guidelines to the

policy makers of the banks as it give the parameters considered important by the customers.

Consumers will seek only those financial products and suppliers which offer the best value for money and

they are educated about it. Thus, if a bank is able to position itself favourably within a specific market,

relative to competitors, high profits will be earned as a result. Hence awareness of the products, schemes,

benefits is required.


36/44

36

5.2 Recommendations

Parking facility: since the bank is located on the main road there is not much space to park the vehicles in

front of the bank it causes a lot of disturbances to the on goin traffic also it reduces the number of

customer who visit the bank for any work instead it has increased the workload for the bank workforce

because the clients call them at their own convenient places instead of bank.

For this the bank can have tie-up with the MCD parking nearby so that it becomes easy for the customers

and it does not disturb the on-going traffic.

Visitors lounge: depending upon the customer base the bank should have its visitors lounge and defence

colony being a posh area the bank should provide enough space for comfortable seatings for thecustomers so that they can discuss about their savings and investment plans also it becomes easy for the

managers to deal with the customers in a relaxed seating.

Lobby managers: there should be a designated post of lobby managers who can clarify with the enquiries

of the walk in customers as this helps in making the customer feel important for the bank.

More relationship managers: in the areas like defence colony and Green Park the customers have huge

spending power and what they focus on are the quality of services provided to them. They do not mind

being charged on it but they require personalise services and it is impossible for 2 relationship managers

to manage all the customers themselves so more staff should be kept.

Since it has been too long for the branch to launch it has lost many of its customers also its reputation has

come down a bit so in order to gain back the trust of the customers the bank should indulge itself into

aggressive promotional activities for at least one month after its launch. for this they can put canopies in

the crowded area and create awareness.

Data base management: the branch is new and it does not have a data base of its own so it must arrange it

so that personalised calls can be made to the people and make them aware about the services offered by

the bank. This can be done by approaching to the defence colony residents welfare association and ask

them for the names and numbers of the residents.


37/44

37

Internet banking: Recently, banks are advanced in using modern technology and IT. In this case, internet

banking has added a new dimension. Customers are using online banking to save time and have prompt

services. However, the response from the customers perception is not satisfactory as only 14% customers

use it because they fear of its safety. Hence it should be developed so that it becomes convenient for the

customers.

Number of ATMS should be increased, since it is the most confortable point of interaction of the bank

with the customers.(as seen in the analysis).

The customers consider service as one of the important factors for customer satisfaction, the bank must

start a service of sending a person from the bank to the customers(regular customers or customers with

huge balances) for collection of cheques, drafts or delivering the cheque books and the debit card kits.

This would save the time of the customers and will aslo be convenient for them, as we have seen

convenience is also one of the important factors in choosing a bank for the customers, so may be the

customer get attracted to this service.

Since there is so much of competition and even retail banking has its competitors around the bank must

start with some awareness campaigns which makes the customers of the general public aware of the

benefits offerd, the products and the various facilities.

The bank should advertise through television and reach the masses.


38/44

38

CHAPTER 6: LIMITATIONS OF THE STUDY

Since the branch was under construction and it did not launch by the time of the internship it was difficult

to get the questionnaire filled by the walking clients.

Respondents were usually busy and if even free were not willing to fill the questionnaire. There were

times when a probable respondent would think of us as a salesman and say not interested or I dont

want to buy

People were hesitant to disclose the true facts

Since the research is limited only to defence colony branch it cant be used for practical purposes.

Since the research is limited only to defence colony branch and the sample size was limited so we cant

use the results because as the area changes the total demographics of the respondents also change.


39/44

39

References

Andreas Herrmann, Lan Xia, Kent B, Monroe, Frank Huber The influence of price fairness on customer

Satisfaction , Journal of product and brand management , volume 16 ,2007, pages 49-58.

Anjan Raichaudhuri, why customer satisfaction practices dont satisfy customers,the TMTC journal of

management.

Gilbert A .Churchill., Jr, carol suprenant, An Investigation into the Determinants of Customer

Satisfaction,(1982:Nov.) p.491

Harkiranpal Singh and Bukit Jalil,Kuala Lumpur, Malaysia ,May 2006 The Importance of Customer

Satisfaction in Relation to Customer Loyalty and Retention

Michael Conklin, measuring and tracking customer satisfaction, zoomerang.

R.K.Uppal (October 2010),customer complaints in banks:Nature ,extent and strategies to mitigation.;

journal of economics and international finance, volume 2(10) pgs 212-220

Rebekah Bennett, Sharyn Rundle-Thiele, (2004) "Customer satisfaction should not be the only goal", Journal

of Services Marketing, Vol. 18 Iss: 7, pp.514552

Roger Hallowell Harvard Business School, Boston, MA, USA, Submitted june 1995,revised February 1996:

The relationships of customer satisfaction, customer loyalty, and profitabilitypg 27-42

Thorsten Hennig-Thurau and Alexander Klee,University of Hanover Vol. 14(8): pg 737764 (December

1997) The Impact of Customer Satisfaction and Relationship Quality on Customer Retention:A Critical

Reassessment and Model Development


40/44

40

Websites

www.indusind.com

www.google.com

www.wikipedia.com

google.schlor

www.zoomerang.com

www.tmtctata.com

Books referred

Naresh.k .MalhotraMarketing Research (ch 3,9,10,11,19)

Phillip Kotler-Marketing Management
http://www.indusind.com/http://www.google.com/http://www.wikipedia.com/http://www.zoomerang.com/http://www.tmtctata.com/http://www.tmtctata.com/http://www.zoomerang.com/http://www.wikipedia.com/http://www.google.com/http://www.indusind.com/


41/44

41

Annexure

QUESTIONNAIRE

1.) What is your occupation?

Service

Business

Self employed

Other: _____________

2.) What is your household income?

Below 200000

200000 - 500000

500000 - 1000000

Above 1000000

3.) For how long you have an account with IndusInd bank?

0 - 2 years

2 - 5 years

More than 5 years

4.) Your account with IndusInd bank is __________ account?

Savings

Current

Other:


42/44

42

5) If savings account, select the type of account you have with the bank?

Indus classic(5000 min bal)

Indus privilege(10000 min bal)

Indus maxima savings (25000 min bal)

Indus privilege plus (50000 min bal)

Indus multiplier(DMAT+SAVINGS+TRADING ACC)

6) If current account, select the type of account you have with the bank.

Indus blue (min bal 10000)

Indus silver (min bal 25000)

Indus gold plus (min bal 50000)

Indus prestige (min bal 100000)

Indus EXIM (min bal 500000)

Indus escrow

Indus freedom

7) From the following benefits which one are you aware of?

Sweep-in

Lending services

International debit cards

ASBA

RTGS/NEFT


43/44

43

8) From the following facilities offered by the bank, which one you avail the most?

Accounts

Deposits

Loans

Debit card

Investment

Insurance

DMAT

Credit cards

9) What is the most frequent point of interaction for you with IndusInd bank?

Bank branch

ATM

Net banking

Phone banking

Drop box


44/44

44

10) Indicate how your bank is performing for BETTER CUSTOMER SATISFACTION by selecting

appropriate number *(5=Excellent, 4=Good, 3=Average, 2= Poor, 1= Very Poor)

PARAMETERS

RATING

Bank facility is clean and orderly

Teller/ bank officer have knowledge of the products

and services

Your business is handled efficiently and in a timely

manner

Queries are attended promptly and response is

satisfactory

Facilities (Loan, Lockers) offered are competitive

than other banks

11) Indicate the extent to which each of the following factors are important to you when CHOSSING ABANK by selecting appropriate number *(5=very important, 1= unimportant)

PARAMETERS RATING

Location of Branch and ATMs

Knowledge of bank products and services

General Service Quality

Word of mouth (recommended by friends and/or family

members)

Advertisement and Publicity

Aditi Sip Final

Documents

Transcript of Aditi Sip Final