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ing in the banking services is substantially influenced by the happenings data, which is supplied by the marketing intelligence system. A bank manager carries on marketing intelligence mostly by reading newspaper, weeklies, trade publications and even by talking to the customers. To get an optimal result from the marketing intelligence, it is essential that the banking organizations evince interest anizations are supposed to know and understand the changing requirements of different categories of farmers.
Industrial sector: The banking organizations subserve the interests of the industrial sector. The large- sized, test the effectiveness before launching of the commercial advertisements.
priority basis and the policy makers at the apex level make possible value-orientation. The problem of inefficiency if not arrested at the beginning stage is likely to infect the entire process.
Incentives, of course, inject efficiency and the organizations offering more incentives succeed in motivating the people. In the Ie foreign banks have no option but to manage their physique and personal has played a major role in the development not of the financial product itself but of the process whereby the service is delivered. Automated queuing systems have made visits to the bank easier and more convenient. Telephone banking and insurance services such as First Direct and Direct Line are examples of telecommunications technology being used to innovate in place of a traditional branch-based service process.
Technology has also played a major role within organizations, bringing about far greater efficiency through computerized records and transaction systems and also in business development, through the setting up of detailed customer databases for effective segmentation and targeting. The Bristol and West Building Society has implemented a highly sophisticated customer database which provides staff with customer profiles so that cross-selling opportunities across a range of services can be maximized when staff are in contact with customers, or later, via direct mail for example.
The main technological developments fall within these categories, therefore:
Process developments
Information storage and handling
Database systems

Product technology is of relatively minor importance within the financial services market place as product innovations are usually in the form of a change in the terms of services offered or slightly different services at lower charges or higher rates of interest. It is easy for competitors to follow suit or make other changes and, once the decision has been made, promotion and advertising the new or revised service will help to make it successful rather than any kind of technological refinements. Some physical developments relating to technology in the production of credit cards have taken place such as the imprinting of a hologram on cards to help prevent forgery.














CATEGORISATION OF BANKS IN INDIA

The Indian banking can be broadly categorized into nationalized (government owned), private banks and specialized banking institutions. The Reserve Bank of India acts a centralized body monitoring any discrepancies and shortcoming in the system. Since the nationalization of banks in 1969, the public sector banks or the nationalized banks have acquired a place of prominence and has since then seen tremendous progress. The need to become highly customer focused has forced the slow-moving public sector banks to adopt a fast track approach. The unleashing of products and services through the net has galvanized players at all levels of the banking and financial institutions market grid to look a new at their existing portfolio offering. Conservative banking practices allowed Indian banks to be insulated partially from the Asian currency crisis. Indian banks are now quoting a higher valuation when compared to banks in other Asian countries (viz. Hong Kong, Singapore, Philippines etc.) that have major problems linked to huge Non Performing Assets (NPAs) and payment defaults. Co-operative banks are nimble footed in approach and armed with efficient branch networks focus primarily on the ‘high revenue’ niche retail segments.
The Indian banking has finally worked up to the competitive dynamics of the ‘new’ Indian market and is addressing the relevant issues to take on the multifarious challenges of globalization. Banks that employ IT solutions are perceived to be ‘futuristic’ and proactive players capable of meeting the multifarious requirements of the large customers base. Private banks have been fast on the uptake and are reorienting their strategies using the internet as a medium The Internet has emerged as the new and challenging frontier of marketing with the conventional physical world tenets being just as applicable like in any other marketing medium.
The Indian banking has come from a long way from being a sleepy business institution to a highly proactive and dynamic entity. This transformation has been largely brought about by the large dose of liberalization and economic reforms that allowed banks to explore new business opportunities rather than generating revenues from conventional streams (i.e. borrowing and lending). The banking in India is highly fragmented with 30 banking units contributing to almost 50% of deposits and 60% of advances. Indian nationalized banks (banks owned by the government) continue to be the major lenders in the economy due to their sheer size and penetrative networks which assures them high deposit mobilization. The Indian banking can be broadly categorized into nationalized, private banks and specialized banking institutions.
The Reserve Bank of India act as a centralized body monitoring any discrepancies and shortcoming in the system. It is the foremost monitoring body in the Indian financial sector. The nationalized banks (i.e. government-owned banks) continue to dominate the Indian banking arena. Industry estimates indicate that out of 274 commercial banks operating in India, 223 banks are in the public sector and 51 are in the private sector. The private sector bank grid also includes 24 foreign banks that have started their operations here. Under the ambit of the nationalized banks come the specialized banking institutions. These co-operatives, rural banks focus on areas of agriculture, rural development etc., unlike commercial banks these co-operative banks do not lend on the basis of a prime lending rate. They also have various tax sops because of their holding pattern and lending structure and hence have lower overheads. This enables them to give a marginally higher percentage on savings deposits. Many of these cooperative banks diversified into specialized areas (catering to the vast retail audience) like car finance, housing loans, truck finance etc. In order to keep pace with their public sector and private counterparts, the co-operative banks too have invested heavily in information technology to offer high-end computerized banking services to its clients.






























BEST BANK 2004


The notion that banks are the only lenders in town is clearly dead, with disintermediation blurring past distinctions. If the traditional view of banks has indeed been junked, the task of picking a winner among the lot becomes that much tougher. One has to go beyond just size and balance sheet numbers, and look at how individual banks are responding to their specific market realities and challenges. The business India panel, which got down to act of selecting the best on 17th July at the Oberoi’s Belvedere, comprised eminent voices from the field of high finance.
The numbers were discussed first. The panel was unanimous in its view that a high capital adequacy ratio in itself meant little. “We should look at the future direction of these banks. Three or four years ago the bank with the highest capital adequacy would have been the winner,” observed a panelist.

The parameters
At long last the panel came to a consensus on the critical parameters: capital adequacy, net non-performing assets, the advances-to-assets and g-secs-to-advances ratio, and spread. The 12 banks that made it to the last lap were Amro Bank, Bank of Baroda, Canara Bank, Citibank, HDFC Bank, HSBC, ICICI Bank, Jammu & Kashmir Bank, Kotak Mahindra Bank, Punjab National Bank (PNB), SBI, and Union Bank of India. Two others, UTI Bank and Standard Chartered Bank, were also considered.
Of the lot ABN Amro Bank was dropped given its small size. So too Kotak Mahindra Bank, which has just rolled out its operations. It was felt that Jammu & Kashmir Bank had too narrow a focus. Of those that made it to the final list, Citibank (2002), HDFC Bank (2001), and SBI (2000) were past winners.
In the case of SBI, reference was made to its high g-secs-to-assets ratio at 38.68 per cent. “If they did not cash in, they were stupid. On the other hand, if they had cashed in, we would have said that isn’t banking.”
HSBC’s assets were found to be low when compared to its investments in g-secs. The investments-to-assets ratio was at 41 per cent. That it was a conservative bank, albeit a good one. “HSBC is not into banking. They are traders. They are not doing business.” Furthermore, it has not shaken up the retail banking space and is at the same time going through a whole lot of changes. In the case of PNB, the view was that it had a long way to go to its act right. There is also a question mark over the quality of loans on its books. Perception too was seen as an issue, even if this applied to a few other state-run banks. “Why is PNB singled out in that case? If you put PNB as the best bank, there will be surprise in RBI!” this was more or less the case with Bank of Baroda as well.
The banks, which made it to the last three, were ICICI Bank, Union Bank of India and Canara bank. ICICI Bank was the biggest with assets of Rs 1, 25,228 crore as at end-March 2004, followed by Canara Bank at Rs 99,539 crore and Union Bank of India at Rs 58,316 crore. The net profits of these banks stood at Rs 1637.11 crore, Rs 1338.01 crore, and Rs 712.05 crore respectively. In just about all-key parameters these banks were well matched. In the comparison against Union Bank of India, the majority of the panelists pressed the case of Canara Bank. One, it was the closest in size after ICICI Bank. Two, it scored over Union Bank of India across all key standards. Canara Bank lost out because of the fact that it had to carry the can for its mutual fund arm, Canfina Mutual Fund, which over promised to its investors and did not deliver. Like in the case of PNB, perception was the issue. It was also perceived not to have done much as a bank.
ICICI Bank drew all-round appreciation for its aggressive market and customer acquisition strategy. Some felt it was going overboard, and that this had the potential to land it in trouble in the days ahead. One panelist aired the point that the quest for volumes has affected the bank’s ability to service its customers. Another said that Union Bank of India was as good, if not better that ICICI Bank in terms of customer service. “Their growth is too high. They cannot cope with it.” The counterview was that when there were service volumes, a few customers will grumble. The profitability aspect was also questioned and attention was called to the fact that the bank operated on a very fine spread: 1.62 per cent. But all over the world banks work on still finer spreads.
ICICI Bank also scored on account of the fact it has shaken up just about every other segment it has forayed into; that it has in many ways forced people to wake up and take notice of it and in several cases redefined the rules of the game as well. “ICICI Bank is very exciting. It is very good in marketing. In the past five years it has changed the face of Indian banking.”
It was also pointed out that other than SBI; the new-generation private bank was the only one that had the potential to go global. Another big plus was that it been able to leverage technology in a big way. And it was ICICI Bank that finally won Business India’s Best Bank Award for 2003-04.

(Source: Business India, August 2004)

Bank Marketing in Indian Perspective

The formulation of polices is substantially influenced by emerging trends in the national and international business conditions. The level of income, expectations, the rate of literacy, the geographic and demographic considerations, the rural and urban orientation, the changes in economic systems the frequent use of technologies are some of the key factors governing the development plan of an organization. To be more specific in a welfare country like ours, the public sector commercial banks are supposed to play a decisive role in fuelling the processes of socio-economic emancipation. This makes it clear that banking organization need a new a vision, a new approach and an innovative strategy. They are supposed to bring about greater mobility in the financial resource to cater to the changing socio-economic requirements. Willingly or unwillingly, they have also to bear the social costs by advancing credit facilities to the weaker sections and the vulnerable regions. The Foreign Banks and a few of the private sector commercial banks have been found making sincere efforts to improve the quality of their services. The customers in general appreciate the functional style and service mix of foreign banks. This makes a strong advocacy in favour of practicing marketing principles in the public sector commercial banks.
In the Indian setting, the contours of development have undergone radical changes, especially after the attainment of independence and to be more specific after the adoption of the planned concept of development. The nationalization of the Reserve Bank Of India is a landmark in the development of Indian Banking system, which in a true sense paved avenues for qualitative-cum quantitative improvements. To curb concentration of economic power and promote a judicious use of the financial resources for the economic development activities, the banking system was regulate and supervised by RBI subsequently in 1969 the government acquired a direct control over a substantial segment of banking system signifying its commitment to reshape the banking system so to meet progressively and serve better the needs of development of economy in conformity with the changing national policy and objective .The fruitful results of nationalize more commercial banks in 1980. These developments necessitated a fundamental change in the functional responsibilities of the public sector commercial banks. Here it is pertinent that nationalization was with the motto of improving the quality of services but the public sector commercial banks started disappointing the masses. Quality of services provided by them was so poor that customers in general are found dissatisfied. This make sit essential hat the RBI and the policy makers of public sector commercial banks think in favour of conceptualizing modern marketing principles which would bring a radical change in the process of quality up gradation.
The first task before the public sector commercial banks is to formulate the marketing mix, which suits the national socio-economic requirements. They need to synchronise the core and peripheral services in such a way that product attractiveness is increased substantially. The designing of a sound product portfolio is found significant to maintain the commercial viability of public sector banks. The promotional measures need an intensive care so that masses come to know about the positive contributions of banks towards the development of socio-economic activities. It is pertinent that leading foreign banks are found promoting telemarketing and the public sector commercial banks need to make it possible. Since there are world-class technologies, the task becomes easier. The word of mouth promotion also needs due care and for that there is a need to improve the quality of the service. The pricing strategy need due weightage since the instrumentality of pricing as a motivational tool would help banks increasing there market share. The Reserve Bank Of India and the Indian Banking Association need an attitudinal change. The gap between services promised and services offered is required to bridge over. This requires professional excellence. The professionals need to make fair synchronization of performance – orientation and employee orientation. This is not possible unless banking regulations are made liberal. The quality of people /employers serving the banking organizations needs overriding priority. The frontline staff needs empathy in their behaviour. This requires intensive training facilities. The domination of trade unions is required to be minimized. The contractual job system needs due attention.
It is right to mention that in the face of new perception of quality developed by foreign and private sector banks; the public sector commercial banks have no option but to improve the quality of services. The marketing principles bear the efficacy of initiating qualitative improvements. Of late the foreign banks have been found promoting the use of sophisticated information technologies. This makes it essential to realize the gravity of the situation and make possible a rational use of technologies, which are not aggravating the problem of retrenchment. The marketing principles would be helpful in making the assault on the multi-dimensional problems. There are good auguries because the policy makers have been found exploring ways for implementing the marketing principles but till now, the efforts are at nascent stages. It is high time that the public sector commercial banks conceptualise innovative marketing for bringing the banking system on the rail.