A PROJECT REPORT ON MARKET SEGMENTATION OF TASC

A PROJECT REPORT ON MARKET SEGMENTATION OF TASC SUBMITTED TO EMPI B-SCHOOL, NEW DELHI In partial fulfilment of the requirement for the award of the Post Graduate Programme of RESEARCH & BUSINESS ANALYTICS

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2008-2010 SUBMITTED BY

BRHAM KUMAR GUPTA submitted to Mr. david easow

director, vc-magtics

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ACKNOWLEDGEMENT This project in itself is an acknowledgement to the inspiration drive and valuable guidance contributed to it by many individuals. This project would never have seen the light of day without the help and guidance that have been received.

I would like to express my sincere appreciation and thanks to Mr. Kamal Gupta (Regional Coordinator of AXIS Bank) guided me all throughout my final project. It is under his valuable guidance, constant interest and encouragement I have completed this project. He devoted his ever-precious time from his busy schedule and helped me in complete understanding of my project. If it wasn’t for him, my learning would be incomplete.

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DECLARATION I here by declare that the project report entitled “ Market Segmentation of TASC� of AXIS Bank submitted in partial fulfillment of the requirements for the Post Graduate Program in Research & business Analytics is my original work and not submitted for the award of any other degree, diploma, fellowship or any other similar title or prizes.

Place: New Delhi Date:

(Brham Kumar Gupta) Roll No: 2

Batch: 2008-10

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TABLE OF CONTENTS CHAPTER Particulars 1

Executive Summary

2 3 4 5 6 7 8 9 10 11 12 13

Company Profile Introduction Objective Products and Services Research Methodology Comparative Analysis Analysis Finding Conclusion Recommendation Bibliography Questionnaire Tally sheet

Page No. 4 8 14 20 22 91 93 95 106 108 110 112 114

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CHAPTER-1 EXECUTIVE SUMMARY

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EXECUTIVE SUMMARY In India the banking sector is segregated as public or private sector banks, cooperative banks and regional rural banks. Foreign banks have been given a different head followed by upcoming foreign banks in this section.

Axis Bank India, the first bank to begin operations as new private banks in 1994 after the Government of India allowed new private banks to be established. The project is based on market segmentation of TASC (trust, associations, societies, corporations) account. This includes Trusts, Associations, and Societies, Section 25 companies (Including

clubs),

Non

Governmental

Organizations

(NGO’s),

Government Departments /Bodies /Agencies. The Bank has witnessed tremendous growth in Govt. Business over the past 6 years, making it a leading player among its Peer Banks in this segment today. As an Agency Bank of RBI, the Bank handles Tax/ Non-Tax Revenue Collection on behalf of the Central & State Governments, Expenditurerelated Payments of Central Govt. Ministries & Departments and Collection of Railway Freight & Passenger Revenue for which it receives Agency Commission from RBI. Under Non-Agency Business, for which RBI authorization is not required, the Bank strives to strengthen the existing relationships as also develop new relationships with various Government Organizations and Central/ State Govt. Public Sector Undertaking (PSU’s) through customized offerings towards providing Account Management Services and Collection/ Payment Services, contributing to Current Account Balances as well as Fee Income.

During the Year ended March 2008, the Bank has handled Govt.

Business Throughput of Rs. 53,585 Crs. with Zero-Cost Float contribution of over Rs. 295 Crs. from Tax/ Non-Tax Revenue Collections, as an Agency Bank. Additionally, the Govt. & PSU Segment has generated Fee Income of Rs. 16.87 Crs. and contributed over Rs. 834 Crs. towards Current Account CDAB of the Bank and Rs.

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2,723 Crs. towards Current Account year-end balance of the Bank for the Year ended March 2008.

More recently, in addition to various Govt. Organizations, we are now also targeting the Central/ State Public Sector Undertakings (PSUs) for providing various Banking and Cash Management Services through our Regional Desks/ Zonal Desks – Govt. Business. Since these PSUs (Central PSU/ State PSU) have linkages to some or the other Central Govt. Ministry/ Department or State Govt. Department, we are making a strong effort to develop our relationship with these PSUs by leveraging our Authorized RBI Agency Bank status and the existing relationships under Govt. Business with these Central Govt. Ministries/ Departments and State Govt. Departments.

Under Non-Agency Business, the focus will be mainly on Govt.

Organizations and Central/ State Public Sector Undertakings (PSU’s), where RBI authorization is not required, for generating substantial Current Account Balances/ CDAB as well as Fee Income, wherever possible.

The emphasis will be on getting associated with various Government Organizations/ Bodies (Central Govt./ State Govt./ Local Govt./ Autonomous) for contributing to Current Account Balances under CAGOS Scheme and also contribute to Fee Income from various services as under: o Account Management Services for Current Account relationship o Cash Management Services (CMS) o

Customized

Collection/

Payment

Services

including

Vendor

Payments, Pension disbursements, Salary disbursements o Value Added Services like e-Payments, e-Tendering/ e-Procurement, Banker to G2C and G2B Projects, etc. o Disbursement of funds under Govt. Benefit/ Social Security Schemes through IT Enabled Financial Inclusion.

The customer segments to be primarily targeted are Municipal Corporations, Housing Boards/ Development Authorities, Electricity Boards,

Railway

Divisions,

Defence

Units,

State

Government 7

Departments, etc. Drive the business of Collection of Stamp Duty through Franking for maximizing the Fee Income from this lucrative business.

For govt. accounts no application of other charges in savings account, means that such account do not attract any charges for nonmaintenance of balance in the account. The trust/society can send cheques for collection at any location of axis bank across the country or deposit cash at any of bank locations and no charge for the same.

•

First and only first bank to give at par facility free to all savings bank account holders.

•

At par cheques relive customers from the hassles of making Demand Drafts and charges levied thereon.

• All third party cheques at axis bank centers will be cleared in the same time as a local cheque.

•

At par thus saves a lot of time and cost associated with outstation clearing.

• Most of the TASC Customers have satisfied with banks service • AXIS Bank provides faster service than other banks.

•

In Ambala, AXIS Bank has major customer of TASC segment is army, navy, temples etc.

•

AXIS Bank mainly focuses on customer satisfaction not on only new customers.

•

Major income of source of AXIS Bank is TASC Segment account.

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CHAPTER-2 COMPANY PROFILE

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COMPANY PROFILE OF AXIS BANK Introduction of Axis Bank AXIS Bank is one of the fastest growing banks in the country and has an extremely competitive and profitable banking franchise evidenced by: Comprehensive portfolio of banking services including Corporate Credit, Retail Banking, Business Banking, Capital Markets, Treasury and International Banking. Private players such as Axis Bank that offer a multitude of delivery channels and have an integrated technology platform could potentially achieve comparable distribution reach in the top 200 cities to government banks with substantially fewer branches.

With a presence in the top 150 cities, Axis Bank is very well positioned to rapidly reap the benefits of the expanded reach by scaling up its retail foray.

Axis Bank is India’s third-largest private-sector bank after the significantly larger ICICI Bank. The Bank's Registered Office is at Ahmedabad & its Central Office is located at Mumbai. Presently, the Bank has a very wide network of more than 853 branch offices and Extension Counters. The Bank has a network of over 3,723 ATMs providing 24 hrs a day banking convenience to its customers. This is one of the largest ATM networks in the country.

The Bank has strengths in both retail and corporate banking and is committed to adopting the best industry practices internationally in order to achieve excellence. The bank has won 'Outstanding Achievement Award' for the year 2005 from Indian Banks Association for IT Infrastructure, delivery Capabilities and innovative solutions.

As on the year ended March 31, 2009 the Bank had a total income of Rs. 13,745.04 crores and a net profit of Rs 1,812.93 crores.

The Bank today is capitalized to the extent of Rs. 359.00 crores with the public holding (other than promoters) at 57.60%.

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The Position as on 31st March 2008 was as under Balance Sheet Size

–

Rs 1,9577.85 Crores

Total Deposits

–

Rs 87,626.22 Crores

Net Advances

–

Rs 59,661 Crores

Investments

–

Rs 33,705Crores

Network of Branches & Extension Counters

–

853

Foreign Offices

–

4

Number of ATMs Net NPA

– –

3723 0.36%

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History of the Axis Bank Axis Bank, previously called UTI Bank, was the first of the new private banks to have begun operations in 1994, after the Government of India allowed new private banks to be established. The Bank was promoted jointly by the Administrator of the Specified Undertaking of the Unit Trust of India (UTI-I), Life Insurance Corporation of India (LIC), General Insurance Corporation Ltd., National Insurance Company Ltd., The New India Assurance Company, The Oriental Insurance Corporation and United Insurance Company Ltd. UTI-I holds a special position in the Indian capital markets and has promoted many leading financial institutions in the country. The bank changed its name to Axis Bank in April 2007 to avoid confusion with other unrelated entities with similar name. Shikha Sharma was named as the bank's managing director and CEO on 20 April 2009.

Board of Directors The members of the Board are: Shri N.C.Singhal Shri J.R. Verma Dr. R.H. Patil Smt. Rama Bijapurkar Shri R.B.L. Vaish Shri M.V. Subbiah Shri Ramesh Ramanathan Shri K.N. Prithviraj

Director Director Director Director Director Director Director Director

Promoters The largest and the best Financial Institution of the country, UTI, have promoted Axis Bank Ltd. The Bank was set up with a capital of Rs. 115

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crore, with UTI contributing Rs. 100 crore, LIC - Rs. 7.5 crore and GIC and its four subsidiaries contributing Rs. 1.5 crore each. SUUTI Shareholding 27.08%.

Erstwhile Unit Trust of India was set up as a body corporate under the UTI Act, 1963, with a view to encourage savings and investment. In December 2002, the UTI Act, 1963 was repealed with the passage of Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 by the Parliament, paving the way for the bifurcation of UTI into 2 entities, UTI-I and UTI-II with effect from 1st February 2003. In accordance with the Act, the Undertaking specified as UTI I has been transferred and vested in the Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI), who manages assured return schemes along with 6.75% US-64 Bonds, 6.60% ARS Bonds with a Unit Capital of over Rs. 14167.59 crores. The Government of India has currently appointed Shri K. N. Prithviraj as the Administrator of the Specified undertaking of UTI, to look after and administer the schemes under UTI - I, where Government has continuing obligations and commitments to the investors, which it will uphold If the sharp decline in the retail asset book in the past year in the case of Axis Bank is part of a deliberate business strategy, this could have significant implications (not necessarily negative) for the overall future profitability of the business.

Despite the relatively slower growth of the retail book over a period of time and the outright decline seen in the past year, the bank’s fundamentals are quite resilient. With the high level of mid-corporate and wholesale corporate lending the bank has been doing, one would have expected the net interest margins to have been under greater pressure. The bank, though, appears to have insulated such pressures.

Interest margins, while they have declined from the 3.15 per cent seen in 2003-04, are still hovering close to the 3 per cent mark. (The comparable margins for ICICI Bank and HDFC Bank are around 2.60 per cent and 4 per cent respectively. The margins for ICICI Bank are lower despite its much larger share of the higher margin retail 13

business, since funding costs also are higher).

CHAPTER-3 14

INTRODUCTION

INTRODUCTION Banking in India Banking in India originated in the first decade of 18th century. The first banks were The General Bank of India, which started in 1786, and 15

Bank of Hindustan, both of which are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the "The Bank of Bengal" in Calcutta in June 1806. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras. The presidency banks were established under charters from the British East India Company. They merged in 1925 to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India. For many years the Presidency banks acted as quasi-central banks, as did their successors. The Reserve Bank of India formally took on the responsibility of regulating the Indian banking sector from 1935. After India's independence in 1947, the Reserve Bank was nationalized and given broader powers.

History The first fully Indian owned bank was the Allahabad Bank, established in 1865. However, at the end of late-18th century, there were hardly any banks in India in the modern sense of the term. The American Civil War stopped the supply of cotton to Lancashire from the Confederate States. Promoters opened banks banks to finance trading in Indian cotton. With large exposure to speculative ventures, most of the banks opened in India during that period failed. The depositors lost money and lost interest in keeping deposits with banks. Subsequently, banking in India remained the exclusive domain of Europeans for next several decades until the beginning of the 20th century.

Foreign banks too started to arrive, particularly in Calcutta, in the 1860s.

The Bank of Bengal, which later became the State Bank of India.

Around the turn of the 20th Century, the Indian economy was passing through a relative period of stability. Around five decades had elapsed since the Indian Mutiny, and the social, industrial and other infrastructure had improved. Indians had established small banks, most of which served particular ethnic and religious communities. The presidency banks dominated banking in India. There were also some

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exchange banks and a number of Indian joint stock banks. All these banks operated in different segments of the economy. The exchange banks, mostly owned by Europeans, concentrated on financing

foreign trade. Indian joint stock banks were generally under capitalized and lacked the experience and maturity to compete with the presidency and exchange banks. This segmentation let Lord Curzon to observe, "In respect of banking it seems we are behind the times. We are like some old fashioned sailing ship, divided by solid

wooden

bulkheads

into

separate

and

cumbersome

compartments."

By the 1900s, the market expanded with the establishment of banks such as Punjab National Bank, in 1895 in Lahore and Bank of India, in 1906, in Mumbai - both of which were founded under private ownership. Punjab National Bank is the first Swadeshi Bank founded by the leaders like Lala Lajpat Rai, Sardar Dyal Singh Majithia. The Swadeshi movement in particular inspired local businessmen and political figures to found banks of and for the Indian community. A number of banks established then have survived to the present such as Bank of India, Corporation Bank, Indian Bank, Bank of Baroda, Canara Bank and Central Bank of India.

Nationalized Banks in India Nationalized

banks

dominant

banking

System

in

India.

The

nationalization of banks in India took place in 1969 by Mrs. Indira Gandhi the then prime minister. The major objective behind nationalization was to spread banking infrastructure in rural areas and make available cheap finance to Indian farmers. Fourteen banks were nationalized in 1969. Before 1969, State Bank of India (SBI) was the only public sector bank in India. SBI was nationalized in 1955 under the SBI Act of 1955. The second phase of nationalization of Indian banks took place in the year 1980. Seven more banks were nationalized with deposits over 200 crores.

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List of Public Sector Banks in India is as follows: ➢Allahabad Bank ➢Andhra Bank ➢ Bank of Baroda ➢Bank of India ➢Bank of Maharashtra ➢Canara Bank ➢Central Bank of India ➢Corporation Bank ➢Dena Bank ➢Indian Bank ➢Indian Overseas Bank ➢Oriental Bank of Commerce ➢Punjab and Sind Bank ➢Punjab National Bank ➢State Bank of Bikaner & Jaipur ➢State Bank of Hyderabad ➢State Bank of India (SBI) ➢State Bank of Indore ➢State Bank of Mysore ➢State Bank of Patiala ➢State Bank of Saurashtra ➢State Bank of Travancore ➢Syndicate Bank ➢UCO Bank ➢Union Bank of India ➢United Bank of India s ➢Vijaya Bank

Private Banks in India All the banks in India were earlier private banks. They were founded in the pre- independence era to cater to the banking needs of the people.

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But after nationalization of banks in 1969 public sector banks came to occupy dominant role in the banking structure. Private sector banking in India received a fillip in 1994. When Reserve Bank of India encouraged setting up of private banks as part of its policy of liberalization of the Indian Banking Industry. Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector.

Private Banks have played a major role in the development of Indian banking industry. They have made banking more efficient and customer friendly. In the process they have jolted public sector banks out of complacency and forced them to become more competitive .

Major Private Banks in India is: ➢Bank of Rajasthan ➢Bharat Overseas Bank ➢Axis Bank ➢Federal Bank ➢HDFC Bank ➢ICICI Bank ➢IDBI Bank ➢IndusInd Bank ➢ING Vysya Bank ➢Jammu & Kashmir Bank ➢Karnataka Bank ➢Karur Vysya Bank ➢Kotak Mahindra Bank ➢SBI Commercial and International Bank ➢South Indian Bank ➢United Western Bank ➢YES Bank

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CHAPTER-4 20

OBJECTIVE

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OBJECTIVE OF RESEARCH 1. To know the services provided by bank to TASC segment.

2. To understand comparative position of banks offering TASC products.

3. Through the past results, to identify the potential of TASC segment 4. To know the customer’s interest in bank’s various products

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CHAPTER-5 PRODUCTS AND SERVICES

PRODUCTS AND SERVICES Retail Banking 23

The Retail Banking business of the Bank is divided into following subunits: • � Retail Liabilities • � Retail Assets • � Cards • � Wealth Management • � Corporate Communications and Market Research • � Bulk Retail Acquisition /Payroll Accounts • � Alternate Channels The focus of the Retail Banking Department is to: 1. Increase share of Retail Deposits 2. Increase share of Retail Assets 3. Increase Fee Based Income In order to achieve the above mentioned, the following strategies are used: 1.

Introduce New Products based on Customer Need and to address targeted segments.

2.

A strong Sales Focus.

3.

An extensive network and effective utilization of the banking channels

RETAIL LIABILITES – An overview of the products Retail Liabilities business includes deposits collected from Retail Customers. These are of two types 1. Savings deposits 2. Term deposits (fixed deposits) Savings deposits are important as these are low cost deposits and are critical to keep the cost of funds low for the bank. A savings account is also the cornerstone of relationship that the customer has with the bank in majority of the cases. Selling a savings account therefore is

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akin to acquiring a customer for the bank who can then be cross-sold other products.

The Bank has launched customized savings account products for various categories of customers – Mass affluent, Senior Citizens, Students & Trusts/NGOs besides a very competitive offering in the Salary Accounts category.

Segmentation of Savings Bank business Saving bank:• Easy Access • Senior Privilege • Trust & NGOs • Smart Privilege • Priority Banking • Salary • NRI Services Easy Access Account The basic savings account product of the Bank is called the EASY ACCESS and its features are as follows: • Multi-city At par cheque Book- Limit of Rs. 50,000/• Anywhere banking • International Visa Debit Card • Tele banking • Iconnect Internet banking • Mobile Banking • Free Quarterly Account Statement • Interest paid on a quarterly basis •

AQB- Rs 5000/- in metro and urban centers, Rs 2500/- in semi urban centers and Rs 1000/- in rural centers

Prime Savings Account

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An intermediary product targeted towards the mid-income segment customer base helping to bridge the gap between the base product and priority offering. It is a value based savings product with customized features enhancing the customer value.

Product Features: • At PAR cheque book – Enhanced Limit of Rs. 1,00,000/• Free Issuance of International Visa Debit Card • Free Pass Book • Free monthly statement of account • No charges on intercity clearing cheques • Free DD/ PO, drawn on Axis Bank Centers • Higher cash deposit/withdrawal limits •

Free withdrawal from any Visa ATM in India (upto six transactions per quarter)

•

Average Quarterly Balance-Rs. 25000/- for metro/urban/semi urban branches and Rs.10,000/- for rural branches

Senior Privilege Account Eligibility: - Savings Bank customers (Male & Female) with 60 years of age or above as on the date of account opening.

AQB Criteria: Rs.10, 000 for Metro/Urban Branches & Rs. 5,000 for Semi-urban/Rural Branches.

Scheme Code: SBSPA Product Features: • Dedicated Relationship Manager at select centers • Senior Citizen ID Card •

Free Home Banking for Cheque/Cash pick up. Cash Delivery is charged at Rs. 50/- per instance.

• Free Inward Remittance with out any limit • Free Outward Remittance once in a Financial Year.

•

Free International Debit Cards- Two debit cards free per account.

• Free Mobile Banking • Free Collection of Outstation Cheques- Only postages of Rs 30/26

will be charged & other bank charges if any.

• Free At Par Cheque book facility • Free Demand Draft/Pay Order drawn on networked centers • Free Passbook/Monthly statement of accounts • Faster collection of foreign cheques •

Customized Loan Offerings - Loans against Fixed Deposits -up to 95% of the FD amt at an interest rate of 1% over the rate of interest of the FD. NSCs/KVPs/LIC Policy - the rate of interest 1% less

than

other

customers and no processing fees and

no pre payment penalty.

•

Silver Health – Medical Insurance for Senior Citizens in association with Bajaj Alliance

•

Demat Account at discounted rates at Rs 250/-. Offer valid only for the new Demat accounts & for two financial years from the date of account opening.

• Financial Advisory services •

Wide range of Health, travel privileges through tie-ups with different agencies- related to the interest of senior citizens.

Savings Account for the Trust/NGOs Segment The account is aimed at the following bodies: • � Trusts • � Associations • � Societies • � Section 25 Companies (including Clubs) • � Non-Governmental Organizations (NGO’s) • � Government Departments / Bodies / Agencies Product Features: • � AQB Requirement of minimum Rs. 25,000/• � Multi-city at-par cheque facility • � Free Anywhere Banking • � Free Demand Drafts / Pay Orders on UTI Bank locations •

Facility for collecting membership fees and contributions in favor

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of the Trust’s account through our network of branches and ATMs across the country as well as through iConnect • Monthly statement of account • Free Internet Banking facility • Free Demat account •

Assistance for Foreign Contribution (Regulation) Act accounts for receiving donations from abroad.

• Free collection of cheques • Doorstep banking services Additional benefits for PF/Gratuity Trusts •

Investment Advisory Services

•

Subsidiary General Ledger (SGL) account for investment in Government securities with value- added services such as: -

•

Investment advice related to the customer’s g-sec portfolio.

•

Offer of better rates on sale of government securities from the Bank’s stock of securities.

•

Concessions in transaction and service charges. (However Charges that have to be directly passed on to the Clearing Corporation of India as part of the Negotiated Dealing System for trading in g-secs cannot be waved – a fact, which will be communicated up front.)

Smart Privilege Account Eligibility: Women customers wanting to open a value added savings bank account Product Features: AQB Criteria: Maintenance of an Average Quarterly balance of Rs. 10,000/- at Metro/Urban Branches and Rs. 5000/- at Semi-Urban Branches.

Debit Card Features The specially designed photo

signature

card for added security

comes with Zero Lost Card Liability, purchase protection and other exclusive features as under: • � Inbuilt Jewellery Insurance up to Rs.50, 000/28

• � Five Free ATM transactions per quarter at Non-Axis Bank ATMs • � Enhanced Accidental Insurance upto Rs.3 Lakhs • � Waiver of 2.5% Petro surcharge Priority Banking In a segmentation study undertaken in 2002, it was found that 2.72 % of our retail customers contribute to nearly 49.05% of our total retail deposits.

The clients that bring a larger share of business to the Bank expect a differentiated standard of service. This also makes business sense, as more often than not, most of the business in a particular branch flows from a handful of clients. Hence, Priority Banking was launched in order to cater to the needs of the high net worth customers within the bank. The product has at its core the thought of providing differentiation in service and treatment to a segment of its customers with a view towards customer retention, acquisition and cross selling.

The nucleus of these services has essentially four important components – personalized service, Investment advisory services, preferential pricing of banking products/ services and lifestyle privileges.

Definition of ‘Priority Customer’ at AXIS Bank The eligibility criteria for Priority Banking is as given below: •

A minimum average quarterly Balance of Rs. 1 lakh in the savings bank account (OR)

•

A minimum relationship of Rs 5 lakhs (avg. quarterly balance) in a combination Savings and Term Deposits (OR)

•

A minimum average quarterly Balance of Rs. 5 lakhs in an Encash 24 (Flexi) Account (OR)

•

A minimum average quarterly Balance of Rs. 75000/- in the SB-Salary account

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(OR) •

A minimum Family Relationship Value of Rs 10 Lakhs Deposits (SB+ Term) with an average of Rs 2 lakhs per member (whereby at least 40% of Value needs to be in SB Deposits)

A charge is levied in case of non-maintenance of Average Quarterly Balances based on category enrollment.

Privileges offered to Priority Banking customers The privileges offered as a part of Priority Banking include: - Banking privileges - Investment privileges - Lifestyle privilege Banking privileges • � Personalized service from the Relationship Manager - who is the one-point contact at the bank for all transactions • � Access to the Priority Banking Lounge/ Area at branches • � Priority Banking Debit card with the following facilities: • •

Free transactions at any VISA ATM in India Higher cash withdrawal limit of Rs 50000/- per day through ATMs

•

Higher POS (Point of Sale) Transaction Limit of Rs 175000/- per day

•

Free Personal Insurance Coverage of Rs 5 Lakh on the Card

•

At par payable cheque books

•

Complimentary Gold Credit Card and 50% off on Issuance of Gold Plus Credit Card – Offer valid on Secured Credit Card variants as well*

•

Enhanced limits / lowered charges for inter-branch cheque and cash transaction

• Home Banking – Free Pick up and drop of cheque/cash above a certain limit, from customer’s office or residence • Preferential pricing on Retail Loans * 30

• Preferential Rates on Foreign Exchange * • Waiver on Foreign Remittances* • Free Mobile Banking Facilities Investment privileges •

Complimentary financial planning, which includes free advisory services on mutual fund investment and general insurance

• Exclusive invitations to investment talks.

• Regular Market information reports Lifestyle Privilege •

Invitations to lifestyle events such as movie screenings, music concerts, theatre, art exhibitions etc

•

Tie – up with several leading brands across different lifestyle segments

•

Bimonthly newsletter – Priority Pages

Priority Assist AXIS Bank has tied up with International SOS, the world’s leading assistance company, to offer “Priority Assist”, a host of utility and assistance services. Priority Assist provides assistance like gifts and flower delivery, hotel and travel bookings, referrals on tax consultants & lawyers, home assistance and medical assistance.

Salary Power AXIS Bank has a very strong and powerful payroll account scheme called “Salary Power” aimed at providing the best of banking services and unmatched benefits to salaried customers. The customized offering has three product variants that are detailed as below. The privileges that accrue to the customers are based on the average salary per employee for the relationship. This was done primarily to ensure that the profitable relationships are given more value propositions, while the low yielding accounts are brought under the charging structure.

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Salary Power Plus- This is the base product variant that is offered to relationships wherein the average monthly payout is less than Rs.10000/- per employee.

Salary Power Privilege- The average monthly payout per employee for this variant ranges between Rs.10000/- and up to a maximum of Rs.24999/Salary Power Premium- This is the top of the line variant where the average payout per employee for the institution is above Rs.25000.

For the Blue Collared segment we also offer the rewards Cardwhich is a pre-funded card and allows the individual to utilize the Bank’s exhaustive ATM network to draw their salaries. The key benefits that are offered to the Corporate, Public Sector undertaking, Government Institutions and Defence and Paramilitary forces are as under: Market Size and Growth Trends – The total employable population in India is close to 402 million, and the market is supposed to grow by almost 1.4 million YOY. Market Drivers – • Outsourcing Business Model (IT / ITES) to have a strong growth story in India.

•

Sixth pay commission recommends 25% pay hike for the government sector employees – This constitutes 30% of the total Salary Power portfolio as of now.

•

11th 5-year plan envisages adding 58 million jobs by 2012 and bringing down unemployment rate to below 5%. More than 14 million jobs would be created annually as per forecasts.

Simplifying the way an Organization can payAXIS Bank opens an account for the institution and also individual salary accounts for the employees. On the date of salary disbursal, there is one single debit to the institution’s account and multiple credits to the staff salary accounts. Besides incase the Corporate does not have an account with the Bank, then the salary accounts can get

32

funded through the RTGS/NEFT or local clearing wherein the funds are pooled in the sundry account at the base branch and employee’s individual accounts are credited at the respective branches of the bank across centers as the case may be. This ensures that the Company can save time on disbursal of the staff salary accounts and credits happen simultaneously across locations at a pan India level.

Exclusive Features of the Salary Power benefits •

Anywhere Banking Facility through the bank’s large network of branches, ATM and also net banking services across the country in a 24 X 7 environment.

•

AT Par Cheque Books with daily issuance limits ranging from Rs.50000/- up to Rs.100000/- per Cheque leaf. This save time and also allows the individual to make outstation Payments across all locations where the bank has its presence.

•

International Debit Card (Master Card) with daily withdrawal limits ranging from Rs.25000/- to a maximum of Rs. 50,000/from Axis bank ATMs. An accidental insurance coverage up to maximum of Rs.2 lacs.

•

Free Demand Drafts/ Pay Orders up to Rs.25, 000/- per month for the Salary Power Plus account holders and unlimited for Salary Power Premium Account holders.

•

Free collection of outstation cheques for Salary Power Privilege and Salary Power Premium accounts.

•

Preferential rates on retail loans for salary account holders.

•

Overdraft facility available.

•

Instant Welcome Kits available.

•

Joint Account and Nomination facility available.

•

Mobile banking/Internet Banking and Phone banking- available

•

Demat and online Trading Accounts available.

•

Free Financial Advisory services-available.

•

Employee reimbursement account available as a savings account variant. Peer group banks offer it as a current account variant.

33

•

Meal Cards- The best substitute of sodexo and accor vouchers.

Works on a master card platform. Greater acceptability and convenience.

•

Priority services available at a reduced quarterly average balance criteria of Rs.0.75 lac per quarter.

Power Salute Salary Accounts Defence Salary Account from Axis Bank is a product designed keeping in mind how tough a life in the Defence Forces is. Not only does it come to you absolutely free, no minimum balance is required either.

You can also access the entire Axis Bank network, no matter where you are posted. For the defence forces their salary accounts are converted into pension accounts post retirement.

Note: Salary Power is a special account offered to customers with regular direct salary credits coming into this account. In case, the monthly salary is not credited into the account for more than 3 consecutive months, the special features offered under Salary Power account shall stand withdrawn and the account shall be treated as Normal Savings Account under our standard charge structure and all charges shall be levied and applied as applicable to normal savings accounts.

NRI services In a globalized scenario that exists in today’s world, geographical boundaries are fast shrinking with more & more Indians going abroad for jobs & settling there. With a view to attract the savings and other remittance into India through banking channels from the person of Indian Nationality / Origin who are residing abroad NRI Services was launched. A segment so specific requires special services tailor made for its requirements hence the product offering was very different from the regular retail individual.

Who can Open NRI Accounts?

NRI - An Indian citizen who is ordinarily residing outside India and

34

holds an Indian Passport. PIO - A person who or who’s any of ancestors was an Indian national and who is presently holding another country’s citizenship/nationality i.e. he/she is holding foreign passport.

Deposit types: •

NRE (Non Resident External Accounts) Any person resident outside India may open NRE account.

This Account permits a NRI to hold and maintain foreign currency earnings in Indian rupee. The principal and interest earned on these balances are freely repatriable. The account can be funded by the following source of funds:

•

Foreign inward remittance by way of TT / DD cheque, Travelers cheque, foreign currency, etc., or transfer from existing NRE / FCNR accounts. It can be in the form of Savings, Current or fixed deposits in

Indian rupees. The funds in this account are

fully repatriable.

NRO (Non Resident Ordinary Accounts) Any person resident outside India may open NRO account, for putting through bonafide transactions in Rupees on account of monies originating in India. The account can be funded by the following source of funds: •

By transfer of existing domestic accounts, by fresh inward remittance by way of TT, DD, Cheque, TC, Foreign currency, by transfer from existing NRE / FCNR accounts, legitimate dues in India of the account holder

•

It can be in the form of Savings, Current or Fixed Deposits in Indian Rupees. The funds in this account are conditionally repatriable.

FCNR (Foreign Currency Non Resident Accounts) It can be in the form of fixed Deposits only, in the five major currencies, namely US Dollars, GBP, Euro, Canadian Dollar and Japanese Yen. The funds in this account are fully repatriable.

35

RETAIL ASSETS Retail Credit is emerging as one of the focus areas of most of the banks in the country. The retail credit business here is still very small compared to some of the developed countries of the world. The business is also in a nascent stage if compared to the corporate loans in the country and comprises of around 25 % of the total commercial bank loans.

Infrastructure Creation: The growth envisaged in retail assets has been achieved by putting in place: Centralized cells for PDC management, recovery and collections, document storage and MIS. It was deemed necessary to set up this infrastructure

before

embarking

on

a

countrywide

marketing

programme.

Software: Given the changes in volumes, the Bank has implemented new software to take care of it s loan originations and maintenance.

This software is called FINNONE and from the stable of Nucleus Software. This system also supplements the new collection system, which went live in 06- 07.

Organizational Structure: The Retail Assets team at the Central Office is reoriented at a product driven and customer centric approach to provide better control, design and management of retail assets.

Distribution: The distribution arm of Retail Asset business happen through: 1. Sales subsidiary AXIS Sales ltd.

2. Already existing DSA network

Product Portfolio of Retail Assets Power Homes Purpose

36

- Purchase of a plot of land and Construction of a house thereon - Construction of a house on plot of land already owned - Purchase of a new house / flat - Purchase of old house / flat which is not more than 15 years old (Home Acquisition Plan) - Extend /Renovate/Repair of a house or flat already owned by self (Improvement/Extension Plan) - Take-over of existing Housing Loan with additional refinance -

Pre-allotment Booking finance

-

Loans to NRI

-

Loan take-over with additional refinance

Loan Amount Minimum: Rs.1 lac Maximum: Rs.50 lacs Margin 15% in the case of normal product and 25% in case of Improvement/ renovation loans Personal Power Purpose To meet personal expenses.

Loan Amount Minimum: Rs.100, 000/Maximum: - Rs.10, 00,000/-for Salaried Individuals - Rs.15, 00,000/- for Salaried Professional Individuals.

- Rs.10, 00,000/-for Self-Employed Individuals and Self-Employed - Rs.20, 00,000/-for Doctors.

Power Drive Purpose - Purchase of a new car - Vehicles under this scheme are to be used for personal use only Loan Amount Cost of Vehicle plus registration & insurance (less stipulated margin) 37

OR as per income eligibility of Customer, whichever is less.

Asset Power (LAP) Purpose - Loan against property - Residential premises - Loan against property - Commercial premises - Loan for Purchase of Commercial Property - Take-over of existing Loan - Take-over of existing Loan with additional refinance (Top-Up) Loan Amount Minimum Rs.1 lac Maximum - Rs.150 lacs Margin 50% LTV (Loan to value) is maintained for Commercial properties.

60% LTV (loan to value) is maintained for Residential properties Lease Rent Discounting This is another variant of Loan against Commercial Property where future rental receivables are discounted and finance is extended to the owner of the property.

Maximum Loan amount: Rs.5 Cr. Loan Against Securities Loan against Shares/ Mutual Funds: Purpose For personal use Quantum of Loan Maximum loan amount is Rs.10, 00,000/- against pledging of approved share scrips/ mutual funds units. We are offering this facility to individuals only.

We also extend loan against other securities. Other securities include NSC, KVP, and LIC policy.

Overdraft against Property An overdraft limit is granted to resident borrowers against a residential/commercial property owned by him Maximum Loan amount: Rs. 1.5 Cr. 38

Reverse Mortgage Loan Targeted at Senior Citizens (above 60 years of age) having an owned residential property.

Maximum Loan amount: Rs. 50 Lacs Medical Equipment Purpose Loan for purchase of Medical Equipments Target customers: Self employed Doctors Loan amount: Maximum Rs.1.50 cr.

Jewellery Loan Purpose Offered only to Smart Privilege Customers (Non-working House-wives) to buy jewellery.

Loan Amount Same as Personal Power The loan eligibility criteria will be based on the joint applicant’s (spouse) income proof Card Power We extend finance to the traders/ merchants on the basis of the goods sold through credit cards.

Consumer Power Purpose: Purchase of new consumer durable item Loan Amount: Minimum Loan amount Rs.25, 000, Maximum Loan amount Rs.2, 00,000 Two Wheeler Loan Purpose To purchase a two wheeler Quantum of Loan Minimum Rs.20, 000/Maximum Rs.70, 000/-.

(Source: (http://www.axisbank.com/personal/loans/loans.asp)) 39

Loan to Value We finance 80-85% of the on road price (Cost of Vehicle + registration + insurance) of the vehicle.

WEALTH MANAGEMENT The Wealth Management Group has been one of the fastest growing divisions of Axis Bank. The tremendous year-on-year growth has been the result of the teamwork and coordination within the group. The following revenue figures only highlight the individual as well as collective abilities and dedication of the Group.

Axis Wealth Axis Wealth is an advisory service offered by the Bank exclusively for the

privileged

HNI.

Axis

Wealth

goes

beyond

banking

and

encompasses solutions for a lifetime. Beginning from investments up to tax planning, we are here with a wide range of services, where the client experiences a specialized and personalized treatment.

The aim of Axis Wealth is to understand the clients’ needs and tailor solutions to meet them. Dedicated and experienced Wealth Managers help the clients and manage their all wealth- related activities. The professional management of these experts pursues the objective of delivering consistent long-term performance while controlling the associated risk.

Wealth Manager- Wealth Managers are the most sought after individuals in the team. They are a disciplined group of individuals, who adhere to the ethical and regulatory standards while delivering of services in an integrated mix of tax-efficient solutions, legal counsel and accounting advice on top of financial planning and investment management. Wealth Managers are a single point contact for the client for their all investments need. They constantly monitor and rebalance 40

the portfolio to optimize the return. They take care of all the administrative aspects of the portfolio with the monthly reporting on the overall status of the portfolio and its performance.

Source:(www.scribd.com/doc/13581494/AXIS-BANKWealthmanagement-) Product Team- Product team takes the ownership of the Axis Wealth product.

The team offers a wide spectrum of products, banking

services & tailor made financial advices to suit investment needs. All products are researched and revalidated by our Investment research team on the parameters of risk, return, future potential, transparency in offering, diversification objective, regulatory aspects and other portfolio related parameters. The final product recommendation is guided by systemic approach and in-depth research.

General Insurance In early 2005, Axis Bank entered into a corporate agency tie up with the leading private sector insurance player, Bajaj Allianz General Insurance Company Ltd, for sales of non-life insurance products through all its branches. The formal launch and announcement of the tie up took place during May 2005.

Bajaj Allianz General Insurance Company Ltd Bajaj Allianz General Insurance Company Limited is a joint venture between Bajaj Auto Limited and Allianz AG of Germany. Both enjoy a reputation of expertise, stability and strength. Apart from selling standard Bajaj Allianz policies, Axis Bank has also launched 4 special co- branded general insurance products in association with Bajaj Allianz. These products are exclusively sold to Axis Bank’s large retail customer base and shall be available only through Axis Bank. These policies offer the customers greater benefits, more competitive pricing and ease of purchase as compared to the regular insurance policies offered by Bajaj Allianz.

Bundled Insurance: The concept is to bundle health insurance with Savings account and Salary account and Credit Card customers. Apart from the regular benefits of a Health Insurance, the key benefit to the Customer in this 41

type of format is that he gets to pay the premium in monthly installment mode.

Corporate Products We also cater to our Corporate & SME segment by offering the following types of policies: • Fire and allied perils • Money Insurance • Fidelity Insurance • Employee Benefit Policies • Workmen Compensation • Marine Insurance • Specialty products • Office Insurance Life Insurance In December 2006, Axis Bank entered into a Bancassurance tie up with MetLife, for sales of life insurance products through all its branches.

MetLife was selected by Axis Bank after an extensive assessment of complementary strengths of all the insurance companies of India. The Bancassurance alliance with MetLife is a referral model whereby leads generated by the bank are executed by MetLife staff stationed at the bank branches.

Financial Advisory Services (Mutual Fund) What is Mutual Fund • It is a fund established in the form of a trust to raise money through the sale of units to the public or section of the public under one or more schemes for investing in securities including money market instruments • Asset Management Company is an organization, which invests in a diversified portfolio of financial securities on behalf of a pool of subscribers to its scheme.

Product Portfolio.

• At Axis Bank Personal Investment Product team we adopt a strong 42

research driven recommendation model to help clients choose the best funds based on qualitative and quantitative parameters.

• Apart from this a dedicated financial advisor can also be assigned to the customer to ensure that the investment requirements are taken care of, smoothly and efficiently. Our advisors understand the investors profile and lead them through a structured financial planning process to devise financial solutions best suited to him. The financial advisors will also help the investor to choose the right investment products in line with their investment goals. • We offer a unique 'One Page Portfolio Snapshot' report across investment products to our customers investing in Mutual Funds. This report can be viewed through our Internet Banking module.

Online Trading Services Online Trading A/c is a new initiative in the Wealth Management product portfolio of Axis Bank. This product was launched in the month of May 2006. Axis Bank tied up with a brokerage firm, Geojit Financial Services Limited (GFSL) for providing Online Trading service to its customers. To avail this service a customer is required to open a 3-in-1 account with AXIS Bank. • The Savings Bank account and the Demat account are to be opened with Axis Bank and Trading account with GFSL. Online Trading service offered by Axis Bank is a 3-in-1 integrated seamless and hassle free way to invest and trade in the equities market whenever and wherever you want through the Internet. The orders can be placed over phone as well if not accessible to the Internet. The facility helps to trade in the Cash market, Margin trading and Derivatives. IPOs can also be applied through this facility. Online Trading A/C s are currently being sold through the Sales channel for bundled products. The Sales executives complete the documentation and send the form to Online Trading Desk, CPU for processing. SB a/c opening department opens the SB a/c, Demat Department opens the Demat a/c and once form is complete in all respect, the form is sent to 43

Geojit for opening Online Trading A/c. Geojit opens the account and generates a unique trading code for the client. The SB a/c and Demat a/c are then linked to the Online Trading a/c to give a seamless experience to the customer.

Investment Research Financial assessment of client is the strategic centerpiece of bank advisory

processes.

Bank’s

work

with

a

client

begins

with

understanding their needs in detail and what he or she wants to achieve – family, financial and other objectives. bank use financial modeling to create side-by-side comparisons of choices will affect their client’s financial situation.

After completing the assessment, Axis introduce various instruments and compare their impact on long-term outcomes for the client. By creating and comparing different scenarios, Axis can demonstrate in detail the outcome accomplishes his or her objectives.

Equity: Axis feel that a long-term investment in good stock offers higher growth. Axis have tailored two sets of model portfolios, namely High risk & Low risk. The weightage given to stocks and sectors makes the portfolio high risk or low risk. Depending on client’s objective Axis recommend him either high risk or low risk portfolio.

The team of

experts keep regular track of stocks, which form part of Model portfolio.

Depending on company’s performance and other developments Axis recommend suitable strategy to bank’s clients.

Mutual Fund: The team of analysts identifies excellence in investment management through cutting edge research of various schemes and fund houses.

The team evaluates the performance of a scheme and the consistency of that performance relative to other schemes. Supported by this expertise Axis recommend investments to their clients in different funds with impressive track record and a disciplined approach.

Axis study various parameters and performance measures like returns in last few years, experience of fund managers, nature of Fund, constituents of the fund, and portfolio diversification measures.

44

Depending on client’s profile we recommend investment in a mutual fund and therefore structure a portfolio most appropriately .

Deal Execution: Axis execute trades on behalf of our clients through channel brokers.

Relationship Managers send the orders to dealing team in a prescribed format. The onus of verifying Cash balance and there details is on Relationship Managers. There are three modes of placing an order which are listed below in the order of their preference Execution of Equity deals: Dealing team, after receiving order in prescribed format and through specified medium, sends it to the channel brokers via email. Brokers after executing the trade send the confirmation to the dealing team, which in turn is sent to the relationship managers. In exigencies, wealth managers do place order over phone, which is enabled with voice recording system. Call center team manages voice-recording system Summary of trades that are executed in a day is sent to operations team after market hours along with trade orders and confirmations for reconciliation purpose.

Execution of Mutual Fund deals: Dealing team, after receiving order prescribed format and through specified medium, sends it to the operation team, which executes Mutual Fund deals.

CREDIT CARDS Core Credit Card Variants AXIS Bank formally launched its credit cards on August 3, 2006. The Bank is offering its credit cards on the Visa platform and has five core variants – Platinum, Gold Plus, and Gold. Silver Plus and Silver.

Platinum Credit Card The Bank launched its Platinum Chip Credit Card in Mumbai on March 7, 2008. The Axis Bank Platinum Credit Card would be the first Chip based Platinum Credit Card in India, offering the highest level of security to their cardholders. The Platinum Credit Card is a key

45

premium product and would be placed above the Gold and Silver Credit Card offerings of the Bank. Apart from the highest level of security the card offers a bouquet of exclusive offers that sets the card apart in premium segment.

Exclusive Features: Higher Credit Limits: The minimum Credit Limit on the Platinum Credit Card would be Rs. 1 Lac. Limit ranges from 1 Lac to 15 Lac would be assigned to the Platinum Credit Card.

1. Highest Level of Security: The Platinum Credit card is India’s first EMV (Europay, MasterCard, Visa) certified Platinum Chip Card. The chip card ensures secure interchange of information between the card and Bank’s authorization system. Chip also offers higher data storage capacity which enables the card to perform multiple functions e.g. Efficient Rewards Management by offering chip based loyalty solutions, instant reward redemption etc.

2. Welcome Gifts: •

Premium Wrist Watch: The Platinum Primary cardholders would be entitled to a Premium Wrist Watch. The cardholder can choose one of the two options of a female or a male watch.

•

Complimentary International Return Flight Voucher: The Platinum Cardholders (Primary as well as Add-on) would be entitled to a Complimentary Return Flight Voucher to one of the four most traveled destinations in Asia namely – Dubai, Bangkok, Kuala Lumpur and Singapore. The Welcome Gifts would be issued to the Platinum Credit Cardholders post realization of Joining and Annual Fee included in the first statement.

3.

5% Savings on Fuel: Platinum Credit Cardholders will

enjoy

5% savings on fuel expenses in form of 2.5% cash back and

46

2.5% surcharge waiver. The benefit would be available across all fuel pumps in India for a minimum transaction of Rs. 400 to a maximum transaction of Rs. 4000. These transactions would not earn any reward points. The maximum cash back is limited Rs. 1500/- in a calendar year.

4. Comprehensive

Insurance

Cover:

Platinum

credit

cardholders will get an Insurance cover of Rs. 51 lacs.

Insurance cover Includes air accident insurance, personal accident policy, zero lost card liability, purchase protection and travel related Insurance.

5. Concierge Service: Platinum credit cardholders will be empowered to enjoy round the clock concierge service. From delivery of flowers to seeking golf course referrals, personal help is just a call away. We have tied up with International SOS for providing concierge service to our Platinum Credit Cardholders.

6. Access to over 500 VIP Airport Lounges: Platinum Credit Cardholders

will

get

a

complimentary

Priority

Pass

membership, allowing access to about 500 VIP Airport Lounges in more than 90 countries.

Apart from the above top of the line benefits the Bank has tied up with various partners to offer exclusive offers, which make the Axis Bank Platinum Credit Card one of the best in the industry.

Wellness Offers: 1.

VLCC – Complimentary Package worth Rs. 5000 and 15-30% discount on other services.

Kaya Skin Clinic – Complimentary Package worth Rs. 1000 and 10% discount on first Package at Kaya Skin Clinic.

Premium Apparels and Accessories: 1.

Trussardi and Savile Row – Flat 50% discount on the premium collection for the first time Hidesign – Rs. 500 off on purchases 47

from Rs. 3000 – Rs. 4999, Rs. 1000 off on purchases of Rs. 5000 and above.

Travel Related Offers: 1.

Hertz Car Rentals – Platinum Credit Cardholders enjoy a 35% discount on chauffeur driven cars through Hertz.

2.

Matrix Cellular – Now Platinum Credit Cardholders can stay connected in a much easier and economical way while traveling abroad by discounted country specific SIM cards.

VISA Offers: VISA brings to the Platinum Credit Cardholders exclusive offers on Golf, PVR, Pizza Hut, and Travel guru etc.

Target Segment: The Platinum Card would be aimed at affluent customer segment. Internally this would offer our customers an upgrade from Gold Plus Credit Card. The target audience has been identified as: High-end internal customers (Existing Gold Plus Credit Cardholders and Customers of Retail Assets, Priority Banking Wealth Management etc.)

1. Senior Management and officials of CAT A, B Corporate (Income Cutoff- Net Annual Income- Rs. 4 lacs) 2. Self Employed Individuals with high aspirational levels (Income Cutoff- Net Annual Income- Rs. 6 lacs)

The Bank offers the following attractive benefits in addition to the standard credit card features on its Gold and Silver card variants: Complimentary flight vouchers: Gold Plus cardholders will be entitled to a complimentary return flight voucher and Silver Plus cardholders to a one-way flight voucher. The customers can choose from 29 destinations across the country.

Fabulous discounts on hotels: Gold Plus cardholders will get a guaranteed 50% discount at 120 hotels in the country all year round.

Silver Plus cardholders will be entitled to a 10 – 50 % discount at 1500 hotels worldwide.

Comprehensive insurance package: This includes an air accident 48

insurance of Rs. 20 lac for the Gold card customers, personal accident policy, zero lost card liability, purchase protection and loss of baggage / passport.

Fuel surcharge waiver across all pumps is available for all the Gold Plus customers. The same benefits are also extended to add on cardholders making it a very attractive package for the customers.

Spice: The Bank has tied up with a rewards solution provider to enable instant rewards and surprises for their customers on the basis of the recency, frequency and value of transactions. The Bank has set up a fully owned subsidiary UBL Sales for managing the card sales and to enable it to focus on the quality of acquisition along with a quick ramp up of the business at a national level.

Corporate Card Launched in April 2007, Axis Bank ‘Corporate Card Solution’ is an effective way for corporates and their employees to manage their travel and entertainment expenses. Along with standard benefits and features, they help corporates to track, analyze and manage their travel, entertainment and procurement expenditures and replace cash advances.

Corporate Card is branded as ‘Expense Management

Solution’ for corporates.

Corporate Cards is available under following variants* · Gold Card · Silver Card · Platinum Card The variants are offered based on the salary levels of the employees.

Corporate Cards are mainly used for official spends incurred by the employees on official Travel and Entertainment, i.e., Hotel Bookings, Flight Bookings, Restaurants, etc.

Visa Information Source (VIS): Corporate Card USP Visa Information Source is a proprietary tool of VISA, which comes with Corporate Cards and is a web-based reporting solution to manage 49

employee purchases and monitor vendor spend as well as cost allocation tool.

Magnet Store Card AXIS Bank Magnet Loyalty Card is a Private Label Store Card, which would be valid for purchases only at Magnet Stores. These cards come with a low credit limit and with minimum verification. They are intended to increase loyalty and increase repeat purchases at Magnet stores.

Depending upon the amount of purchase, the customer is sent discount coupons with his monthly statement, which he can redeem the next time he/she purchases from Magnet.

Basic Features: 1. Limit – upto Rs. 5000 to Rs.20000 2. Joining Fee – Nil 3. Annual Fee – Nil; Free for Life Cards 4. Interest on Revolve - @ 2.95 % 5. Late Payment Fee - Rs. 300/6. Monthly Statements 7. EMI Schemes – for high value transactions * Value Added Features: 1. Comprehensive Insurance • Personal Accident Insurance – upto Rs. 2 lac • Zero Lost Card Liability • Purchase Protection Facility Axis Bank Subhiksha Loyalty Credit Card Axis Bank Subhiksha Loyalty Credit Card is a Private Label Store Card, which would be valid for purchases only at Subhiksha Stores. These cards come with a low credit limit and with minimum verification (including KYC norms). They are intended to increase loyalty and increase repeat purchases at Subhiksha stores. The Subhiksha Loyalty Credit Card entitles the customer to special discounts, offers and freebies on purchases from the Subhiksha Stores. These cards cannot be used for Cash Withdrawals and no Balance transfers are allowed on them.

Core Features 50

1. Limit – Rs 2,500 to Rs 20,000 2. Joining Fee–Nil 3. Annual Fee–Nil; Free for Life Cards 4. Interest on Revolve-@ 2.95 % 5. Late Payment Fee -Rs. 300 6. Monthly Statements Value Added Features 1. Comprehensive Insurance consisting of the following elements: • Personal Accident Insurance – upto Rs. 2 lac • Zero Lost Card Liability • Purchase Protection Facility Trust Chemist Axis Bank Credit Card The Trust Chemist Axis Bank Credit Card is the first co-branded credit card in the pharmacy sector. Trust Chemists is a well-known chain of Pharmacy stores in Bangalore. The Trust Chemist Axis Bank Credit Card is directed towards the customers of Trust Chemists. This card can be used anywhere in India or internationally. The Card brings many benefits to its customers including free first aid boxes, medical check-ups, health camps etc. In addition to all this, the customer also gets a 4% discount on all his purchases.

Core Features: 1. Joining Fee – Nil 2. Annual Fee – Nil 3. Cash Withdrawals 4. Balance Transfers 5. Limits according to Income documents submitted 6. Finance charges – 2.95% per month 7. Monthly Statement Cycles AXIS Bank Secured Credit Card Customers who do not have a source of income, income proof or credit history may not qualify for a regular Credit Card. A Secured Credit Card will serve to offer a Credit Card to this group of customers.

A Secured Credit Card requires cash collateral in the form of a Term Deposit account with the Bank, which acts as a security for the line of 51

credit provided on the card. If the customer does not make the Credit Card payments on time, the Bank may use the collateral to pay down the Credit Card balance. The Bank thus does not have any credit risk attached with the issuance of the card. The sourcing of the AXIS Bank Secured Credit Card will be done by the Bank’s Branches.

Product Features: Product features are along the same lines as our standard Credit Card products. The validity of the Secured Credit Card would be 2 years.

However, the facility will be limited by the maturity date of the underlying deposit subject to renewal.

Credit Limit: The credit limit on the Secured Credit Card will be fixed at 80% of the face value (principal amount) of the collateral plus up to date accrued interest i.e. with a margin of 20%. Credit Limit will be extended only against a corresponding increase in the FD amount.

Debit and Prepaid Card Products • Debit Cards • Travel Currency Cards • Meal Card • Gift Card • Rewards Card • Annuity Card

DEBIT CARD A Debit Card provides on-line direct electronic payment from a Bank Account for payments at Merchant Establishments (shops, restaurants, petrol pumps etc.), and access to ATMs for cash withdrawals and inquiries. It can be used both as an ATM Card and as a method of payment (instead of cash / cheques) when purchasing goods and services.

The difference between a Debit Card and a Credit Card is the difference between "debit" and "credit." Debit means "subtract." When you use a debit card, you are subtracting your money from your own 52

bank account. Debit cards allow the customer to spend only what is in the customer’s bank account. It is a quick transaction between the merchant and the customer’s personal bank account. Credit is money made available to the customer by a bank or other financial institution, like a loan. The amount the issuer allows the customer to use is determined by the customer’s credit history, income, debts, and ability to pay. The customer may use the credit with the understanding that he will repay the amount, plus interest if the customer does not pay in full each month. The customer will receive a monthly statement detailing the charges and payment requirements.

AXIS BANK DEBIT CARDS Axis Bank International Debit Cards are VISA Electron/Visa Flag/ MasterCard Unembossed cards and are accepted globally at all VISA / MasterCard

ATMs

and

Merchant

Establishments

accepting

Visa/MasterCard cards. The Bank has issued close to 9 million Debit Cards. The Bank currently issues around 1.5 to 1.7 lakh Debit Cards to the customers on a monthly basis.

Insurance: The Axis Bank International Debit Card comes with the following insurance features – Lost Card Liability: Axis Bank Debit Cardholder is insured for risk of loss due to fraudulent use of a lost/ stolen / missing Debit Card. All he needs to do is communicate the loss of your Card by calling our Customer Service Number or Branch (during working hours).

Purchase Protection: All consumer durable goods purchased using the Debit Card are insured against fire, natural calamity, burglary and house – breaking upto 90 days from the date of purchase.

Personal Accident Cover: In the unfortunate event of loss of life in an accidental mishap, the customer’s beneficiaries will receive the benefit of accident insurance of up to Rs. 2 Lakhs or 5 Lakhs as the case may be. The personal accident insurance covers the debit cardholder and compensates the nominee in the event of accident leading to death.

Sum Assured Rs. 200,000/ Rs. 500,000 per cardholder (a cap of same amount in the event of multiple cards / multiple accounts per person).

53

A few conditions have been built in for the customer to get his / her Personal Accident Insurance cover activated. The customer may also contact 022-67987700 the Debit Card help line directly .

REVENUE DRIVERS In the absence of any annual fee, the revenue driver for the Bank is the commission earned on the transaction amount, when a customer uses his Debit Card at a merchant outlet. Thus the challenges are: • Activation of Dormant Cards •

Migration of transactions at ATMs (non-revenue earning) to Point of Sale (where the bank earns a commission) In the financial year 2007-08 the Bank’s revenues from its Debit Card program were approximately Rs. 50 crore. Usage of the Card varies according to age and location. People in the metros, large towns use the Debit Card because of more awareness and concentration of ATMs and POS terminals. The highest usage comes from Tier I cities like Mumbai, Delhi, Kolkata, Chennai, Hyderabad and Bangalore where most merchant outlets have EDCs (Electronic Data Capture Terminals). Similarly age of the customer also has a bearing on the usage pattern. Studies show that the Debit Card is used maximum by people in the age group of 25-45.

ONLINE TRANSACTIONS USING DEBIT CARDS Now online transactions can be made using Axis Bank Visa Debit Cards (except NRI Domestic Visa Debit Card) by getting the Debit Card registered to Verified by Visa (VBV). Verified by Visa (VBV) is an easy to use, secured online payment service from Axis Bank that lets you shop securely online with your existing Axis Bank Visa Debit Card.

This service through a simple checkout process, confirms your identity when you make purchases on the Internet.

Through a personal

assurance message it also reassures you of the authenticity of the online store.

AXIS BANK TRAVEL CURRENCY CARDS 54

The most common way for travelers today is to carry foreign exchange in the form of Travelers Cheques or Foreign Currency (cash). However, Travelers Cheques have certain inherent disadvantages such as limited places and hours for encashment and adverse exchange rates.

Invariably people end up losing a couple of hours from their valuable time in trying to encash their Traveler’s Cheques. Currency is difficult to handle and there is no replacement in case you lose currency abroad.

AXIS Bank Travel Currency Card helps people who are on the move for business or for leisure, directly and through its intermediaries. AXIS Bank Travel Currency Card is a superior alternative to Travelers Cheques or Foreign Currency Cash since it ensures a high level of convenience for utilization and security by not carrying cash.

AXIS Bank is a market leader in the Travel Currency Card segment providing eight currency options in US Dollars, EURO, GBP, Australian Dollars (AUD), Canadian Dollars (CAD), Singapore Dollars (SGD), Swiss Francs (CHF), and Swedish Kroners (SEK). AXIS Bank has strong direct relationships with top IT companies and with Full Fledged Money Changers (FFMCs) to sell the Travel Currency Card. The Travel Currency Cards can also be availed through any of the 671 Axis Bank branches.

Worldwide Acceptance The AXIS Bank Travel Currency Card is a VISA signature based card, which signifies the widest acceptance. It is accepted at over 900,000+ VISA enabled ATMs and at over 14 million VISA enabled POS Terminals worldwide. It can be used to settle hotel bills, pay for airline tickets or shop all with a single swipe.

Security There is a secure 4 digit PIN to secure all cash withdrawal transactions at the ATMs. If the Card is lost or misplaced, all the customer needs to do is call the 24-hour Customer Service Number, the Card will be immediately blocked to guard against misuse and a replacement Card will be sent to the customer within two working days, upon request. In the meantime, the Bank also provides access to Global Customer 55

Assistance Service (GCAS) from VISA, which can be used, among other things, to get emergency cash assistance for a fee.

Comprehensive Travel Insurance (Optional Charged Rs 150) The Cardholder is covered with Comprehensive Travel Insurance, less Mediclaim to provide him the security and comfort as he travels abroad. The cover is available during the cardholder's travel abroad.

Lost Card liability Insurance The cardholder also gets insurance coverage equivalent of upto Rs. 2,00,000/- for Loss of Card from the time the loss is reported to us.

Reloadable The Card is valid for five years. During this period the card can be reloaded any number of times for any subsequent trips. Remote reloading is also possible as per instructions received from your office to ensure adequate funds for your executives at all times.

Monthly Statements Every month the statement of spending on the card will be sent to the e-mail id as provided by the executives while filling up the form.

Access to Available Balance on the Internet Banking Module The customer can log on to our Internet Banking module, iConnect™ and check his available balances and the transactions online.

Unique Facility of PIN Change on the AXIS Bank ATMs in India Before the employee embarks on his journey abroad, he/she can change the 4-digit PIN to a more convenient PIN and also check his balance. These transactions can be done on any AXIS Bank ATM and are not charged.

Minimum and maximum loading The card may be loaded with a minimum amount of US$ 250 to a maximum of US$ 25000. Reload amounts may be of a minimum of US$ 100 Charges The Pricing for Sale/Usage of the Card is as under: � Initial Sale Price – Rs. 150

56

� Reload /Renewal of the card – Rs. 100 � No charges for zero balance maintenance on the card �AXIS Bank charges for the replacement of the Card, in case of loss: US$3.00 (Equivalent in other currencies) plus handling (courier) charges at actual.

AXIS Bank Meal Card The AXIS Bank Meal Card is a prepaid card, aimed primarily at corporates as a convenient and secure mode to disburse Meal allowances to their employees. The card is based on the MasterCard Platform, usable at merchant outlets selling ready-to-eat items, food and beverages and reloadable on the request of the corporate only.

Target Market The target market for this product would constitute of corporates who are willing to provide a meal allowance to their employees. There would be three types of corporates to target: • Corporates who are already providing their employees with meal Allowances through the use of paper-based vouchers the comparison table above • Corporates who are providing meal facilities to their employees through in-house canteens, contractual caterers, etc Product features Card Type – The Meal Card is being launched on the MasterCard Platform, with a validity period of 5 years. The Meal Card is valid for use in India only.

Usage - The Card is usable only at all AXIS Bank ATMs for balance enquiry, PIN Change and statement of transactions and at MasterCardenabled merchant outlets selling ready-to-eat items, food and beverages in India. Telebanking facility is allowed to the cardholder for balance enquiry. I-connect access is blocked on the Meal Card.

Personalization: The card will be personalized with the following: a. Name of the cardholder b. (Optional) Unique ID (employee ID or name of the organization) below the name

57

c. Card number d. Validity Period of the card Branding: The Meal Card has been branded the ‘AXIS Bank Meal Card’ or simply the “Meal Card” in order to highlight the purpose of payment received.

Funding of the Card: On a periodic basis, based on instructions from the corporate, the card accounts would be funded by the branch. The cardholder is not allowed to fund the card account.

Additional Features: The following value added features may be provided (on a case-to-case basis, depending on the Bank’s agreement with the corporate): • Insurance Cover on the Prepaid Card comprising of Purchase Protection and Zero Lost Card Liability upto Rs. 20,000/• Free Telebanking facilities • Account Statement through E-mail on a periodic basis.

Transaction Limits: Daily POS transaction limit of Rs. 3,000/ATM transaction limit: Rs. 0/Card account balance limits: Maximum balance at any time on the Card – Rs. 20,000/Commercials: The commercials shall be decided by the Central Office, based on factors like approximate number of cards to be issued and average payout per card per year, AXIS Bank Gift Card The AXIS Bank Gift card is a rupee-denominated, non-reloadable, prepaid card based Electron platform usable at all Visa enabled merchant outlets and is unique as in • The AXIS Bank Gift Card comes in a unique Gift-Wrap shape unlike the normal rectangular shape prevalent in the market. It is aimed to score over competition on this factor.

•

AXIS Bank is the first to try this kind of shape on a card in India.

The Bank intends to market the card based on aesthetic appeal of the card. It gives all our branches an added edge in terms of

58

sourcing both walk-in and existing customers for the Gift-Card product.

Target Market The AXIS Bank Gift Card has two target markets Gift Card can be sold to the Bank’s existing customers or marketed to other retail customers as • It is a solution to the pains associated with choosing a perfect gift that the beneficiary would appreciate.

• It is a smart alternative to cash and gift cheques Corporate customers The Gift Card can be sold to corporate customers too as a mode of giving out gift clients, vendors and employees on any occasion especially during the festive season. Retail customers Branches should approach their corporate customers during festivals like Christmas, Diwali, New Year, etc and hard sell the product as a means of employee motivation.

•

In the IT/ ITES sector, there is also a practice of giving employee awards as gift vouchers, which also can be replaced with our Gift Card.

Product Features Branding: The Gift Card has been branded the “AXIS Bank Gift Card” in order to highlight the purpose of the card.

Card Type: The Gift Card is being launched on the Visa Electron platform, with a validity period of 2 years. The Gift Card is valid for use in India only.

Usage: The Card is a usable at all Visa-enabled merchant outlet in India. Telebanking facility is allowed to the cardholder for balance enquiry. VISA Money Transfer (to and from) and ATM access is blocked on the Gift Card.

Non-Personalized: Since the Gift card will be available off-the-shelf akin to the Travel Currency Card; it will come personalized only with the following: a. Card number b. Validity Period of the card 59

Transaction Limits Daily POS transaction limit - Rs. 50,000/ATM transaction limit - Rs. 0/Load Amount Minimum Load Amount: Rs. 1,000/Maximum Load Amount: Rs. 50,000/-. No Reloads are allowed on the card.

Balance Requirements At no point of time should the balances in the Gift card account exceed a total amount of Rs. 50,000/-. Exception reports will be available with the RB-CO in case of accounts where the balance has crossed Rs. 50,000/- and all such accounts would be immediately blocked.

Back End Account At the back end, dummy accounts have been opened under a special scheme code SBGIF under the SOL Id - 020 (Andheri -Lokhandwala Branch).

Funding of the Card Once the customer fills up the Gift Card application form at the branch and deposits the amount to be loaded onto the card, the branch staff will fund the card account. Charges Issuance fee:

Rs. 100 or 1% of the amount loaded on the card,

whichever is higher.

Quarterly Maintenance Fee: Rs. 25/- to be deducted from the card account at the end of each calendar quarter. For any kind of fee waivers for corporates, branches need to get back to the cards team at RB- CO. Rewards Card – An Introduction The Axis Bank launched Rewards Card in July 2005. Rewards card is a prepaid card, aimed primarily at corporates for the disbursement of Salary/ Commission/ Incentive payments. Rewards Card acts as a substitute for Cheques, Pay orders or Demand drafts for the corporates with low-ticket salary size.

60

The Rewards Card, comes with a validity of 5 years, is an innovative and extremely convenient way to receive regular Salary / Incentive / Commission payments.

Target Market The Prepaid Rewards Card may be marketed to the following segments: 1) Corporates employing an agent/distributor base, such as direct marketing companies, multi-level marketing companies and insurance companies.

2) The card may also be marketed as a replacement of low-end salary accounts. Several corporates, owing to the low average salary payout to their employees, do not qualify for salary accounts with our Bank. Such corporates may be offered the Rewards card facility whereby the monthly salary would be directly loaded onto the card.

Product Details Instant Gratification Immediate access to Salary / Incentives/ Commissions payments anytime, anywhere to the cardholder.

Usage: The Rewards Card can be used at all Axis Bank ATMs free of cost and at all other VISA ATMs in India at applicable rates. In addition, the Card may also be used at all VISA enabled merchant outlets in India to pay for purchases. Please note that the card is valid for use only within the geographical boundaries of India.

Transaction Limits • Daily cash withdrawal limit at ATMs -Rs. 40,000/• Daily POS usage limit -Rs. 40,000/-. � Easy to Pay: The corporate has to give a single loading instruction to the Bank for loading the cards � Annuity Card – An Introduction AXIS Bank in association with Life Insurance Corporation of India

61

presents the internationally accepted Co-branded Prepaid Annuity Card. The AXIS Bank LIC Annuity Card is a rupee denominated card which is an innovative and extremely convenient way to receive regular Pension / Annuities from LIC of India.

The LIC Annuity Card apart from being an ATM Card used to withdraw cash, it also enables to shop and make purchases, thus serving the dual purpose, just like the normal Debit card. The Annuity Cardholder will get his annuity reloaded on the card whenever it is due from LIC of India, giving him the access to his funds anytime, anywhere.

The LIC AXIS Bank Annuity Card is launched on VISA Electron platform and is accepted at VISA / VISA Plus ATMs worldwide and at all Merchant Establishments displaying the VISA Electron sign globally.

Product Details: Eligibility: Only the Annuitants of LIC are eligible for applying for Axis Bank LIC Annuity Card. No Bank Account or Average quarterly Balance maintenance is required.

Commercials: The Bank has entered into an agreement with LIC of India on the Annuity Card whereby the fees shall be borne by the LIC of India. The branches are thereby advised to inform the customers that, the “Annuity card” is Free to all the individual annuitants.

Additional Services: The following services shall be made available on the Annuity card: • Purchase Protection and Zero Lost Card Liability and • Free Telebanking facilities • Account Statement through E-mail on a monthly basis.

Global Acceptance: The LIC AXIS Bank Annuity Card can be used at more than 20,000 VISA ATMs and 80,000 Merchant Establishments in India. The card is also internationally acceptable at more than 9,00,000 ATMs and 13 million Merchant Establishments worldwide.

62

Validity: The Axis Bank Annuity Card comes with validity period of 10 years Transaction Limits: • Daily ATM transaction limit: Rs 40,000/• Daily POS transaction limit: Rs 40,000/Insurance: Zero Lost Card Liability: The Annuity Card comes with a Zero Lost Card liability. In case of loss of your Annuity Card, you are insured for the loss due to the fraudulent transactions done using your card. You would however be required to report the loss of the card to the Bank immediately upon realizing the loss.

•

Purchase Protection: All consumer durable goods purchased using the Annuity Card are insured against fire, burglary, natural calamity and house-breaking up to 90 days from the date of purchase.

Customer Service: • 24 Hour Emergency Helpline: In case of the card lost you may call our 24 Hr emergency helpline 022-67987700 for card blocking • Tele Helpline: For any assistance, call our customer service no 1860-425-8888 (From a BSNL / MTNL landline anywhere in India) during 9 am to 7 pm (Monday to Saturday) • Email Helpline: The cardholder may write his Annuity Card product related queries to annuity.card@axisbank.com How to apply for Annuity Card The Annuity card is absolutely Free of cost for the cardholder. Only the Annuitants of LIC are eligible for applying for Axis Bank LIC Annuity Card. The cardholder can download the Annuity Card application form from the website of LIC. The duly filled Annuity card application form has to be sent to the LIC of India office along with anyone the following KYC documents: • Defence / Police ID/ Employee ID Card • Voter Card ID

63

• PAN Card • Driving License OR Passport

Merchant Acquiring Service Axis Bank has launched its Acquiring business from December 15, 2003. Currently, the Bank has an installed base of more than 77,000 terminals and adding around 5000 MEs per month, the highest in the industry in terms of nos. added per month. Axis Bank is now the 2nd largest player in the country.

Market Scenario Business is concentrated in top 8 centers New Delhi - 35% Mumbai Rest*

- 30% -

35%

*(Chennai, Hyderabad, Bangalore, Kolkata, Pune, Ahmedabad and others) Our Offerings Salient Features of Cards Acceptance Services (Acquiring) offered by Axis Bank is: Enhanced Protection against Frauds To ensure a high level of protection from frauds, we have built in sophisticated security features additionally in the EDCs. Our terminals are also EMV certified and can accept chip cards.

Customer Care of Highest Standard: A robust, round-the-clock authorization and merchant support services function ensures fast response times and reliable support in case of network outages and EDC malfunctioning. This minimizes downtime, thus enhancing productivity and profitability.

Loan against card receivable (Card Power): The Bank offers schematic loan to securtise the card receivables in the form of cash credit and short-term loans.

Dynamic currency conversion (DCC): We can give the option of Dynamic currency conversion to our MEs whereby the international

64

cardholder can choose to transact in his local currency.

International Banking Department The International Banking Department, formerly known as NRI Services Department, was formed in the year September 2001 to develop the NRI business of the Bank. Subsequently, the department was re-christened as International Banking Department to give shape to overseas expansion strategy of the Bank. Presently, the department is involved in identifying opportunities in overseas markets with a perspective of having a presence and implementing the same. Once the foreign offices start functioning, the department performs overall supervisory functions.

The Flashback The rapidly changing world around us in terms of economic liberalization and shifting of centre of gravity of world economy to Asia led to identification of overseas expansion as one of the key opportunity areas for the Bank. The stepping-stone chosen for international waters was the island of Singapore, given its vibrant financial centre, historical connections, presence of the Diaspora and geographical proximity. The Singapore initiative was a tremendous learning experience for the all those involved and the efforts culminated into reality in the month of April 2006 when the branch commenced its operations. Since then in a short span of a year, the Bank entered Hong Kong, DIFC-Dubai and Shanghai, China. While the first two are branches, the Shanghai office is a representative office engaged in business promotion. Bank started Financial Year 2008-09 with the opening of its second Representative Office in Dubai (UAE) under Representative Office License issued by Central Bank of the UAE The Present Given the changes the department has witnessed over a couple of years, the profile of the department has undergone metamorphosis and today, we have built up skills that is multi directional and is geared up to take up increasingly diverse and complex tasks.

65

What we do As mentioned in previous paragraphs, the department gets in to act right from the stages of conducting research on the overseas opportunities, converting the opportunity in brick and mortar structure and then providing all supports to enable the overseas offices to meet the stated business objectives. Therefore, our functions can be categorized at Research Stage, The Execution Stage and the Operational Stage.

The Research Stage The first step to a new initiative and arguable the most crucial because a false start can be time consuming and can have the associated opportunity cost. The parameters that go in for a scrutiny are the business environment, the opportunity, the connection and the value that such a presence at can bring to the Bank. The analysis of the above parameters is exhaustive and elaborate involving close scrutiny of prevailing regulatory environment, the startup cost that the Bank has to bear, the break even time, taxation levels and opportunity that can be converted in tangible revenue. Once internal approvals are in place, necessary permissions have to be applied to Reserve Bank of India and the regulators in the host country.

The Execution Stage Once the approvals are through from RBI, we move on the next stage where in discussions are initiated with the regulators in the host country, presenting our case and starting application formalities. The application process is long, spread over months and involves extensive interactions with regulators in the host country. Typically, the application for a license in an overseas location involves detailed assessment of the business plan, our policies and practices. Once the approvals are in place from the host country regulators, the action time begins with multi pronged initiatives be it for identifying premises, staff, administrative structures and host of compliance obligations. It takes almost three months to commence operations once host country approvals are in place.

The Operational Stage 66

The commencement of business at foreign offices is one of the milestones and the easier portion of the overseas initiatives. The stakes are highest in the post commencement stage, which is the time to convert the opportunity into tangible revenue streams in an alien surrounding.

Besides

the

business

parameters,

the

post

commencement stages also brings in compliance issues and operational issues, beside periodic updation of the administrative structures in terms of polices and procedures. The International Banking Department is involved in providing support to foreign offices in business development, in administrative matters and is the single point link between foreign offices and the rest of the Bank Profile of the Existing Foreign Office Singapore Since its inception, the Singapore branch has been active in the area of corporate banking and has been able to participate in and facilitate the debt raising activities of Indian corporates in the international markets.

The Singapore branch also provides trade finance and treasury solutions. As of March 31, 2008 the branch has built up an impressive balance sheet with total assets at USD 1.18 billion and Profit Before Tax of USD 18.97 million.

Restrictions: In addition to restrictions imposed by terms of operations of Merchant Bank and ACU, the license terms stipulate the following conditions 1. Asset Maintenance Requirement of 75% of all DBU books non-bank liabilities and, 2. Limiting Deposit taking activity from Accredited Investors, The activities permitted as per ACU terms of operations generally exclude dealing in SGD, the local currency.

Hong Kong The Hong Kong branch commenced operations on March 21, 2007 and is a full license bank branch that enables the Branch to operate with a wide range of financial offerings covering Corporate Banking, Trade 67

Finance and Retail Banking businesses. However, at the moment, the branch is offering services in the area of Corporate Banking, Trade Finance and Treasury solutions.

Restrictions: As per the extant regulations in Hong Kong, any person carrying on ‘Regulated Activities’ that include dealing and/or advising in securities, futures contracts, foreign exchange trading, security margin financing and asset management is required to be licensed or registered with the Securities and Futures Commission (SFC). The process for obtaining “Registered Institution” status (in Hong Kong) is under active consideration so as to enable the Branch to undertake fullfledged wealth management and capital markets related activities in Hong Kong.

As at the end of 31 March 2008, the Hong Kong Branch had loans and advances level of U.S.$278.89 million and Profit Before Tax of USD 4.59 mio.

DIFC-Dubai During the fiscal year 2007, the Bank obtained a Category-1 license from the Dubai Financial Services Authority (DFSA) to set up a branch in the DIFC. The DIFC Branch had commenced operations in April 2007 and is authorized to conduct the following businesses in respect of Credit, Shares, Debentures, Warrants, Options, Units and Futures: 1. Accepting deposits; 2. Providing credit; 3. Dealing in investments as principal/agent; 4. Arranging credit or deals in investments; 5. Managing assets; 6. Advising on financial products or credit; and 7. Providing custody General Restrictions on Authorized Firms (AF) operating from DIFC (also applicable on our DIFC Branch): All AFs, conducting banking business from DIFC, must ensure; (1) That it does not conduct Investment Business, Banking Business or 68

Provide Trust Services with or for a Retail Customer.

Shanghai, China The Bank has a representative office at Shanghai, China, which is involved in the business promotion, conducting research on the opportunities available to the bank for business, liaisoning between Bank’s customer and correspondent banks, etc. The office was inaugurate on July 17, 2006 under the Representative office License issued by China Banking Regulator Commission (CBRC).

Dubai Representative Office, UAE: The Bank received Representative Office License from Central Bank of the UAE in March 2008. Consequently, Bank commissioned its second representative office in May 2008 in Dubai (UAE).

The Future The Bank had availed services of M/s Mckinsey & Co. in devising the strategy for development of business at the foreign offices of the Bank.

Based on the recommendation of the said engagement, a business model for the overseas operations of the Bank has been drawn up to meet objectives adopted by the Bank, in which the department plays a crucial role.

Business Banking Department The Business Banking Department (erstwhile Institutional Business Department) was set up in the year 2000, with the objective of having a special cell to serve the institutional and corporate clientele of the Bank. Business Banking initiatives revolve around transaction banking services to garner Business Current Accounts, Cash Management Service mandates, Government Business. The Business Banking department has consistently focused on procuring low cost funds by offering a range of Current Account products and Cash Management solutions

across

all

business

segments

covering

Corporates,

Institutions, Central and State Govt. Ministries/Undertakings as well as small business customers. Cross selling of transactional banking products to develop account relationship, aided by product innovation

69

and customer centric approach have borne fruits in the form of growing current account balances and increasing realization of transaction banking fee.

The Department presently focuses on the above three broad areas through the respective Business Groups, as under: • Business Current Accounts • Cash Management Services • Government Business BUSINESS ACCOUNTS Business Current Accounts are major thrust area of the Bank.

Accepting deposits (broadly categorized as Demand Deposits and Time Deposits or Term Deposits) for the purpose of lending and investment is one of the basic functions of banks. Deposits are the main source of their working funds. The volume and growth of deposits of a bank are indicators of the consumer confidence, and are also considered as important parameters for measuring its size and performance.

Demand Deposits are low cost source of funds and it forms a significant part of a bank’s deposit base. Higher the proportion of Demand Deposits in the overall deposits of a bank, lower is the cost of funds for the bank. On current account portion of Demand Deposits banks do not pay any interest hence current accounts are the cheapest source of funds. However current account deposits are very volatile in nature, as these deposits are not committed to the bank for any fixed time period.

Hence healthy pace of Current Accounts acquisition is an imperative for sustained growth of balances.

The Bank has over 3.50 lacs current account relationships with an outstanding balance of Rs. 20,045 Cr. as on March 31, 2008.

Business Accounts Group: The focus of the Group is to increase the share of Demand Deposit by

70

broad basing the Bank’s Business Current Account Clientele reducing the Cost of Funds and improve bottom line as well. Generation of fee income from this segment by offering a range of products to suit the various customers such as Small Businesses, SME, Large Corporates as well as Institutions has always been constant endeavor of the Group.

The Group also drives the business by effectively using the Sales Executive and Business Banking RM Channel of the Bank. The focus of the Group is also on new initiatives offering better privileges for highend customers.

Product Development: Under product development constant market research through data mining on the existing portfolio, study of the usage patterns, processes, networking and pricing offered by competitors, decision-making process of consumers etc. is carried out to develop new customized products based on the findings.

Sales: The role of the sales team is to enhance the penetration of various products, which are developed and designed by the product team. They are also responsible for monitoring the activities of the entire sales channel.

Marketing: The marketing team takes care of the promotional aspects like brochures, posters, advertising, running promotional campaigns, launching special schemes, etc.

71

Axis Bank Current Accounts The Bank offers a range of current account products to meet the needs of the various customer segments such as Small Enterprises, Traders, Exporters, Corporates and Institutions. The various accounts are as follows:

Value Based Current account normal Business Advantage Business Classic Business Privilege

Sector based Krishi Current account Capital Market Current Account Business Global Current Account Builders & Real Estate Current

Channel One Current Account

Account Current

Club 50 Current Account

Maritime Current Account Inland Road

Account

Shipping

&

Transport Current Account Travel, Tourism & Hospitality These products offer flexibility to customers to choose from the above options with varying minimum monthly average balance commitments and associated tariff structure. In addition to conventional banking facilities, these accounts offer Multi-City At Par payable cheque- book facility and Anywhere Banking facility across branches. Customers can access their account Online through Corporate iConnect, our Internet banking platform, as also through Phone Banking facility and can

72

receive account information on mobile phones and electronic mail.

Why different types of Current Accounts?

The reason why the Bank has different types of current accounts is to cater to each and every segment of the market. The various value based products are based on the MAB / HAB requirement and hence lower MAB products are designed for the small players in the market and the higher MAB products are designed for the SMEs and Large Corporates. Hence, need for different products with various MAB / HAB requirements. The high value accounts provide higher float income for the bank while the accounts with lower MAB provide more fee income for the bank. Current Account Normal and Current Account Business Advantage cater to the lower end of the market, whereas Current Account Business Classic, Current Account Business Privilege, Channel One Current Account and Club 50 Current Account cater to the higher end of the market.

Axis Bank is a pioneer in terms of launch of the 10 lacs and 50 lacs product. In fact, 24 months after the launch of Channel One Account, ICICI Bank has launched a similar variant called ‘The Elite Current Account’. ‘Channel One’ and ‘Club 50’ are the high-end current account variants launched by the bank, where customers enjoy various

transactional

benefits,

lifestyle

privileges,

dedicated

relationship manager, etc. The Channel One product was introduced in F.Y.2005-06 and has been well received by the customers and based on its success and to nurture the relationship with premium customers by providing enhanced product features and benefits, Club 50 current account was introduced in F. Y. 2007-08 which is a premium product over and above Channel One. Axis Bank has also launched seven industry specific products, which cater to various industry segments where the bank has identified strong business potential and have offered customized solution to these segments.

At Axis Bank Current Account group, segmentation is a two-pronged 73

road. They are: Value Based Segmentation: Using this, we segregate customers based on the Monthly Average Balances (MAB), which they maintain in their current accounts. The services offered and charges levied vary according to the MAB requirements. For example, a corporate maintaining MAB equivalent of Rs.10 Lakhs will get a Relationship Manager, whereas anybody maintaining less than that will not be able to avail the facility. In this manner we are able to insulate our cost structure and provide facilities commensurate to the overall profitability of an individual customer.

Sector Based Segmentation: The second half of F.Y. 2008-09 saw us grow in stature as a trendsetter in the sphere of transaction banking.

We, for the first time in the Business Account space, have treaded on the path of segmentation and sector specific product offerings. This approach has been a result of both data driven analysis and intuitive business sense. With an objective to target various industry specific segments to garner more current accounts, the main aim of targeting industry specific accounts is as follows: 1. Identification of needs of a particular segment and to fulfill them effectively.

2. To provide an end-to-end solution by integrating the bank platform with the industry requirement.

3. To remain ahead of competition by identifying lucrative segments and designing need based products thereby capturing the tremendous growth potential these segments offer. The other Current Account schemes available with the bank are: • Current Account BANK: The scheme is meant for opening of Current Accounts of other Banks. The concessional collection and payment facilities are an integral part of the product feature. •

Current

Account

-

GOVT

ORGANISATIONS:

Offered

to

Government Organizations / Bodies (Central Govt./State Govt./Local Bodies Govt Dept. / Autonomous Bodies) with no Minimum Balance 74

Stipulation and host of other services without any charges.

• Current Account – PUBLIC SECTOR ENTERPRISES: Launched during 2007-08 specifically for Central and State Public Sector Undertakings (PSUs) with no Minimum Balance Stipulation and host of other services without any charges.

• Current Account - LIC: A special current account offered by the bank for Life Insurance Corporation of India with certain special benefits as per the MoU agreed with LIC. • Current Account - SWEEPS: Facility offered by the Bank to current account customers for linking multiple current accounts. The product facilitates payments in case of shortfall in the drawee account by sweeping in the balance from linked accounts. For the purpose of payment, total balance in all the linked account is considered as a pool balance.

Future Strategies: • Co-ordination with Branches for sourcing large Value accounts.

•

Greater emphasis on sales campaigns / internal sales contests, focused on select business segments through business segmentation research support & dissemination of learning with sales team.

•

Co-ordination with Large and Mid Corporate groups of the Bank for

high

value

current

account

relationships

(including

Franchisees/ Dealerships).

•

Systematic process for deepening of existing current accounts relationships through identification of Accounts, Assessing Business potential through customized offering, ring fencing existing high- end customers by categorizing their accounts in appropriate scheme codes.

• Additional Regional Desks to provide intense focus.

• Product & Sales Training Programmes.

Cash Management Services Under cash management services, the Bank offer solutions towards collection & payment services, which allow CMS clients to minimize the

75

gap between collections & remittances. The bank also provides web enabled query and MIS that facilitates easy reconciliation of their collection and payment transactions.

The Bank offers a comprehensive array of collection and payment products and has emerged as one of the front-runners in the area of Cash Management Services with a constant endeavor to offer competitive and innovative customized solutions to corporates. Our technological initiatives backed by innovative solutions enable us to constantly provide our customers with improved offerings to help them do their business better. The different products offered under CMS are:

Collections: - Local Cheque Collection (LCC) - Upcountry Cheque Collection (UCC) - Post Dated Cheque (PDC) Management and Bulk Collections - Utility Bill Collections - Collecting Bankers for IPOs/FPOs/Rights Issue - Collecting Banker to Educational Institutes for fee/prospectus selling - Cash pick up and delivery - Electronic Clearing Services (ECS) Debit - Collection through Real Time Gross Settlement (RTGS) Payments: - Payment of Interests/Dividend/Redemption - Centralized/Remote Printing of Bulk Customer Cheques - Remote/Centralized printing of Bulk DDs - Direct Credit - ECS Credit - National Electronic Fund Transfer (NEFT) - Payment through RTGS

76

Cash Management Products: Our cash management products include Local & Upcountry Collections with pooling of the funds to a central account along-with customized MIS. We have a Centralized version of collection module with realization process under Local cheque collection.

In addition to collection, we also offer Local & Remote Payment facility through customized Customer Cheques and Bulk Demand Drafts with Cover Note through centralized or remote printing, Electronic Clearing Services, Disbursement of dividend and interest, remittance services and Internet- based payment products.

We offer electronic payment facilities to our Government, Corporate and Institutional customers for payments to their vendors/ suppliers through various modes such as Direct Credit and Electronic Clearing/ Funds Transfer facility. This service offers a high level of convenience since no physical instruments are required and all transactions are effected electronically.

The Bank also offers online viewing of transactions and query resolution through Internet.

Cash Management Network: Presently, we offer an ever-expanding network of electronically linked CMS branches across 360 cities in the country. In addition to our own locations, we have tied up with various other banks to offer a broader coverage to meet the specific requirements of our customers under Cash

Management

Services.

We

have

today

an

extensive

correspondent bank network of more than 3000 locations, which provides us a definite competitive advantage.

Our dedicated

Centralized Collection & Payment Hub (CCPH) is available on all days except Sundays & National Holidays to resolve customer queries promptly and efficiently. Additionally, we are also offering our CMS services to other Private and MNC Banks as a Correspondent Bank.

77

Advantages of Cash Management Services: ďż˝ For Corporates: - Improved liquidity through faster access to funds.

- Assured Funds in the Pooling Account.

- Reduced borrowings and lower interest payments.

- Deployment of Funds is easier by reduction in accounts maintained with Banks for different requirements.

- Lower operational costs.

- Greater ease in accounting and reconciliation through Client Specific MIS, including MIS through Web. - Single Window Query ďż˝

For the Bank - Client Acquisition by offering CMS as an entry strategy - Fee as well as Float Based Income - Cross Selling of other Banking Products - Developing overall relationships - Monitoring of Cash Inflows of the Corporate where Bank has a Credit Exposure - Balancing of Mis-matches at the Branch level from the CMS funds Cash Management Group: The Group strives to generate fee and float income by offering highend value added transactional services and customized solution to various client segments. The focus is to target the Large and Mid Corporates and Institutions in coordination with the Relationship Managers of Credit department and SME/ other Clients through the Zonal Business Banking/ Regional Business Banking Officials and Branches. The Group performs the following broad role:

78

•

Product Development: The product development team is engaged in constant market research to keep our offerings in line with the industry, to develop new products to remain ahead of competition and process re-engineering to add value to existing products. The focus is also on continuous up-gradation of product capabilities and process efficiency to meet the needs of various customer groups. The team also does the appraisal of the various proposal sourced by the RMs/ Zonal BB/ Regional BB desk in terms of pricing and profitability.

•

Implementation & Logistics: The implementation & logistics team ensures successful implementation of the mandates received by the Bank and manages the Correspondent Banks, Courier Agencies etc. The team also endeavors to expand the Bank’s

CMS

network

through

additional

tie-up

with

Correspondent Banks/ Courier Agencies.

•

Business Development: The team focuses on increasing business volumes from the existing clients & sourcing additional business by aggressively acquiring new clients through close co- ordination with Relationship Managers and Regional/Zonal Business Banking officials and branches.

•

Zonal Business Banking, Regional Business Banking desk and Branches

Future Strategy: The role of the Cash Management Group at Central Office is to formulate strategies for various businesses in CMS-Collections and Payments and drive business through Zonal BB/Regional BB. The broad strategies for achieving the same are as under: •

Providing customized collection and payment solutions to various Client Segments including large and mid Corporates, Mutual funds, Brokering firms, etc by leveraging the Bank’s technology.

79

• Emphasis on Electronic Remittances viz. ECS /RTGS/NEFT. •

Increasing CMS network - own locations & through Correspondent Bank tie ups.

•

Close Coordination with RMs for large & mid corporate accounts.

• Close Co-ordination with Zonal BB/ RBBs for SME Clients.

• Thrust on Utility Service Providers in Telecom/ Energy Sector for generating fee income.

• Special focus on IPO Collections/ Refund Payments for float income.

Further to this there is a constant endeavor to enhance the existing client relationships by making a constant effort to offer the entire gamut of services to all the existing customers. The CMS group is also focused on widening and deepening the relationship by cross selling other Banking Products thereby increasing the fee and float income for the bank.

Government Business The Bank has witnessed tremendous growth in Govt. Business over the past 6 years, making it a leading player among its Peer Banks in this segment today. As an Agency Bank of RBI, the Bank handles Tax/ Non-Tax Revenue Collection on behalf of the Central & State Governments,

Expenditure-related

Payments

of

Central

Govt.

Ministries & Departments and Collection of Railway Freight & Passenger Revenue for which it receives Agency Commission from RBI. Under Non-Agency Business, for which RBI authorization is not required, the Bank strives to strengthen the existing Relationships as also develop new relationships with various Government Organizations and Central/ State Govt. Public Sector Undertaking (PSU’s) through customized offerings towards providing Account Management Services and Collection/ Payment Services, contributing to Current Account Balances as well as Fee Income.

During the Year ended March 2008, the Bank has handled Govt.

80

Business Throughput of Rs. 53,585 Crs. with Zero-Cost Float contribution of over Rs. 295 Crs. from Tax/ Non-Tax Revenue Collections, as an Agency Bank. Additionally, the Govt. & PSU Segment has generated Fee Income of Rs. 16.87 Crs. and contributed over Rs. 834 Crs. towards Current Account CDAB of the Bank and Rs. 2,723 Crs. towards Current Account year-end balance of the Bank for the Year ended March 2008.

Authorization as an Agency Bank of RBI: Axis Bank has been authorized by Reserve Bank of India and Govt. of India vide its letter dated August 27, 2003 to handle all Government Business transactions as an Agency Bank which includes the following: •

Collection of Direct and Indirect Taxes

•

State Government Businesses such as Collection of Sales Tax, Pension Payments, etc.

•

Expenditure-related Payments on behalf of various Ministries/ Departments of Govt. of India

•

Disbursement of Central Civil as well as Non-Civil (Railways, Defence, Telecommunication and Posts) Pensions

Apart from our Bank, the other Private Sector Banks authorized for conducting Government Business are ICICI Bank and HDFC Bank.

Prior to the induction of these Private Sector Banks, handling of Government Business transactions was restricted to Nationalized Banks only. For businesses handled as an Agency Bank of RBI, the Bank receives Agency Commission from RBI as under: • Receipts – Rs. 45 per transaction • Payments other than Pension – Rs. 0.9 per Rs. 1000 on turnover basis • Pension – Rs. 60 per transaction Government Business Group Backed with the authorization of the Bank for conducting Govt.

81

Business as an Agency Bank of RBI, the Govt. Business Group today primarily focuses on the “Government & PSU Segment� for generating Fee Income as well as Current Account Balances/ Zero-Cost Float for the Bank by offering various Banking/ Other Services. For a greater focus and with an objective to offer specific solutions to the Govt.

Organizations and PSUs, we are following a segmental approach at Central Office as well as Zonal Office along three Sub Segments Central Govt., State Govt. and Other Govt. Organizations with PSUs falling under Central/ State Govt. Sub Segments for effective business development. The business generation from this segment is not instant and requires developing and managing relationship with key officials, offering customized solution fulfilling their requirements and having a first mover advantage by replicating the businesses done in other regions.

Roles & Responsibilities: The roles and responsibilities of the Officials in Govt. Business Group at Central Office are enumerated as under: Business Development: The business development role primarily involves driving business through Regional/ Zonal Desks - Govt.

Business and Branches for new client acquisition by providing marketing support through business visits, meetings and structured presentations to Clients. The role includes evaluating business proposals from Zonal/ Regional Offices including profitability and feasibility analysis and also coordinating with Other Departments viz.

Credit/ Treasury/ Retail Banking for offering their products and services.

Product Management: The product management role includes ownership of Central/State Tax Revenue Collection, Stamp Duty Collection, Expenditure Payment and Pension Payment Products and allocating related budgets (Throughput, SL Float, CA-CDAB & Fee Income) to Zones/ Regions/ Branches and monitoring of Performance.

Coordinating with IT/ Legal/ Compliance Departments & Govt.

Business Implementation Team for rollout of various products and 82

services is also an integral part of product management.

Strategy Planning & Research: In this role, the Group focuses on formulating business and marketing strategies for various businesses including

competition

analysis,

conceptualizing

and

structuring

customized solutions for acquiring High-Value Current Accounts through Value-Add Services and creating Marketing Programmes to support client acquisition. The role also requires identifying and analyzing new business opportunities in Govt. & PSU Segment.

Further, it also requires research and analysis of processes of specific client groups in Govt. & PSU Segment and designing process flows for new businesses.

The Group at Central Office is also responsible for liaisioning with Department of Govt. & Bank Accounts, RBI Mumbai for policy level issues relating to Govt. Business.

For business development and effective relationship management, the Govt. Business Group operates through its Zonal Desks at Zonal Offices and Regional Desks who are dedicated resources for generating and developing business from Govt. & PSU segment in their respective Zones/ Regions. Presently, there are over 50 Govt.

Business Regional/ Zonal Desk positions across the 4 Zones at the State Capitals and other important locations. Moreover, since most of the Central Govt. Ministries/ Departments are based in Delhi, we have a strong team of 9 Officials in Govt. Business Zonal Desk, as part of Northern Zonal Office, who are building and maintaining relationships with these Ministries for various, banking services.

The roles and responsibilities of these Regional/ Zonal Desks – Govt. Business include building, managing and strengthening existing relationships with clients in Govt. & PSU Segment through regular interaction/ follow-ups as well as identifying and developing business opportunities in this Segment including Agency and Non-Agency Business. Additionally, these Officials are also responsible for liasioning and providing support to the Branches in their region for various existing businesses as well as for acquiring new clients.

83

Existing Associations & Initiatives: More recently, in addition to various Govt. Organizations, we are now also targeting the Central/ State Public Sector Undertakings (PSUs) for providing various Banking and Cash Management Services through our Regional Desks/ Zonal Desks – Govt. Business. Since these PSUs (Central PSU/ State PSU) have linkages to some or the other Central Govt. Ministry/ Department or State Govt. Department, we are making a strong effort to develop our relationship with these PSUs by leveraging our Authorized RBI Agency Bank status and the existing relationships under Govt. Business with these Central Govt. Ministries/ Departments and State Govt. Departments.

Strategy for F.Y. 2008-09: With the experience gained and the capabilities developed for Govt. & PSU segment towards providing various banking services through relationship-based approach and the significant success in terms of Zero-Cost Funds and Fee Income, it has been decided to continue with the same relationship-based approach for the Govt. & PSU segment in the ensuing year 2008-09 also, however, with a greater focus.

Accordingly, a liability driven relationship-based approach will be followed in the Bank for Govt. & PSU Segment during 2008-09 so as to bring in incremental business to the Bank and also to meet the competition. The business development will be done through relationship building and offering comprehensive banking solution under Business Banking Department as part of Corporate Banking, as being followed in the Peer Banks where a single Business Group takes care of the requirements and manages the relationship. Therefore, under the above approach, the Govt. Business Group will be responsible for relationship management with the clients in this segment and offering comprehensive transaction banking solutions (viz.

Account

Management

Services

and

Collection/

Payment 84

Services). Additionally, the Govt. Business Group will also be responsible for cross-selling Other Departments’ products/ services in co-ordination with the respective CO Teams for business generation as

Agency Business: � The efforts will be geared towards maximizing the Tax Revenue Collection as well as the Number of Transactions for existing mandates i.e. CBDT, CBEC and 7 State Governments/ UTs for increasing the Fee Income and GB SL Float by taking the following steps: •

Maximize the number of Challans by targeting even the lowvalue Challans, which will contribute to the Fee Income. This can be achieved by targeting the TDS/ TCS paid by the companies every month under CBDT and Service Tax under CBEC, which will also result in regular inflow of tax payments.

•

Maximize the Collections by leveraging the Bank’s relationships across different products & services and ensure that all the existing clients pay their Tax Dues through our Bank as well as continuously add new clients.

Value-add Services/ Facilities like online payment of Central/ State Taxes (Income & Corporation Tax, Central Excise, Service Tax, Chhattisgarh Sales Tax) and DGFT e-Payments will be promoted for retention of Current Account customers as well as acquisition of new clients. This becomes strategically important considering that payment of Income/ Direct Taxes (CBDT) through e- Payment mode has been made mandatory for all companies and all Section 44AB entities w.e.f April 1, 2008. In case of CBEC, it is mandatory for all Assesses paying Central Excise/ Service Tax of over Rs. 50 lakhs p.a. to make payment through e-Payment mode only. �

In those States, where the Bank is not authorized for State Tax

Collections, opportunities to be explored for associating with the State

85

Government by way of offering the facility of online payment of various State Taxes, which will not only contribute to Fee Income/ Float but also serve as a good tool for acquiring new Current Account customers.

Non-Agency Business: Under Non-Agency Business, the focus will be mainly on Govt. Organizations and Central/ State Public Sector Undertakings (PSU’s), where RBI authorization is not required, for generating substantial Current Account Balances/ CDAB as well as Fee Income, wherever possible.

Govt. Business Organizations/ Bodies: � The emphasis will be on getting associated with various Government Organizations/ Bodies (Central Govt./ State Govt./ Local Govt./ Autonomous) for contributing to Current Account Balances under CAGOS Scheme and also contribute to Fee Income from various services as under: • Account Management Services for Current Account relationship • Cash Management Services (CMS) • Customized Collection/ Payment Services including Vendor Payments, Pension disbursements, Salary disbursements •

Value Added Services like e-Payments, e-Tendering/ eProcurement, Banker to G2C and G2B Projects, etc.

•

Disbursement of funds under Govt. Benefit/ Social Security Schemes through IT Enabled Financial Inclusion  The customer segments to be primarily targeted are Municipal Corporations, Housing Boards/ Development Authorities,

Electricity

Boards,

Railway

Divisions,

Defence Units, State Government Departments, etc.  Drive the business of Collection of Stamp Duty through Franking for maximizing the Fee Income from this lucrative business.

86

Central/ State Public Sector Units (PSU’s): •

Effectively targeting all the Central/ State PSU’s for generating Current Account balances under CAPSE Scheme from various services as under: 1. Account Relationship - Current Account for normal transactions as well as for customized Online Collection facilities like e Tendering and e-Payment Facilities like Taxes, DGFT License Fees, etc.

2. Collection Services - Through Anywhere Banking and/ or CMS 3. Payment Services - CMS Payment Products and Single Window Payment Facility for Vendor/ Supplier Payments 4. Collecting & Refund Banker - For Bonds/ IPO/ FPO and Interest/ Dividend Payments 5. Collection of CBDT/ CBEC/ State Tax Dues including ePayment of Central Excise & Service Tax 6. Empanelment of the Bank for placement of short term surplus funds and other banking arrangements

With the above approach, we expect to make further inroads into all categories

of

Govt.

Departments/

Corporations/

Municipal

Corporations/ Other Govt. Organizations/ Public Sector Undertakings (PSUs) across multiple States for incremental business and strengthen our position as a leading Bank in the Govt. Business domain.

Axis Bank’s Government Business Initiatives Association with Central Government Ministries/ Departments: The Bank is authorized for handling Collection of Income/ Other Direct Taxes on behalf of Central Board of Direct Taxes (CBDT) under Ministry of Finance since October 2003 and Collection of Central Excise & Service Tax on behalf of Central Board of Excise & Customs (CBEC) under Ministry of Finance since November 2003 through its designated authorized Branches across the country 87

including e-Payment facility for payment of Taxes through Internet for Taxpayers/ Assesses having Account with the Bank.

During the year 2007-08, the Bank has handled collection of Central Govt. Taxes (Income/ Other Direct Taxes, Central Excise & Service Tax) in excess of Rs. 32, 050 Crs. with transaction volume of over 13.42 lakh Challans. The Bank is among the top 5 Banks in collecting Income/ Other Direct Taxes on behalf of CBDT and ranked 4th in 200708 as compared to 5th rank previous year with a market share of around 7.5 % on a pan-India basis. (Source by axis bank) Additionally, the Bank is also associated with other Central Govt.

Ministries/ Departments for providing Expenditure-related Payments and other Banking Services as under: •

Expenditure-related Payments and other businesses of Ministry of Urban Development and Ministry of Housing & Urban Poverty Alleviation as an Accredited Bank since February 2004. During the year 2007-08, the Bank has handled Collection/ Payment Throughput of over Rs. 3,656 Crs. on behalf of the Ministry.

•

Expenditure-related Payments and other businesses of Office of the Controller General of Accounts (CGA) under Ministry of Finance since April 2004.

•

Banking Services to Railway Divisions under Ministry of Railways towards Collection of Freight/ Passenger Revenue and Contractors/ Vendor Payments through Single Window Payment Facility - The Bank has been authorized by RBI & Raipur Division of South East Central Railway (SECR) for handling Collection of Station/ Freight Earnings from designated Stations/ Sidings, as an Accredited Bank. The Bank is also handling Collection of Freight/Passenger Revenue on behalf of 1 Railway Division i.e. Central Railway, Mumbai Division as a Non-Accredited Bank. The Bank is also providing its Single Window

Payment

Facility

towards

handling

Contractors/

88

Suppliers Payments to 15 Railway Divisions and has handled payments in excess of Rs. 1,277 Crs. in 2007-08.

• Banking Services to 22 Ordnance Factories under Ministry of Defence towards Payment to Contractor/ Vendors through Single Window Payment Facility and has handled payments in excess of Rs. 1,359 Crs. in 2007-08.

The Bank is also authorized for handling the disbursement of Central Civil Pension since March 2004 through its 218 Authorized branches and disbursement of Defence Pension on behalf of Ministry of Defence since August 2005 through its 151 authorized branches. As on March 31, 2008, there were 153 Civil Pensioners Accounts and 207 Defence Pensioners Account maintained with our Bank and during the year 2007-08, the Bank has handled pension disbursement of over Rs. 11 Crs. to the above Pensioners.

Association with State Government Departments: •

Collection of State Taxes: Axis Bank was the first Private Sector Bank to be authorized by Govt. of India and RBI for Collection of Commercial Taxes in Andhra Pradesh in July 2001.

Presently, the Bank is authorized in 7 States/ U.T.s for Collection of Commercial Tax/ Sales Tax/ VAT and other Revenues as under:

•

Collection of Commercial Taxes in Andhra Pradesh including handling VAT Refund Payments.

•

Collection of Sales Tax/ Professional Tax in Gujarat since February 2004.

•

Collection of Commercial/ Sales Tax in Chhattisgarh since December 2004.

•

Collection of Sales Tax in Punjab since December 2004 and Collection of National Permit Fee since October 2005.

•

Collection of Sales Tax in Chandigarh U.T. through Sampark Centers since November 2004.

• Collection of Sales Tax in Uttaranchal since December 2004.

89

• Collection of Sales Tax/ VAT in NCT of Delhi since May 2005.

During the year 2007-08, the Bank has handled collection of State Taxes (Commercial Tax/ Sales Tax/ VAT) in excess of Rs. 16,685 Crs. with transaction volume of over 10.61 lakh Challans.

Additionally, the Bank has launched e-Payment facility for payment of Chhattisgarh Sales Tax on behalf of the Department of Commercial Taxes, as part of the ‘eKosh’ Project initiated by Govt. of Chhattisgarh. The Bank is also handling Collection of Stamp Duty through Franking in Maharashtra, Gujarat and Rajasthan and has handled a franking throughput of over Rs. 72 Crs. through its 11 designated Branches during the year 2007-08.

Banking Services to e-Governance Initiatives: The Bank is providing its banking services, including online payments, to the eGovernance initiatives of various State Governments aimed at providing better citizen services by setting up of integrated citizen facilitation centers and online portal. The Bank is presently associated with the ‘eSeva’ initiative of the Government of Andhra Pradesh, the ‘Sampark’ initiative of Government of Chandigarh UT, the ‘Bangalore One’ initiative of Govt. of Karnataka, the ‘eSuvidha’ initiative of Govt. of Uttar Association with Other Government Departments/ Organizations: �

Municipal Corporations - The Bank is associated with more than

75 Municipal Corporations/ Municipalities towards offering Account Management Services for various Project-related funds and other banking services including Collection of Municipal Taxes through Offline & Online modes and banking services for ‘eProcurement Project’. Few of the important associations are – Municipal Corporation of Delhi, Thane Municipal Corporation, Navi Mumbai Municipal Corporation,

Municipal

Corporation

of

Greater

Mumbai,

Kochi

Municipal Corporation, etc.

90

State Housing Boards & State Urban Development Authorities: The Bank is associated with more than 18 Development Authorities/ State Housing Boards towards offering Account Management Services and various other banking services including acting as Collecting/ Refund Banker for Housing Schemes and digitization of Allottee Accounts. Few of the important associations are – Delhi Development Authority, Chandigarh Housing Board, Housing Board Haryana, Haryana Urban Development Authority, Karnataka Housing Board, Goa Housing Board, etc.

State Electricity Boards: The Bank is associated with more than 15 State Electricity Boards towards offering Account Management Services, Collection of Electricity Bills through Offline & Online modes and Collecting/ Payee Banker for their Bonds-issue Programme. Few of the important associations are – Assam State Electricity Board, West Bengal State Electricity Board, Transmission Corporation of Andhra Pradesh, Punjab State Electricity Board, etc.

State Govt. Corporations: The Bank is associated with more than 100 State Govt.Corporations towards various Collection & Payment Services as well as Account Management Services. These State Govt.

Corporations

include

Corporations,

Financial

Tourism

Corporations,

Corporations,

Civil

Industrial

Supplies

Development

Corporations, Water Resources Corporations, Forest Development Corporations, Agri & Small Industries Corporations, etc.

Others: The Bank is associated with other Govt. Organizations including Port Trusts for Collection of Port User Charges (Kolkata Port Trust, Tuticorin Port Trust), Govt. Educational Institutions for Collection of Application/ Course Fees (Indian Institutes of Management, National Institute of Fashion Technology), District Implementation Agencies and other Govt. Organizations for various Account Management and

91

Collection/ Payment Services.

CHAPTER-6 RESEARCH 92

METHODOLOGY

Research Methodology •

DATA COLLECTION METHODS:Data

is

collected

by

survey

method

through

filled

questioners.

•

RESEARCH INSTRUMENTS:Questionnaire design to gather the information from respondents having multiple choice question, open-ended questions.

•

SAMPLING SIZE : 1. TASC segment- 30

•

SELECTING OF SAMPLING SIZE: All sampling units are chosen randomly. These are mainly 93

organizations, trusts, colleges, and temples.

CHAPTER-7 COMPARATIVE 94

ANALYSIS

COMPARATIVE ANALYSIS OF AXIS BANK WITH OTHER BANKS 1. AXIS bank is a fast growing in TASC Segment comparative to other banks, like ICICI, HDFC, CANARA Bank, Yes bank etc.

2. AXIS Bank provides anywhere banking at free of cost, on the other hand other banks takes charge on this facility.

3. AXIS bank provides free Demand draft, pay order facility free of cost in all AXIS Bank branches but Yes bank provides this facility in only selected branches not in all branches.

4. AXIS bank provides free monthly statements to all TASC segment customers in comparison to other banks, other banks 95

send the quarterly statements of account.

5. AXIS bank provides international debit card, in case of other banks they do not provide international debit card to TASC Segment customers.

6. AXIS Bank provides free DMAT account to TASC Customers, others bank do not provide this facility free of cost.

7. AXIS Bank have great share in TASC segment in Ambala Cantt comparison to ICICI, HDFC Bank.

8. AXIS Bank deals in other products like mutual fund, life insurance, credit card, debit card, gold card, platinum card, general insurance, loans etc.

9. AXIS

Bank

provides

better

service

to

their

customers

comparison to other banks like ICICI, HDFC etc.

10. AXIS Banks have best staff in their branches in comparison to other banks.

11. Customer problems are very less in AXIS Bank comparison to other banks.

CHAPTER-8 ANALYSIS

96

ANALYSIS Q: 1 How Do you come to know about AXIS bank?

1.

Marketing

2.

Ad’s

3.

Exhibition

4.

Word of mouth

5.

Others

97

70%

63%

60% 50% 40% 30.00%

30% 20% 10%

4.00%

3%

Word of mouth

others

0%

0% Marketing

Ad's

Exhibition

Result: Most of them Know to Axis bank by Marketing and Exhibition, very less percentage know by word of mouth & ads.

Q:2 Which factors play an important role while opening an account?

1. Ad’s 2. Special offer 3. Operational staff 4. Convincing power 5. Credibility of Bank

98

70.00% 60.00%

60.00% 50.00% 40.00% 30.00% 20.00%

20.00%

13%

10.00%

3.33%

3.67%

0.00% Ad's Special Offer Operational Convincing Staff power Credibility of bank

Result: Most of the respondents thinks that credibility of bank play a important role to bring customers.

Q:3 Which product do your organization use most?

1. Saving A/C 2. Current A/C 3. FD 4. Mutual Fund 5. Insurance Policy

99

90% 80%

80%

70% 60% 50% 40% 30% 17%

20% 10%

0.00%

0% Saving A/c Current A/c

FD

3.00% Mutual Fund

0% Insurance Policy

Result: Most of the respondents have saving account in AXIS Bank.

Q:4 Which facilities provides by AXIS Bank free of cost? a. DD, Pay order fee b. Monthly statements of A/C c. Internet banking d. Free mobile banking Options: 1. All of these 3. None of these

2.

A, B, C

4. Only D

100

100% 90%

90% 80% 70% 60% 50% 40% 30% 20% 10%

10%

0% All of these

A,B,C

0%

0.00%

none of these

only D

Result: Most of the customers of bank know that bank do not charge any charges for facilities.

Q:5 Do your Organization have another account in another in bank?

1. Yes 2. No

101

120.00%

100.00%

100.00%

80.00%

60.00%

40.00%

20.00% 0.00%

0.00% Yes

No

Result: All of these respondents have extra account in other bank.

Q:6 Do another bank provides these services faster than AXIS Bank?

1. Yes 2. No

102

70% 60.00%

60% 50% 40%

40%

30% 20% 10% 0% Yes

No

Result: Most of the respondents think AXIS bank provide faster service than other banks.

Q: 7

Which of the direct banking channel you use most?

1. ATM 2. Net Banking 3. Phone Banking 4. Mobile Banking

103

50%

47%

45% 40%

36.00%

35% 30% 25% 20% 15% 10.00%

10%

7%

5% 0% ATM

Result:

Net Banking

Phone Banking Mobile Banking

Most of the respondents use ATM & net banking for

transactions mode and very less use phone banking and mobile banking.

Q:8 Are you facing any problem while maintain your account at bank?

1. Yes 2. No

104

100% 90%

90% 80% 70% 60% 50% 40% 30% 20% 10%

10%

0% Yes

No

Result: Very less respondents are facing problems for maintain the account.

Q:9

Do you think private sector bank are better than public banks?

1. Yes 2. No

105

90%

83%

80% 70% 60% 50% 40% 30% 17%

20% 10% 0% Yes

No

Result: Most of the respondents say that private banks perform better than public bank.

Q: 10 Do you want to suggest any improvements in AXIS bank?

1. New Branches 2. Extra charges 3. Fast Service 106

4. Monthly Statement 5. Others 35% 30%

30.00% 27%

27.00%

25% 20% 15% 10.00%

10%

6% 5% 0% New Branches

Extra charges

Fast service

Monthly statements

others

Result: Equal number of person suggests opening new branches and providing fast service and very less suggest about extra charges and monthly charges.

107

CHAPTER-9 FINDING

MAJOR FINDING OF THE STUDY Based on the quantitative analysis the major findings of the study have been highlighted below:

108

1. Most of Trusts, associations, bodies satisfied with saving account, They do not want to invest in other products of bank.

2. People think that Private banks are better than public bank.

3. Most of the trusts accounts running satisfactory in AXIS Bank.

4. Maximum people want to invest in axis bank 5. Bank provides faster service than other private and public sector banks.

6. Most preferred type of product is saving account.

109

CHAPTER-10 CONCLUSION

CONCLUSION From the above study it can be concluded that AXIS Bank is growing fast in comparison to other banks in terms of selling, customer retention, customer satisfaction. And also axis bank’s share in TASC segment is more than other banks. It can say that AXIS Bank provides 110

faster service than other banks. AXIS Bank successfully deals in other products like MetLife insurance, Birla sunlife, Relience, etc. AXIS bank have cooperative staff than other banks, bank provide many services free of cost to their customers, which is not provided by other banks.

111

CHAPTER-11 RECOMMENDATIONS

RECOMMENDATIONS 1. Axis bank should open new branches in rural areas.

2. Extra charges should reduce.

3. Staff should more cooperative than before.

4. Force on selling other products like fixed deposit, insurance policy to their customers.

112

113

CHAPTER-12 BIBLIOGRAPHY

BIBLIOGRAPHY 1. http://www.scribd.com/doc/13581494/AXIS-BANKWealth2. http://www.scribd.com/doc/6001731/ProjectReportHDFC-

114

3. Sourced by “mutual fund navigator”, booklet.

4. http://www.axisbank.com/personal/loans/loans.asp

115

CHAPTER-13 QUESTIONIARE

Name of the Organization……………………………………………

Type of Organization……………………………………….

Address…………………………………………………………… ……………………………………………………………………….

116

………………………………………………………………………..

Q:1 How do you come to know about AXIS bank?

1. Marketing 2. Ad’s 3. Exhibition 4. Word of mouth 5. Others Q:2 Which factors play an important role while opening an account?

1. Ad’s 2. Special offer 3. Operational staff 4. Convincing power 5. Credibility of bank Q:3 Which product do your organization use most?

1. Saving A/c 2. Current A/c 3. FD 4. Mutual Fund 5. Insurance policy Q:4 Which facilities provides by AXIS Bank free of cost? a.

DD, Pay order fee

b.

Monthly statements of A/C

c.

Internet banking

d.

Free mobile banking 117

Option: 1. All of these

2. A, b,c

3. None of these

4. Only D

Q:5 Do your org. have another account in another bank?

Ans: 1 Yes

2. No

If yes, which bank…………………………………..

Q:6 Do another bank provides these services faster than AXIS Bank?

1. Yes

2. No

Q:7 Which of the direct banking channel you use the most?

1.

ATM

2.

Net banking

3.

Phone banking

4.

Mobile banking

Q:8 Did you facing any problem while maintain your account at bank?

1. Yes

2. No

If Yes Specify Problem…………………………………………………

Q:9 Do you think private sector bank are better than public banks?

118

1.

Yes

2. No

Q:10 Do you want to suggest any improvements in AXIS Bank? …………………………………………………………………………… …………………………………………………………………………….. ……………………………………………………………………………..

119