EXECUTIVE SUMMARY
The project seeks to provide an analytical basis for evolving a concept of awareness of peoples about wealth management services .It attempts to unfold the true nature of customers and his needs and satisfaction level, by means of an analysis of risk profiling of customers. I have done my research work at Centurion Bank of Punjab .for a period of six weeks , in that internship period I got thorough knowledge about banking industry and the bank itself. By the coordination and cooperation of employees of the organization, I completed my project successfully .This project is mainly based on three products of the bank, i.e.: Life Insurance, Mutual funds and Credit Card. My research was basically meant to know – Customer awareness about wealth management services of CBOP Sales volume of LI, mutual funds & Credit Card of the bank. Customers view about L.I mutual fund & Credit Card. Customer retention. According to Demosthenes “small opportunities are often the beginning of great enterprise”. In today‟s market a lots of opportunities are available for newly entrants. Because needs and tastes of the customers are changing day by day. All the procedure collectively followed by questionnaire. The questionnaire consists of 14 questions to reach at the objectives. I have collected the data from 100 customers.
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INTRODUCTION
The world of banking is changing at such a faster rate, that the use of clichés like “rat race”, “struggle for existence and survival of fittest” has become effete. This report has been prepared with a view to presenting the true persona of the banking industries. Here the focus has been on the evolution, development and wealth management of Centurion Bank of Punjab (CBOP). Through this report an attempt has been made to recommend how to invest your money in such a critical movement. CBOP has guided people how to invest their money and get the optimum outcome through Wealth Management in the current fluctuating market situation.
It has been attempted here to make an in-depth analysis of wealth management in Crunch situation and also the way it affect the lives of millions of people everyday.
The world today is passing through a cries of confidence which has affected all aspect of lives including Wealth-Management, the fluctuation in the sensitive indices all over the world particularly in India noticed during the past six month are indicative of crises of confidence of the investors invest in banking sector visa-vis. The uncertainties reflected in the sensitive stock market are a case in point. In this situation CBOP has come up with certain investors friendly propositions, which will be of great use building-up the confidence of Investors. The nervousness of the investors is an established fact. The CBOP accept this fact and allay the fear of investors. It has come out with the following confidence rising measures, which will be beneficial to the individual as well as group investors.
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So, Lets come to the word Wealth –Management, “It is all about making a risk profile of a prospect customer, analyzing his financial needs and suggesting investments plans or proposals.
OBJECTIVES OF THE STUDY
To know about the services rendered by Centurion Bank with different product offerings.
To know the perception of customers on the wealth management services. To know the penetration of the Centurion Bank products in the market. To make an appraisal of the study findings and offer suggestions. Identify the extra facilities given by the bank. To know what are the customer‟s requirement.
Retention of the existing customer.
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Overview of Banking Sector
The banking sector is the lifeline of any modern economy. It is one of the important financial pillars of the financial system, which plays a vital role in the success or failure of any economy. Banks are one of the oldest financial intermediaries in the financial system. They play an important role in the mobilization of deposits and disbursement of credit to various sectors of the economy. The banking system is the fuel injection system which spurs economic efficiency by mobilizing saving and allocating them to high return investment. Research confirms that countries with a well-developed banking grow faster than those with a weaker one. The banking system reflects the economic health of the country. The strength of economy of any country basically hinges on the strength and efficiency of the financial system, which in turn depends on a sound and solvent banking system. A sound banking system effectively deploys mobilized savings in productive sectors and a solvent banking system ensures that the bank is capable of meeting its obligation to the depositors. The banking sector is dominant in INDIA as it accounts for more than half the assets of the financial sectors. Section 5(1) (b) of banking regulation act defines “banking as the accepting, for the purpose of lending or investments, of deposits of money from the public, repayable on demand or otherwise and withdrawal by cheque, draft, order, or otherwise. From the definition, two important functions of commercial banks emerge: acceptance of deposits and lending of funds. For centuries, banks have borrowed and lent money to business, trade, and people charging interest on deposits. These two functions are the two core activities of banking.
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REVIEW OF THE BANKING INDUSTRY
To survive, banks will have to graduate out of the kindergarten definition of banking they had been happy with so far. At the turn the millennium, the banking and financial sectors have been severely put to test across the globe. Banks have fallen like ninepins in the Southeast Asian countries, Russia, and other emerging economies spanning Latin America. Even Japan, a member of the G-7 nations, is no exception. In comparison, the Indian economy has weathered the storm well and banking, which mirrors the economy, has not done badly either.
Though commercial banking of the western type has been a recent development in this country, banking as such has not been unknown to India. From very ancient days, indigenous banking has been organized in the form of family and individual businesses. Despite the predominant role played by the indigenous bankers in India‟s economic life, they have generally remained outside the pale of organized banking. As early as 1931, the Central Banking Enquiry Committee emphasized the necessity to unify the two sectors of Indian money markets and recommended the linking of indigenous bankers with the RBI when the latter was created. Since 1935, when RBI was created, many attempts were made to achieve this. However, resistance from most of them put a stop to these moves. But seeing the winds of change, some of the prominent alternative banking establishments became non-banking finance companies by the mid-1970s.
The last decade has been a spate of mergers and acquisitions across the globe. But bank mergers are not a new phenomenon to the Indian banking sector. The Indian banking system had gone through a series of crisis and consequent failures and thus, growth was quite slow during the first half of this century.
In 1950-51, there were 430 commercial banks but the number of banks declined rapidly because of RBI‟s policy of mergers and amalgamations of small banks with big ones as a measure of strengthening the banking system. In 1960-61, for instance, there were as many as 256 small non-scheduled commercial banks but by 1980-81 only four were left;
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the rest were merged with the bigger ones. In 1980, the government added another six banks to this list for social objectives. Banking was driven by socio economic reasons forcing banks to open branches even in unlivable places. This resulted in the country having more than 60,000 branches and a huge employee baggage, and functioning impeded by government and RBI directives. The huge distribution network, in fact, went against the spirit of distribution – it was extremely slow and tardy. Besides, the high preemption cost of SLR at 35 per cent levels, CRR at 15 per cent levels, an another 40 per cent towards directed lending (priority sector) hardly left and scope to do commercial lending. Moreover, the banks piled up a huge non-performing loan baggage of over Rs. 55,000 crore.
The late 1970s saw this demand supply gap being filled by the mushrooming NBFC sector and the merchant and investment banks. But this euphoria was short lived as they too in turn got caught in the turn got caught in the economic slow down in 1977. Besides, the 1992 securities scam and the massive default by the C.R. Bhansali-owned finance companies in 1977-98 shook the foundations of both banking as well as the NBFC sector. The RBI‟s regulatory whip in a massive shakeout in the NBFC sector. As against over 40,000 NBFC‟s less than 9,000 were able to meet RBI‟s requirements. The ripples were felt even at the top end; many were forced to reduce their balance sheet sizes.
Meanwhile, the onset of liberalization in 1991 saw the clock turn full circle for Indian banking. The buzzword was prudential lending, profitability and a clean balance sheet. The banks were expected to stand on their own feet and not look at fiscal subsides for capital. The mid 1990‟s saw the RBI opening the gates of competition by issuing private bank licenses to new entrants. In barely five years, this has created a hornet‟s nest on the Indian banking turf. Besides the nationalized banks, even the foreign banks have begun to feel the heat of competition. In fiscal year 1998-99, barring ABN Amro Bank, all other foreign banks in Indian either reported a dip in profits or losses. Until recently, bank mergers were either bailouts or the forced mergers by the RBI in the 1950s and the
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1960s. But the HDFC bank‟s strategic business acquisition move saw several bank chiefs rolling up their sleeves and speed up their consolidation moves.
Besides, the Internet banking and E-commerce forays by banks like HSBC, ICICI bank, HDFC bank, Global Trust bank, Standard Chartered bank and Citibank are forcing every banker on the block to think on the same lines. The ultimate result would be tremendous focus on technology; the speed of transactions will increase which in turn will drive up volumes. Besides, it gives an edge to offer complex products like derivatives. Lastly it helps the bank in being more transparent and efficient.
Going forward, there is bound to be a paradigm shift in banking. Because of extreme competition the power has moved from the seller (the bank) to the buyer (depositor as well as borrower). The surge in ATMs, credit and debit cards, consumer driven loans, are a few examples of this. The biggest challenge for the bank is not on the assets side but in raising deposits. The economic reason for putting money in banks was more because of habit and the lack of alternative avenues. The biggest challenge for banks will be the mutual fund sector which has already commenced attracting the depositors with products and liquidity similar to banks coupled with better returns.
But where does the Indian banking sector fit in the next millennium? Considering the Indian savings rate at around 25 per cent, savings will be around $1,000. Compare this to the US figures: The average per capital income of the top 50 million population at $33,000 with a savings rate of 3 per cent means they save around $1,000. This means the fund market size in India is same as that of the US. With a brighter picture emerging after the mergers and consolidation and all the efforts to clean up NPAS(Non Performing assets), Indian banking is fast becoming a sector one can bank upon.
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Centurion Bank of Punjab Brief history Bank of Punjab
Established in 1989, in pursuance of The Bank of Punjab Act 1989 and was given the status of scheduled bank in 1994. The Bank of Punjab is a scheduled commercial bank with its network of 266 branches at all major business centers in the country. The Bank provides all types of banking services such as Deposit in Local Currency, Client Deposit in Foreign Currency, Remittances, Advances to Business, Trade, Industry and Agriculture. The Bank of Punjab has indeed entered a new era of science to the nation under experience and professional hands of its management. The Bank of Punjab plays a vital role in the national economy through mobilization of hitherto untapped local resources, promoting savings and providing funds for investments. Attractive rates of profit on all types of deposits, opening of Foreign Currency Accounts and handling of Foreign Exchange business such as Imports, Exports and Remittances, Financing, Trade and Industry for working capital requirements and money market operations are some facilities being provided by the Bank. The lending policy of Bank is not only cautious and constructive but also based on principles of prudent lending with maximum emphasis on security. As agriculture is considered as backbone of our economy the Bank of Punjab has introduced "Kissan Dost Agriculture Finance Scheme" to small farmers.
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CENTURION BANK
1994 The company was incorporated on 30th June,1994 and the certificate of Commencement of Business on July 20th. It is promoted as a joint venture between 20th Century Finance Corporation Ltd, and its associates and Keppel Group of Singapore. It has got a network of ten branches. The main equity of the Bank was provided by the promoters, 20th Century Finance Corporation Ltd. & its associates and Keppel Bank of Singapore (now Keppel TatLee Bank Ltd.) through Kephinance Investment (Mauritius) Pte. Ltd.
1995 20th Century Finance Corporation Limited, has been amalgamated with Centurion Bank Limited.The Bank, set up in a fully computerised environment with ATM facility at every branch and Computer networking between branches can indeed claim to be a `Bank with a difference'.
The Bank has introduced, for the first time in the country, the concept of `anywhere banking' which enables to operate the account from any other branch of the Bank.
2005 Boards of Directors of Centurion Bank and Bank of Punjab Ltd on June 29, 2005 approves merger of two banks. The combined bank will be called Centurion Bank of Punjab
Centurion Bank of Punjab was incorporated on June 30, 1994, under an overall
economic reform programmed initiated by the government of India in 1991, when the RBI granted nine new licenses for the establishment for commercial bank in the private sector. The bank was founded by the erstwhile TCFC and its associates along with Keppel Tatlee Bank ltd. (Which was earlier the Keppel Bank of Singapore) through Kephinance Investment (Mauritius) Pvt. Limited. Centurion Bank of Punjab is a new generation private sector bank offering a wide spectrum of retail, SME and corporate banking products and services. It has been among
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the earliest banks to offer a technology-enabled customer interface that provides easy access and superior customer service. Centurion Bank of Punjab has a nationwide reach through its network of 241 branches and 389 ATMs. The bank aims to serve all the banking and financial needs of its customers through multiple delivery channels, each of which is supported by state-of-the-art technology architecture. Centurion Bank of Punjab was formed by the merger of Centurion Bank and Bank of Punjab, both of which had strong retail franchises in their respective markets. Centurion Bank had a well-managed and growing retail assets business, including leadership positions in two-wheeler loans and commercial vehicle loans, and a strong capital base. Bank of Punjab brings with it a strong retail deposit customer base in North India in addition to a sizable SME and agricultural portfolio. The shares of the bank are listed on the major stock exchanges in India and also on the Luxembourg Stock Exchange. Among Centurion Bank of Punjab's greatest strengths is the fact that it is a professionally managed bank with a globally experienced and capable management team. The day-to-day operations of the bank are looked after by Mr. Shailendra Bhandari, Managing Director & CEO, assisted by a senior management team, under the overall supervision and control of the Board of Directors. Mr. Rana Talwar is the Chairman of the Board. Some of our major shareholders viz. Sabre Capital, Bank Muscat and Keppel Corporation, Singapore are represented on the Board.
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Key Business Highlights Network Expansion
Centurion Bank of Punjab now operates from 242 branches across 122 locations in India. The Bank received approval from the Reserve Bank of India to open up to 38 new branches within the next financial year.
Co-sourcing arrangement with First India Enterprises for SME Business
The Bank has entered into a co-sourcing agreement for its SME business with First India Enterprises, a wholly owned subsidiary of Asia Financial Holdings, Singapore. This arrangement will help the bank better service its current SME clients and incrementally expand this business segment going forward.
Partnership with Indecomm Global Services for Back office operations
The Bank has entered into an enterprise partnership with Indecomm Global Services, a widely recognized international business process services firm to form Centillion Solutions and Services. Centillion will focus on back office processing and related services for Banks and other financial services firms. This partnership will enable the bank to strengthen its back office processing and make operations a key competitive advantage over time.
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Launch of the ‘Miracle’ Credit Card
Centurion Bank of Punjab entered the credit card market with the launch of the „Miracle‟ credit card in association with the Art of Living Foundation (AOL). The card provides a unique opportunity to Art of Living members and well wishers to spread smiles on the faces of thousands of rural children by making them „First Generation Literates‟. The Bank has positioned the card as a „card with a conscience‟ as each subscription facilitates members to make a very nominal contribution of Rs.50, while a matching contribution of Rs.50 is made by Centurion Bank of Punjab. The entire Rs.100 per card goes to „Gift a Smile‟ initiative of AOL for children.
Launch of e – broking services in alliance with IL&FS Investmart
The Bank tied up with IL&FS Invest mart to launch e-broking services. It now provides customers with the advantage of seamless settlement of trade and funds for all their equity transactions done through IL&FS platform. This service will complement Centurion Bank of Punjab‟s existing wealth management initiatives such as distribution of Mutual Fund and Insurance.
Bancassurance tie up with Aviva Life Insurance
The Bank has partnered with Aviva Life Insurance, one of India‟s leading Private Sector Life Insurance Company. This tie – up was in line with the Bank‟s strategic vision of becoming a one-stop shop for their customer‟s financial needs. Centurion-Bank of Punjab now offers its retail and corporate customers the flexibility to choose from a range of products that suit their investment as well as protection needs.
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Organizational Culture Values
The staff claims these values as their own and lives them. Their values create their unique culture and drive them in everything they do.
Responsiveness
They believe in putting customers at the heart of their business. They spend time listening to their customers to understand whom they are and how they operate to anticipate their needs. They are recognized for their friendliness, and they go out of the way to make colleagues and customers feel at home. They empower their employees to deliver great service, through enabling them to take decisions, which positively impact their customers. The people there take personal ownership for their dealings with customers, are knowledgeable about what they do and promise only what they know they will deliver. They understand that all employees are different, and have unique talents and individual needs.
Trustworthiness
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It is their people who set us above other organisations through their unique ability to build trusted relationships with all stakeholders. Trustworthy is about meaning what they say, being able to explain their actions, doing what they promise and being consistent in their approach. It means that they know how they will be treated and that there are no surprises. It requires us to be direct and honest in their dealings. They trust people to make the right decisions and trust them to act accordingly. Team success is as critical as individual success in achieving their business goals. Trust and integrity are the foundations for working together as one Bank in supportive and productive teams.
Creativity
They encourage employees who can see a better way of doing things to contribute their ideas. The quality of their people and the diversity of their backgrounds mean that they have an infinite capacity for fresh ideas and alternative solutions. They seek to tap this creativity. They are courageous enough to allow employees to take considered risks, recognizing that creativity comes from experimentation rather than limiting they‟re thinking to the tried and tested. They believe in setting clear expectations, but give their people the freedom to achieve their goals in the way that is best determined by their individual talents.
International Brand
They respect the local communities where they do business, and share their aspirations to build long-term security and prosperity. They know they can make a difference to the lives of others through sponsorship of community projects and by encouraging employees to actively participate in local programs.
They thrive on the diversity of their people and the breadth of thinking their experience brings. They offer a meritocracy, where people are valued and recognised for their 14
contribution, rather than their backgrounds. They believe in working as “one Bank” across all geographies and businesses, providing a seamless relationship to their customers. They uphold consistent ethical standards wherever they operate.
PRESENCE OF CENTURION BANK OF PUNJAB
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Financial highlights march 2006-march2007
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Share Capital Net Worth Total Assets Deposits Advances Gross Income Gross Profit (Before Depreciation)
14083 91776 1133019 939964 653344 105206
19945
Net Profit / (Net Loss) Dividend (%) Capital Adequacy Ratio (%) No. Of Branches No. Of Employees
8780 12.52 241 4471
Meaning of Wealth Management
Wealth Management offers relationship advice, sales, service and product solutions for 17
wealth-building whether you've saved over the years or inherited a sizable portfolio, how you manage your wealth today will have a significant impact on your future net worth.
Wealth management process: To do risk profiling of customers. To do finance need analysis of customers. To draw up the finance plan of customers. To ensure customer wealth management objectives are met. To achieve the business targets in terms of growth of the existing MAC portfolio of the branch. To convert leads generated through mass affluent referrals and increase the mass affluent relationships in the branch. To cross sell asset products to the MAC customers. To ensure outstanding service as per the service standards set to the MAC customers of the branch.
Financial Planning Model
Portfolio Construction
Asset Allocation
Product selection
Execution & Servicing
Portfolio tracking & Rebalancing
Investor Profiling COMPONENTS OF WEALTH MANAGEMENT
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Wealth – Managements Products are: Mutual Funds Insurance Portfolio -Trackers Fixed income products IPO Buzz Mutual Funds Mutual Fund is a mechanism for pooling the resources by issuing units to the investors and investing the funds in accordance with the scheme‟s objectives as disclosed in offer document. Investment in securities are spread across a wide cross – section of industries and sectors and thus the risk is refused diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time. Mutual Fund issues units to investors in accordance with quantum of money invested by them. Investors of mutual of funds are known as unit holders. The profits and losses are shared by the investors in proportion to their investments. The mutual funds normally come out with a number of schemes with different investment objectives which are launched from time to time. A mutual fund is required to be registered with the securities and Exchange Board of India (SEBI}, which regulates securities markets, before it can collect funds from public.
Insurance in Centurion Bank of India
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Centurion Bank of Punjab has a bancassurance tie up
with
Aviva for Life Insurance & with ICICI Lombard for Non-life insurance. Aviva Life Insurance having two attractive products – Life Long Safe Guard
What is LifeLong DGH? LifeLong is a whole life unitized protection cum savings plan LifeLong – Now with DGH No medical tests No medical questionnaire LifeLong DGH can be purchased for any life between 18 to 45 years o Max. annualised premium age 18-35: Rs. 100,000 o Max. annualised premium age 36-45: Rs. 50,000 The regular premium is payable up to 85 years of age but risk cover expires at 70 years of age Benefits Choice of premiums: from Rs. 3500 to Rs. 1 lac Fixed cover level of 10 times the annualised premium* Choice of investment options: UWP fund or 3 unit-linked funds No medical tests Option to switch between the unit-linked funds Option of Additional Single Premiums Partial withdrawals available after 3 policy years
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Tax benefits as per IT Act 1961
Maximum Sum Assured of Rs. 10 lacs upto age 35 and Rs. 5 lacs for ages 36-45. Key Features - LifeLong Maximise your savings: make additional lump sum payments apart from the regular premiums Choose how your money is invested: 100% Unit Linked -choice of 3 funds OR 100% Unitised with Profit With Profits Fund: guarantee against any fall in selling price of units Unit-Linked Funds: Strive for investment growth for capital invested. Choose from Secure, Balanced and Growth Funds or a combination Process for LL DGH Proposal form: 4 pager DGH form to be used Proposal number starts with NU
LifeLong is also available in the original, non-templated form Save Guard Save Guard is a limited premium paying term, whole life product Premium paying Term: 10, 15, 20, 25 or 30 years Annual Premium: 12K, 18K, 24K…240K Sum Insured: 10 times the annual premium subject to a max sum insured of Rs 12 Lakhs. No medical product. Policy issued on declaration of good health Proposal number starts with UP
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3 funds: Secure, Balanced and Growth 100% in one fund, or any combination(min 10% in a chosen fund) Switching possible between funds One free switch allowed every year .Additional single premiums can be paid (min Rs 10,000) Once the Premium Paying Term is over, the customer has three options: Withdraw fund completely Begin to make regular withdrawals from fund Leave the fund untouched for a few years, and then make regular withdrawals Tax Benefits.
Comparison Of Services Provided By Centurion Bank With Other Banks
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Banks
ATM Internet Locker Any where Insurance Phone Mobile DMAT NRI banking banking banking Banking A/C A/C
CBOP HDFC UTI ICICI UCO
Yes Yes Yes Yes Yes
Yes Yes No Yes No No No No No
Yes No Yes Yes No Yes Yes No No
Yes No No Yes No No No No No
Yes Yes No Yes No No Yes No No
Yes No No Yes No No No No No
Yes No No Yes No No No No No
Yes Yes No Yes No No No No No
Yes Yes No Yes No No Yes No No
ANDHRA Yes BANK PNB Yes UBI Yes
CONo OPERATI VE BANK SBI Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
I have tried here to present the data for the services provided by different banks with comparison to Centurion Bank. It clearly shows that the services provided by Centurion bank are quite high as compared to the other banks. It shows that there are so many reasons of a simple customer to have an account with Centurion bank. Although there are some Private Banks who have also got most of the services provided by Centurion Bank, but the Centurion Bank customers have their own reasons to have an account with the bank
RESEARCH METHODOLGY
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Field Research Desk Research Field Research:
This research is done from the primary information available. It provides the first hand information. It is accurate and depicts the correct picture. The approach is focused on the information collected from the field. The information is complete in object and cannot be influenced unlike information available in articles and magazines, which can be biased and sponsored. Chances of failure or misrepresentation in field survey are negligible. The required information for the primary source is collected from a sample survey collected in different sectors. The survey is confined to a total of one thousand persons. All the possible attempts have been made to make the sample truly represent the mass. This was possible by covering a wide spectrum of people of different income groups, occupation and having accounts with different banks. Desk Research:
In desk research facts and figures are taken from the secondary sources available. It consists of collection of published information and a brief analysis of the same. The major advantage of desk research is that it is relatively cheap, requires comparatively less time and does not require elaborate structure on man power. The secondary source of information can be the following. Companies annual report Data from the Internet Published data
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QUESTIONNAIRE
The questionnaire prepared for the survey is a structured questionnaire consisting of twelve questions. The questions cover in detail, wide variety of aspects relating to the study. Demography, occupation and saving pattern of the information. Their opinion and awareness about the products provided by Centurion Bank Of Punjab. Their opinion about services available from other channels in comparison with Centurion Bank. Their opinion on the different types of investments. Their feedback and suggestions if they want to give any. This questionnaire is for the purpose of conducting a market survey on the “wealth management services of CBOP”. This is exclusive for the study purpose and the information gathered will be highly confidential. Name – AddressOccupationAgeMarital Status-
1. Do you have an account in CBOP Yes No 2. Are you interested to open an account in CBOP Yes No If yes type of account If no any reason 3. I am interested to avail/know more about the following products of CBOP Liability products Asset products
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Saving account Current account Private banking account Senior citizen account Women‟s account Tax saving bonds Gold coins 4. I prefer the following investments Fixed deposit Mutual funds Insurance Shares
Two wheeler loans Personal loans Credit card
5. Are you aware of wealth management services provided by CBOP Yes No 6. Do you have any insurance policy Yes
No
7. Do you know about Aviva life insurance Yes No 8. Do you know about credit cards? Yes No 9. Which credit card do you know about? SBI …………. ICICI ………….. CENTURION BANK……….. BOB ………………………. STAND CHART…………… CITI BANK……………….... HDFC…………………… ANDHRA BANK…………..
10. Are you satisfied with the services provided by the bank? Yes No 11. If yes , What is the main cause? Interest rate Service Others.
credit limit grace period
12. What is your perception about credit card?
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13. Are you satisfied with the service provided by CBOP? Yes No 14. I would like to give referance of two best friends/relatives who would like to avail CBOP products and services. NAME:- ……………………………………………….. ADDRESS:SUGGESTIONS (If Any) Date Of Survey……………………..
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DATA COLLECTION TOOLS The nature of the data that has been used in the project under study is both primary and secondary and several methods are used to collect it. Primary data Questionnaire, interviewing method/personal meetings with the concerned persons has been used to collect the primary data. Secondary data Various publications in the form of annual reports, various papers, journals and magazines published from time to time. RESEARCH APPROACH Surveys are best suited for descriptive research. Surveys are undertaken to learn about people‟s knowledge, beliefs, preferences, satisfaction etc and to measure these magnitudes in the general public. Therefore, a survey has been carried out for the descriptive research purpose. SAMPLE DESIGN A sampling design is a definite plan for obtaining a sample from a given population. It refers to the technique or the procedure the researcher would adopt in selecting items for the sample. The sample plan of design calls for the following decisions: Universe Research sample unit refers to the geographical area that I have covered while conducting the research. The universe to be studied for this project comprises of the people of Bagha Purana and near by industrial area.
Sample unit The target population must be defined that will be sampled. It is necessary to develop a sampling frame so that everyone in the target population has an equal chance of being sampled. The sample unit pertaining to my study is “people who invest their money in centurion bank of Punjab whether it is any account or any kind of insurance plans or investment plans”.
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Sample size This refers to number of respondent to be selected from the universe to constitute a sample. An optimum sample is one that fulfils the requirement of efficiency, reliability and flexibility. The sample size of 100 serves the purpose of study. Sample method The sampling method used is non-probability convenience sampling (where the researcher selects the most accessible population members from which to obtain information).
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DATA ANALISYS AND INTERPRETATION Data after collection have been processed and analyzed using percentages. Data obtained during the study have been systematically tabulated and interpreted with the help of tables or pie charts. For the purpose of analysis of data, information has been collected from primary sources as well as secondary sources. In the primary sources a questionnaire has been used, coupled with personal interview and in the secondary sources data has been collected from various reports, journals and web sites. The data has been presented in the form of tables and charts. Average and percentages have been calculated to help in the analysis of the data. Efforts have been made to analyze and interpret the data in the lucid and easy language.
Opinion Regarding the services provided by Centurion Bank of Punjab
Excellent Very Good Good Average Not Experienced 2 10 28 11 49 2% 10% 28% 11% 49%
SERIVCES PROVIDED BY CENTURION BANK OF PUNJAB
60 50 40 30 20 10 0
This chart and graph tries to explore the satisfaction level with the Bank Customers. There are a lot of the customers who have not experienced the services of the bank yet.
Excellent Very Good Good Average Not Experienced
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The bank should eye on getting this customer base. The bar for the Excellent is also quite low. Most of the satisfied customers have chosen the services to good. Now the task for the operation department is to convert this Good group to Excellent group.
Preference of the individuals in different sectors:
Investment Fixed Deposit Mutual Fund Insurance E-Broking & Stock Trading
Number 56 28 11 5
Percentage 56% 28% 11% 5%
Preference of Investment
5% Fixed Deposit Mutual Fund 28% 56% Insurance E-Broking & Stock Trading
As it is already shown above, a major part of the population consists of Service Persons & Retired Person their preference of investment is the Fixed deposits. They do not want to take any risk on this stage nor they are worried on the return on the investment. They are concerned in having their deposit safe and grow at a steady rate.
11%
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Few people from the mass have also opted for the Insurance also because they are been aware of the human Life value and the Number of Business people in opting for Insurance is more than Service Holder & Retired People as they want to avoid tax by getting some sort of rebate under Sec 80c & sec10 (10D). But so far these Service Holder & Retired People are concerned they are happy with one or two policy of any amount. More over with the new government coming up it is expected that the Fixed Deposit Interest rates will rise.
Percentage of people preferring Aviva Life:
Perception of customer about Aviva Life
Aviva Life 15%
Aviva Life Other
Other 85%
The above figure shows that only 15% of people prefer Aviva Life .So marketing people need to advertise their plans and should enhance their skills in order to persuade the customers to buy from Aviva life.
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Credit Card
Awareness about credit card
Awareness of of people about Credit Card
No 5%
Yes No
Yes 95%
The above figure shows that 95% of people aware about credit card scheme of centurion bank of Punjab.
Market Leader in Credit Card Sector:-
Market Share of Different Bank
80 70 60 50 40 30 20 10 0
Percentage
70
60 25 5 10 City Bank 10 Andhra Bank
SBI
ICICI
HDFC CBOP
bank
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Though 95% of people are aware about credit card scheme of Centurion Bank of Punjab but most of the people prefer to buy it from SBI followed by ICICI and Centurion bank of Punjab holds only 5% of market share in credit card segment
Services provided by the Bank Customer satisfaction
28% Yes No 72%
The figure shows a clear picture that 72% customers are satisfied with the service of bank and the rest 28% are not satisfied out of 100.
Reason of Satisfaction
Reason of Satisfaction
50 40 30 20 10 0
Percentage
30
Interest Rate
30 10
Grace Period Credit Limit
45 10
Life Time Free
5
Credit Transfer Cash Withdraw
Satsfaction
From the above figure it is cleared that Cash Withdrawal is the main reason of customer‟s satisfaction.
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FINDINGS AND SUGGESTION
A major percentage of the population consists of Businessman. So an eye should be kept to encash huge Revenue through Life Insurance, Mutual Fund. The Centurion Bank is trying to Implement the 20-80 ratios. This ratio means that there are 20% of the population who can give 80% of the business and there are 80% of the populations who can give 20% of the business. Centurion bank of Punjab aims to trade with these 20% of the population that can give 80% of the business. Off late the Nationalized Banks have started the aggressive Marketing tool. We have to agree from the findings of the survey that major parts of the population hold their accounts with the nationalized banks. The customer base with State Bank of India & Subsidiaries and Andhra Bank is quite high and are a big challenge for the private sector banks. As in Bagha Purana number of nationalized Banks are playing major role and has already captured a major part of market so it is a great challenge before Centurion Bank of Punjab to come with new strategy to expand it‟s customer base to compete with them. Major percentage of the population wish to have their own houses well furnished and decorated. The cost of living is also quite high. So Centurion Bank of Punjab, should make effort to introduce the House-Lone facilities. At the branch to improve the environment, some quotations should be placed. This will also motivate the people at work. These quotations will also attract the attention of the customers. The medium of advertising should take the help of the environment. By planting some trees in the city and quoting on them “Maintained by Centurion Bank of Punjab”. Advertisement of all the new coming products on them will also take the attention of the population.
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There is a limit on deposit or withdrawal of money for a Centurion Bank of Punjab customer, at the branch. This has dissatisfied a lot of account holders. The reason for putting the charge on is, a lot of people have used this medium as a transferring of money from one place to another. So care should be taken to point out these people who use this as a regular medium of transferring money and charge them.
Keeping in mind these things Private Banks are coming up with a lot of attractive services and to a certain extent are able to divert the population also, but they have long miles to go.
As Centurion Bank of Punjab
has only one branch in Baghapurana, so
customers face a lot of problem to transact with this bank & the Relationship managers, BSO are facing problem to promote banks products.
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FINDINGS: FOR LIFE INSURANCE
During the analysis I found the following findings Most of the people invest their surplus income in Insurance. 85% of people agreed that, they do their Insurance for Tax Benefit. Apart from that 65% of people invest for life Protection. L.I.C is the market leader in the insurance Sector and ICICI PRUDENTIAL is the market leader among all private Insurance Company. Aviva Life Insurance having low market share, i.e.15%. So reasons should be spot out as soon as possible and needs of customers should be analysed and should be taken into consideration while formulating new plans of insurance.
FOR CREDIT CARDS
Most of the people are aware of credit card. Among the credit card holders maximum are salaried. SBI is the market leader followed by ICICI bank in the Credit Card sector. Customers want better service from their respective banks. Cash withdrawal is the main cause for customer satisfaction. Credit Card is a need for more users rather than safety. Most of credit card holders are getting enough opportunity in the existing market. Apart from general credit purchase customers are using credit card for ticket reservation, payment of bills, cash withdrawals etc.
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SUGGESTIONS FOR LIFE INSURANCE:Opportunity
The organization should be fully equipped to meet the rising demand for different categories of insurance policies. It should launch some special scheme for children for their higher education
Transparency
Lots of insurance companies are do not disclose policy returns to their customers. So Aviva life should update their customers on this front.
Attractive interest rate
It should try to create new ways to attract new customers by declaring new offers and schemes such as high and flexible interest rate in order to get good market share.
Update Information
Bank should always update with each and every news about life insurance in the market and it should take necessary steps to approach the customers more effectively and serve them efficiently.
Mass advertising
The bank should try to reach every nook and corner of the town by every means whether by television advertisement in local channel and can even use radio transmission to cover the poor segment people.
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For Credit Card:Clarity in purchase statement
Immediately after every purchase bank should provide the purchase statement to its customers and summary of the purchase statement should be a transparent one.
Feedback
Bank should have the proper database of the customers and in a proper interval of time customer‟s feedback should be collected about their needs and satisfaction.
Sales promotion
To attract more customers some gift items should be designed at festive occasions like Dusshera, Dipawali, and New Year etc.
Lowest Interest Rate
CBOP should provide low interest rate to its customers to grab the market share.
Customer relationship management
After all, the sales person should courteous and should have adequate knowledge about the product to communicate in a better way and should maintain a harmonic relationship with its customers.
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Retaining the client
It is very important for a bank or financial institution to retain its clients. This is possible only if a customer is satisfied. There are several stages, which have to be followed to keep customers happy and satisfied.
The 7 C’s for Retaining Customer
The 7 C‟s framework is constructed around a number of dynamic stages, each of which emphasizes a different aspect within the consultancy life cycle. Each stage represents a particular phase that a consultancy process will follow. Within each stage is a step of subelement and diagnostic tools that are used to east the engagement process. These all come together to form a total framework that will act as a guide to any engagement. Each of the stages can be undertaken independently, jointly or in parallel with each other.
The stages are:
Client: Define the clients orientation of the world, their perception of the situation, what
goals they have regarding the final outcomes and who has power to influence the outcome. Once the stage is concluded, you will have a clear agreement as to what value you will deliver to the client and what value they will offer in return.
Clarify: Determine the nature and detail of the problem to be addressed. Map the construction of the system under consideration, identify what and who is to be included and excluded from the change and determine what areas pose a risk for the assignment.
Create: Use creative techniques to develop a detailed plan that specifies what action
will be included in the change process, the appropriate resources, stream owners and potential change problems.
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Change: Understand the fundamental aspects that drive and
underpin change process, such as the energy sources, change points, entry levels, emergent factors and evidence of success.
Confirm: Ensure that change has taken place, into the account the issues of data focus,
ownership, depth, timing, and design of the measurement process.
Continue: Ensure that the change will be sustained; using learning that emerges from
the transition, the skills of the change agents and the sharing of new knowledge and skills.
Close: Close the engagement process with the client, emphasizing the need to
understand the final outcomes, the added value, new learning and what further action you might undertake.
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LIMITATIONS : It is said, “What is worth doing is worth doing best”. In other words a person should aim at perfection. However in real life this is not always possible. Human have to work within the limitation set by the nature and society. That is to say even though every possible effort to make this project report authentic and comprehensive has been made, however many constraints were also at play. The major limitations of the study are:
It was hard enough to fetch information. It was not an easy task. The respondents were not always open and forthcoming with their thoughts and views. The sample study was done in the apartments and the high cost areas. So it mostly contains the upper income group. The range of products provided by Centurion Bank is too large, so the customers got confused while selecting any. The Bank has only one Branch so customers lack interest to deal with this bank. Another limiting factor could be the existence of biases in the respondent‟s mind. Though every care has been taken to eliminate such biases, but considering the human factor the possibility of small bias having come up cannot be ruled out altogether. The project may not be able to answer some open ended questions related to peculiarities of results which may be different from our hypothesis due to smaller scale of survey being done because of time and cost constraints. Inappropriate feedback by customer because of lack of sufficient time and interest.
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ORGANISATIONAL PROCESS
Management is generally considered to have three major dimensions- technical, conceptual and human. The technical dimension consists of the manager‟s expertise in computers or functional expertise in accounting, engineering or marketing. Today‟s managers are competent in their functional specialization of which there is no doubt. Most practicing managers in the past, and even today have ignored the conceptual and human dimensions of their jobs or made some overly simplistic assumptions. When such assumptions were accepted, the human problems facing management were very clearing cut and easy to solve. All management had to do was to devise monetary incentive plans, ensure security and provide good working conditions. Unfortunately, this approach no longer works under the new environmental demands that the new paradigm managers are currently faced with.
The major fault with the traditional approach is that it oversimplifies and overlooks too many aspects of the problem. Human behavior at work is much more complicated and diverse than is suggested by the economic security working condition approach.
Character of Motivational forces
The first thing that strikes one at Centurion is the high degree of motivation that each person exhibits. Centurion has a 6-day week schedule but its fairly usual for people to be turning up on Sundays, or working late. In fact I hardly found someone moving out at sharp 5:30pm, which is the leaving time. People were largely concerned about their performances and worked really hard for it. It was equally motivating for all the employees irrespective of the fact whether their performance was appraised. It could be attributed to the fact that professionals were really paid well and there was a huge amount of autonomy given to people for their work. Employees (at least in the Indore office) spoke positively about the organization and wanted to contribute to it.
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There is no ambiguity in the roles and responsibilities of the employees, because of which there is a lesser chance of conflict arising out of confusing standards. Every employee is directly held responsible for the work he does. Hence every success and failure in the job is the responsibility of a particular employee. A friendly and informal atmosphere in the organization enhances work quality and efficiency.
Communication Process
There is no rigid structure that is followed in Centurion Bank Of Punjab in terms of top down approach or bottoms up approach of communication. Most of the policy decisions are taken in board meetings, but they are also open to any kind of suggestions from the employees lower down in the echelon. There have been instances in the company where executives came up with their proposals and they were promptly taken and effectuated in the organization.
There is a very robust intranet in the bank for communication, which acts as an information disseminator, as well as a medium for exchange and building of knowledge.
All the employees and officers are referred to, on first name basis. All the executives to the extent of Branch Manager keep the doors of their offices open, and any employee can walk in any time he wishes to. This reflects a real intention on keeping every day communication very informal.
Interaction Influence process
This is one area, which the bank has ignored. There are small informal groups in the bank and the people of one group are only concerned about people of their own group. On the managerial level there is some sense of responsibility, loyalty and team spirit but the
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lower level employees are not bothered about other people. They are concerned with their own work and keep to it without bothering about other‟s job. Decision Making Process
The decisions are made at various levels, depending upon the nature of the decision. The employees themselves take small day-to-day decisions. The managers take decision relating to customer services, handling important clients etc. but there are customers who complain that the managers are not empowered enough to take quick decisions. As strict hierarchy is followed, most of the important decisions have to be approved by the heads and if the heads are not available, there are a lot of delays.
Being a financial institution, where even the smallest decision has some monetary implication, the management observes a lot of prudence when arriving at decisions. Interestingly, the unofficial dictum being followed is “Take your time, but be sure”.
Goal Setting Process
There is considerable amount of freedom exercised when it comes to setting goals in the organization. Branch heads set their own targets and goals depending on how they perceive the market would move in the near future. This influence is generated by feedback from outbound sales teams, employees in the branch and analysis of the immediate environment.
At the corporate level the concerned product head, to deliberate on the goals set by the branch head, convenes a review meeting. The concerned branch head may be asked to increase or decrease his target depending on the additional input that the committee is able to provide. But the employees at the lower levels of the organizations are not made privy to the goals set by the marketing heads. They are expected to work within the framework given to them at the beginning of every month.
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Control Process The top management does not exercise a lot of control on the employees, explicitly. Yet the structures have been designed in a manner, which allow implicit control subtly. The dress code down to details on the color of socks and shoes is expressly laid out in the employee manuals. Regular memos, instructions etc. keep on flowing to and fro on the intranet.
Performance Characteristics
Productivity Each person knows his/her job well and so they make sure that they give their best in doing their work. The performance is measured by the targets set and the results achieved.
Absenteeism The level of absenteeism in the bank is pretty low. They are given casual leaves etc. but they do not take leave casually. If they are unwell, they usually inform their superiors beforehand.
Waste People usually avoid any wastage of stationery. They take are of small issues like number of photocopies made or printouts taken. The stationery being given to employees is being monitored and in exceptional cases, explanations are also required.
Employee turnover In the mortgage loan division, employee turnover is low. This is because of the kind of the work. People switch off the jobs very frequently in this particular segment.
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Experience during the project
When I left the organization after six weeks of my training, I reviewed the whole episode in my mind. I tried to figure out what I had learnt and how my perspectives have changed. I also tried to figure the relation between theory and practice. Overall I got to know roughly the various processes of how the bank gets businesses and how it works accordingly. Also that for each of the branch there is a fixed area of working Basically CENTURION BANK OF PUNJAB bank is a sale driven bank and gives more importance to sales than operations. Because of this reason it has got a completely different sales office where no banking is done and from where all the sales are operated. This office consists of its own army of sales executive and sales officer who have got their own targets to fulfil. Together with this each of the branch has its own sales officer who along with the other employees is responsible for the targets of the particular branch. The branches generally work by leads and references from the existing customers. The targets are also given according to a product that is each product has got its own target. Schemes are also floated regularly to lure more customers and also to get more references. Through out the course of my project I have had tremendous exposure to the corporate world and have gained some real life experience from it. It has become absolutely clear to me that it is one‟s communication skills, which makes his/her a cut above the rest. This project has added relevant/considerable knowledge to our repertoire of the banking sector in India I have experienced how much cut throat competition exists in this sector.
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Banking Today & Tomorrow
The future of Indian Banking represents a unique mixture of unlimited opportunities amidst insurmountable challenges. On the one hand we see the scenario represented by the rapid process of globalisation presently taking shape bringing the community of nations in the world together, transcending geographical boundaries, in the sphere of trade and commerce, and even employment opportunities of individuals. All these indicate newly emerging opportunities for Indian Banking. But on the darker side we see the accumulated morass, brought out by three decades of controlled and regimented management of the banks in the past. It has siphoned profitability of the Government owned banks, accumulated bloated NPA and threatens Capital Adequacy of the Banks and their continued stability. Nationalised banks are heavily over-staffed. The recruitment, training, placement and promotion policies of the banks leave much to be desired. In the nutshell the problem is how to shed the legacies of the past and adopt to the demands of the new age. On the brighter side are the opportunities on account of 1. The advent of economic reforms, the deregulation and opening of the Indian economy to the global market, brings opportunities over a vast and unlimited market to business and industry in our country, which directly brings added opportunities to the banks. 2. The advent of Reforms in the Financial & Banking Sectors (the first phase in the year 1992 to 1995) and the second phase in 1998 heralds a new welcome development to reshape and reorganise banking institutions to look forward to the future with competence and confidence. The complete freeing of Nationalised Banks (the major segment) from administered policies and Government regulation in matters of day to day functioning heralds a new era of selfgovernance and a scope for exercise of self initiative for these banks. There will be no more directed lending, pre-ordered interest rates, or investment guidelines as per dictates of the Government or RBI. Banks are to be managed by
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themselves, as independent corporate organizations, and not as extensions of government departments. 3. Acceptance of prudential norms with regards to Capital Adequacy, Income Recognition and Provisioning are welcome measures of self regulation intended to fine-tune growth and development of the banks. It introduces a new transparency, and the balance sheets of banks now convey both their strength and weakness. Capital Adequacy and provisioning norms are intended to provide stability to the Banks and protect them in times of crisis. These equally induce a measure of corporate accountability and responsibility for good management on the part of the banks 4. Large scale switching to hi-tech banking by Indian Scheduled Commercial Banks(SCBs) through the application of Information Technology and
computerisation of banking operations, will revolutionalise customer service. The age-old method of 'pen and ink' systems are over. Banks now will have more employees available for business development and customer service freed from the needs of book-keeping and for casting or tallying balances, as it was earlier. All these welcome changes towards competitive and constructive banking could not however, deliver quick benefits on account insurmountable carried over problems of the past three decades. Since the 70s the SCBs of India functioned totally as captive capsule units cut off from international banking and unable to participate in the structural transformations, the sweeping changes, and the new type of lending products emerging in the global banking Institutions. Our banks are over-staffed. The personnel lack training and knowledge resources required to compete with international players. The prevalence of corruption in public services of which PSBs are an integral part and the chaotic conditions in parts of the Indian Industry have resulted in the accumulation of nonproductive assets in an unprecedented level. The future of Indian Banking is dependent on the success of its efforts as to how it shakes off these accumulated past legacies and carried forward ailments and how it regenerates itself to avail the new vistas of opportunities to be able to turn Indian Banking to International Standards.
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PSBs in India can solve their problems only if they assert a spirit of self-initiative and self-reliance through developing their in-house expertise. They have to imbibe the banking philosophy inherent in de-regulation. They are free to choose their respective paths and set their independent goals and corporate mission. The first need is management upgradation. We have learnt prudential norms of asset classification and provisioning. More important now, we must learn prudential norms of asset creation, of credit assessment and credit delivery, of risk forecasting and de-risking strategies. The habit of looking to RBI and Government of India to step in and remove the barriers in the way of the Banks should be given a go-bye. NPA is a problem created by the Banks and they have to find the cause and the solution - how it was created and how the Banks are to overcome it. Powerful Institutions can be nurtured by strong and dynamic management and not by corrupt and weak bureaucrats. These issues are discussed with frankness and candour in these pages, under titles listed in the Table of Contents(see Menu Bar at the top), which provide you a direct access to any or all the topics of your choice. Public sector ownership need not result in inefficiency and poor customer service. These are not due to the ills of ownership, but due to failure to accept the correct "Mission" and "Goals" of management. On the other hand unlike several private sector units, Public sector units have specific plus points. They do not evade taxes, and do not accumulate unassessed wealth or unaccounted money. They do not bribe controlling persons to get their way through. They do not indulge in predatory "take over" of weaker rival units. In fact a public unit never competes unethically with its rival-units.
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Learning
Better understanding of the need to plan an activity before attempting to work on it Need to work upon one‟s competencies to maintain an edge in that area Knowledge as a key resource to infinite growth Treating office and private matters separately, taking utmost caution not to mix the two Quality as a measure is achieved when it is beyond the expectation of the person concerned.
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BIBLIOGRAPHY
www.centurionbop.co.in Banking journals. Product manuals. The various circulars of Centurion Bank of Punjab. The various wealth management proposals of Centurion Bank. Centurion Bank‟s Annual Reports Various Magazines and Journals. www.economictimes.com „The 7 C‟s of consulting‟ by Mike Cope
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