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					                      [1]




              FINAL REPORT OF
   MANAGEMENT RESEARCH PROJECT REPORT
                      ON
“A COMPARATIVE STUDY OF CUSTOMER RELATIONSHIP
MANAGEMENT OF STATE BANK OF INDIA & HDFC BANK”




    MANAGEMENT RESEARCH PROJECT


                 ON
        “A COMPARATIVE ANALYSIS
                OF
 CUSTOMER RELATIONSHIP MANAGEMENT
                 OF


   STATE BANK OF INDIA AND HDFC BANK”
                                     [2]


                          TABLE OF CONTENTS
CONTENTS                                      PAGE NUMBER

1.ACKNOWLRGEMENT                                     4
2.TITLE AND OBJECTIVE OF THE PROJECT               5-6
3.A BRIEF IDEA OF THE BANKING SECTOR                 7
4.WHAT IS CRM                                        8
5.CUSTOMER FOCUS ON BANKING SERVICES                 9
6.A BRIEF IDEA OF BOTH THE SECTOR BANKS            10
7.SBI                                               10
8.SBI CUSTOMER CARE                                 11
9.SBI CITIZENS CHARTER                              12
10.SBI COMPENSATION POLICY                       13-21
11.MOBILE AND INTERNET BANKING.                    22
12.KEY COMMITMENTS OF SBI                          23
13.KYC                                             24
14.HDFC BANK                                       31
15.TECHNOLOGY                                     32
16.CRM POLICY                                   33-37
17.GRIEVIEANCE REDRESSAL MECHANISM              37-40
18.QUESTIONNAIRE                                40-42
19CRM IN PUBLIC AND PRIVATE SECTOR BANKS        42-46
20.PREVENTION OF EFFECTIVENESS OF CRM             46
21.CONCLUSIONS                                   46-47
22.REFERENCES                                     47
                                             [3]




TITLE: “A compatative study of Customer Relationship Management of State Bank Of India
and HDFC Bank”




3. OBJECTIVE OF THE PROJECT: - The objective of the study is to know,
i.) How the Customer Relationship Management is implemented in the banks of both the
sector.

ii.) The main areas of focus of the project will be as the name suggests: customer ,
relationship , and the management of relationship by the two banks and how they are
different from each other.
iii.) The objective of the study s to know how both the banks are using CRM to provide
better customer service to discover new customers and , serves the customer and finally
retain the customers.

A BRIEF IDEA OF THE BANKING SECTOR IN INDIA: (ITS PAST AND
PRESENT)

Banking in India originated in the last decades of the 18th century. 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, 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.
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:

    Early phase from 1786 to 1969 of Indian Banks.

    Nationalisation of Indian Banks and up to 1991 prior to Indian banking sector
     Reforms.
                                             [4]



    New phase of Indian Banking System with the advent of Indian Financial & Banking
     Sector Reforms after 1991.


    By the 1960s, the Indian banking industry had become an important tool to facilitate
     the development of the Indian economy. At the same time, it had emerged as a large
     employer, and a debate had ensued about the possibility to nationalise the banking
     industry. Indira Gandhi, the-then Prime Minister of India expressed the intention of
     the GOI in the annual conference of the All India Congress Meeting in a paper
     entitled "Stray thoughts on Bank Nationalisation." The paper was received with
     positive enthusiasm. Thereafter, her move was swift and sudden, and the GOI issued
     an ordinance and nationalised the 14 largest commercial banks with effect from the
     midnight of July 19, 1969. Jayaprakash Narayan, a national leader of India, described
     the step as a "masterstroke of political sagacity." Within two weeks of the issue of the
     ordinance, the Parliament passed the Banking Companies (Acquisition and Transfer of
     Undertaking) Bill, and it received the presidential approval on 9 August, 1969.
    A second dose of nationalization of 6 more commercial banks followed in 1980. The
     stated reason for the nationalization was to give the government more control of credit
     delivery. With the second dose of nationalization, the GOI controlled around 91% of
     the banking business of India. Later on, in the year 1993, the government merged New
     Bank of India with Punjab National Bank. It was the only merger between nationalized
     banks and resulted in the reduction of the number of nationalised banks from 20 to 19.
     After this, until the 1990s, the nationalised banks grew at a pace of around 4%, closer
     to the average growth rate of the Indian economy.
But as time goes on there take a huge changes in the banking sector.There was a rapid
turnaround in the banking sector.
In the early 1990s, the then Narsimha Rao 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 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.
                                                  [5]


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.




                                  SCHEDULED BANKS IN INDIA



SCHEDULED COMMERCIAL BANKS                                     SCHEDULED COOPERATIVE BANKS



PUBLIC BANKS   PRIVATE BANKS   FOREIGN BANKS   REGIONAL RURAL BANKS




NEW PRIVATE BANKS OLD PRIVATE BANKS             SCHEDULED URBAN         SCHEDULED COPERATIVE

                                               COOPERATIVE BANKS         STATE BANKS

With the increase in competition of retail banking in india there leads to a he competition
among the banks. Their sole objective is to retain customers. Customers become the heart of
the every bank.so inorder to retain the customers they emphasized not only the technological
aspect but also also ther aspect to build long term relations with their customers. Today,
banks have moved away from a transactional-based marketing approach to a relationship-
based approach that has at its core the recognition of the lifetime value of the customer.

WHAT LEADS TO CHANGE IN BANKING SCENARIO AND HOW IT CHANGES
THROUGH CRM?

 The biggest management challenge in the new millennium of liberalization and globalization
for a business is to serve and maintain good relations with the king-the customer. In the past,
                                              [6]


the banks took their customers for granted because at that time customers were not
demanding nor had many alternative sources of supply or suppliers. Since he was a passive
customer, the producer dictated terms and had little customer commitment. But today there is
a radical transformation. The changing business environment is characterized by economic
liberalization, increasing competition, high consumer choice, enlightened and demanding
customer, more emphasis on quality and value of purchase.

All these changes have made today's producer shift from traditional marketing to modern
marketing. Modern marketing calls for more than developing a product, pricing it, promoting
it and making it accessible to target customers. It demands building trust, a binding force and
value added relationship with the customers to win their hearts. The new age marketing aims
at winning customers for ever, where companies greet the customers, create products to suit
their needs, work hard to develop life time customers through the principles of customer
delight, approval and enthusiasm.



Customer relationship management (CRM) strategies have gained momentum in recent
years. Understanding and responding to customer needs and improving customer service
have become important elements of corporate strategy. IT based CRM applications are being
used by banks to support corporate strategies.
WHAT IS A CRM(CUSTOMER RELATIONSHIP MANAGEMENT)?

The process of developing a cooperative and collaborative relationship between the buyers
and sellers is called customer relationship management shortly called CRM.

CRM aims at focusing all the organizational activities towards creating and maintaining a
customer. CRM is a new technique in marketing where the marketer tries to develop long
term collaborative relationship with customers to develop them as life time customers. CRM
aims to make the customer climb up the ladder of loyalty.

Customer Relationship is the base on which the entire structure of banking rests. Customer
service is the vital for the success of banking. Customer Relationship Management (CRM)
emerged as an amalgamation of different management and information systems approaches,
in particular Relationship Marketing and technology-oriented approaches such as Computer
Aided Selling (CAS) and Sales Force Automation (SFA).
                                              [7]


CUSTOMERS FOCUS ON BANKING SERVICES:

As the intense competition becomes a way of doing business, it is the customer who calls the
shot in deciding the nature of products and services offered in the market by the banks. The
customers are becoming demanding, dominant and selective. In fact the perceptions and the
expectations of the customers have undergone a sea change, with the availability of banking
services to the customers at their door steps through the help of technology.

Marketing of customer services aims at two important goals: prosperity to the bank and
satisfied customers. Banks offer tangible services like loan schemes, interest rates and kinds
of account and the intangible services like behavior and efficiency of staff, speed of
transactions and the ambience. The banks may need to include customer oriented approach or
customer focus in their five areas of businesses such as Cash accessibility, asset security,
money transfer, deferred payment and financial advices.

There are four strategies available to customer relations' managers:

• To win back or save customers

• To attract new and potential customers

• To create loyalty among existing customers and

• To up sell or offer cross services.

The future of banking business very much depends upon the ability of the banks to develop
close relationship with the customers. In order to develop close relationship with the
customers the banking industry has to focus on the technology oriented innovations that offer
convenience to the customers. Today customers are offered ATM services, access to internet
banking and phone banking facilities and credit cards. These have elevated banking beyond
the barriers of time and space.

NEED FOR CRM IN BANKS:

    Helps financial institutes and wealth management firms create the relationship.

    They need to uncover new business opportunities and enhance client
     service.

    Provides financial advisors with an intuitive interface that incorporates detailed insight
     into customer information and full integration with the Microsoft Office programs.
                                               [8]



    Provides management functions and helps enable confident decision making by
     providing better insight across the organization.

    Provides full-featured CRM capabilities tailored to banking industry requirements
     including financial risk management and customer financial planning features.

    Integrates fully with core banking applications and with the Internet and
     corporateintranets through the use of Web services.

    Better compete with banks offering similar products.

    Compete with new market players— mostly from segments outside of the banking
     industry, such as insurance.

    Increase sales and marketing effectiveness.

    Increase customer loyalty and retention.

    Win new customers


A brief idea of both the banks and their CRM policy:

STATE BANK OF INDIA:-

STATE BANK OF INDIA is the government owned and the largest bank in India.It traces
its ancestry back to the BANK OF CALCUTTA which was established in 1806 and made
SBI the oldest commercial bank in the sub continent.It has the largest ATM network all over
India and and rendering a wide range of products and services to their customers not only in
India but also outside India also.

There seven other associate banks which fall under SBI.They all use “The State Bank Of”
followed by the regional headquarters name. State Bank Of India is present in 32 countries
with 84 offices serving the international needs of foreign customers.

The State Bank Of India was the first public sector bank in India who implemented core
banking solution as a part of its banking activities.It then introduces various fascilities to
satisfy their customers.
                                              [9]


As a part of their CRM activities SBI computerized all its branches and then it introduces a
programme named “PARIVARTAN” to make a change in the behaviour of their employees .

Technological changes:
As a part of the technological activities it introduces various changes to make long term and
good relations with their customers.State Bank aims to response faster to the market demand
enabling real time information access and assighn right people in the right place.

On implementation of SAP ERP help State Bank helps to retain customer.

The CRM portal at SBI

SBI Life Insurance chose the WebLogic platform to streamline its CRM initiatives and other
business processes.

The need for system automation became critical at SBI . The challenge was to meet the
demanding service and fulfilment levels of the growing banking sector. SBI was on the
lookout for a technology solution that was easy to implement, cost-effective and robust to
expand its presence in the banking sector and achieve a higher degree of service
differentiation.

Early on, the top management realised that technology was a crucial driver for product and
service delivery. Although using the extensive SBI group platform for cross-selling products
and services was a viable option, reaching and engaging the customer cost effectively
required a technology backbone. The portal initiative started sometime in 2003. Earlier, the
insurance major had little enterprise software to support its business and the processes were
carried out in an ad hoc manner. The system went live in 2004, taking just four to five
months to go online.

It was clear as far back as 2002 that a durable and scalable system was going to be essential,
and it was felt that a Web portal would be the best solution as a part of SBI’s CRM initiative.
Various options were taken into consideration-recreating their entire operations in-house,
allowing a vendor to provide the basic platform and then build applications on it, etc. SBI
also spoke to some leading providers in the industry, did some spadework, and finally
decided to go for BEA WebLogic.

SBI CUSTOMER CARE

State Bank of India Customer Care or SBI Customer Care is a dedicated customer service by
India's largest bank. SBI provides a 24 - hour help line where you can dial up and enquire
about any of the State Bank of India products and banking services. To know about the
                                               [10]


ongoing interest rates on various credit card services and loans, or to get details of the terms
and conditions of the bank in regard to any of the banking service or product, you can
directly contact SBI through their customer care numbers.

Customers of the Bank can meet senior executives of the Bank on 15th of every month
(between 3.00 p.m. and 5.00 p.m.) without any prior appointment and discuss issues relating
to their accounts/banking transactions. In case 15th of month is a holiday, customer can meet
on the next working day.

In case, excessive delay in resolving their problems is experienced, customers can contact
the helpline of the Local Head Office, under whose control the branch functions.

CITIZENS’ CHARTER OF STATE BANK OF INDIA

PREFACE:

I. State Bank of India strongly believes that a satisfied customer is the most important factor
for growth of its business. The Bank was the first in India to introduce a code of Fair Banking
Practices in India called “Towards Excellence”. The code reflected the commitment of the
Bank to provide Banking services of a high order to individual banking customers. The code
came into effect from October 1997 as part of the Golden Jubilee Celebrations of Indian
Independence. The Code was substantially revised in the year 2005 taking into consideration
the transformation in banking practices and customer service standards that have since taken
place.

II. In February 2006, Reserve Bank of India set up the Banking Codes and Standards Board
of India (BCSBI) as an independent autonomous watchdog to ensure that customers get fair
treatment in their dealings with Banks. The BCSBI has published the “Code of Banks’
Commitments to Customers “ (the Code) which sets minimum standards of banking practice
and benchmarks in customer service for banks to follow. SBI is a member of the BCSBI and
has therefore voluntarily adopted the Code as its Fair Practice Code in dealings with its
customers.

III. This document called the “Citizens’ Charter of State Bank of India” provides key
information on various facilities/services provided to customers in ordinary branches of State
Bank of India. The Code together with the Citizens’ Charter will thus ensure high standards
of accountability, responsibility and transparency in the Bank’s dealings with customers.
The Charter also provides comprehensive information on Bank’s Grievance redressal
mechanism. It also specifies the obligations on the part of the customers for healthy banker-
customer relationship.
                                              [11]


IV. This is not a legal document creating rights and liabilities. The information on general
terms and conditions provided herein may not apply to special branches of the Bank like
Personal Banking Branches etc. (The information on services provided by these branches can
be obtained from the branches or the helplines of the respective Local Head office Centres).
Loans and advances may also have specific terms and conditions not mentioned in the
Charter. However, all terms and conditions will comply with the principles and commitments
undertaken by the Bank in the Code.

V. Copies of the Code and Citizens’ Charter will be available on request to all our customers
at our branches, administrative offices and at our web site. We will ensure that all our staff
members are aware of the commitments contained in these documents and faithfully
implement them.


VI. The Charter provides essential information on transactions relating to savings, current
and fixed deposit accounts, collections and remittances, grievance redressal etc.

VII. Information given in the Charter is current as of March 31 2007. Information given is
subject to change/revision. The Bank will endeavour to update the information on the website
when changes are made but please contact the nearest branch/Zonal Office/Local Head
Office for the latest changes, if any.

VIII. We request all our customers to keep us informed of their experiences about the
customer services rendered at our branches and feel free to comment on the Code and
Citizens Charter. Your feedback will help us evaluate, improve and widen our range of
services.


COMPENSATION POLICY

Introduction

Technological progress in payment and settlement systems and qualitative changes in
operational systems and processes undertaken by various players in the market have
improved efficiencies for providing better service to the users of the system. It has been the
endeavour of the Bank to offer services to its customers with best possible utilisation of its
technology infrastructure. Withdrawal of RBI's instructions to banks on time frame for
collection of outstation cheques, payment of interest on delayed collection of outstation
cheques/instruments etc., with effect from 1st November 2004 had given further scope for
increasing efficiency for better performance.
                                               [12]


Objective

The objective of the policy, namely "State Bank of India Compensation Policy (Banking
Services)" (hereinafter called the Policy), is to establish a system whereby the Bank
compensates the customer due to deficiency in service on the part of the Bank or any act of
omission or commission, directly attributable to the Bank.

Scope

•The Policy is based on principles of transparency and fairness in the treatment of customers.

•It is designed to cover deficiency in service in areas relating to account operations,
collections and remittances etc., as specified in this Policy.

•Grant of compensation under this Policy is without prejudice to the Bank's rights in
defending its position before any Court of Law, Tribunal or any other forum duly constituted
to adjudicate banker-customer disputes and does not constitute admission of liability or any
other issue, of any nature whatsoever for the purposes of Adjudicatory proceedings.

Recognition of deficiency and compensation

a) Unauthorised / Erroneous Debit

•If the Bank has raised an unauthorized/ erroneous debit to an account, the entry shall be
reversed immediately on being detected/informed, after due verification. If such a debit has
resulted in reduction in the minimum balance applicable for payment of interest on savings
bank deposit or payment of additional interest to the Bank in a loan account or levying of
penalty for not maintaining the stipulated minimum balance in the account, Bank shall
compensate the customer to that extent.

•In case of return of a cheque or not carrying out of direct debit instructions due to
insufficiency of balance on account of the unauthorized / erroneous debit, Bank will
compensate the customer with an amount equivalent to interest calculated on the
unauthorised/erroneously debited amount at applicable Savings Bank rate, minimum Rs.20/-,
besides refunding the cheque return charges.

•In case verification of the entry reported to be unauthorised/erroneous by the customer does
not involve a third party, the Bank shall arrange to complete the process of verification
within a maximum period of 3 working days from the date of reporting of erroneous debit. If
                                              [13]


it involves a third party, the Bank shall complete the verification process within one month
from the date of reporting of unauthorised/erroneous transaction by the customer.

b) ECS direct debits/other debits to accounts

•The Bank undertakes to carry out, within the prescribed time, direct debit / ECS (Electronic
Clearing Service) debit instructions of customers. In the event of non-compliance/delayed
compliance of instructions by the Bank to meet such commitments, the customer will be
compensated equivalent to interest calculated on the amount to be debited, for the delayed
period, at applicable Savings Bank rate minimum Rs. 20/-, subject to a maximum of Rs.
1,000/-.

•In the event the Bank levies any charge in violation of the arrangement/ or inadvertently, the
Bank will reverse the charges, subject to scrutiny of agreed terms and conditions, and
compensate the customer by a sum equal to the charges reversed.

c) Issue of ATM/Debit Cards

•Where the Bank had issued and activated a debit card without written consent of the
customer which has been disputed by the customer without using the card, the Bank would
not only reverse the charges, if levied, immediately but also pay compensation to the
customer minimum Rs 50/- and maximum Rs. 100/-.

d) Payment of Cheques after Acknowledgement of Stop Payment Instructions

•In case a cheque has been paid after stop payment instruction is acknowledged by the Bank,
the Bank shall reverse the debit with value dated credit within two working days of the
customer intimating the transaction to the Bank and also compensate the customer with Rs.
100/-.

e) Collection of cheque drawn on foreign countries

•As time for collection of instruments drawn on banks in different countries vary and even
within a country from place to place, delay in collection of cheques payable at foreign centres
will be construed if the customer’s account is not credited within 10 working days, excluding
Saturdays, from the date of clear credit to the Bank's Nostro account i.e. after taking into
account the prescribed cooling period for that currency, with the correspondent.
                                               [14]


•The compensation on account of delays in collection of instruments in foreign currency
would be as detailed below:

i) At 5% p.a. if the period of delay is beyond prescribed collection period and upto 45 days
where proceeds of the instruments are to be credited to the deposit accounts.

ii) In case of abnormal delay i.e. delays exceeding 45 days, interest will be paid at 1% above
the specified rate (i.e. 5% p.a.).

iii) In the event of the proceeds of cheque under collection being required to be credited to an
overdraft / loan account of the customer, interest will be paid at interest rate applicable to the
loan account or State Bank Advance Rate (SBAR), whichever is lower.

iv) For abnormal delays i.e beyond 45 days, interest will be paid at the rate of 1% above the
applicable interest rate to the loan account or SBAR, whichever is lower.

Such interest shall be payable with a minimum of Rs. 20/-.

No separate compensation is payable by the Bank on account of movement in the values of
the respective currency.

f) Collection of cheques payable in India

•The compensation on account of delays in collection of instruments drawn and payable in
India for individual account holders will be as per 'Cheque Collection Policy' and in respect
of other account holders it would be paid as detailed below:

i) At 5% p.a. if the period of delay is beyond prescribed collection period and upto 45 days
where proceeds of the instruments are to be credited to the deposit accounts.

ii) In case of abnormal delay i.e. delays exceeding 45 days, interest will be paid at 1% above
the specified rate (i.e. 5% p.a.).

iii) In the event of the proceeds of cheque under collection being required to be credited to an
overdraft / loan account of the customer, interest will be paid at the applicable interest rate or
State Bank Advance Rate (SBAR), whichever is lower.

iv) For abnormal delays, interest will be paid at the rate of 1% above at the applicable interest
rate or State Bank Advance Rate (SBAR), whichever is lower

Such interest shall be payable with a minimum of Rs. 20/-.
                                               [15]


Compensation as detailed above shall be paid without any formal demand from customers
and there shall be no distinction between instruments drawn on the Bank's own branches or
on other banks which are payable in India.

g) Cheques / Instruments lost while in Bank's custody

•In the event a cheque or an instrument accepted for collection is lost in Bank's custody or in
transit, Bank shall, immediately on coming to know of the loss of instrument, notify the
customer and shall, simultaneously, advise the drawee bank particulars of lost cheques for
exercising caution against payment and provide assistance to the customer to obtain a
duplicate instrument from the drawer / maker of the instrument.

•The Bank will compensate the account holder in respect of instruments lost while in its
custody as detailed below:

i) In case intimation regarding loss of instrument is conveyed to the customer beyond the
time limit stipulated for collection, as per the Cheque Collection Policy of the Bank, interest
will be paid for the period beyond the stipulated collection period at the rates specified in (f)
above for cheques payable in India and at rates specified at (e) above in regard to cheques
payable abroad.

ii) Bank will pay interest on the amount of the cheque for a further period of 15 days at
Savings Bank rate to provide for possible further delay in obtaining duplicate cheque/
instrument and collection thereof.

iii) The Bank will bear the actual charges of recording Stop Payment instructions levied by
drawee bank.

iv) The Bank would also reimburse the customer with actual charges levied by the
drawer/bank in issuing duplicate cheque/instrument, subject to a maximum of Rs. 250/-.

Compensation for delay in other services:-

In respect of the following services provided to the customers, if the delay in providing
services is beyond twice the time norms, specified hereunder, compensation would be
payable as indicated hereinafter:
                                               [16]


 Sl.
                                    Services                                Time Norms
 No

       Delay in issue of cheque book by Liability Centralised Processing Beyond 3 working
 1.
       Centre (LCPC)/Branch                                                   days

                                                                          Beyond 7 working
 2.    Delay in issue of duplicate ATM card/PIN
                                                                               days

                                                                          Beyond 7 working
 3.    Delay in issue of internet banking id/password
                                                                               days

       Delay in providing banking services after receipt of request /
                                                                          Beyond 3 working
 4.    completed formalities,
                                                                               days
       either through internet banking platform or across the counter.

                                                                             Beyond 14
 5.    Delay in transfer of accounts
                                                                            working days

       Delay in effecting remittances or crediting customers account      Beyond 2 working
 6.
       after receipt of funds                                                  days



The compensation paid by the Bank will be Rs.100/- per instance, if the delay is upto twice
the specified time norm given above and Rs. 250/- per instance for delays beyond twice the
time norm.

Payment of "at par" cheques issued by other Banks

Bank will not pay any compensation, to the cheque holder, for dishonour of "at par" cheques
issued by other banks, including co-operative banks, in the absence of adequate funds in the
account on which cheques are issued even though the amount of the cheque may have been
paid to the bank which had issued the "at par" cheque.
                                              [17]




Force Majeure

The Bank shall not be liable to compensate customers under this Policy if some unforeseen
event including but not limited to civil commotion, sabotage, lockout, strike or other labour
disturbances, accident, fire, natural disasters or other "Acts of God", war, damage to the
Bank's or its correspondent bank(s) systems, communication channels etc. beyond the control
of the Bank, prevents it from performing its obligations within the specified service delivery
parameters

Amendment/Modification of the Policy

The Bank reserves the right to amend/modify this Policy, as and when deemed fit and proper,
at its sole discretion.

CHEQUE COLLECTION POLICY

Local / outstation cheques for Deposit / Loan accounts of individuals

Policy Guidelines

(A) Arrangements for Collection (salient feature)

I) Local Cheques

      All cheques and other Negotiable Instruments payable locally would be presented
       through the clearing system prevailing at the centre.

      Cheques deposited at branch counters and in collection boxes within the branch
       premises before the specified cut-off time will be presented for clearing on the same
       day.

      Bank would give credit to the customer account on the same day of clearing
       settlement.

       Withdrawal of amounts so credited would be permitted after reckoning the cheque
       return schedule of the clearing house.
      Wherever applicable, facility of high-value clearing (Rs. 1 lac and above) will be
       extended to customers (same day credit).
                                              [18]


      Bank branches situated at centers where no clearing house exists, would present local
       cheques on drawee banks across the counter and proceeds would be credited, at the
       earliest, on realization.




II) Outstation Cheques payable in India

       Cheques drawn on other banks at outstation centers in India will normally be collected
       through bank's branches at those centers. Where the bank does not have a branch of its
       own, the instrument would be directly sent for collection to the drawee bank or
       collected through a correspondent bank. The bank would also use the National
       Clearing services offered by Reserve Bank of India at centres where such collection
       services exist.

       Cheques drawn on bank's own branches at outstation centers will be collected using
       the inter-branch arrangements in vogue. Branches which are connected through a
       centralized processing arrangement and are offering anywhere banking services to its
       customers will provide same day credit to satisfactorily conducted accounts (defined
       hereafter in the policy) of its customers in respect of instruments drawn on any of its
       branches in the CBS network.

III) Cheques payable in Foreign Countries

       Cheques payable at foreign centers where the bank has branch operations/ banking
       operations through a subsidiary etc. will be collected through that office. The services
       of correspondent banks will also be utilized in country / centers where we have no
       presence. Cheques drawn on foreign banks at centers where the bank or its
       correspondents do not have direct presence will be sent direct to the drawee bank with
       instructions to credit proceeds to the respective Nostro Account of the bank maintained
       with one of the correspondent banks.


Cheques / Instruments lost in transit / in clearing process Or at paying banks branch:

In the event a cheque or an instrument accepted for collection is lost in transit or in the
clearing process or at the paying bank's branch, the bank shall immediately on coming to
know of the loss of instrument not only bring the same to the notice of the account holder so
that drawer can be informed to record stop payment and also take care that cheques, if any,
                                              [19]


issued by him / her are not dishonored due to non-credit of the amount of the lost cheques /
instruments but also compensate the customer as per Bank's Compensation Policy. The bank
would also advise the drawee bank all particulars of lost cheques / instruments for exercising
caution and provide all assistance to the customer in obtaining a duplicate instrument from
the drawer of the cheque.

Force Majeure

The bank shall not be liable to compensate customers for delayed credit if some unforeseen
event (including but not limited to civil commotion, sabotage, lockout, strike or other labour
disturbances, accident, fire, natural disasters or other "Acts of God", war, damage to the
bank's facilities or of its correspondent bank(s), beyond the control of the bank prevents it
from performing its obligations within the specified service delivery parameters.



Interest payment for delayed collection :

It is the responsibility of Bank to collect the instruments within the time frame prescribed for
the purpose and to compensate the customers for delays due to non-adherence to time
schedule. Following guidelines are, therefore, laid down for cheques / instruments payable in
India:

I) a) Interest shall be payable without any claim from the customers, if the Instruments are
not realized / proceeds credited to the customer's accounts within the period as mentioned in
paragraph (C) above.

b) The rate of interest payable will be 5% p.a. If the collection of outstation Instruments are
delayed beyond the stipulated period and upto 45 days where the proceeds of the instruments
are to be credited to the deposit accounts. Where proceeds are to be credited to overdraft or
loan accounts of the customers, the interest payable would be at State Bank Advance Rate
(SBAR).

II) For abnormal delays, the rate of interest payable would be 1% above the prescribed rate
(i.e. 5% p.a.) in deposit accounts and 1% above SBAR in case of overdraft/loan accounts.
                                              [20]


III) Such interest shall be payable with a minimum of Rs. 10/- even if the interest calculated
works out to less than Rs. 10/-.

IV) In respect of cheques / instruments sent for collection to foreign countries Bank will
value date the collection once the proceeds have been credited in the NOSTRO Account of
the bank / with its correspondent.



INTERNET BANKING

For assistance in Internet Banking , a customer may contact Toll-free helpline No. 1800-11-
2211 of our contact centre at New Delhi, Mumbai, Kolkata , Hyderabad, Bangalore, Chennai,
Chandigarh, Lucknow, Bhubaneswar, Bhopal and 170 other cities or e-mail
at inb.customer@sbi.co.in for other centres. The customer can also access the contact centre
at New Contact Centre Access Numbers from land lines and mobile phones 24x7. This
number, however, is not toll free and the call charges shall be borne by the customer.

In case the customer is not satisfied with handling of Internet Banking related complaints by
Local Head Office / Helpline, he may contact Dy. General Manager (Internet Banking) at
apex office on the following address



MOBILE BANKING SERVICE

  For assistance in Mobile Banking Service, a customer may contact Toll-free helpline No.
  1800-11-2211 of our contact centre or e-mail at mb.support@sbi.co.in. The customer can
also access the contact centre at 080-26599990 from land lines and mobile phones 24x7. This
    number, however, is not toll free and the call charges shall be borne by the customer.

In case the customer is not satisfied with handling of Mobile Banking related complaints,
he/she may contact the Dy. General Manager (IT-PSG) at apex office on the following
address:
                                             [21]


Dy. General Manager(IT PSG),

State Bank of India,
                                             E-mail address- dgm.psg@sbi.co.in
1st floor, A Wing
Sector 11 CBD Belapur
                                             Fax No. 022-27561664
Navi - Mumbai - 400614.



ATM SERVICES

For help in ATM-cum-Debit card related operations, a customer may contact Toll-free
helpline No. 1800-11-2211 of our contact centre at New Delhi, Mumbai, Kolkata ,
Hyderabad, Bangalore, Chennai, Chandigarh, Lucknow, Bhubaneswar, Bhopal and
other cities . The customer can contact the nearest card issuing branch or e-mail at
contactcentre@sbi.co.in for other centres. The customer can also access the contact centre at
New Contact Centre Access Numbers from land lines and mobile phones 24x7. This number,
however, is not toll free and the call charges shall be borne by the customer.
In case the customer is not satisfied with handling of ATM-cum Debit card related issues by
the concerned Local Head Office or Helpline centre, he may contact the General Manager
(ATM) at central office in the following address :-

General Manager ATM
State Bank of India,                                     E-mail:gm.atm@sbi.co.in
Ground Floor,B Wing                                      Tel No. 27566050 Extn.
Sector 11 CBD Belapur                                    Fax No. 27566052
Navi - Mumbai 400614




OUR KEY COMMITMENTS TO CUSTOMERS:


i. We promise that we will act courteously, fairly and reasonably in all our dealings with you

ii. We will make sure that our documents and procedures are clear and not misleading and
                                               [22]


that you are given clear information about our products and services.

iii. When you have chosen an account or service we will give you clear information about
how it works, the terms and conditions and the interest rates which apply to it.

iv. We will help you use your account or service by sending you regular statements (where
appropriate) and we will keep you informed about changes to the interest rates, charges or
terms and conditions.

v. We will deal quickly and sympathetically with things that go wrong by correcting mistakes
quickly, handling complaints quickly and reversing any bank charges applied in error.

vi. We will treat all your personal information as private and confidential, and operate secure
and reliable banking and payment systems.

vii. We will publicise our Citizens’ Charter, have copies available and make sure that our
staff are trained to put it into practice.




WE EXPECT OUR CUSTOMERS TO:

i.to help us meet the “Know Your Customer (KYC)” guidelines at the time of opening the
account

ii. take precautions that are indicated for protection of their accounts

iii. Avail services like Automated Teller Machine (ATM), Online banking, Electronic
Clearing System (ECS), Electronic Fund Transfer (EFT) etc. if offered by the branch.

iv. Avail nomination facility for their accounts and safe deposit lockers.

v. Not to introduce any person not known personally for the purpose of opening account.

vi. Pay service charges for non maintenance of minimum balances, return of cheques,
remittances, collections etc. The details of charges are available on the Bank’s web site and
also with our branches.
                                               [23]


vii. Provide valuable feedback on our services so as to enable us to correct our mistakes and
improve our customer service.

FAIR LENDING PRACTICES CODE (FLPC)
1. PREAMBLE

Scope: l(a)

FAIR LENDING PRACTICES CODE (FLPC for short) is a voluntary code adopted by our
Bank, which aims to achieve synchronization of best practices while dealing with Customers
in India. It aims to provide valuable inputs to Customers and facilitates effective interaction
of customers with the Bank.

Extent:
          l(b) FLPC would be applicable in the Bank from the date it is placed in the Bank's
               web site or is otherwise publicised through the media.FLPC contains 8
               important declarations from us, the spirit of which pervades the entire FLPC
               provisions.



2. Important declarations:

The Bank declares and undertakes

              To provide in a professional manner, efficient, courteous, diligent and speedy
              services in the matter of retail lending.

              Not to discriminate on the basis of religion, caste, sex, descent or any of them.

              To be fair and honest in advertisement and marketing of Loan Products.

              To provide customers with accurate and timely disclosure of terms, costs, rights
              and liabilities as regards loan transactions.

              If sought, to provide such assistance or advice to customers in contracting
              loans.
                                             [24]


            To attempt in good faith to resolve any disputes or differences with customers
            by setting up complaint redressal cells within the organization.

            To comply with all the regulatory requirements in good faith.

            To spread general awareness about potential risks in contracting loans and
            encourage customers to take independent financial advice and not act only on
            representations from banks.



3. FAIR PRACTICES:

3.1.        Product Information:

         (a) A prospective customer would be given all the necessary information
             adequately explaining the range of loan products available with the Bank to suit
             his / her needs.

         (b) On exercise of choice, the customer would be given the relevant information
             about the loan product of choice.

         (c) The Customer would be explained the processes involved till sanction and
             disbursement of loan and would be informed of timeframe within which all the
             processes will be completed ordinarily at our bank.

         (d) The Customer would be informed of the names and phone numbers of branches
             and the persons whom he can contact for the purpose of loan to suit his needs.

         (e) The Customer would be informed the procedure involved in servicing and
             closure of the loan taken.



3.2. Interest Rates

3.2.1.      Interest Rates for different loan products would be made available through and
            in anyone or all of the following media, namely:
                                             [25]


         (a) In the Bank's Web site

         (b) Over phone, if Tele Banking services are provided

         (c) Through prominent display in the branches and at other delivery points

         (d) Through other media from time to time



       3.2.2 Customers would be entitled to receive periodic updates on the interest rates
             applicable to their accounts.



       3.2.3 On demand, Customers can have full details of method of application of
             interest.



3.3 Revision in Interest Rates:

         (a) The Bank would notify immediately or as soon as possible any revision in the
             existing interest rates and rnake them available to the customers in the media
             listed in Para 3.2.1.

         (b) Interest Rate revisions to the existing customers would be intimated within 7
             working days from the date of change through notifications in the Bank’s
             Website / media/ notice board at branches.



3.4. Default Interest/Penal Interest:

         (a) The Bank would notify clearly about the default interest/penal interest rates to
             the prospective customers.
                                              [26]


3.5. Charges:

          (a) The Bank would notify details of all charges payable by the customers in
              relation to their loan account.

          (b) The Bank would make available for the benefit of prospective customers all the
              details relating to charges generally in respect of their retail products in the
              media specified in Para 3.2.1.

          (c) Any revision in charges would be notified in advance and would also be made
              available in the media as listed in Para 3.2.1.



3.6. Terms and Conditions for Lending:



    (a)      The Bank would ordinarily give an acknowledgement of receipt of loan request
             and if demanded by the customer, a copy of the application form duly
             acknowledged would also be given, as soon as the customer chooses to buy a
             product of or service of his choice.

          (b) Immediately after the decision to sanction the loan, the Bank would show draft
              of the documents that the customer is required to execute and would explain, if
              demanded by the customer, the relevant terms and conditions for sanction and
              disbursement of loan.

          (c) Loan Application forms, Draft documents or such other papers to be signed by
              a customer shall comprehensively contain all the terms and conditions relating
              to the product or service of his choice.

          (d) Reasons for rejection of loan applications would be conveyed to all barrowers
              irrespective of the size of the loan.

          (e) Before disbursement of loan and on immediate execution of the loan
              documents, the Bank shall deliver a copy of the documents to the customers.
                                               [27]




3.7. Accounting Practices:

         (a) The Bank would provide regular statement of accounts, unless not found

            necessary by the customers.

         (b) The Bank would notify relevant due dates for application of agreed interest,
             penal interest, default interest, and charges if they are not mentioned in the
             Loan applications, documents or correspondence.

         (c) The Bank would notify in advance any change in accounting practices which
             would affect the customer before implementation.



3.8. Information Secrecy

         (a) All personal information of the customer would be confidential and would not
             be disclosed to any third party unless agreed to by customer. The term 'Third
             party' excludes all Law enforcement agencies, Credit Information Bureaux,
             Reserve Bank of India, other banks/ financial and lending institutions.

         (b) Subject to above Para, customer information would be revealed only under the
             following circumstances;



            If our Bank is compelled by law.

            If it is in the Public Interest to reveal the information.

            If the interest of the Bank require disclosure.



3.9. Financial Distress:
                                          [28]


       a) The Bank would sympathetically reckon cases of customer's financial distress.

       b) Customers would be encouraged to inform about their financial distress as soon
          as possible.

       c) The Bank would adequately train the operational staff to give patient hearing to
          the Customers in financial distress and would try to render such help as may be
          possible in their view.




  3.10. Grievance Redressal

       a) The Bank would have in place a Grievance Redressal Cell/ Department/ Centre.

       b) The Bank would make available all details, namely;



         Where a complaint can be made

         How a complaint should be made

         When to expect a reply

         Whom to approach for redressal of grievance etc.,

         to the customers individually on demand and through the media.




SPECIMEN OF COMPLAINT FORM:-

              STATE BANK OF INDIA - CUSTOMER COMPLAINT FORM

         Customer Type:       Existing SBI Customer          Not a SBI Customer
                                             [29]


            NAME                                              ACCOUNT NO


            BRANCH                                                   STATE


            ADDRESS




            Email


            Telephone No Mobile No

            Product / Service about which you have complaint:


            Nature of Complaint




            Please give brief details of your complaint




HDFC BANK:-

Housing Development Finance Corporation Limited, more popularly known as HDFC Bank
Ltd, was established in the year 1994, as a part of the liberalization of the Indian Banking
Industry by Reserve Bank of India (RBI). It was one of the first banks to receive an 'in
principle' approval from RBI, for setting up a bank in the private sector. The bank was
incorporated with the name 'HDFC Bank Limited', with its registered office in Mumbai. The
                                              [30]


following year, it started its operations as a Scheduled Commercial Bank. Today, the bank
boasts of as many as 1412 branches and over 3275 ATMs across India.

HDFC Bank has always prided itself on a highly automated environment, be it in terms of
information technology or communication systems. All the braches of the bank boast of
online connectivity with the other, ensuring speedy funds transfer for the clients. At the same
time, the bank's branch network and Automated Teller Machines (ATMs) allow multi-branch
access to retail clients. The bank makes use of its up-to-date technology, along with market
position and expertise, to create a competitive advantage and build market share.




TECHNOLGY


HDFC today is leader in the banking industry and today IT and HDFC together combined has
reached the sky.new technology has changed the concept of the customers and also the queue
concept also from the mind of the customer.



Centralized processing units                         Derived Economies of scale

Electronic straight through processing               Reduced transaction cost

Data warehousing CRM                                 Improved cost efficiency cross sell

Innovative Technology Application                    Provide new or superior product

HDFC BANK bank decided to implement a datawarehouse solution that would eliminate the
inconsistencies of working with disparate sources. The warehouse pulls information from the
different customer interface channels the bank offers, centralising them in a single database.
In early 2002, the bank completed the interface of the warehouse with the retail banking
liability system, followed by the assets system and the depository system by the end of 2002.

The analytical capability of the CRM solution throws up data on the basis of which processes
are re-engineered, often resulting in the dual benefit of improving customer service as well as
reducing cost for the bank. In addition, the single view of the customer across products and
channels enables banks to service the customer better in a more integrated fashion. HDFC
                                              [31]


Bank now undertakes analytics-driven database driven marketing efforts based on the
banking behaviour of the customer. If he has used his card in an apparel shop, customised
incentive mailers are sent to him; or marketing programs are sent to merchants who facilitate
usage of the bank’s cards on the bank’s terminals. With over two terabyte of data under
management, the data warehouse empowers the product managers to study and monitor the
customer and business trends over the last six quarters in an online manner.



HDFC Bank Ltd Customer Compensation Policy


Customer Compensation Policy

Introduction
HDFC Bank offers high levels of service to its customers. In the event, for some reasons
beyond the control of the bank or inadvertently, the bank is unable to meet the service levels
committed in the dealings with individual customer, this compensation policy will be
applicable. The Compensation policy is therefore, designed to cover areas relating to
unauthorized debiting of account, payment of interest to customers for delayed collection of
cheques /instruments, payment of cheques after acknowledgement of stop payment
instructions, remittances within India, foreign exchange services, etc. The policy is based on
principles of transparency and fairness in the treatment of customers. The objective of this
policy is to establish a system whereby the bank compensates the customer for any financial
loss he/she might incur due to deficiency in service on the part of the bank or any act of
omission or commission directly attributable to the bank. By ensuring that the customer
is compensated without having to ask for it, the bank expects instances when the customer
has to approach Banking Ombudsman or any other Forum for redressal to come down
significantly.It is reiterated that the policy covers only compensation for financial losses in
real terms for specific value which customers might incur due to deficiency in the services
offered by the bank which can be measured directly and as such the commitments under this
policy are without prejudice to any right the bank will have in defending its position before
any forum duly constituted to adjudicate banker-customer disputes. The policy does not
cover and is not applicable in respect of claims made by customers on account of opportunity
losses or damages or claims pertaining to reputation loss.

1. Un-authorized / Erroneous Debit:
If the bank has raised an unauthorized/erroneous direct debit to an account and upon being
informed of the erroneous debit, the entry will be reversed with proper value date, after due
verification. In such cases, the Bank will compensate the customer, by way of loss of savings
                                              [32]


account interest due to reduction in the minimum balance applicable for payment of interest
on savings bank deposit or payment of additional interest to the bank in a loan account or any
HDFC Bank Ltd Customer Compensation Policy. charges levied for balance falling below
minimum balance requirement or any charges levied for return of cheques due to shortfall in
balance.In case verification of the entry reported to be erroneous by the customer does not
involve a third party, the bank shall arrange to complete the process of verification within a
maximum period of seven working days from the date of reporting of erroneous debit. In
case, the verification involves a third party, the bank shall complete the verification process
within a maximum period of one month from the date of reporting of erroneous transaction
by the customer.


2. ECS direct debits/other debits to accounts:
The bank undertakes to carry out direct debit/ ECS debit instructions of customers in time
subjectto (a) Customer having already provided valid and complete mandate to accept any
debit received from ECS
(b) Direct debit / ECS received is complete and correct. Failure to carry out the
instruction subject to clause (a) and (b) as above and for reasons directly attributable to the
bank, the customer shall be compensated at the prevailing fixed deposit interest rate for the
period between the due date of direct / ECS debit and the date of actual debit carried out by
the bank. Direct / ECS debits which are towards payments of an Equated Monthly
Installment (EMI), the bank would reimburse the customer, penal interest, late payment
charges, if any levied upon producing evidence of the same. Electronic payments such as
RTGS / EFT / NEFT instructions will be governed by the applicable terms and conditions
communicated to the customer.
The bank would debit the customer’s account with any applicable service charge as per the
schedule of charges notified by the bank. In the event the bank levies any charge in violation
of the arrangement, the bank will reverse the charges with value when pointed out by the
customer subject to scrutiny of agreed terms and conditions and such other terms and
conditions as may be communicated from time to time.

Credit Cards:
Where it is established that the bank had issued and activated a credit card without written
consent of the recipient, the bank would reverse the charges immediately and also pay a
penalty without demur to the recipient amounting to twice the value of charges reversed in
this regard. Operation of credit account shall be in accordance with HDFC Bank credit card
terms and conditions. Transactions reported as erroneous by customers in respect of credit
card operations, which require specific reference to a merchant establishment will be handled
as per chargeback HDFC Bank Ltd Customer Compensation Policy
                                               [33]


Version: October 2008 3 of 5 rules laid down by VISA / Master card international. The bank
will provide explanation and, ifnecessary documentary evidence to the customer within a
maximum period of sixty days.
3. Payment of Cheques after Stop Payment Instructions:
In case a cheque has been paid after stop payment instruction is received and acknowledged
bythe bank, and there have been no subsequent and contradictory instructions received by the
bank,the bank shall reverse the transaction and give value-dated credit to protect the interest
of the customer. Any consequential financial loss to the customer will be compensated as
providedunder Para 1 above. Such debits will be reversed after ascertaining the facts within
seven working days of the customer intimating the transaction to the bank.
4. Foreign Exchange Services:
The Bank would not compensate the customer for delays in collection of cheques designated
inforeign currencies sent to foreign countries as the bank would not be able to ensure timely
credit from overseas banks. It is the bank’s experience that time for collection of instruments
drawn on banks in foreign countries differ from country to country and even within a
country, from place toplace. The time norms for return of instruments cleared provisionally
also vary from country to country. The bank will compensate the customer for undue delays
in affording credit once proceeds are credited to the Nostro Account of the bank with its
correspondent. Such compensation will be given for delays beyond the day when the amount
is due for credit after taking into account normal cooling period as detailed in the cheque
collection policy. The compensation in such cases will be worked out as follows:
a) Interest for the delay in crediting proceeds as indicated in the collection policy of the bank.

b) Compensation for any possible loss on account of adverse movement in foreign exchange
rate.

5. Remittances in India:
I) The compensation on account of delays in collection of instruments would be as indicated
in the bank’s cheque collection policy in the following instances
a. Payment of Interest for delayed Collection of Outstation Cheques:

b. Cheques / Instruments lost in transit / in clearing process or at paying bank’s branch:
HDFC Bank Ltd Customer Compensation Policy
Version: October 2008 4 of 5
II) For NEFT remittances, the credit will be given to the beneficiary’s account on the same
day of receipt of remittance at HDFC Bank, provided the following conditions are met:
a) Request for remittance is tendered within the prescribed time frame set for same day
credit. Inany case, the credit will be given latest by the next working day.
b) There is no mismatch in the beneficiary details.
c) The account of the beneficiary is not blocked due to statutory reasons/frozen/closed.
                                              [34]


d) Necessary information on remittances in NRE accounts is available from remitting bank.
For any delayed period of credit of NEFT remittances beyond the prescribed timelines and
subject tomeeting the conditions as given above, compensation would be paid at the then
prevailing RBI repo rates.
Other remittances falling under the various payment system products would not be eligible
for the same.
6. Erroneous Debits Arising on account of Fraudulent or Other Transactions:
a) In case of a claim raised by any of the customers, the bank shall depute staff personnel to
investigate the matter in its entirety and if the bank is convinced that an irregularity /fraud
has been committed by its staff towards any constituent, the bank will acknowledge its
liability and pay the just claim.
b) In cases where the bank is at fault, the bank will compensate the customer without demur.
c) In cases where neither the bank nor the customer is at fault, but the fault lies elsewhere in
the system, the Regional Business Manager can take a decision to reimburse the customer up
to an amount of Rs 1,000/-.
d) For any claim greater than Rs 1,000/- the matter would be required to be referred to the
Grievance Redressal Cell. The Cell would then after updating the Top Management take a
final decision in this regard.
7. Violation of the Code by banks agent:
In the event of receipt of any complaint from the customer that the bank’s representative /
courier or DSA has engaged in any improper conduct or acted in violation of the Code of
Bank’s Commitment to Customers which the bank has adopted voluntarily, bank shall take
appropriate steps to investigate and to handle the complaint and to revert to the customer
within seven days from the date of receipt of complaint and wherever justified, shall
compensate the customer for financial losses, if any.
HDFC Bank Ltd Customer Compensation Policy
Version: October 2008 5 of 5
8. Transaction of “at par instruments” of Co-operative Banks by Commercial Banks *
The RBI has expressed concern over the lack of transparency in the arrangement for payment
of “at par” instruments of co-operative banks by commercial banks resulting in dishonor of
such instruments when the remitter has already paid for the instruments. In this connection it
is clarified that since the "at par" instruments are only cheques drawn on accounts maintained
with the bank and are not prepaid instruments, the drawee bank will not honour cheques
drawn on thecurrent accounts maintained by the concerned banks with it unless arrangements
are made for funding the cheques issued. This has been communicated very clearly in the
agreements entered into with the co-operative banks concerned. Thus, the issuing bank i.e.
Cooperative Banks/Drawer of the cheque would be responsible to compensate the cheque
holder for nonpayment/delayed payment of cheques in the absence of adequate funding
arrangement.
                                              [35]


9. Force Majeure:
The bank shall not be liable to compensate customers for delayed credit if some unforeseen
event (including but not limited to civil commotion, sabotage, lockout, strike or other labour
disturbances, accident, fires, natural disasters or other “Acts of God”, war, damage to the
bank’s facilities or of its correspondent bank(s), absence of the usual means of
communication or all types of transportation, etc beyond the control of the bank prevents it
from performing its obligations within the specified service delivery parameters.



Grievance Redressal Mechanism


Grievance Redressal Policy of HDFC Bank
HDFC Bank realizes that quick and effective handling of complaints as well as prompt
corrective & preventive actions to improve processes are essential to provide excellent
customer service to all segments of customers.
To achieve this, the bank has a clearly documented policy for redressal of customer
grievances. However, in line with RBI guidelines enumerated in Para 16 of the Master
Circular on Customer Service dated 3rdNovember 2008, this policy has been suitably revised
and is being tabled for the approval of the Board. Through this policy, the bank shall ensure
that a suitable mechanism exists for receiving and addressing complaints from its customers /
constituents with specific emphasis on resolving such complaints fairly
and expeditiously regardless of sources of the complaints.

The policy seeks to ensure that:
Bank shall achieve compliance with the procedure on Grievance Redressal
as outlined in Para 7 of the Code of Commitment to Individual Customers set out by the
Banking Code and Standards Board of India (BCSBI) as well as Para 16 of the Master
Circular on Customer Service (RBI/2008-09/261/DBOD.No.Leg.BC.75/09.07.005/2008-09)
Dtd. 3rd November 2008 Adequate information will be made available to all customers on
the various channels for seeking redressal of grievances arising out of any perceived
deficiency in service by the Bank or noncompliance to the Code of Commitment. This will
be updated as and when any change occurs in the processes emerging out of internal reasons
or change in guidelines from the regulators.

Bank shall develop a detailed procedure (Complaints Management Note) to execute the
grievance redressal policy. The Procedure shall be reviewed and updated every Quarter. Any
complaints received - either verbally, via email or in writing - from the customers, will
belogged into the state-of-the art web-based software namely Next step CRM and Vision
                                             [36]


Plus (for Credit Card related complaints). The bank will not only ensure that all the
complaints received are recorded and resolved, but also ensure effective monitoring /
escalation mechanism to the senior functionary responsible so as to ensure that none of the
complaints remain unresolved. All complaints received at the retail branches will be entered
into Next step CRM, and followed up for resolution by the branches. Complaints to be
tracked and closed only after resolution of the customers’ grievance. Quality Initiatives
Group of the bank will be responsible to track the pending complaints and provide support to
ensure faster resolution.

Complaints on credit cards, received telephonically, will be captured online at the time of
customer contact with the bank and be referred to the appropriate backend unit for necessary
resolution. All complaints pertaining to retail assets will be managed by the Retail Asset
Central Complaint Management unit (except for collections related complaints) and will
ensure that complaints received are resolved as per the defined TAT. Complaints pertaining
to collections shall be forwarded to the collections department for appropriate resolution.
Collections department to publish help-line number as well as dedicated email id in
newspapers for customers to address their concerns regarding Retail Asset Collections. A
Code Compliance Officer will be appointed by the bank for Retail Asset Collections. The
name and numbers of the code compliance officer will be published in all Collection
reminder letters to facilitate escalation of complaints

Grievance Redressal Mechanism

Quality Initiatives Group :

Dedicated Client Service Desk (CSD) will cater to customer queries/complaints pertaining to
nonretail Segment.All complaints received at the corporate office of the bank will be
forwarded to the Grievance Redressal Cell for handling in a prompt manner.

All complaints received at the Chairman & the Managing Director’s desks shall be handled
End-to- End by a dedicated team under the Service Quality Unit. A weekly update of all
complaints received at the Chairman’s & the MD’s desk will be sent to the Chairman and the
MD.
All complaints received through the below mentioned channels will be handled centrally by a
dedicated resource under the audit and compliance department.

    Reserve Bank of India complaints received at Corporate Office.

    Government of India complaints received at Corporate Office.
                                              [37]


    BCSBI complaints received at Corporate Office.

    Consumer Forum complaints received at Corporate Office.

    CORE Centre complaints received at Corporate Office.

The Bank shall appoint Nodal officers at various locations in terms of Clause 15 (3), chapter
IV, ofthe Banking Ombudsman scheme 2006 and a list of state wise nodal officers of the
bank is to bemade available on bank’s website and through displays at the Branches. The
same shall be updatedperiodically.

The Bank will provide an email ID (customer_service@hdfcbank.com) to the National
Consumer Helpline (NCH) for any complaints received for / against HDFC Bank. The
arrangement to ensure that the forum diverts these complaints to the Bank on the above
mentioned email id for necessary action. The Bank will publish a Toll-Free number on the
Bank’s website for customers to register their complaints and any query/complaints
pertaining to Retail Liabilities, Retail Assets, Depository, Credit Cards and Collections are
handled at this desk. The bank, in compliance to the Tara pore committee recommendations,
shall set up a Grievance Redressal Cell.
 In case a customer is not satisfied with the resolution provided to him by the front office
staff, the customer will be provided an option to write to the Grievance Redressal Cell either
through an e-mail or through a letter. The contact details of the Grievance Redressal Cell will
be displayed at all the branch premises of the Bank as well as on the website. The Unit will
be responsible for resolution of all complaints received at their end. Customers shall also be
provided detailed information on how to escalate the matter in case the redressal is not found
to be adequate or appropriate. Through posters in branches, bank shall take necessary steps to
do wide publicity about creating awareness among customers that in case they are not
happy/satisfied they can approach Branch Manager, followed by GRC and then to Banking
Ombudsman.
 In lieu of the recommendations as per RBI Circular (RBI/2007-08/309-DBOD. No.
LegBC.81/09.07.005/2007-08), Bank will ensure that all final written responses to customers
shall contain the mandatory clause to make customers aware of their rights to approach the
Banking Ombudsman. The standard draft which requires to be communicated to customers
with necessary reference to the website will be mandated to all employees by the Quality
Initiatives Group of the Bank.

Grievance Redressal Mechanism

Quality Initiatives Group
                                             [38]


Complaints shall be resolved in a proper and time bound manner with detailed advice to the
customer. In case the resolution needs time, an interim response, acknowledging the
complaint shall be issued. Customer Complaints received through Emails will be responded
through Email Only. Bank’s Email Management Unit will be responsible to provide final
resolution response to customers raising complaints via Email.Feedback by way of
complaints as well as in structured Customer Service Committee meetings will be analyzed
and acted upon. Quality Initiatives Group of the bank will be responsible to drive process
improvement in coordination with other functions of the bank.

All employees at the customer facing channels and other support departments will be
periodically trained in handling of complaints.The internal mechanism for recording and
resolution of complaints shall operate smoothly at all times and shall be monitored on daily
basis. In this direction, the Bank shall establish a Complaints Management Cell within the
Quality Initiatives Group of the bank to monitor on a regular basis the complaints logged in
Nexstep CRM software. To ensure adequate closure of Customer Complaints and to improve
Resolution of Complaints within the defined TAT, bank shall institute 2 Level Escalation
Boards.
Level 1 Escalation Board – To meet Weekly
Senior Escalation Board – To meet Monthly

The quality of customer service rendered by the Bank shall be reviewed / examined by
Bank’s Top Management at regular intervals. The same shall also be discussed in the meeting
of the Standing Committee on Customer Service and will be reported to the Customer
Service Committee of the Board of Directors.

Various elements of the Grievance Redressal Policy will be elaborated in the form of a
detailed procedure which shall be reviewed on a quarterly basis.

                                “QUESTIONNAIRE”


1. On a scale of 1 to 5 where 1 represents "Extremely dissatisfied" and 5 represents
"Extremely satisfied," how would you rate your level of overall satisfaction with SBI ?
 1    2   3 4       5



2.Why do you say that? What specifically are you satisfied or dissatisfied with SBI? Enter
response below…
.
                                             [39]




3.How likely are you to recommend SBI to a friend or relative? Would you say the chances
are …
  Excellent
  Very Good
  Good
  Fair
  Poor

4.How likely are you to repurchase products and services from SBI? Would you say the
chances are …
  Excellent
  Very Good
  Good
  Fair
  Poor

5.How would you rate the overall quality of your relationship with SBI, considering all of
your experiences with them? Would you say it is …
  Excellent
  Very Good
  Good
  Fair
  Poor


6.About how long did you have to wait before speaking to a representative?



    I was taken care immediately

     Within 3 minutes.

    3-5 minutes

    5-10 minutes.

7.About how long did it take to get this problem resolved?

   Immediate resolution

   Within a day.

    1-3 days
                                              [40]


    Problem still not resolved.

8.Repetation of same problem

      Yes

      No

      Sometimes



The same questionnaire was done for the HDFC bank.



After analyzing the questionnaire and the survey among the exsisting customers of both the banks
it has been realized that



CRM IN PUBLIC SECTOR BANKS:


Most CRM initiatives have been in the private sector where a working definition of
CRMwould be:“to maximise the value of customers to the organisation by efficient
acquisition, retention and penetration of customers”.

CRM in the public sector bank is a relatively recent phenomenon. Here, the definition of
CRM is usually “to improve levels of services to citizens whilst optimising cost to serve”.
However, in many ways the public sector model is similar to the private sector
model, except that the former usually lacks the profit motivation, the competitive
dimension, and the day-to-day “service management” activities are fewer. The service
management stages are:
    Pre-sales or pre-relationship targeting and management.
    Welcoming.
    Fulfilment of product or service.
    Managing dissatisfaction.
    Winback of lost or disenchanted customers.

CRM Service Processes
This type of process consists of sub-processes with direct customer interaction designed for a
complete coverage of the customer process. The following processes can be distinguished:
    Campaign Management:-
                                              [41]



Campaign management is the core marketing process, which puts the ideas ofrelationship
marketing into practice. It can be defined as planning, realization andcontrolling of marketing
activities directed at already known recipients.

     Sales Management:-
    The aims of sales management are to find out the needs of potential or existing
     customers as comprehensive as possible, to advice the customer on possible
     alternatives for the satisfaction of the identified needs, to provide the customer with an
     offer, and to close a contract as the final step.



    Service Management:-
    Service management can be referred to as planning, realization and controlling of
     services offered in the after-sales phase.

    Complaint Management
   Complaint management is about receiving, processing and communicating the
   dissatisfaction articulated by the customer throughout the customer process.



PRESSURE FOR CHANGES IN PUBLIC SECTOR:

The range of public services is wide and varied, from paid-for services, such as leisure club
membership, to traditional services such as those provided in education, health and
policing. However, in many ways the public sector model is similar to the private sector
model, except that the former usually lacks the profit motivation, the competitive
dimension, and the day-to-day “service management” activities are fewer. The service
management stages are:
�� Pre-sales or pre-relationship targeting and management
�� Welcoming
�� Fulfilment of product or service
�� Managing dissatisfaction
�� Winback of lost or disenchanted citizens
Governments in many developed countries have introduced "Citizen charter" type
initiatives. While these set out with the best intentions, designed to make public sector
departments more accountable and service focused, the initiatives live or die by the
targets that are set, and the measures that are employed. We have carried out
                                              [42]


assessments all over the world and those carried out in the Public Sector have shown real
issues with Measurement and Target Setting, and this provides a major focus



WHAT PREVENTS EFFECTIVE PUBLIC SECTOR CRM?

Audience selection: Unlike private sector banks, most public sector ones
cannot choose the people they serve. In fact, they often have to target citizens
who may qualify for the service or benefit, but who resist approaches from public
service departments. This raises significantly the cost of acquisition and of
continuing service. This means public sector banks face unique CRM
Challenges that are less common in the private sector. For instance, the cost of
Providing service to old, infirm and disabled “customers” is one that few private
sector CRM programmes have to contend with. Vendors and integrators have little
or no experience of designing and delivering CRM to support such programmes.
There are high moral and political disadvantages if such groups are overlooked or
experience worse service.

As in the private sector, public sector organisations are often poorly coordinated
across departments and geographies, internally and with each other (the interagency
problem). Optimising one part of customer management may increase
overall costs and impair the customer experience.

There is also a resource problem. The public sector has rarely developed
resources to design, build and optimise CRM. Where they have, their best people
are often enticed away by higher salaries from the private sector. This is likely to
lead to a widening skills gap.

Public sector organisations are starting to understand that CRM philosophy
involves not just technology but also changes to the proposition, the way service is
delivered, integration of access and delivery channels, improved data, different
measurement systems and a new way of managing people. In the public sector,
only very senior managers can achieve these kinds of change. Leadership tends
to be slower to make decisions and act, and this will make it difficult for public
sector organisations to manage CRM programmes as suggested in Chapter 7.

Lower levels of pay, lower calibre managers, low status or job esteem and a costminimisation
culture have created a public sector culture that gives a low priority
to customers. Chapter 5 shows the significance of people and organisation issues
                                             [43]


in delivering effective customer management. A major cultural shift is required in
most public sector organisations to deliver CRM through people.

In the private sector, databases are often developed as independent initiatives by
separate departments. Over time, their integration into an organisation-wide
database becomes commercially justifiable – it helps the company achieve
commercial benefits of improving customer value cost-effectively. Issues such as
value optimisation motivate the public sector less, and there is usually little

history of cross-agency or interdepartmental cooperation. There is also less
appetite to understand and optimise the organisation’s data capabilities within
data protection and privacy constraints. All this suggests that public sector CRM is
more likely to be a follower than a leader in terms of using customer data.

There is a strong measurement culture in the public sector, but it tends to be
activity and work content-based. There is less experience of process, service and
value measures. There is less focus on measures based on the perception of
customers concerning the quality of service delivery. Because of the public service
culture, which tends to penalise any “bad news” , measures which show negative
customer perceptions (e.g. service bottle necks) are often avoided or, if in place,
disregarded. Effective CRM requires a strong capability of “honest” measures,
measuring current performance and designing and implementing improvements,
and then measuring whether the planned improvements – as seen by the
company - resulted in improvements as seen by customers.

There has been much outsourcing of functions and processes in national and
local government, usually to reduce costs or to finance replacements of large IT
systems. Outsourcing agreements tend to focus on just one part of the
organisation, with performance criteria tightly defined, not usually in customer
terms. So outsourcing as usually practiced rarely improves things for customers,
and can make it more difficult to re-engineer processes that cross the interface
between the client and the outsourcing company.
                                               [44]


CRM IN PRIVATE SECTOR BANKS:-

There are more banking options than ever these days. Applying a little research and legwork,
you can find the banking relationship that you are needing. The following are a few tips to
help you to find the 'perfect' banking arrangement:

You would want to take a look at what will be crucial to you in a banking relationship.
Whenever you expect to be able to create a personalized, long-term relationship with a bank,
a smaller, local bank may best suit your needs. Whenever you move around often and expect
access to branch offices if you are away, consider a regional or national bank.

Check out the branch office where you would be conducting most of your banking business.
Are the bank clerks professional and friendly? Are the account officers and/or managers
accessible? Are the hours of operation compatible with the hours when you might need to do
your banking?

Visit different banks' internet sites. That is where you will obtain a sound idea of the types of
accounts, available services and rates provided before you enter inside a branch office.

Look for a bank that is convenient to your everyday activities. Search for banks that are
readily accessible while you go to and from your work or whenever you run your usual
errands.

Take a look at how you may be banking. In case internet banking and ATM banking interest
you, seek a bank that extends those services.

Compare interest rates and service charges among banks to make sure you're obtaining the
right deal.


                                  CONCLUSION

From the above survey and the project it can be concluded that CRM is the integral part of
the banking system. As a nowadays there is huge competition among the banks to stay in the
market there is a constant effort from banks of both the sectors to retain their customers .If
the customers are not satisfied they will not be able to carry their activities. But as State Bank
Of India is the oldest public sector bank they generally followed a conservative approach in
the CRM process, whereas the HDFC bank followed a much aggressive approach to retain
their customers. But as the time changes SBI is following new processes to implement CRM
in banks. They are employing Relationship manager in almost every branches to solve
                                            [45]


customer query. And cross selling of products among the exsisting customer is a common
phenomenon in almost every banks.So it may be concluded that in order to withstand in the
competition you have to satisfy your customers as they are heart of the business.

				
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