g g project

7/27/2019 g g project

1/55

1

CHAPTER 1

INTRODUCTION


2/55

2

1. Introduction1.1Nature and Scope of the project:The project is about the study of the basic operations in banking and also the day to- day

problems faced by the customers. It also includes a study on the various steps to process the

customer requests performed at the branch level. An attempt has also been made to study

about how to analyze the balance sheet of a bank. The project was for a period of two

months from 5th

May 2013 to 3rd

July 2013.

1.2Implications of the Study:The outcome of the study is the learning about the regular activities in a bank. It also helps to

give an idea about the purpose of the common customers in visiting the bank. It also provides

an idea on how Axis Bank attracts its customers and the service offered.

1.3 Chapter Scheme

Chapter 1:

This chapter deals with the introduction about the project and the nature and scope of the

project.

Chapter 2:

This chapter deals with the organization profile and review of literature.

Chapter 3:

This chapter deals with the various operations being performed at the branch.

Chapter 4:

This chapter involves the study of transfer and clearing operations.

Chapter 5:

This chapter deals with the various products offered at Axis Bank.

Chapter 6:

This chapter is about the various requests received from customers and the processing of the

requests at the branch level.


3/55

3

Chapter 7:

This chapter includes the financial analysis of Axis bank for the last three years and also the

interpretations made.


4/55

4

CHAPTER 2

ORGANIZATION PROFI LE


5/55

5

2. Organization Profile and Review of Literature:2.1Profile of the Industry:The banking system is a crucial and vital component of the global economy. The system of

moneychanging and moneylending is as old as money. Banking is assumed to have started

back in the 15th

century. The health of an economy and the health of a countrys banks have been

interrelated. Banks are a part of the group of financial institutions that profit from the creation of

flow of money across an economy. The other financial institutions include insurance companies,

finance companies, investment managers, mutual funds etc. But banks are the safest option

among the minds of several people. As financial intermediaries, banks stand between depositors

who supply capital and borrowers who demand capital. Banks are among the most heavily

regulated businesses in the world as it handles great amount of commerce and individual wealth.

2.2 Indian Banking Industry:

The Indian banking industry is governed by the Banking Regulation Act of India, (1949) and is

closely monitored by the Reserve Bank of India (RBI). The major functions of the Reserve Bank

of India (RBI) are as follows:

1. Formulates, implements and monitors the monetary policy in order to maintain the pricestability in the economy

2. Acts as the regulator and supervisor of the Indian financial system3. Acts as the manager of foreign exchange4. Issues currency to the nation in times of real need

Public sector banks account for 70 per cent of the Indian banking assets. The financial sectorreforms were initiated in the early nineties. Guidelines for issuance of license to private banks

were issued in January 1993. The objective of promoting private sector banks was to instill

greater competition in the banking system and thereby leading to increased efficiency and

productivity. Government support and huge development in other economic segments have made

the Indian banking industry more progressive and inclusive with regard to global banking

standards.

2.3 Functions of Banks:

1. Accept deposits and provide loans:The most basic function of bank is to accept deposits from customers, raise capital from

investors or lenders and then use that money to provide loans, buy securities and provide other

financial services to customers. These loans are then used by people and businesses to buy goods

or expand business operations, which in turn leads to more deposited funds that make their way

to banks. Banks can lend money at a higher interest rate than they have to pay for funds and

operating costs. This is how the banks make money out of circulation of money.


6/55

6

2. Provide Safety:Banks also provide security and convenience to their customers.By keeping physical cash athome, or in a wallet, there are risks of loss due to theft and accidents. Also customers will lose

the income from interest. Consumers no longer need to keep large amounts of currency on hand;

transactions can be handled with cheque, debit cards or credit cards, instead.

Banks also provide vaults and rent it to customers in the form of safe deposit boxes or lockers.

This is used by customers to keep precious items and also enables the bank to earn extra money

or income without any risk to the capital.

3. Payment Agents:As payment agents, banks make commercial transactions much more convenient; it is not

necessary to carry around large amounts of physical currency when merchants will accept the

cheques, debit cards or credit cards that banks provide. Though a cheque is a promissory note

between two people, no one will accept a cheque without a banks name and other details in the

cheque. Here comes the importance of banks as payment agents.

2.4 Economic Concepts in Banking:

1. Settle Payments:Banks play an invaluable role in the settling of the payments made through cheques, electronic

transfers and paper currency. Banks make sure that the proper accounts are credited or debited,

in the proper amounts and with relatively little delay.

2. Credit Intermediation:Banks play a major role as financial intermediaries. Banks collect money from depositors,

essentially borrowing the money, and then simultaneously lend it out to other borrowers, forging

a chain of debts.

3. Maturity Transformation:Many investors are willing to invest only in short term deposits, but many projects will need long

term financial support. In order to help the projects, banks obtain short term investments in the

form of demand deposits and lend them in long term. Thus banks transform debts with short term

into credits with long term maturities. The difference in the rates is collected as profit.

4. Money Creation:One of the most vital roles of banks is in money creation. Money creation at the individual bank

level is not the same as "printing money". Banks create money through fractional reserve
http://www.investopedia.com/terms/f/fractionalreservebanking.asp#axzz1ZISod4Tnhttp://www.investopedia.com/terms/f/fractionalreservebanking.asp#axzz1ZISod4Tn


7/55

7

banking. Fractional reserve banking refers to the fact that banks keep only a small portion of

their deposits on hand. This phenomenon is known as the money multiplier.

This is how banks increase the money supply and effectively create money. If banks simply

acted as storehouses or vaults for money, then banks would not be able to lend money and

provide other services as of now.

2.5 Axis Bank Ltd.

Axis Bank Limited is an Indian financial services corporation. It has the headquarters at

Mumbai, Maharashtra. It was started in the year 1994. It was initially called UTI Bank. The

registered office is in Ahmadabad and the corporate office in Mumbai. It was promoted by 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. The first branch was inaugurated in April 1994 at Ahmadabad by Dr.

Manmohan Singh, the then Honorable Finance Minister. For the financial year 2012 13, AxisBank had a profit after tax of Rs. 5179 crores and a net interest income of Rs. 9666 crores.

During the year 2012 13, the bank raised capital in the form of equity and debt to support

future growth. The Bank mobilized an aggregate of Rs. 5537.47 crores through this offering by

issuing 34,000,000 equity shares through a QIP offering and 5,837,945 shares to the promoters in

order to maintain their percentage shareholding of the Banks promoters at pre QIP offering

levels. The equity shares offered under the QIP offering and preferential allotments were both

priced at Rs. 1390 per share.

Company Profile:

Axis Bank is the third largest private sector bank in India. Axis Bank offers the entire spectrum

of financial services to customer segments covering Large and Mid-corporates, SME,

Agriculture and Retail Businesses. The Bank has a large footprint of 1787 domestic branches

(including extension counters) and 10,363 ATMs spread across 1,139 centres in the country as

on 31st December 2012.

2.6 Evolution of Axis Bank:

The Bank was incorporated on 3rd December 1993 and Certificate of business was obtained on

14th December 1993. It was formerly known as UTI Bank. The bank was the first private sector

bank to get a license under the modified guidelines issued by the RBI. The Bank obtained licenseto act as Depository Participant with NSDL in the year 1997. UTI contributed Rs. 100 crores,

LIC contributed 7.5 crores, GIC and its four subsidiaries contributed 1.5 crores.

The Bank came out with a public issue of 1,50,00,000 no. of equity shares of Rs 10 each at a

premium of Rs 11 per share aggregating to Rs 31.50 crores and Offer for sale of 2,00,00,000 no.

of equity shares for cash at a price of Rs 21 per share. Out of the public issue, 220000 shares
http://www.investopedia.com/terms/f/fractionalreservebanking.asp#axzz1ZISod4Tnhttp://www.investopedia.com/terms/d/deposit_multiplier.asp#axzz1ZISod4Tnhttp://en.wikipedia.org/wiki/New_India_Assurancehttp://en.wikipedia.org/w/index.php?title=Oriental_Insurance&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Oriental_Insurance&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Oriental_Insurance&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Oriental_Insurance&action=edit&redlink=1http://en.wikipedia.org/wiki/New_India_Assurancehttp://www.investopedia.com/terms/d/deposit_multiplier.asp#axzz1ZISod4Tnhttp://www.investopedia.com/terms/f/fractionalreservebanking.asp#axzz1ZISod4Tn


8/55

8

were reserved for allotment on preferential basis to employees of UTI Bank. Balance of

34780000 shares were offered to the public. ICRA upgraded the rating of UTI Bank's Rs 500-

crore certificate of deposit programme to A1+ in the year 2000. UTI Bank launched a private

placement of non-convertible debentures to raise the total debt to Rs 75 crores in 2001. The

company name was changed from UTI Bank into Axis Bank in the year 2007.

Axis bank received final clearance from the Securities Exchange Board of India (SEBI) to begin

its mutual fund operations in the year 2009. Axis bank acquired 4 percent stake in Max New

York Life in 2010.

2.7 Organization Structure:

The Board of Directors consists of 15 members. The Chairman of the board of directors is

Mr.Sanjiv Mishra. Mrs. Shikha Sharma is the Chief Executive Officer as well as the Managing

Director. The other directors are K. N. Prithviraj, V. R. Kaundinya, S. B. Mathur, Prasad.

R.Menon, R. N. Bhattacharrya, Samir K. Barua, A. K. Dasgupta, Som Mittal, Ireena Vittal andRohit Bhagat. Somnath Sengupta is the Executive Director and Head of Corporate Centre.

V.Srinivasan is the Executive and Head of Corporate Banking. P. J. Oza is the company

secretary.

The members of the core management are R. K. Bammi, P. Mukherjee, S. S. Bajaj, Vinod

George, M. V. Subramanian, S. K. Mitra, B. Gopalakrishnan, Bapi Munshi, C. Babu Joseph,

Sanjeev. K. Gupta, V. K. Bajaj, Sidharth Rath, A. R. Gokulakrishnan, Rajendra. D. Adsul, R. V.

S. Sridhar, Lalit Chawla, Rajesh Kumar Dahiya, Sharad Bhatiya, Rajiv Anand and Jairam

Sridharan as on April 1st

2013. The organization structure of Axis Bank Limited is as follows:

Fig 2.7.1 Organization Structure


9/55

9

The step by step growth of the employees at Axis Bank can be depicted from the following

figure:

Fig 2.7.2 Growth of an employee

The regions are divided into circles headed by the circle head. The circles are again divided into

clusters which are headed by cluster head. The clusters consist of several branches headed by

branch head. The Trichy Road branch of Axis Bank comes under the Coimbatore circle.

2.8 Launch of Products over the years:

UTI Bank and Citibank launched an international co-branded credit card in 1997. The Bank has

announced the launch of Tele-Depository Services for its depository clients. In the year 2000,

UTI Bank launched `iConnect' as its Internet banking Product. UTI Bank signed a memorandum

of understanding with equitymaster.com for e-broking activities of the site in the same year.

Pre-paid travel card - 'Visa Electron Travel Currency Card' was unveiled in the year 2002. In

2004, UTI Bank unveiled premium payment facility through ATMs applicable to LIC & UTI

Bank customers. UTI Bank entered into a bancassurance partnership with Bajaj Allianz General

for selling general insurance products through its branch network in 2005. The priority banking

was started in the year 2006. The launch of credit card business was also announced in the same

year. The Gold Debit Card Master Card was launched in the same year and it was designed

especially for business related transactions by SMEs and self employed persons. Axis Bank

launched Indias first EMV chip based card- the Platinum Credit Card in 2008.


10/55

10

2.9 Review of Literature

Differentiate or Die: Banks need Brand Personalities, Simon CloughGlobal Director at

Clear (The Financial Brand, June 12, 2012)

With customer sentiment at an all time low and a raft of new players entering the banking space,the last thing any financial institution wants to hear is bad news about their brand. But the reality

is that consumers view most banking brands as undesirable and wholly undifferentiated. Thats

why the battle cry Differentiate or Die has never been more relevant in the financial sector.

The survey conducted by Clear in February 2012 confirmed what we all intuitively know about

banking brands: they are virtually identical in consumers eyes. Every bank in the study was seen

as being highly organized, serious and sensible. The banks considered in the survey include

Amex, Citi, HSBC, ING, GE, MasterCard, Visa USAA, Allianz, StateFarm, Bank of China and

Standard Chartered (among others). Its rare to find a bank that stands for much else.

Incorporation of Banking Technologies, Bimal JalanFormer Governor of RBI (Economic

Times, October 26, 2002)

The Indian banking industry has to embrace new emerging technologies to enhance performance

and profitability. Though India has emerged a major hub for software exports, it has been

lagging behind in using the technologies. It was a paradoxical situation where the country

continues to grow in software exports but does not extensively use the software for the domestic

market.

Government and Banking, Abraham Lincoln

The Government should create, issue, and circulate all the currency and credits needed to satisfy

the spending power of the Government and the buying power of consumers. By the adoption of

these principles, the taxpayers will be saved immense sums of interest. Money will cease to be

master and become the servant of humanity.


11/55

11

CHAPTER 3

BASIC OPERATIONS IN

BANKING


12/55

12

3 Basic Operations in Banking

The three basic operations in banking are:

1. Cash2. Clearing3. Transfer

3.1 Cash:

As the basic function of a bank involves accepting deposits and lending money to the customers,

it can be implemented only with money. The cash section deals with the withdrawal of money

and also deposit of money. The person dealing with the cash section is called the teller.

The teller performs the following duties:

1. Accepts cash from depositors2. Lends cash to customers when demandedThe other minor duties of a teller involves collection of application fee, Visa fee collection etc.

3.2 Cash Deposit Machine:

The cash deposits can be made through the cash deposit machine. It is a type of self service

being offered. There is no need of any intervention of any officials in depositing the cash into the

account. The task of filling up deposit slips and the long queues can be avoided. The amount will

get immediately credited into the account and the customer receives the receipt at the same

moment. At present, these machines are available at 540 branches of Axis Bank.

The maximum limit of cash deposit through machine for a savings account holder is as follows:

i. Rs. 49000 per day for customers who have not updated the PAN card numberii. Rs. 2,00,000 per day for those who have updated the PAN number

To deposit money through the deposit machine, one should have the Axis bank debit card or the

15 digit account number to which the cash is to be deposited.

Steps involved:

3.2.1 Using Debit Card:

Insert debit card and enter PIN for validation. Select account type (Saving or Current). Place the money in the cash deposit slot and click Continue. Machine will sort the cash and will show denomination-wise amount to be deposited.


13/55

13

If correct, clickDeposit. Amount will be deposited. Receipt will be generated.

3.2.2 Using the account number:

Click Cash deposit without card. Enter account number in which you wish to deposit cash. Machine will display the name of the account holder. If correct, click Enter. Place the money in the cash deposit slot and click Continue. Machine will sort the cash and will show the summary. If correct, click Deposit. Amount will be deposited.

Receipt will be generated.

3.3 Automatic Teller Machine:

The cash withdrawal for daytoday purposes can be made through ATMs without visiting the

banks. However, there are limits for transactions possible through machines. The withdrawal

limits are set based on the debit card type the customer holds. The maximum limit for various

cards is as follows:

i. Visa Classic - Rs. 20000 per dayii. Titanium Reward - Rs. 50000 per dayiii. Priority PlatinumRs. 100000 per day

Axis Bank provides one of the largest network of ATMs in the country. It has a network of over

7600 ATMs. The Axis Bank ATMs also offer a number of facilities other than cash withdrawal.

The various other facilities involve:

1. Balance enquiry2. Mini statement (last 7 transactions)3. PIN change4. Cheque book request5. Mutual Fund payment6. Insurance premium payment7. Register for SMS banking and NETSECURE8. Fund transfer between linked accounts


14/55

14

3.3.1 Steps for fund transfer:

Insert ATM card and enter PIN for validation. Select Banking transactions, followed by Funds Transfer Select Other Axis Bank account Enter beneficiary and other required details

When the customer has to perform transactions exceeding the limit or if the customer does not

possess such cards, the cash section is necessary. In order to withdraw money, the customer has

to bring a bearer cheque with the account holders signature at the back side. If it is an account

payee cheque or order cheque, the cash cannot be withdrawn as such. In such cases, it can only

be transferred from account to account.

For both withdrawing as well as depositing money to an account through the cash counter, the

customer should fill up the cash chellan with all the details. The account number to which the

money is to be deposited has to be written in the corresponding column and also the name of theaccount holder should be filled. If the cash to be deposited exceeds Rs. 50000, the PAN number

also needs to be filled. In case the customer has not updated the PAN number, then he should

submit a copy of the PAN card to the Assistant Manager and get it verified to proceed further.

The date, contact number and denomination must also be filled appropriately. In case when the

customer hasnt updated the PAN number in the account, then he should fill up the Form 60. But

as per the modified RBI regulations, these forms are no more accepted. In case of transactions

involving huge amounts (more than Rs. 1000000), the purpose of the transaction, source of

money and the KYC (Know Your Customer) verification must be done for income tax purposes.

3.4 Bait Money:

Bait money refers to those currencies whose serial number is recorded by the bank by listing in a

log book. During a bank robbery if robber has taken the bait money, details of this can be passed

on to the police. If the money is found in the possession of someone or used to purchase goods

then it is often easier to find the perpetrator of the bank robbery. When the bait money has left

the bank it is known as hot money. There are three types of bait money

1. Vault bait2. Counter bait3. Transit bait

3.4.1 Vault bait:

Vault bait refers to the money kept in the vault. This will be taken out only when the cash at the

counter gets over.


15/55

15

3.4.2 Counter bait:

Counter bait refers to the cash kept in the counter for the transaction purposes of the customers.

3.4.3 Transit bait:

Transit bait refers to the cash in transit from a bank to bank or even to other branches. The cash

will be taken by a staff and also a gun man will always be present when cash is being

transported.

3.5ConclusionThe general idea is that the teller has to collect money and lend money when approached by

customers. This is not true. At the end of the day, it has to be checked whether the cash in hand

gets balanced with the records in hand. Also the cash received has to be checked whether it is

fake or not. If the cash is found to be fake, then the teller has to record the same and inform the

higher official.


16/55

16

CHAPTER 4

CLEARING AND TRANSFER


17/55

17

4 Clearing and Transfer

4.1 Introduction on Clearing

Clearing refers to the process of transferring money to the customers account when cheque of

another bank is deposited in the customers name. In the earlier system of clearing cheques, the

process was a tedious process. It used to take minimum of 4-5 days for clearing the cheques

received from banks within the state. If the cheques received were from banks outside the state,

then it used to take more than a week.

The clearing cheques received at the bank are taken to the clearing house in the district. The

clearing house receives cheques from other banks in the district too. The person in charge

separates the clearing cheques bank-wise. Then the total amount to be credited and debited is

calculated. If the amount is to be received, the cheques are taken to the respective banks and if

the amount is to be given, then those cheques are received. The transit of cheques used to take

several days. This process had several disadvantages. There are chances that the instrument may

get lost during the transit. The transport of instruments to the other banks may take several days.

In order to overcome such difficulties, the Cheque Truncation System (CTS) was introduced.

4.2 Cheque Truncation System:

Truncation is the process of stopping the flow of the physical cheque issued by a drawer at some

point with the presenting bank en-route to the drawee bank branch. In its place an electronic

image of the cheque is transmitted to the drawee branch by the clearing house, along with

relevant information like data on the MICR band, date of presentation, presenting bank, etc.Cheque truncation thus obviates the need to move the physical instruments across branches,

other than in exceptional circumstances for clearing purposes. This effectively eliminates the

associated cost of movement of the physical cheques, reduces the time required for their

collection and brings elegance to the entire activity of cheque processing.

In order to implement effectively it has been ordered that the customers who are using older

cheques must apply for CTS cheques. Beginning from July 1st

2013, the older cheques will not

be accepted by any banks. The CTS cheques have a barcode which helps to recognize the

corresponding cheques. For easy identification of the common man, the word CTS will be

present on the left hand side of the instrument.

4.2.1 Cheque Truncation in India:

Cheque Truncation speeds up the process of collection of cheques resulting in better service to

customers reduces the scope for clearing-related frauds or loss of instruments in transit, lowers

the cost of collection of cheques, and removes reconciliation-related and logistics-related


18/55

18

problems, thus benefitting the system as a whole. With the other major products being offered in

the form of RTGS and NEFT, the Reserve Bank has created the capability to enable inter-bank

and customer payments online in near-real time. However, as cheques are still the prominent

mode of payments in the country and Reserve Bank of India has decided to focus on improving

the efficiency of the cheque clearing cycle, offering Cheque Truncation System (CTS) as an

alternative. CTS is a more secure system for the exchange of physical documents.

In addition to operational efficiency, CTS offers several benefits to banks and customers,

including human resource rationalization, cost effectiveness, business process re-engineering,

better service, adoption of latest technology, etc. CTS, thus, has emerged as an important

efficiency enhancement initiative undertaken by Reserve Bank in the Payments Systems area.

The Reserve Bank has implemented CTS in the National Capital Region (NCR), New Delhi and

Chennai with effect from February 1, 2008 and September 24, 2011. After migration of the entire

cheque volume from MICR system to CTS, the traditional MICR-based cheque processing has

been discontinued in these two locations. Based on the advantages realized by the stakeholders

and the experienced gained from the roll-out in these centres, it has been decided to implement

CTS across the country. Accordingly, Grid based CTS clearing started in Chennai by including a

few banks from Coimbatore and Bengaluru with effect from March 2012. It has also been

envisaged to bring all the bank branches in the states of Tamilnadu, Kerala, Karnataka, Andhra

Pradesh and the Union Territory of Puducherry under Chennai Grid in a phased manner.

Grid-based Approach:

Under this approach the entire cheque volume in the country cleared across numerous locationswill be consolidated into a much fewer number of grids. The concept of region wise grids will be

replaced and operational freedom will be given to the operator in deciding the number of grids

required to expand the reach of CTS Pan-India and also on choosing the locations for each grid

for optimum use of the resources.

Each grid will provide processing and clearing services to all the banks under its jurisdiction.

Banks, branches and customers based at small / remote locations falling under the jurisdiction of

a grid would be benefitted, irrespective of whether there exists at present a formal arrangement

for cheque clearing or otherwise.

4.2.2 Process Flow of CTS:

In CTS, the presenting bank (or its branch) captures the data (on the MICR band) and the images

of a cheque using their Capture System (comprising of a scanner, core banking or other

application) which is internal to them, and have to meet the specifications and standards

prescribed for data and images.


19/55

19

To ensure security, safety and non-repudiation of data / images, end-to-end Public Key

Infrastructure (PKI) has been implemented in CTS. As part of the requirement, the collecting

bank (presenting bank) sends the data and captured images duly signed and encrypted to the

central processing location (Clearing House) for onward transmission to the paying bank

(destination or drawee bank). For the purpose of participation, the presenting and drawee banks

are provided with an interface / gateway called the Clearing House Interface (CHI) that enables

them to connect and transmit data and images in a secure and safe manner to the Clearing House

(CH).

The Clearing House processes the data, arrives at the settlement figure and routes the images and

requisite data to the drawee banks. This is called the presentation clearing. The drawee banks

through their CHIs receive the images and data from the Clearing House for payment processing.

The drawee CHI also generates the return file for unpaid instruments, if any. The return file /

data sent by the drawee banks are processed by the Clearing House in the return clearing session

in the same way as presentation clearing and return data is provided to the presenting banks forprocessing. The clearing cycle is treated as complete once the presentation clearing and the

associated return clearing sessions are successfully processed. The entire essence of CTS

technology lies in the use of images of cheques (instead of the physical cheques) for payment

processing.

4.2.3 Features of CTS cheques:

The CTS cheques must consist of minimum security features prescribed under CTS Standards

2010, such as embedded verifiable features such as bar-codes, encrypted codes, logos,

watermarks, holograms, etc., for early interception of altered / forged instruments. Images that donot meet the specifications are rejected. As the payments are made on the basis of the images, it

is essential to ensure the quality of the images. To ensure only images of requisite quality move

in the CTS processing cycle, there is a rigorous quality check process at the level of the Capture

Systems and the Clearing House Interface (of the presenting bank). The solution encompasses

Image Quality Assessment (IQA) at different levels. The presenting bank is required to perform

the IQA during the capture itself. Further IQA is done at the gateway before onward transmission

to clearing house. The images are captured with digital signatures of the presenting bank and

thereafter transmitted to the Clearing House and then to the paying banks. Further, the paying

banks, if not satisfied with the image quality or for any other reason, can ask for the physical

instrument to facilitate payment processing.

4.2.4 Clearing at Axis Bank:

In this system, the cheques received from other banks are collected and taken to the service

branch in the district. The cheques along with the pay slip are scanned and sent to the RBI

through e-mail. The new process of clearing takes maximum of one day for clearing of cheques


20/55

20

from anywhere across India. The first session of clearing has a cut off time till 11 am. The

second session time limit is till 1.00 pm. The cheques which are collected after 1.00 pm are

stocked with the seal Too late for todays clearing. These cheques are taken for the next days

clearing. On Saturdays, the cut off time is till 11 am. The cheques received after that will be sent

to the clearing house only on the next Monday.

A list of the cheques collected is prepared with the details of the bank name, cheque number and

the amount. This list is also necessary when the cheques are taken to the clearing centre. This

will be used for the verification of the cheques at the clearing house.

4.3 Transfer:

The transfers can be of three types:

1. Account to account transfer2. RTGS (Real Time Gross Settlement)3. NEFT ( National Electronic Fund Transfer)

4.3.1 Account to account Fund Transfer:

As the name depicts, this refers to transfer of fund between accounts of the same bank (Axis

Bank). This does not require any commission or charges. The one who transfers has to provide a

cheque drawn in the name of the account holder to whom the fund is to be transferred. A transfer

chellan or pay slip has to be filled up and submitted along with the cheque. The account details

of the receiver are to be mentioned in the pay slip along with the cheque number.

4.4 National Electronic Fund Transfer:

The Reserve Bank of India introduced the electronic system of fund transfer in India and this

system is called the National Electronic Fund Transfer System or NEFT system. This system

facilitates an efficient, secure, economical, reliable and expeditious system of funds transfer in

the banking sector throughout India. If a person or customer wishes to transfer funds through the

NEFT system, he should fill up the NEFT application form with the necessary details. Some of

the most frequent terms in the NEFT system are as follows:

Beneficiary refers to the customer in whose name the funds are to be transferred (the one who

gets benefitted). Beneficiary Bankrefers to the bank which holds the account of the beneficiary.

NEFT clearing centre is any office designated by the Nodal department for receiving, processingand sending NEFT SFMS message and the debiting and crediting of accounts of the participating

bank. The National Clearing Cell, Reserve Bank of India, Nariman Point, Mumbai has been

designated as the NEFT Clearing Centre in India. NEFT SFMS message is an electronic

Structured Financial Messaging Solution which contains a batch of NEFT payment instructions

sent from NEFT service centre to NEFT clearing centre.


21/55

21

4.4.1 Process Flow:

Funds transfer refers to the series of transactions beginning with the issue of payment instruction

to the sending bank and is completed by the acceptance of payment instruction by the

beneficiarys bank for the purpose of making payment to the beneficiary as per the instruction.

The customer who wants to transfer fund by NEFT should fill up the application form and it

should be duly signed by the authorized signatory. The submission of this application form to the

sending bank denotes that the bank is authorized to transfer funds from the senders account to

the beneficiarys account. The application can be submitted either electronically or physically.

The NEFT application form should be as per the standard model.

A bank may reject a customers request for funds transfer in the following cases:

There is insufficient fund in the senders account or if the funds availab le are reservedfor some other purpose.

If the customer has not filled up all the necessary details of the beneficiary required toperform NEFT.

The necessary details of the beneficiary involve name, branch name, bank name, account type,

account number and branch IFSC. IFSC stands for Indian Financial System Code. This code is

used to identify the participating banks branch in the NEFT system.

4.4.2 NEFT at Axis Bank:

The process of NEFT followed at Axis Bank is as per the regulations mentioned by the Reserve

Bank of India. The NEFT application form provided at Axis Bank requires the details of thecustomer as well as the beneficiary. The senders name, account type, account number, contact

details, the amount to be transferred and the cheque number must be filled up. Under the column

beneficiary details, the beneficiarys name, account number, bank name, branch name and IFSC

should be mentioned. The contact details of the beneficiary also should be mentioned. The form

should be duly signed by the authorized signatory. The terms and conditions are mentioned at the

back side of the form. The terms and conditions should also be accepted and signed by the

person authorized to handle the account.

NEFT can be done for any amount from Rs.1 onwards. It may take maximum of 48 hours for the

funds to get transferred. The forms for NEFT are accepted till 3.30 pm during the regularworking days and on Saturday the time limit is till 12.00 pm. Once the form is received from the

customer, the signature on the cheque as well as the form is verified. If the signature does not

match, then the ID proof of the customer is verified and then the form is processed. In such

cases, if there is no identity proof, then the transaction will not be done.


22/55

22

4.5 Real Time Gross Transfer:

Real Time Gross Transfer is also like the NEFT system. The transfers beyond Rs. 200000 are

transferred through RTGS. The fund transfer takes place almost immediately. Once the

transaction is done, a reference number will be generated and also a message will be sent to the

beneficiary.

The requirements of RTGS are also similar to that of NEFT. The necessary details should be

filled up in the form. The cheque should be named as Yourself for RTGS. The forms for

RTGS and NEFT are similar.

Once the form is submitted along with the cheque, then the official processes the transaction and

a transaction id will be created. The id, time and date of the transaction will be noted down in the

corresponding column of the form. The form is then given to another official for the purpose of

verification. Each official will be given a limit for verification. The process of verification is

done in order to check if the particulars have been entered correctly by the officer. If there areany mistakes, then the corrections should be made by the one who has done the entry by the

process of modifying the corresponding transaction id. If there are no mistakes, the RTGS will

be posted and the amount will be debited from the particular account and credited to the desired

beneficiarys account. For the reference of tracking the transaction, a number called UTR

number will be generated and sent to the customers account.

In case there is any mismatch between the account number and name or any other error, then the

amount will be credited back to the customers account. In such cases, the customer should be

contacted and the information should be conveyed. The customer can give the correct details

either in a new form or the correction can be made in the same form. The corrections should besigned by the authorized signatory.

The official should then delete the entry made priorily and new entry of the transaction should be

made. The new transaction id should be noted down and then should be verified by the

authorized official.

In case the time limit for RTGS is over, then the entry has to be deleted and a new entry can be

done for the same transaction as NEFT. During regular days, the time limit for RTGS is till

4.00pm. On Saturday, the time is till 1.00 pm. On Saturdays if the entry gets delayed, then it

cannot be done through NEFT as the time limit for NEFT gets over by 12.00 pm. In such cases

the entry has to be deleted and should be re-entered only on the next banking day.


23/55

23

CHAPTER 5

PRODUCTS & SERVICES

OFFERED


24/55

24

5 Products and Services Offered at Axis Bank:

The products offered at Axis Bank are based on the various segments personal, corporate,

business, NRI, rural and agriculture.

5.1 Personal Banking:

Under the personal banking, the major products offered are savings account, current account and

salary account. A special account called Womens Account is also available now.

5.1.1 Easy Access Savings Account:

The Easy Access Savings account provides the customer continuous and easy access to the funds

available in the account. Tracking the account activities is also easier in this type of account.

The minimum opening deposit is Rs. 10000 for urban and semi-urban areas. The customer will

receive an interest of 4% for the daily balance and this will be paid quarterly to the account. The

account holders can have internet banking as well as mobile banking facilities. Also five free

transactions are allowed in other bank ATMs for a month. The minimum average quarterly

balance to be maintained is Rs. 10000 in urban and semi-urban areas. In rural areas the average

quarterly balance to be maintained is Rs. 5000. The debit cards can be used to withdraw a

maximum of Rs. 40000 per day from ATM.

The account holders will get one free at-par cheque book with 20 leaves for one quarter. If an

account holder needs more than one cheque book per quarter, it will be charged and debited from

the account. The charge per leaf is Rs. 5.

5.1.2 Personal Current Account:

The types of current accounts offered for individuals are the Resident Foreign Currency

(Domestic) Account. The RBI has permitted Indian residents to hold foreign currency without

any charges. This is facilitated by RFC (D) accounts. The RFC (D) accounts are more commonly

known as NRO account. Axis Bank enables its customers to maintain non-interest bearing

current account in four major currencies - USD, EURO, GBP and Japanese Yen. There is no

ceiling on the balances held in the account. Cheque books denominated in USD or GBP or

EURO or Yen will be issued on these accounts with 25 leaves. The cheques thereby branded as

RFC (Domestic) Account cannot be presented in clearing and will be payable only at the issuing

branch.The minimum balance for such a current account will be USD 100 or GBP 60 or EURO 100 or

Yen 20,000. There will be a penal charge of USD 5 or GBP 3 or EURO 5 or Japanese Yen 1,000

per quarter in case of failure to maintain the minimum balance requirements.

The RFC (D) account holders are not given the facility of ATM usage. They can use the

iConnect facility (internet banking for Axis Bank) for any enquiry purposes.


25/55

25

5.1.3 Salary Power Scheme:

Savings Account under Salary power scheme 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 this

account will be withdrawn and the account shall be treated as Normal Savings Account under the

standard charge structure and Average Quarterly Balance (AQB) is required to be maintained.

All charges shall be levied and applied as applicable to normal savings accounts. Moreover the

Know Your Customer (KYC) must be complied with as applicable to a Normal Savings Bank

account and documents are to be submitted, failing which there would be a credit freeze marked

on the account.

The Easy access salary account provides a number of benefits to the account holders. The holder

can access at any of the branches and ATMs across India. The holder will be provided one free

at-par cheque book per quarter. The customer can take one free Pay Order / Demand Draft drawn

at Axis Bank locations per month. There will not be any commission or charge for collection of

outstation cheques drawn on Axis bank locations. They can have electronic banking facility

across all banks in India. The account holder is also facilitated with Internet banking and mobile

banking facilities. Also, they will be provided with free SMS alerts for debits and credits over

Rs. 5000, balance enquiry, enquiry on last three transactions and status of cheque clearance. If

the customer prefers, a free quarterly statement will be provided either in the physical form or

the electronic form as per the preference.

The holder will be provided with a Visa Classic debit card. It has unlimited transactions over any

of the Axis ATMs over India and 5 free transactions in other bank ATMs for a month. It will be

charged Rs. 100 per annum for purchase transactions exceeding Rs. 15,000. The maximum

withdrawal limit per day is Rs. 40,000. The customer will get an overdraft facility limit of up to

2/3 times of the net salary as per the eligibility. Also they can avail preferential rates on personal

loans, auto loans and home loans as per eligibility criteria.

5.1.4 Prime Salary Account:

The employees who earn a minimum of Rs. 25000 per month can hold a prime salary account in

Axis bank. The account holder will be provided with a Master card Titanium Reward Debit card,

for which the issuance charges will be waived. Unlimited cash withdrawal across any ATM and

also the maximum withdrawal limit per day will be Rs. 50,000. Purchase transaction limit will be

Rs. 2 lakhs per day. They will also be provided with occasion based cash back offers. The holderwill be provided a personal accident cover of up to Rs. 5 lakhs on MasterCard Titanium Reward

Debit card. All consumer durable goods bought using the debit card are insured against fire,

natural calamity, and theft for up to 90 days from the date of purchase.


26/55

26

5.1.5 Womens Account:

There is a special scheme of account for women. The unique feature of this account is that it is a

zero balance account. It is not necessary to maintain any minimum average balance as in other

personal savings account. The major purpose of introducing this account is to attract household

women toward opening an account. The initial funding for this account will be Rs. 10000. Oncethe account is opened and the customer receives a message, she can withdraw the money

immediately. The customer will receive an instant kit of debit card and debit card pin. Cheque

books are not issued for this type of accounts and also pass books will not be issued. If the

customer wants to know the details of the transactions done in the account, then she has the

option of getting the statement for the period desired.

5.2 Business Purposes:

For business purposes, the following types of accounts are offered by Axis Bank:

1. Normal Current Account2. Local Current Account3. Business Advantage Account4. Business Select Account5. Business Classic Account6. Privilege Account7. Channel One Account8. Club 50 Current Account

5.2.1 Normal Current Account:

The monthly average balance to be maintained is Rs. 10000. At home branch, the cash deposits

upto Rs. 200000 per month is devoid of charges. If the deposits are made at a branch other than

the home branch, then deposits of more than Rs. 100000 will be charged. Cash withdrawal of

upto Rs. 100000 from branches other than home branch is free. The DD and PO will be charged

at nominal cost. Also a free transaction package of 25 transactions is also provided.

5.2.2 Local Current Account:

Small businesses coming up in the local areas are provided with this type of account. They may

not be able to maintain the monthly average balance of Rs. 10000. Hence to promote such

people, Axis Bank offers the local current account. Almost 75 transactions are free in a month

based on a combination of services. A nominal annual charge of Rs. 1999 and Service Tax will

be charged. The account can be renewed every year with a nominal fee to continue with the same

benefits. If average balances maintained in a quarter exceeds Rs. 50000, there will be a rebate of

15% on the annual charges.


27/55

27

5.2.3 Business Advantage Account:

The Business advantage account offers a wide variety of attributes with a requirement of

maintaining Rs. 25000 as the monthly average balance. At home branch a cash deposit limit of

upto Rs. 3 lakhs is allowed. Inter branch transactions of upto Rs. 1 lakh is permitted per month.

A cheque book of 50 leaves can be received on request at zero charges in a month. Inter branchcash withdrawal limit is set to Rs. 3 lakhs per month. A free transactional package of 50

transactions consisting of cash or transfer or clearing is also provided.

5.2.4 Business Select Account:

Business select account is a unique current account which has flexibility of free limits as its core

feature. The monthly average balance to be maintained should be Rs. 50000. Flexibility in limits

refers to cash deposits. The minimum free limit of cash deposit is Rs. 600000. Also the customer

gets a free deposit limit of upto 12 times the monthly average balance maintained in the same

cycle. Also there is free limit in deposits at home branch as well as other branches. Also theaccount holder can avail a cheque book with 100 leaves per month without any charge. The

account holder also gets a free transactional package of upto 100 transactions per month.

5.2.5 Business Classic Account:

In this account, the customer gets a free cash deposit limit of Rs. 1200000 at the home branch

and a limit of Rs. 250000 per month at branches other than the home branch. The customer can

avail 200 cheque leaves per month for zero charges. Intercity cash withdrawal of upto

Rs.1200000 is permitted. A free transactional package consisting of 200 transactions per month

is also available.

5.2.6 Privilege Account:

The Business privilege account is for those customers who are ready to maintain a monthly

average balance of Rs. 500000. As the name denotes, this account has enhanced facilities when

compared to the other business accounts. The home branch cash deposits is free till Rs. 60 lakhs

and inter branch cash deposit is free till Rs.1250000 per month. The customer will not be

charged for taking Demand draft and Pay order. Free 500 cheque leaves are available per month.

The transactional package consists of free 500 transactions per month. Also the customer will not

be charged for any NEFT or RTGS.

5.2.7 Channel One Account:

Channel One account is the high end current account for which the minimum monthly average

balance to be maintained is Rs. 1000000. Free monthly cash deposits upto Rs. 1.2 crores at any

Axis branch across India is permitted per month. Customer can avail 1000 free cheque leaves per

month. The transactional package consists of 1000 transactions per month. As in privilege


28/55

28

account, DD and PO issuance charges will be nil and also the NEFT and RTGS charges will also

be nil.

5.2.8 Club 50 Current Account:

The minimum average quarterly balance to be maintained is Rs. 50 lakhs in urban areas whereasit is Rs. 25 lakhs in semi-urban and rural areas. The major attractive features are as follows:

1. Free cash deposit of upto 2 crores at any Axis branch across India2. Free DD and PO transactions3. Any number of cheque leaves can be availed free of charge4. Free transactional package of 2000 transactions5. Free NEFT and RTGS services

All these business accounts are provided with some ancillary services like mobile alerts, ATM

cum debit card, phone banking, corporate net banking and account statements through e-mail.

The charges will be different for the different business accounts.

5.3Salary Account:Axis bank provides salary accounts to employees of the various companies. Customized salary

accounts are provided based on the requirements.

5.3.1 Corporate Salary Account:As mentioned, there are customized salary accounts. The types are as follows:

Prive Salary- For employees with net monthly salary of Rs.5,00,000/- or more Wealth Salary- For employees with net monthly salary of Rs.2,00,000/- or more Priority Salary- For employees with net monthly salary of Rs.60,000/- or more Prime Salary- For employees with net monthly salary of Rs.25,000/- or more Easy Access Salary- For employees with net monthly salary of Rs.9,000/- or more Salary Plus- For employees with net monthly salary of Rs.9,000/- or more. Currently

being offered only to existing relationships

Smart Pay Card- For employees with net monthly salary less than Rs.9,000/-The major feature is that it is not necessary to maintain average balance and hence there will not

be any penalties for not maintaining the balance. Also the customers will get concession in

taking pay orders and demand drafts. The major advantage for the employers in creating salary

accounts for the employees in Axis bank lies in the fact that web upload facility to upload

salaries at the employers convenience. Also depending on the necessity, the employer can installan Axis bank ATM at the premises.

5.3.2 Defense Salary Account (Power Salute):The defense accounts are provided with unlimited at par cheques. Also, there are no commission

charges for taking demand drafts, pay orders, electronic fund transfers and for collection of

outstation cheques. The account holder gets SMS alerts on transactions above Rs. 5000. Also a

quarterly e-statement will be sent to the account holders address. As an additional service to the
http://www.axisbank.com/personal/accounts/salary-accounts/privee-salary-account/features.aspxhttp://www.axisbank.com/personal/accounts/salary-accounts/privee-salary-account/features.aspxhttp://www.axisbank.com/personal/accounts/salary-accounts/wealth-salary-account/features.aspxhttp://www.axisbank.com/personal/accounts/salary-accounts/wealth-salary-account/features.aspxhttp://www.axisbank.com/personal/accounts/salary-accounts/priority-salary-account/features.aspxhttp://www.axisbank.com/personal/accounts/salary-accounts/priority-salary-account/features.aspxhttp://www.axisbank.com/personal/accounts/salary-accounts/prime-salary-account/features.aspxhttp://www.axisbank.com/personal/accounts/salary-accounts/prime-salary-account/features.aspxhttp://www.axisbank.com/personal/accounts/salary-accounts/easy-access-salary-account/features.aspxhttp://www.axisbank.com/personal/accounts/salary-accounts/easy-access-salary-account/features.aspxhttp://www.axisbank.com/personal/accounts/salary-accounts/salary-power-plus/features.aspxhttp://www.axisbank.com/personal/accounts/salary-accounts/salary-power-plus/features.aspxhttp://www.axisbank.com/personal/cards/prepaid-cards/prepaid-cards-from-your-employer/smart-pay-card/features-benefits.aspxhttp://www.axisbank.com/personal/cards/prepaid-cards/prepaid-cards-from-your-employer/smart-pay-card/features-benefits.aspxhttp://www.axisbank.com/personal/cards/prepaid-cards/prepaid-cards-from-your-employer/smart-pay-card/features-benefits.aspxhttp://www.axisbank.com/personal/accounts/salary-accounts/salary-power-plus/features.aspxhttp://www.axisbank.com/personal/accounts/salary-accounts/easy-access-salary-account/features.aspxhttp://www.axisbank.com/personal/accounts/salary-accounts/prime-salary-account/features.aspxhttp://www.axisbank.com/personal/accounts/salary-accounts/priority-salary-account/features.aspxhttp://www.axisbank.com/personal/accounts/salary-accounts/wealth-salary-account/features.aspxhttp://www.axisbank.com/personal/accounts/salary-accounts/privee-salary-account/features.aspx


29/55

29

family, add-on ATM card facility is also provided. Also the defense people are provided with

preferential rates for personal loans, auto loans and home loans based on the eligibility criteria.

5.3.3 NRE Salary Account:When any establishment has more than ten NRI employees, then they can avail for NRE salary

accounts. All the basic facilities are available like free multi city cheques, free international debit

card, free internet banking, free demand draft issuance, monthly e-statement etc. The cash

withdrawal limit is Rs. 40000 per day.

5.4Agriculture and Rural Accounts:India has an agro-based economy. Though majority of the population is involved in agricultural

activities and is from rural areas, it is understood that they may not be able to meet the

requirements of several other accounts. To encourage people with such background, Axis bank

provides a number of special accounts. Some of them are discussed below:

5.4.1 Krishi Savings Account:This account was started with the aim of reaching the farmers. The account is designed as per the

basic requirement of a farmer. The half-yearly average balance to be maintained in urban centres

is Rs. 5000 whereas in semi-urban and rural centres, it is Rs. 2500. The customers will get an

international debit card with a withdrawal limit of Rs. 25000 per day.

5.4.2 Krishi Current Account:The Krishi current account is also meant for farmers and agriculturalists. The minimum half-

yearly average balance to be maintained is Rs. 10000 in urban areas, Rs. 5000 in semi-urban and

Rs. 2500 in rural areas. If the account holder maintains a higher average balance, he will get arebate on transaction charges. The percentage of rebate varies with the balance maintained. The

higher the average balance, the higher the rebate. Also multi city at par cheques are also

provided.

The other facilities involve mobile alerts, internet banking, ATM cum debit card etc.

5.5Fixed Deposits:Fixed Deposit, also called Term Deposit is an investment where the interest rate is guaranteed

not to change for the nominated term. Axis Bank offers a variety of fixed deposit schemes. The

minimum amount for opening a fixed deposit should be Rs. 10000 and the minimum period

should be for 6 months. The additions of amount can be made at any time later.

5.5.1 Reinvestment Deposits:

In a reinvestment fixed deposit scheme, the interest accrued on the deposit at the end of each

quarter is invested along with the principal. The tenure of deposit must be a minimum of 6

months. At the end of the quarter, the interest and the principal are both rolled over, and the

interest is calculated on the total sum. Income tax is deducted at source.


30/55

30

5.5.2 Automatic Rollover:

As a Fixed Deposit holder, the customer can avail of the facility for automatic rollovers on

maturity (for both the principal and interest). This option can be selected in the Account Opening

Document (AOD). The options available are:

Rollover only Principal:

Only the principal amount of the fixed deposit will be rolled over. The interest will be either

credited to the designated account or paid out.

Rollover Principal and Interest accrued in Reinvestment Deposit scheme:

These types will rollover both the deposit and the interest accrued for the same tenure at

the interest rates applicable on the maturity date.

5.6Recurring DepositsThe recurring deposit is a type of term deposit in which a fixed amount has to be deposited everymonth into the recurring deposit account and the interest will be at the rate that is offered for

fixed deposit.

At Axis Bank, recurring deposits are accepted at equal monthly installments of minimum

Rs.1000 and above in multiples of Rs. 500. The minimum period should be for 12 months and

can be multiple of 12 months. The maximum period allowed is 120 months (10 years). Once the

amount of installment is fixed, it cannot be changed after that. The installment for a month

should be made on or before the last working day of the same month.

5.7 Conclusion

The above mentioned accounts are few of the accounts offered by Axis Bank Ltd. Other than

offering accounts and deposits to customers, Axis Bank also offers insurance policies joining

hands with Bajaj Allianz as well as Tata AIG. There are insurance like medical insurances,

accident shields, insurance policies for automobiles etc. Also Axis Bank has a joint venture with

Max Life Insurance.
http://www.axisbank.com/personal/deposits/interest-rate.aspxhttp://www.axisbank.com/personal/deposits/interest-rate.aspx


31/55

31

CHAPTER 6

CUSTOMER SERVICE


32/55

32

6 Customer Service at Axis Bank Ltd:

6.1 Introduction

One of the major reasons that customers are attracted towards Axis Bank is their service to the

customer. Customers consult the bank for a variety of enquiries and requests to be processed.Though the banking operations are being mechanized, the significance of banks has not been

reduced. There are still a lot more areas in which a customer requires the help of banking

official. There are requests which can be processed at the branch level as well as requests when it

has to be sent to the service branch in Mumbai.

6.2 Types of Requests

There are so many enquiries and requests to be processed for customers. In order to process the

requests in the bank, there are specific formats for each type of requests. The various forms

available are customer request form, account opening form, account transfer form, account

closure form, debit card application, corporate net banking requests etc.

6.3 Customer Request Form

This is a single form which has several options. It is necessary to fill up the date, name, account

number and customer id columns. There are separate columns for the following needs:

6.3.1 Mobile number updation

When a customer has changed his mobile number and wishes to change the mobile number for

future communication purposes like SMS alerts and transaction alerts, he can fill up the

corresponding column in the request. If the customer wants to update it himself, he can do it bygoing to the Axis bank ATMs and then go for the option mobile banking and proceed based on

the instructions.

When the customer submits the form for mobile number updating, the official goes to the site for

iConnect mobile banking and then changes the number using the option Mobile banking

modification.

6.3.2 Landline Number Updation

This is similar to that of mobile number updating. But this is not often received as request in the

bank and also not much desired by the customers as it is the era of mobile phones. The landline

number is updated only in the account details. The bank uses this number when bank cannot

contact the customers on mobile phones.


33/55

33

6.3.3 E-mail id updation

If the customer wishes to receive the monthly or quarterly e-statements, then he can register by

updating the mail id in the account. To process this request, the official scans and send the

request to the service branch in Mumbai. It will be updated in 2 to 3 days and an

acknowledgement mail will be sent to the official who has sent the request.

6.3.4 PAN and Aadhar updation

As per the RBI regulations, when a customer has to perform transactions of more than Rs.

50000, the PAN number (Permanent Account Number) has to be updated in the account for

security purposes. In such cases, it is safe for the customers to keep their PAN updated.

For both PAN and Aadhar updating, the customer has to fill up the corresponding columns and

also submit a photocopy of the PAN or Aadhar as required. The original has to be checked and

verified by the official who is receiving the request from the customer. Also the signature has to

be verified. The request is then scanned and sent to the service branch in Mumbai.

6.3.5 Change of Address

For changing the mailing address in the account, the customer has to fill in the column for

change of address and all the necessary details required in the request. An address proof in the

name of the account holder is also required. The same is scanned and sent. The address gets

updated in 2 to 3 days.

6.3.6 Cheque Book Request

The cheque book requisition slip is provided in the cheque book. In case if the customer does nothave the slip, then he can get the customer request form and fill in the details required and also

write down the number of cheque books required. The signature of the customer is verified and

then sent to the service branch. The cheque book will be sent to the customer as per the address

in the account. It will take atleast 7 banking days for the customer to receive a new cheque book

after submitting the request.

The cheque book requisition can also be done at the Axis Bank ATMs. The processing time is

the same for both.

6.3.7 Statement Request

There are several conditions in which a customer may require a printed copy of the statement of

their account. In such cases, they may also require a statement with the seal of the bank.

The date for the period in which the statement is needed has to be written down and the form

must be signed. The signature is verified by the official and the statement for the period can be


34/55

34

generated by going to the web site Finacle MIS. The statement will be printed and the hard copy

will be given to the customer immediately.

6.3.8 Account Activation

In cases when the account has been frozen or become dormant as there have not been anytransactions for a long period of time, the customer can request for account activation for using

the account in future.

The customer has to mention the reason for not using the account for such a long period of time.

The identity proof and address proof of the customer should be submitted along with the request.

The account activation request has also to be sent to the service branch.

6.3.9 Debit card Related Requests

There may be situations when a customer has to de-activate the debit card. This occurs mostly

when the customer has lost the card and it has to be blocked to prevent any unnecessarytransactions. The 16 digit debit card number has to be written down and the column Debit card

de-activation has to be ticked. There is a link for knowing the card details and also an option for

hot listing or blocking is also available. The official can hotlist the card immediately.

If the customer has got back the debit card, then he will have to re-activate his card to continue

using the same. For re-activation of the card, the customer must submit the identity proof along

with the request. On receiving the request, the official must sent a mail to the corresponding mail

id asking to re-activate the debit card along with the account number and debit card. The card

will be activated on the same day.

If the customer has forgotten the secret pin of the debit card, then he has to apply for a duplicate

pin. Tick the corresponding column and the form must be signed. The request will be sent to the

service branch. A new duplicate pin will be generated and sent to the customers address. It will

take upto 57 banking days.

6.3.10 Stop Payment

If a customer has given a cheque for payment and there is no sufficient balance in the account,

then he can stop the payment of the cheque by specifying the cheque number in the request. The

payment can be stopped only if there is sufficient balance to debit the stop payment charges.

The customer can also submit a letter along with the details of the cheque like cheque number

and the amount mentioned. It is mandatory to process the stop payment requests immediately on

receiving the request.


35/55

35

6.3.11 Reversal of Charges

If the customer finds that his account has been debited of a specific charge more than once or due

to some other mistakes, he can request for the reversal of charges in the customer request. The

details like the date and amount being debited should be mentioned.

6.3.12 Issuance of Pass book

For most of the accounts, pass books are not provided. In case the customer prefers to have a

pass book, then a request has to be submitted along with a passport size photograph. The pass

book will be issued immediately.

6.3.13 Other Requests

Other than these specified requests, customer may have some additional requests like net

banking activation, de-activation of SMS alerts etc. Such requests must be mentioned in the

Others column. It should be signed by the customer.

6.4 Account Opening

There are different account-opening forms based on the type of account being opened. The

format is different for each type. The three major formats are Savings Account form, Current

Account form and Prime Account form.

The details have to be filled up and the passport size photograph along with identity proof and

address proof must be submitted. The initial funding should also be deposited based on the type

of account.

The duration for the processing of the form is 7 days. The officials are allotted points for the

accounts they open. Each official will be given a target for each quarter which he or she has to

achieve.

6.5 Account Transfer

When a customer has shifted to a new place, he may wish to transfer his account to the branch in

the new place. There is an account transfer form in which the details will have to be filled and

the form must be signed. A photograph, identity proof and address proof must also be submitted

along with the form. The reason for transfer should also be mentioned.

If it is a joint account, then the photographs of all the joint holders along with their signature

must be on the form. The signatures of the holders are verified and the forms are scanned and

sent to the service branch.


36/55

36

6.6 Account Closure

If the customer wants to close the account, there is a separate format. The form should be filled

with the details like account number, name, reason for closure, whether the cheque book and

debit cards are destroyed or not etc. must be filled. The account holder must write the name and

sign in the corresponding column.

Once the form is submitted, the official has to go the link CUSTEYE in Finacle. On entering

the account number, there will be a score called CVS score displayed on the screen. This score

will be based on the transactions of the customer. The CVS should be filled in a separate form

and signed by the official. If the score is more than 3, then the form should be attested by the

Branch Head.

6.7 Debit Card Application

There may be several situations when a customer wants a new debit card like card being lost or

damaged or expired and not renewed etc. In such cases, he has to request for the issue of a new

card. There are separate columns for single account and joint account. The customer should fill

in the corresponding columns appropriately and completely along with the nomination details.

The reason for the application should also be mentioned. The customer can choose the type of

card he/ she prefers to have (Classic, Titanium Premium, and Titanium Rewards etc.) Also there

is an option of getting an image card.

If the customer prefers to have a classic card, then a passport size photograph is required. For the

other cards, photograph is not a necessary requirement. If it is an image card, then the customer

should sent the soft copy of the image he prefers to have on the card to the concerned officials

mail id. All the applications are verified for the signature and also must be signed by the

Operations Head. The employee code of the official who has accepted the application form from

the customer must also be filled. For normal cards, the application forms are sent to the service

branch in Coimbatore (RS Puram). If it is an image card, then the application should be sent to

the service branch in Mumbai and the image should be sent to concerned mail id.

The issuance charge of the debit card varies with the type of card. The card will be received by

the customer in 7 to 10 banking days. The cards are directly sent to the customers address as in

the account. If the customer is not able to receive the courier because of any reason, then it will

be sent back to the home branch of the customer. The customer will then be informed via

telephone for collecting the card from the bank. The debit card pin is sent separately to the

customers address for security reasons.

6.8 Signature Updation

A persons signature may not necessarily remain the same throughout his life. It may change as

time passes. But the signature is verified for each and every process in a bank. If there are even


37/55

37

minor variations, the banker may not proceed with the process. So if the signature has been

changed, then the customer should fill up the corresponding application form.

The customer should fill up the account number, customer id and name. He should sign in the

column specified. A self attested identity proof must also be submitted. The application is

scanned and sent by mail. The signature gets updated in the customers account in 3 to 4 bankingdays.

6.9 Corporate Net Banking

For individuals to get access to internet banking, the process is very simple. One just needs to fill

up the customer request form and submit it to the Front Desk Officer. He will get the iConnect

pin in 4 to 7 banking days.

But when it comes to the corporate, the process of applying is different. Priorily the customer

request form was sufficient. But at present the forms have been updated. Depending on whether

a concern is a partnership firm or proprietorship firm, there are different formats.

It is in the form of a letter where blanks are provided to be filled up. The details like account

number, firms name, the limit of transactions etc. have to be mentioned. In case of partnership

firm, it should be confirmed if the initiator and approver can be a single person or it should be

two different persons. This is done for security purposes for the transactions in firms. The letter

should be printed on the firms letterhead and must be signed by the authorized signatory in case

of sole proprietorship. In case of partnership firm, all the partners must sign the letter and also

the firms seal must be kept.

Along with the letter, there is a separate iConnect form for corporates. In the application form,the firms name, account number, customer id, preferred user id, the limit of transaction, the type

of initiation and approval, the number of transactions that can be allowed in a month etc. should

be filled up necessarily. There are columns specified for the signature of the authorized people.

Once the form along with the letter is submitted, the signature is verified and the Operations

Head signs the form. The form along with the letter are scanned and sent to the service branch in

Mumbai. Once the application is processed, the iConnect pin will be sent to the firms address as

in the account. In case of not being received by the customer, the courier is directed back to the

home branch. The customer will be contacted later and will be asked to collect the pin from the

bank. If the pin is collected by the customer from the bank, the identity proof of the customershould be photocopied along with the courier cover. The photocopy must be signed by the

authorized person stating that he has received the password on the particular date. This is done

for the safety purpose of banks so that complications do not arise later.


38/55

38

6.10 Demand Draft Cancellation

The validity of a demand draft from 1st

April 2013 is three months from the date of the demand

draft. If the demand draft is not deposited in the corresponding account within three months, then

it has to be revalidated by submitting a letter in the bank where it was taken. The officials who

have signed in the DD must sign it again after changing the date.

In case, there are some mistakes in the demand draft like the amount being incorrect or the name

being wrong, corrections cannot be made. The DD has to be cancelled in such cases and new DD

must be taken.

The customer should submit a letter stating the reason for cancelling the demand draft. Also a

revenue stamp should be pasted behind the demand draft and it should be signed crossly over the

stamp by the account holder from whose account the amount was debited. Once the letter along

with the DD is submitted, the official cancels the DD. The amount gets remitted to the

customers account. The charges for cancellation will be debited.

If the mistake in the demand draft occurred due to the officials error, then it can be manually

corrected and the banks label is pasted over the area where the correction is made. The

correction is then signed by the concerned official.

6.11 Customer Complaint

The most frequently received customer complaint is for debiting the account of money when

customers try to withdraw money from ATM and the money does not come out from the

machine. Usually, the amount gets credited back in 24 hours of the transaction. But there may be

cases when it is not credited back. In such cases, the customer can submit a complaint. There is aseparate complaint format. The customer has to mention the basic details and the nature of

complaint. If it is in the case of money withdrawal from ATM, there are specific columns. The

time of transaction, the ATM at which the problem occurred and the date of transaction should

be mentioned.

Once the complaint is received, the official submits the request through customer leverage site.

The service team will investigate the case and when the reason for the error is found, then the

amount will be credited back in the account.

Also there is a complaint box in the bank. In case the customers are not satisfied with the service

offered in the bank, then he can write a complaint letter and drop in the complaint box. The box

will be checked frequently and the necessary measures will be taken as per the customer

complaint.


39/55

39

6.12 Conclusion

These are some of the most common requests from customers and are processed almost daily.

Most of the processing of requests was done manually initially. Now almost all processes are

being centralized and automated to offer better customer service. There are advantages as well as

disadvantages for this updation. The major advantage is the automated processing and securityavailable. The major disadvantage which has been observed was that some processes are taking a

longer period to get processed. In case there are any corrections in the request given by the

customer, then it can be made known only after the service team has rejected the request

mentioning the reason.

There are chances customers will get frustrated when they are made to know about the

corrections after few days. Hence officials must check the requests if all the necessary details are

mentioned by the customer. Else it may lead to customer dissatisfaction. But the properprocessing of the requests can result in customer satisfaction and when they receive the response

earlier than expected, it can lead customer delight.


40/55

40

CHAPTER 7

FINANCIAL ANALYSIS


41/55

41

7 Financial Analysis of Axis Bank

7.1 Introduction

The banking sector in India is in a stage of transformation at present. Many of the public sector

banks are undergoing structural changes whereas the private sector is getting modified by

mergers and acquisitions. There have been several changes in the policies and regulations in the

banking sector. Entry of private and foreign banks in the segment has provided healthy

competition and is likely to bring more operational efficiency into the sector. However, before

investing in a banking stock an investor should look at certain key performance ratios. The

analysis of a banks accounts differs significantly from any other company due to their structure

and operating systems. Hence the analysis and the ratios used are also different.

7.2Operating PerformanceThe operating performance of the bank can be measured using the following ratios.

7.2.1 Net interest margin (NIM)For banks, interest expenses are their main costs and interest income is their main revenue

source. The difference between interest income and expense is known as net interest income. It is

the income, which the bank earns from its core business of lending. Net interest margin is the net

interest income earned by the bank on its average earning assets. These assets comprises ofadvances, investments, balance with the RBI and money at call.

NIM = Interest incomeInterest expenses

-----------------------------------------

Average earning assets

7.2.2 Operating profit margins (OPM)Banks operating profit is calculated after deducting administrative expenses, which mainly

include salary cost and network expansion cost. Operating margins are profits earned by the bank

on its total interest income.

OPM = Net interest income (NII)operating expenses

---------------------------------------------------------

Total interest income


42/55

42

7.2.3 Cost to income ratioThe cost to income ratio is calculated as a proportion of operating profit including non-interest

income.

Cost to income ratio = Operating expenses

--------------------------

NII + non interest income

7.2.4 Other income to total incomeThis ratio can be calculated as a rate of the other income to the total income which includes both

interest and non-interest income.

Other income to total income = Other Income

----------------------

Total Income

7.3Financial PerformanceThe next step of analysis is to find out the financial performance of a bank. This can be

calculated using the following ratios.

7.3.1 Credit to deposit ratio (CD ratio)The ratio is indicative of the percentage of funds lent by the bank out of the total amount raised

through deposits. Higher ratio reflects ability of the bank to make optimal use of the available

resources.

CD Ratio = Advances

Deposits

7.3.2 Capital adequacy ratio (CAR)A bank's capital ratio is the ratio of qualifying capital to risk weighted assets. The RBI has set

the minimum capital adequacy ratio at 10% as on March 2002 for all banks. A ratio below the

minimum indicates that the bank is not adequately capitalized to expand its operations. The ratio

ensures that the bank do not expand their business without having adequate capital.


43/55

43

CAR = Tier I capital + Tier II capital

------------------------------------

Risk weighted assets

7.3.3

NPA ratio

The net non-performing assets to loans (advances) ratio are used as a measure of the overall

quality of the banks loan book. Higher ratio reflects rising bad quality of loans.

NPA ratio = Net non-performing assets

---------------------------------

Loans given

7.3.4 ROAReturns on asset ratio is the net income generated by the bank on its total assets. The higher the

proportion of average earnings assets, the better would be the resulting returns on total assets.

Similarly, ROE (returns on equity) indicates returns earned by the bank on its total net worth.

ROA = Net profits

---------------

Avg. total assets

7.4Efficiency AnalysisThe efficiency of a bank can be measured in terms of the performance per employee. The major

ratios used to analyze the efficiency are as follows:

7.4.1 Interest income per employeeThe interest income per employee denotes the income generated through interest per employee

and can be calculated as follows:

Interest Income per Employee = Total Interest Earned

Number of employees

7.4.2 Net Profit per employeeThe net profit earned per employee can be calculated using the formula:


44/55

44

Net profit per employee = Net profit

Number of employees

7.4.3 Business per employeeThe total business for a bank is the sum of the advances lent by the bank and the deposits

received by the bank from the customers. The business per employee can be calculated using the

formula:

Business per employee = Total Business

Number of employees

7.5Analysis of Axis Bank:

The profit and loss statement for Axis Bank from the years 2010 to 2013 is as follows:

Table 7.5.1 Profit and Loss Statement

P&L Statement 2013 2012 2011 20

INCOME

Interest earned 271825744 219946474 151548058 1163802

Interest/discount on advance/ bills 191662356 153793526 104031107 7986604

Income on investments 77469805 63942666 44386841 342830Interests on balances with RBI & inter-bankfunds 1112621 984267 1826199 120004

Others 1580962 1226015 1303911 103104

Other income 65511063 54202163 46321338 394578

Total 337336807 274148637 197869396 1558380

EXPENDITURE

Interest expended 175163111 139769024 85918230 663352

Interest on deposits 150155486 121836378 74985188 571452

Interest on RBI/ inter bank borrowings 4596175 2319578 1609768 149364

Others 20411450 15613068 9323274 76963

Operating expenses 69142375 60070995 47794281 3709722

Gross Profit 93031321 74308618 64156885 524055

Provisions and contingencies

Documents

g g project