ING Vysya Bank-Hrishikesh Jadhav-0529

A Report on Organizational study and Understanding consumer behavior in the purchase of

financial products and services and Competitor analysis with respect to ING Vysya Bank, Bangalore

Submitted in Partial fulfillment for the award of

Masters in Business Administration of Bangalore University

Submitted by Hrishikesh Jadhav

Reg. No: 05XQCM6033

Under the guidance and Supervision of Prof. Nandini Vaidyanathan

M.P.BIRLA INSTITUTE OF MANAGEMENT ASSOCIATES WITH BHARATIYA VIDYA BHAVAN

#43.RACE COURSE ROAD, BANGALORE-560001

2005-07

id21939468 pdfMachine by Broadgun Software - a great PDF writer! - a great PDF creator! - http://www.pdfmachine.com http://www.broadgun.com

M. P. Birla Institute of Management. 2

DECLARATION

I hereby, declare that this internship report entitled

�An Organization Study� at ING Vysya Bank and the project titled

�Understanding consumer behavior in the purchase of financial products

and services and Competitor analysis with respect to ING Vysya Bank�

submitted in partial fulfillment for the award of Master of Business

Administration of Bangalore University is a record of independent work

carried out by me under the guidance of Prof. Nandini Vaidyanathan faculty

member, M. P. Birla Institute of Management Studies, Bangalore.

I also declare that this report is a result of my own effort and has not been

submitted earlier for the award of any degree or diploma of Bangalore

University or any other University.

Place: Bangalore Hrishikesh Jadhav

Date: 07/10/2006 REGD.NO: 05XQCM6033


PRINCIPAL�s CERTIFICATE This is to certify the internship project report entitled

�AN ORGANISATIONAL STUDY� at ING Vysya Bank and the project

titled �Understanding consumer behavior in the purchase of financial

products and services and Competitor analysis with respect to ING Vysya

Bank� has been prepared by Hrishikesh Jadhav bearing the registration No.

05XQCM6033 under the guidance and supervision of Prof. Nandini

Vaidyanathan of M. P. Birla Institute of Management (Associate Bharatiya

Vidya Bhavan), Bangalore. This has not formed the basis for the award of any

degree/ diploma for any university.

.

Place: Bangalore Principal

Date: 07/10/2006 (Dr. N. S. Malavalli)


GUIDE�s CERTIFICATE

This is to certify that the Internship Project Report entitled

�An Organization Study� at ING Vysya Bank and the project titled

�Understanding consumer behavior in the purchase of financial products

and services and Competitor analysis with respect to ING Vysya Bank�

done by Hrishikesh Jadhav bearing Registration No.05XQCM6033 is a

bonafide work done under my guidance during the academic year 2005-06 in

partial fulfillment of the requirement for the award of MBA degree by

Bangalore University. To the best of my knowledge this report has not formed

the basis for the award of any other degree.

Place: Bangalore Prof. Nandini Vaidyanathan

Date: 07/10/2006


Company Certificate


ACKNOWLEDGEMENT

It is my special privilege to extend words of thanks to all of them who have

helped me and encouraged me in completing the internship successfully.

I owe a special debt of gratitude to Ms. Sangeetha Reddy, Manager Marketing

(Branding) ING Vysya House who has been kind enough to permit me to take

up INTERNSHIP STUDY at ING VYSYA BANK LTD. and guide me

constantly throughout my project.

I extend my sincere gratitude to Mr. Vishal Bhan, (HR) ING Vysya House for

giving me the opportunity to do the project at ING Vysya Bank.

I am indebted to my internal guide Prof. Nandini Vaidyanathan for her

encouragement and support for the completion of study.

I extend my sincere gratitude to our Principal Mr. Nagesh Malavalli.

I also wish to express my gratitude to every one who directly and indirectly

helped me through this Internship.


Executive summary

The MBA course offered by the Bangalore University has its own unique syllabus which

requires its MBA students to undertake an internship with any of the leading business houses

for a period ranging from 6 weeks to 8 weeks during the second semester. The purpose of

this internship is to enable the students to appreciate and understand the nuances of the

practical world vis-à-vis the theoretical input administered during regular academic sessions.

This helps in creating Managers who are equipped with the experience of linking the

theoretical inputs with those of practical exposure and come out with creative solutions/ideas

in enhancing the business.

In partial fulfillment of MBA degree of Bangalore University I took up an Organizational

Study at ING Vysya Bank and Understanding consumer behavior in the purchase of financial

products and services and Competitor analysis with respect to ING Vysya Bank

The field of consumer behavior studies how individuals, groups and organization select, buy,

use and dispose of goods, services, ideas, or experiences to satisfy their needs and desires.

The banking industry worldwide has been showing steady progress since 2002. In India total

asset size of the retail banking industry grew at a rate of 120% to reach a value of $66 billion

in 2005. This growth in retail banking sector has helped in the growth of the overall banking

sector. This Project deals with Organization study of ING Vysya Bank and Understanding

consumer behavior in the purchase of financial products and services and Competitor

analysis with respect to ING Vysya Bank�. A questionnaire was prepared, as per the

requirements of the bank. The questionnaires were filled in by the general public with whom

I interacted at various locations in Bangalore city. I had to interview them who gave me their

opinions regarding their primary bank and also about various features and products about

their Bank and their views regarding other banks.


Contents

S. No Contents Page No. Part A

1 About ING Vysya Bank 10 2 Milestones 11 3 Vision 12 4 Introduction to Indian banking system 13 5 Origin of ING Group 14 6 Performance of Bank over decades 16 7 ING Vysya reach and coverage in India 8 Organization structure 20 9 Functional departments 25 10 Practices followed by branches 39 11 Financial results 40 12 Other key Initiatives 47 13 SWOT analysis 48

Part B 49 14 Topic - Understanding consumer behavior in the

purchase of financial products and services and Competitor analysis with respect to ING Vysya Bank

50

15 Consumer understanding 51 16 Objective 52 17 Questionnaire 53 18 Findings 55 19 Inferences 72 20 Recommendations 74 21 Bibliography 75


Part A


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

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

ING of Dutch origin, during Oct 2002.

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

team of visionaries came together to found a bank that would extend a helping hand to those

who weren't privileged enough to enjoy banking services.

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

every area of present-day banking activity and has carved a distinct identity of being India's

Premier Private Sector Bank.

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

made rapid strides to reach the coveted position of being the number one private sector bank.

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

the then Finance Minister Prof. Madhu Dandavate, had termed the performance of the bank

'Stupendous'. The year of 2005 was the 75th anniversary or Platinum Jubilee year.


Milestones of the Bank 1930 Set up in Bangalore 1948 Scheduled Bank 1985 Largest Private Sector Bank 1987 The Vysya Bank Leasing Ltd. Commenced 1988 Pioneered the concept of Co branding of Credit Cards 1990 Promoted Vysya Bank Housing Finance Ltd. 1992 Deposits cross Rs.1000 crores 1993 Number of Branches crossed 300

1996 Signs Strategic Alliance with BBL., Belgium. Two National Awards by Gem & Jewellery Export Promotion Council for excellent performance in Export Promotion

1998

Cash Management Services, & commissioning of VSAT. Golden Peacock Award - for the best HR Practices by Institute of Directors. Rated as Best Domestic Bank in India by Global Finance (International Financial Journal - June 1998) State -of - the -art Date Centre at ITPL, Bangalore.

2000 RBI clears setting up of ING Vysya Life Insurance Company 2001 ING-Vysya commenced life insurance business.

2002

The Bank launched a range of products & services like the Vys Vyapar Plus, the range of loan schemes for traders, ATM services, Smartserv, personal assistant service, Save & Secure, an account that provides accident hospitalization and insurance cover, Sambandh, the International Debit Card and the mi-b@nk net banking service.

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

2002 RBI clears the new name of the Bank as ING Vysya Bank Ltd, vide their letter of 17.12.02

2003 Introduced customer friendly products like Orange Savings, Orange Current and Protected Home Loans

2004 Introduced Protected Home Loans - a housing loan product

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

2006 Saral Savings - No Frills Account for the common man


Vision

INTRODUCTION TO INDIAN BANKING SYSTEM


The effective growth in Indian economy indicates the efficient banking system in India. The

banking system of India should not only be hassle free but it should be able to meet new

challenges posed by the technology and any other external and internal factors.

For the past three decades India�s banking system has several outstanding achievements to its

credit .The Indian banking system has a large geographic and functional coverage

HISTORY:

The first bank in India, through conservative, was established in 1786. From 1780 till today,

the journey of the Indian banking system can be segregated into three distinct phases. They

are:

1. Early phase from 1786 to 1969 of Indian bank.

2. Nationalization of Indian bank and upto1991 prior to Indian banking sector reforms.

3. New phase of Indian banking system with the formulation of Indian financial &

banking sector reforms after 1991.


The Origin of ING Group

On the other hand, ING group originated in 1990 from the merger between Nationale �

Nederlanden NV the largest Dutch Insurance Company and NMB Post Bank Groep NV.

Combining roots and ambitions, the newly formed company called �Internationale

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

followed suit by changing the statutory name to �ING Group N.V.�.

Profile

ING has gained recognition for its integrated approach of banking, insurance and asset

management. Furthermore, the company differentiates itself from other financial service

providers by successfully establishing life insurance companies in countries with emerging

economies, such as Korea, Taiwan, Hungary, Poland, Mexico and Chile. Another

specialisation is ING Direct, an Internet and direct marketing concept with which ING is

rapidly winning retail market share in mature markets. Finally, ING distinguishes itself

internationally as a provider of �employee benefits�, i.e. arrangements of nonwage benefits,

such as pension plans for companies and their employees.

Mission

ING`s mission is to be a leading, global, client-focused, innovative and low-cost provider of

financial services through the distribution channels of the client�s preference in markets

where ING can create value.


The new identity

The immediate benefit to ING Vysya Bank ltd is the pride of having become a member of

global financial services giant, with an asset base of 1159 billion euros (Rs.6490 thousand

crores), net profit of 72.10 billion euros (Rs 40.76 thousand crores) as of December 31st

2005. Further, the presence of the group in over 50 countries, employing over 117000 people,

serving over 60 million customers across the globe, only multiplies the credibility, not only

across the country but also across the globe. The pride of this global identity, the back up of a

financial power house and the status of being the first Indian International bank, would also

greatly enhance productivity, profitability resulting in improved performance for the bank to

translate into higher returns, to all the stake holders.

1 Euro = Rs.56/- (Approx.)


PERFORMANCE OF BANK OVER DECADES In terms of pure numbers, the performance over the decades can be better appreciated from

the following table:

Year

Net

worth Deposits Advances Profits Outlets

1940 0.001 0.4 0.4 0.001 4

1950 1.4 5.3 3.8 0.09 16

1960 1.6 20.1 13.5 0.13 19

1970 3 91.5 62.8 0.74 39

1980 11.5 1414.3 813.7 1.13 228

1990 162.1 8509.4 4584.8 50.35 319

2000 5900 74240 39380 443.1 481

2001 6527 81411.1 43163.1 371.9 484

2002 6863.24 80680 44180 687.5 483

2003 7067.9 91870 56120 863.5 456

2004 7473.2 104780 69367.3 590.01 523

2005 7094 125693.1 90805.9 -381.8 536 2006 1019.67 133350 102320 90.6 575

* Outlets comprises of 374 branches, 57 ECs, 28 Satellite Offices and 101 ATMs.

Additionally bank also has Internet Banking � mi-b@nk and Customer Service Line for

Phone Banking Service.


No of Outlets

0

100

200

300

400

500

600

2001 2002 2003 2004 2005 2006

Outlets

Deposits and advances

0

20000

40000

60000

80000

100000

120000

140000

2001 2002 2003 2004 2005 2006

Deposits

Advances


Net worth

0

1000

2000

3000

4000

5000

6000

7000

8000

2001 2002 2003 2004 2005 2006

Networth


ING Vysya reach and coverage in India

ING ING VysyaVysya Reach and Coverage in Reach and Coverage in IndiaIndia

.

......

.... ... .

.................. ....

.

.........

.........

...

.....

.... .

. ... ... .....

........ ...

. ... . ........ ...... ..

. ......... ............... ... ......... ..... .........

. .....

.... ......... .....

.

.

.

...

.. ..

..

.South is our Home� ING Vysya House�

Karnataka

Andhra

Pradesh

Tamil

NaduKerala

Maharashtra

Orissa

Goa

Madhya Pradesh

Gujarat

Rajasthan

UttarPradesh

Bihar

Punjab

West Bengal

Delhi

Haryana

..

Organization Structure

Board


WB : Wholesale banking

C& IB : Coroprates and Investment banking

Audit Secretarial

DIST & MKTG

Products & Sales

SME

ASB SBU

RCEOs N & E

RCEOs SeAP

RCEOs AP

RCEOs WEST

C & IB

Bank & FGs

Emerging Corporates

HNI Treasury

Backoffice

Derivatives

Finance & A/Cs

HR Legal CRM CAPU CMS IT

Credit Risk

Market Risk

Call centre


HNI : High Networth Individual

SME : Small and Medium Enterprise

CRM : Credit Risk Management

ASB : Agricultural and Social banking

CAPU : Credit Asset Processing Unit

CMS : Cash Management Service

IT : Information Technology

HR : Human Resource

Wholesale banking structure


Regional CEO Wholesale Banking Wilfred Nagel Regional Head of Corporate Clients Malcolm Brown

Country Head

Corporate and investment Banking

Bank & FIs Head

Emerging Corporate Head

Clients Products

Client Coverage Head-India (TBA)

Western & Eastern India

Northern India

Southern India

GL Credit Products Head

Structured Finance Head

Trade Finance Marketing

Cash Management

Investment Banking

Local Debt Products

Credit Admin

Western India

Northern India

Eastern India

Chennai / Kerala

Andhra Pradesh

Karnataka

MD & CEO


Marketing department structure

CEO

RETAIL COUNTRY

HEAD

DISTRIBUTION AND MARKETING HEAD

MARKETING

BRANDING BTL CAMPAIGN MANAGEMENT

CORPORATE COMMUNICATIONS


Retail Banking Structure

MD & CEO

RCEOs

Regional Head

Branch Manager

Branch Ops manager

Branch Associate


Functional Departments

In order to have a focused approach in exploiting the business opportunities in various

business segments, the bank has constituted these business units

1. Retail banking

2. NRI banking services

3. Whole sale banking

4. Financial markets

1. Retail banking

a. Accounts and deposits.

b. Loans

c. Wealth management

d. Cards

e. Payment services

f. Private banking

g. Small and medium enterprises

h. Agricultural and social banking

a. Accounts and deposits.

ING Vysya Bank has a portfolio of banking solutions and a range of offerings for people

from all walks of life, whether they require a simple savings account or a sound banking

partner.

1. Savings Accounts


Orange savings account

Mpower corporate salary account

Solo savings accounts

Saral savings account

2. Current accounts

Orange current account

Advantage current account

General current account

3. Term deposits

Fixed deposit

Cumulative deposits

Akshaya deposit

4. Demat Account

The ING Vysya Bank Demat Account offers a secure and convenient way to keep track of

shares and investments, how much you've bought and sold over a period of time, without the

hassle of handling physical documents that get mutilated or lost in transit.

b. Loans

Personal Loan

Home Loan

Home Equity Loan

NRI Home Loan

c. Wealth Management


ING Vysya Bank, through its 100% subsidiary ING Vysya Financial Services (IVFS) caters

to the investment needs of retail individual investors, small & medium enterprises,

corporates, trusts and associations. Their Wealth Management services provide a full

spectrum of integrated financial services to our clients who get access to an array of

investment avenues like Insurance, Mutual Funds and Government of India Bonds.

Investment products

1. Mutual Funds

As a distributor of Mutual Funds, they have tied up with almost all the Asset

Management Companies thereby assisting the clients to invest in mutual fund schemes,

which meet with their investment requirements

2. Life Insurance

ING Vysya Financial Services is actively engaged in selling ING Vysya Life Insurance

products ING Vysya Life Insurance provides a range of products including endowment,

pension & unit linked plans.

More details on ING Vysya Life Insurance products are available at the link

www.ingvysyalife.com

3. Government of India and tax savings bonds

Their clients can invest through them in 8% Government of India bonds as well as in tax

savings bonds like REC, NHAI and NHB.

d. Cards

http://www.ingvysyalife.com


ING Vysya Bank's Credit and Debit Cards give convenient access to our account at any

place and any time.

1. Credit card

Their International Credit Card is accepted at 30 million establishments worldwide! This card

also entitles to a reduced service charge on cash withdrawals from ATMs & no petrol

transaction fee

2. Debit card

The ING Vysya Bank's International Debit Card, powered by MasterCard,. This card lets you

access your bank account from anywhere, any time through a wide range of ATM networks

and use at merchant establishments for purchases

e. Payment services

This feature is to make payments conveniently and promptly with Demand Drafts, Pay

Orders, and Payable at Par cheques, Telegraphic Transfers and the RTGS scheme.

1. Bill Pay

This is their payment service - Bill Pay. With this facility customers will never have to go

through queues to pay their bills. All they need to do is instruct the bank and the bill amounts

will be deducted from their account.

2. Smartserv

Smartserv is a comprehensive personal assistance service brought by ING Vysya Bank in

association with Les Concierges. Designed exclusively for customers of ING Vysya Bank,

Smartserv runs day-to-day errands and completes mundane chores. This facility is available

free of charges with the Orange Savings account.

f. Private Banking


The Private Banking Program offered through ING Vysya Bank is an exclusive Wealth

Management Service offered to a select group of individuals and institutions with a minimum

portfolio size of Rs.50 lakhs and above.

ING was the first bank to offer private banking services in the country and is amongst the top

20 banks worldwide offering private banking services* ING Private Banking is a global

network of over 2000 private banking professionals, managing 55 Billion euros for their

clients in 15 countries, ING Vysya Bank combines sound investment philosophy, total

transparency and a comprehensive range of products and services to give customers an end-

to-end solution to all their wealth management needs.

ING Vysya Bank Private Banking aims to give the best advice on your portfolio by giving

customized solutions and exclusive client management. The 3-stage process followed by

their wealth managers is:

Wealth Creation

Wealth Preservation

Wealth Transmission

g. Small & Medium Enterprises

ING Vysya Bank has a track record of serving SME Customers for over 75 years. They

understand how much of hard work goes into establishing a successful SME and that

establishing and running a successful business takes hard work, money and planning. ING

Vysya Bank looks not only at immediate banking requirement, but also the long-term needs

of business as it expands.

Their solutions are designed to meet varying needs. They offer a complete range of banking

services to small & medium sized corporates such as Business Accounts, Working capital,

Cash Management Services, Trade Finance, Other Non Funded Facilities and Term Loans for

Business Expansion. In addition they also offer specific structured products to SSI's, Traders,

Distributors and other SME customer


1. Business Loans - MPower Business Loans Trade

Small business entrepreneurs often encounter problems regarding finance. ING Vysya

Bank presents a unique banking loan, specially customized for Small & Medium Business

Enterprises.

These loans are available for Small Business Entrepreneurs, Retailers, Shop

owners, Contractors, Commission Agents and Transport Operators as well as practicing

professionals like Doctors, Lawyers, Consultants, Women Entrepreneurs and any others with

a credit requirement ranging from Rs. 5 lakhs upto Rs. 50 lakhs

2. Business Loans � Rent

The MPower - Rent offers loans against the security of rent receivables. Individuals,

proprietary concerns, partnership firms, public and private limited Companies, trusts and

registered bodies who meet the eligibility criteria will be able to secure fast finance for their

businesses.

3. Business Loans - Small Scale Industries Loans (SSI)

ING Vysya Bank offers loans to Small Scale Industries at competitive interest rates

without any collateral security.

Credit Guarantee Fund Trust for Small Industries [CGTSI]

ING Vysya Bank is one of the member lending banks for CGTSI. ING Vysya Bank Ltd

offers loans of up to Rs.25 lakhs to SSI units under CGTSI at competitive interest rates

without any collateral security and / or third party guarantee. In addition the guarantee fee

payable to CGTSI would be debited to the account.


4. MPower Business Account (MBA)

Business Enterprises, Traders, Exim Houses, Wholesalers, Commission Agents,

Contractors, Transport Operators, Professionals and Mid-sized companies including

manufacturing / processing units.

h. Agricultural & Social Banking

1. Term Loans

They have redefined Rural Banking in terms of products and services. Providing a boost to

the potential existing in the rural sector, term loans are categorized into these segments.

Poultry.

Dairy

Wells.

Pump sets.

Tractors/Power Tillers.

Plantation Crops.

Horticulture Crops.

Rural Godowns / Cold storage units.

Rural Housing.

Microfinance Institutions / Self Help Groups

2. Short Term Loans

Providing a boost to the potential existing in the rural sector, they provide short term loans

to the rural sector short terms loans are categorized into these segments

KISSAN CREDIT CARD / Crop Loans.

Working Capital Loans to Poultry / Fisheries etc.

Gold Loans for Agriculture / General Purposes.

Produce loans against Warehouse Receipts / against pledge of Stocks of Agri

Produce.


2. NRI BANKING SEVICES They have special banking services and products for Non Resident Indians to help them

Investment in securities/shares and deposits of Indian firms/companies

maintenance of bank accounts in India

Investment in immovable property in India

Investment in Mutual Funds in India

1. Accounts and Deposits

a. Rupee Savings Accounts

This account is for NRIs if they have any investments to be made both on a

repatriable and non-repatriable basis,

NRE savings account

NRO savings accounts

b. Rupee Current Accounts

NRE and NRO Rupee Current Accounts that come with a host of convenient Banking

options.

NRE current accounts

NRO current accounts

c. Rupee Fixed Deposits

Deposits in Indian Rupees, which can be fully repatriated at any time. Twin

advantages of affordability and higher earnings�

NRE fixed deposit

NRO fixed deposit

NRE akshaya deposit

NRO akshaya deposit

NRE cumulative deposit

NRO cumulative deposit


d. Foreign Currency Deposits

These deposits are to earn Indian Interest Rates on Foreign Currency deposits with their

Foreign Currency Non-Resident Deposits

FCNR fixed deposit

FCNR akshaya deposit

e. Accounts for Returning Indians

RFC Savings account, Fixed Deposit and Akshaya Deposit allows holding deposits in any

one of four currencies (USD, Pounds Sterling, Euro)

RFC savings accounts

RFC fixed deposit

RFC akshaya deposit

2. NRI HOME LOANs

ING Vysya Bank's NRI Home Loans are offered to all NRI's on their return to India for the

purchase, construction, repair/renovation/alteration of a house or a composite loan for self

occupation.

a. Loan Amount - Minimum amount of the loan is Rs.5 Lakhs and Maximum amount is

Rs.100 Lakhs.

3. Remittances - Mi-remit

Mi-remit is a quick and easy way of remitting funds to India. All that is needed to do is

access the internet, choose the mode of transfer and remit funds online. This user-friendly

service saves time and money transferring funds to over 350 locations across in India.

3. Wholesale Banking

Wholesale Banking is a reflection of ING Vysya Bank's ability to provide its corporate

clients in India a full range of commercial, transactional and electronic banking products.

The bank offers a wide array of client-focused corporate banking services, including working


capital finance, trade and transactional services, foreign exchange and cash management.

A well-integrated approach to relationship management and innovative product development

helps the bank achieve the above. The offerings take into account a client's risk profile and

specific needs. The bank has made significant inroads into the formal banking consortia of a

number of Indian companies including multinationals, domestic business houses and prime

public sector companies, based on our superior product delivery, industry benchmark service

levels and strong customer orientation.

a. Credit Products and Structured Finance

The bank understands the importance of providing working capital finance and structured

finance facilities to their clients. Which is why, they have special groups, working on newer,

better ways to help manage money of their clients.

b. Offshore Borrowings

With the bank's strong capabilities in lead managing, underwriting and syndicating foreign

currency loan offerings, we excel at external commercial borrowings, particularly offshore

foreign currency loans to large Indian clients. They have two teams

Origination and execution teams based in India

The strong distribution team based in Singapore.

c. Investment Banking, Local Debt Syndication and Securitisation

The bank is uniquely positioned to be able to advice, lead manage and place, thus giving

the customer the advantage of being a full fledged Commercial Bank along with investment

banking. As a Category I merchant banker registered with SEBI, the bank has an advanced

product portfolio that includes the following:

Financial advisory services for mergers and acquisitions, capital and debt

structuring and restructuring, private capital raising and structured financing. This

includes onshore as well as offshore


Local debt distribution, both in loan and bond forms, including plain vanilla debt

and structured debt.

Securitization - We advise our clients on securitizing their assets with a view to sell

them. Our services include advisory, structuring portfolios, assist in obtaining ratings

for the portfolios & sell-down of the portfolio.

The investment banking services are provided to a range of Indian as well as offshore clients.

For cross border transactions involving global clients, the investment-banking group works

closely with ING Bank's global corporate finance and investment banking offices

d. Trade Finance and Commodities

As an innovative solution provider of international and domestic trade flows of their

clients, they offer an entire range of trade finance products. The product suite, offered in

close co-ordination with the ING global network of structured trade finance units includes

documentary credit, guarantees, bills/ invoices discounting, supply chain financing, pre/post-

export finance and structured trade/commodity finance.

1. Letters of Credit: Letter of credit facilities (inland/ foreign) are provided to the customers

for meeting working capital requirement needs as well as for capital equipment purchases.

2. Guarantees: Guarantees are issued on behalf of the domestic and international customers

in favour of corporations and government authorities. In addition, as a part of their project

financing activity, they issue guarantees to foreign lenders, export credit agencies and

domestic lenders on behalf of the clients.

3. Bill Discounting: Bill discounting involves financing of short-term trade receivables

through negotiable instruments/ invoices discounting. This has gained considerable

importance in recent past in view of self-liquidating nature.


4. Supply Chain Financing (SCF): SCF refers to trade credit extended by the Bank to

partners involved in comprehensive supply chain process (commodities to cash) commencing

from conversion of raw material into parts/ components, consumed by big manufacturers and

thereafter sold to ultimate consumers through dealers. Core objective is to provide integrated

financial solution to the supply and distribution channels of their corporate clients.

5. Export Credit: ING Vysya provides extensive export credit for pre-shipment and post-

shipment requirements of exporter borrowers in rupees and foreign currencies. They also

arrange discounting of bills under export LCs by overseas banks at competitive pricing with/

without recourse to the exporters.

6. Import Finance: import finance (buyers / suppliers credit) under LCs opened by various

Indian banks for import of raw material as well as capital equipment

e. Cash Management Services

Understanding the customer's need for prompt and efficient cash management services, the

bank has come out with a variety of solutions to meet the complex collection and payment

requirements of various businesses.

The bank has field specialists who guarantee a flexible response to customer's needs as and

when required. Expert advice from them also ensure that the products and solutions decrease

interest costs, help manage funds efficiently and keep a trail of transactions through web-

enabled support

4. FINANCIAL MARKETS


Management of risk continues to be one of the most important aspects of running

successful businesses. They mainly concentrate on providing solutions and services for

managing different risks in business, dealing in foreign currency for import/export or short

term assets or liabilities.

a. Market Making & Trading

The Market Making unit provides competitive prices on all major currency and interest

rate products to the client facing Financial Market Sales teams as well as to other market

participants. The product range includes the Indian Rupee, all major currencies, FX Swaps,

Government of India Securities, Corporate Debt and most Rupee Interest Rate benchmarks

including the Overnight Index Swaps and MIFOR. ING Vysya Bank is one of the largest and

most competitive price makers in Indian Rupee.

b. Asset Liability Management

The ALM unit of Financial Markets plays a pivotal role in the formulation and

implementation of the bank's Asset Liability Management strategy. The ALM team manages

the banks statutory and investment portfolios. It is also responsible for managing liquidity

and interest rate risk and plays an active role in the management of Transfer Pricing within

the bank.

c. Financial Market Sales

Financial Markets Sales team offers solutions to clients for their varied risk management

needs. The Sales team is geographically distributed across offices in Delhi, Mumbai,

Bangalore and Chennai. Strong client relationships acquired over the bank's 75 years of

service in the Indian markets augment their understanding of customer needs and risk

management requirements.

The sales team is supported at each location by information systems providing

comprehensive and up-to-date market information, tools for analysis and access to research


from the ING Group and ING Vysya Bank. The sales teams use some of the most advanced

pricing systems so as to be able to structure and price across a wide range of products.

To aid this the Sales team is supported by a niche Structuring desk that, apart from helping in

product structuring based on both client needs and market opportunities, helps in efficient

execution of mandates

d. Products and Services

Foreign Exchange Transactions

They offer currency conversions, trading, hedging and investment solutions in G-10 and

other emerging currencies for all business needs. ING Vysya Bank is one of the leading

players and best price makers in the India Rupee Spot market

e. Money Market Products

They assist their clients in their liquidity and cash flow management through a number of

instruments, which include

Certificates of Deposit

Corporate Bonds

Commercial Paper

Repurchase Agreements

OTC deposits


PRACTICES FOLLOWED BY BRANCHES:

1. Display business hours.

2. Renders equitable and courteous services.

3. Attending to all customers present in the banking hall at the close of business hours.

4. Provides separate 'Enquiry' or 'May I Help You' services with dedicated

�Customer Care Officers� at select branches.

5. Offers nomination facility to all deposit accounts (i.e. account opened in individual

capacity).

6. Displays prevailing interest rates for various deposit accounts.

7. Notifies change in interest rates on advances through specific communication to

borrower.

8. Provides details of various deposit schemes/services of the Bank

9. Issues Demand Drafts, Pay Orders, Mail Transfer, Telegraphic Transfers, etc.

10. Completes the transactions within reasonable time.

11. Provides complaint or suggestion box in the premises of branch.

12. Displays address of Customer Care Unit and Regional office dealing with customer

grievances/complaints.

13. Make available the product literature / brochures of the products / services offered

by the bank.


FINANCIAL RESULTS

Significant business performance

The total deposits the Bank stood atRs.13,136 crore as on 30 June 2006,

compared toRs.12,606croreas on 30 June 2005, recording a growth

(Y-on-Y) of 4.20% .

Net Advances stood at Rs.9,578 crore as on 30 June 2006, compared

toRs.9,011croreas on 30 June 2005, recording a growth (Y-on-Y) of 6.29%

Investments of the Bank stood atRs.4,268 crore as on 30 June 2006, compared

toRs.4,319croreas on 30 June 2005.

The number of branches as on 30 June 2006 stood at 392 and the Bank�s ATM

network stood at 123 (including 11 Self Bank ATM�s)


Key figures 2005-06 2004-05 % change

Net Interest income 481.19

356.76

34.88

Other Income 190.31

122.67

55.14

Total income 671.50

479.43

40.06

Operating Costs 518.79

380.10

36.49

Pre provision profit 152.71

99.33

53.74

Provisions and contingencies 131.19

172.77

-24.07

Profit before tax 21.52

(73.44)

129.30

Provision for tax 12.46

(35.26)

135.34

Profit after tax 9.06

38.18)

123.73







Other Key Initiatives

The Bank opened eight new branches, including the conversion of an existing extension

counter (EC) to a branch, bringing the total number of branches and ECs of the bank to 377

and 56 respectively. The bank also operates 28 satellite offices. With the increased emphasis

on automation, a total of 368 offices are now connected to the networked core-banking

platform.

The ATM network of the bank reached 114 machines, which is inclusive of nine Self Bank

outlets opened in Bangalore. These Self Banks are a unique concept introduced by ING as a

first in the country.

The bank also launched Mi-remit, an Inbound Money Transfer Service from the U.S.A. The

service offers a secured online mode of remitting money by any non-resident Indian in the

U.S.A. to a beneficiary in India -24 hours a day, 7 days a week. It is offered by the Bank in

association with

TimesofMoney Limited, which has provided the technology and back-end services.

CRISIL has reaffirmed its rating of �AA+/Stable� for the Bonds raised by the bank.


SWOT Analysis

Strength

1. ING groups world wide presence and image has enhanced its credibility. And it has the

back up of the Financial power house.

2. Long standing relationships with clients

3. Hi story of reliable banking

4. Customer friendly product line

Weakness

1. No strong brand power, when compared to Citibank or SBI.

2. People still associate it with traditional Vysya bank and are not completely aware of all its

latest facilities.

3. Its presence is mainly concentrated in south India.

4. Visibility of the brand is less when compared to other banks.

Opportunities

1. The economy is booming and there is an increasing openness to International firms.

India is having a growing consumer class.

2. The retail banking sector is expected to grow at 120%, so it offers good opportunities to

grow and increase the customer base

3. Tremendous opportunity in Salary accounts of companies to increase transactions

Threats

1. Banks like ICICI, UTI etc. that is all the new generation private sector banks.

2. Most of these banks offer similar products, facilities and features.


Part B


Understanding consumer behavior in the

purchase of financial products and services and Competitor analysis with respect to

ING Vysya Bank


Consumer Understanding

The field of consumer behavior studies how individuals, groups and organization select, buy,

use and dispose of goods, services, ideas, or experiences to satisfy their needs and desires.

Category- Retail Banks

The banking industry worldwide has been showing steady progress since 2002. Much of the

growth in the worldwide banking industry can be attributed to the surge in the retail-banking

sector in the Asia Pacific region. In India total asset size of the retail banking industry grew

at a rate of 120% to reach a value of $66 billion in 2005. This growth in retail banking sector

has helped in the growth of the overall banking sector. In future the retail banking industry in

India is likely to reach a value of $300 billion by 2010. Competition is fierce, particularly

from local private banks such as HDFC and ICICI, in the business of home, car and

consumer loans There are two main reasons behind this. Firstly, it is now undeniable that the

face of the Indian consumer is changing. This is reflected in a change in the urban household

income pattern. The direct fallout of such a change will be the consumption patterns and

hence the banking habits, which will now be towards Retail products.


Objective: The aim of the project was to understand consumer behavior in the purchase of financial

products and services and Competitor analysis with respect to ING Vysya Bank

Research topic given as a part of the internship was �understanding consumer behavior in the

purchase of financial products and services and Competitor analysis with respect to ING

Vysya Bank�.

Design

A copy of the questionnaire is given below, formulated by me as per the

requirements of the bank. The questionnaires were filled in by the general public with whom

I interacted at various locations in Bangalore city, like Garuda Mall, Bangalore Central, The

Forum, and in the vicinity of various companies and at the various bank ATMs�(apart from

ING Vysya). I had to interview general public who would give me their opinions

Regarding their primary bank and also about various features and products about their Bank

and their views regarding other banks.

Approach �

Qualitative study with a random sample size of 90


Questionnaire Name : __________________________________ (Tick the appropriate) Occupation : Student ( ) Salaried ( ) Self employed ( ) Retired ( ) Others ( ) Gender : Male/Female Age Group : 18-25 ( ) 26-35 ( ) 36-45 ( ) 45-above ( )

1. Are you a customer of these banks? (Tick the appropriate) SBI ( ) CITIBANK ( ) ING Vysya ( ) ICICI ( )

Others ___________________

2. How would you rate the following on a 5 point scale?

3. How do you associate the following banks against these parameters?

Parameter Points Performance Customer friendly Promised Delivery ATM access

Banks Trustworthy Aspiration Easy to deal

Customer Satisfaction

Speedy process

Delivers on Promises

Citibank HDFC HSBC ICICI ING Vysya SBI Stan Chart UTI


4. How often do you visit the bank branches and ATMs? (Tick the appropriate)

5. How often do you visit other bank ATMs and for what reason?

(Tick the appropriate) ATM not functioning ( ) Emergency ( ) Proximity ( ) No Cash ( )

6. How would you rate your present bank? (Tick the appropriate) Excellent ( ) Good ( ) Bad ( ) Worse ( )

7. How long have you been with your present bank_______________. 8. Which of the following products you use of your bank? (Tick the appropriate)

Credit card ( ) Home loan ( ) Personal loan ( ) Vehicle loan ( ) Others ( )

9. What is your opinion about celebrity endorsement on Ads? (Tick the appropriate) Good ( ) Bad ( )

10. Do you think celebrity endorsement influences people to stick to a product or shift products? (Tick the appropriate) Yes ( ) No ( )

Thank you for your co-operation ------------------------------------------------------------------------------------------------------------

Branches ATMs Once a week Twice a week Once in a month Others

ATMs Once a week Twice a week Once in a month Others


FINDINGS


OCCUPATION

7%

90%

3%

0%Student

Salaried

Self employed

Retired

90% of the respondents were salaried .

7% of the respondents were students

3% of the respondents were self employed

GENDER

64%

36%Male

Female

Of the 90 respondents interviewed

64% of them were male and 36% were female.


INCOME GROUP

25%

40%

24%

11%Less than15000

15000-25000

25000-40000

40000 & above

Income group

25% of them in the income group less than Rs.15,000 p.m.

40% of them in the income group Rs.15,000-25,000 p.m.

24% of them in the income group Rs.25,000-40,000 p.m.

11% of them in the income group Rs.40,000 p.m. and above.

Age Group

Age Group

39% of them were in the age group between 18-25 years,



2 % of them were in the age group between 45 and above.

39%

49%

10% 2%18-25

26-35

36-45

45 &above


Primary banks

34% of the respondents had a primary bank account of Citibank,

30% of the respondents had a primary bank account of ICICI,

13% of the respondents had a primary bank account of HDFC,

9% of the respondents had a primary bank account of SBI,

7% of the respondents had a primary bank account of HSBC,

3% of the respondents had a primary bank account of UTI,

3% of the respondents had a primary bank account of Stan Chart.

1% of the respondents had a primary bank account of Andhra Bank

13%

34%

9%

30%

3%7% 3% 1%

HDFC

Citibank

SBI

ICICI

UTI

HSBC

STAN CHART

ANDHRABANK


The respondents were asked to rate the parameters like Performance, Customer friendly,

Promised Delivery, ATM access on a 5 point rating scale

.

Of the above parameters ATM access, received a maximum rating of 31%.

26% for customer friendly, 23% for promised delivery and 20% Performance

Rating of parameters

20%

26%23%

31% Performance

Customer friendly

Promised Delivery

ATM access


Association of bank of against parameters

Citibank came across as the Aspiration bank for the customers followed by Easy to deal with. HDFC bank came across as the most Easy to deal with Bank, followed by Customer friendly.

CITIBANK

1%

55%24%

7%

12%

1%

Trustworthy

Aspiration

Easy to deal with

Cust friendly

Speedy process

Delivers onPromises

HDFC

7% 2%

47%31%

11% 2%

Trustworthy

Aspiration

Easy to deal with

Cust friendly

Speedy process

Delivers onPromises


HSBC Bank also came across as the most Aspiration bank on par with Citibank, followed by Easy to deal with. ICICI Bank came across as the most Customer Friendly bank followed by Easy to deal with.

HSBC

4%

54%22%

10%6% 4%

Trustworthy

Aspiration

Easy to deal with

Cust friendly

Speedy process

Delivers onPromises

ICICI

3%0%

38%

51%

7%

1%

Trustworthy

Aspiration

Easy to deal with

Cust friendly

Speedy process

Delivers onPromises


ING Vysya came across as trustworthy bank followed by delivers on promises SBI came across as a trustworthy bank followed by both easy to deal with and delivers on promises

ING Vysya

69%0%

8%

5%

0% 18%

Trustworthy

Aspiration

Easy to deal with

Cust friendly

Speedy process

Delivers onPromises

SBI

83%

0%

8%

0%

1%

8%

Trustworthy

Aspiration

Easy to dealwithCust friendly

SpeedyprocessDelivers onPromises


Stan Chart came across as an Aspiration bank followed by customer friendly UTI came across as a customer friendly bank followed by easy to deal with.

Stan Chart

16%

25%

11%21%

11%

16%

Trustworthy

Aspiration

Easy to deal with

Cust friendly

Speedy process


UTI

2%

0%

29%

43%

22%4%

Trustw orthy

Aspiration

Easy to deal w ith

Cust friendly

Speedy process



The respondents were asked how often they visited their bank branches and ATMs.

49% of the respondents said they visited the branches once a month

7% of the respondents said they visited the branches once a week

2% of the respondents said they visited the branches twice a week

42% of the respondents said they visited the branches others (greater than one month)

Visit to Branches

7% 2%

49%

42%

Once a week

Twice a week

Once a month

Others


The respondents were asked how often they visited the ATMs

Visit to ATMs

69%

25%

5% 1%

Once a week

Twice a week

Once a month

Others

69 of the respondents said they visited the ATMs once a week

25 of the respondents said they visited the ATMs twice a week

5 of the respondents said they visited the ATMs once a month

1 of the respondents said they visited the ATMs


The respondents were asked the main purpose for which they visited the other bank ATMs

REASON FOR VISITING OTHER BANK ATMs

15%

41%19%

25% ATM notfunctioning

Emergency

Proximity

No cash

41% of the respondents said Emergency

25% of the respondents said No cash

19% of the respondents said Proximity

15% of the respondents said ATM not functioning


The respondents were asked to rate their experience with their bank as Excellent

Good

Average

Bad

Worse

Rating customer gives for his/her bank6%

84%

3% 5% 2%

Excellent

Good

Average

Bad

Worse

84% of the respondents said their bank(current bank) was Good

6% of the respondents said their bank(current bank) was Excellent

5 % of the respondents said their bank(current bank) was Bad

3% of the respondents said their bank(current bank) was Average

2% of the respondents said their bank(current bank) was worse


The respondents were asked how long they have been associated with their present bank

Customer relationship with his/her in average no of Yrs

2.95 3.26 3.28

7.63

2.822.17

3.27

7

0123456789

HDFC

CIT IBANK

ICIC

ISBI

HSBC UT I

STANCHART

ANDHRA BANK

Banks

Ye

ars

HDFC

CITIBANK

ICICI

SBI

HSBC

UTI

STANCHART

ANDHRA BANK

SBI had a maximum no of years (7.63)


The respondents were asked which of these products they use of their bank

Credit card

Home loan

Personal loan

Education loan

Vehicle loan

Others

Products customer uses of his/her bank

71%

7%

10%

7% 4% 1%

Credit card

Home loan

Personal Loan

Educational Loan

Vehicle Loan

Others

71% of the respondents said credit card

10% of the respondents said personal loan

7% of the respondents said home loan

7% of the respondents said educational loan

4% of the respondents said vehicle loan

1% of the respondents said others


The respondents were asked about their opinion on celebrity endorsement

Opinion about Celebrity endorsement

67%

33%

Good

Bad

67% of the respondents said good

33% of the respondents said bad


The respondents were asked if celebrity endorsement influences people to stick to a product

or shift products

Celebrity Influence on customer

34%

66%

Yes

No

66% of the respondents said it does not influence them

34% of the respondents said it does not influence them


Inferences

1. Most of the respondents had Citibank as their primary bank. Of the respondents

interviewed 34% had a Citibank a/c, 30% ICICI, 9% SBI, 13% HDFC, 7%HSBC as their

bank.

2. The respondents were asked to rate the parameters like Performance, Customer friendly,

Promised Delivery, ATM access on a 5 point rating scale.

3. Of the above parameters ATM access, received a maximum rating of 31%. 26% for

customer friendly, 23% for promised delivery and 20% Performance.

4(a) The most aspirational Bank is Citibank, HSBC comes a closes 2nd followed by

StanChart.

(b) The most trustworthy bank is SBI followed by ING Vysya and Stan Chart.

HDFC toped the list of the bank being the most easy to deal with followed by ICICI and

UTI came 3rd

(c) ICICI came across as the most customer friendly bank followed by UTI and HDFC.

(d) UTI came across as the bank with the most speediest process of various transactions

followed by Citibank, both StanChart and HDFC cam 3rd in this

(e) ING Vysya came across as the bank which delivers its promises followed by StanChart

and SBI came 3rd in this

5. Since 69% of the respondents visit their ATM once a week ATM accessibility came across

as the most important aspect expected from a bank.

Respondents used the other bank ATMs in times of emergency and when their own banks

ATMs did not dispense cash or were not accessible.


6. 84 % of the respondents when asked to rate their experiences with their present bank rated

good, with just 6 % of them rating their primary bank as excellent and 5% of the

respondents rated their bank worse.

7. SBI came across as the bank having the highest relationship with their customers in

average number of years followed by Andhra Bank followed by Stan chart.

8. Credit card was the most availed product of any bank followed by personal loans. Home

loans and education loans was the preferred 3rd option

9. Though the respondents felt that celebrity endorsements are good, they would not be

influenced into making a purchase decision because of it.


Recommendations

1. ATM accessibility is a very important aspect for an bank, so its imperative to have a very

good ATM Network.

2. Easy to deal with and customer friendly, speedy processes are very important for a bank

which goes on to prove that the above three parameters go a long way in building customer

base and rapport with them.

3. Delivering on promises and being trustworthy is the other really important factor

according to respondents.

4. On the whole, an positive interaction with the customers (customer care) helps in

generating sustaining long term relationships the with the clients.

5. Internet banking is the most used facility by the people now and customers hardly visit

branches, they prefer to do all their transactions on the internet. So it is important to have

an excellent internet banking facility.

6. Banks should have other products like Insurance and Mutual funds, which should be

marketed aggressively and the existing client base because these are the most preferred

option.

7. Most of the customers are happy with their present bank so we need to create any extra

facility to make customers inclined towards our bank. Like tie-ups with various outlets,

having petro card, etc.

8. Should have tie ups with corporates� to have corporate salary accounts so as to increase

customer base which in turn increases transactions.


Bibliography

Websites 1. http://www.ingvysyabank.com 2. http://www.moneycontrol.com 3. http://economics.about.com/cs/finance/a/india_banking.htm 4. http://www.google.com. 5. http://www.banknetindia.com/banklinks.htm

Books 1. Research design by Kothari. 2. Marketing Management by Philip Kotler.

http://www.ingvysyabank.com

http://www.moneycontrol.com

http://economics.about.com/cs/finance/a/india_banking.htm

http://www.google.com

http://www.banknetindia.com/banklinks.htm

Date post:	06-Apr-2015
Category:	Documents
Upload:	amit-tripathi
View:	756 times
Download:	5 times

ING Vysya Bank-Hrishikesh Jadhav-0529

Documents