| Private Banks - The Public Edge |
Just a couple of months ago, HDFC bank acquired the Times Bank to strengthen its customer muscles. Indian banking sector, worth US $ 250 million approximately has started experiencing a clear shift in its service paradigm towards retail customers. The new offerings in personal banking are very sharp now a days to challenge the Indian traditional banking system.
What do private players offer to the retail customers that public sector banks are unable to offer. Consider these facts. The smart account opening will allow you to complete all the formalities required to open a bank account right in your house or office. You need not carry your passbook, as the bank statement will be available in your mailbox every month. Dial-a-draft facility offers you to request a draft through phone and your bank will take care of sending it to the concerned party. Internet will allow monitoring your account online, 24 hours a day, 365 days a year. Bank will give you the facility of Any Time Money (The popular ATM network) using your Personal Identification number.
ICICI and HDFC are the two prominent players in the new retail market. Every three months, they come out to offer a new service. The Youth surely are caught by the services such as HDFC’s 60 seconds loan sanction facility and ICICI’s Zero balance offers etc. Citibank is ready to extend its hand to you with Relationship Banking while UTI and Syndicate Bank are ready to offer FD interest rate at your savings account once it touches a limit of Rs.5000.
Now, compare these whole new gambit of banking services with cluttered, conspicuous godfatherly like banking services of public sector banks. They often exercise anti-queuing theory, a means of articulating a never-ending busy culture, where you will be going late invariably. They may like to see you waiting for one hour for a demand draft. All these things resulted in losing customer base. Strong age-old banks are unable to attract the new generation. Banks like UTI, UBI and Allahabad bank are the major customer- losers to private banking in India in the last two to three years.
The services Net banking has offered has pulled the customers of public-sector banks towards it. What is Net Banking and how important it is to people? Come to the fact now.
Internet can be a friend of customers but can not replace the traditional banking process. In India, the Internet population is 1 million of which only 2-3 percent does Netbanking. But, the smart packaging of services like Tele-banking, Dial-a-draft, 7Days-8 Hours banking, warm welcome at the reception or a courteous attitude of the private players along with the facility of Internet banking definitely spells pleasure of banking to the new generation. The successful integrity of tangible offerings with intangible benefits led these banks to pull the customers.
Take a look at the excellent financial performance of the private banks during the second quarter ended September 2000. HDFC, ICICI, Global Trust and UTI’s combined PAT stands at Rs.835 million, a 55.3% good growth over the previous quarter while substantial investment in Infrastructure (ATM network building, e-Initiative, Internet banking etc.) has doubled the other expenses of the bank.
Needless to mention, the success of private banks in India is not built at a single stroke but was achieved with a pure focus at the needs of the new generation a long time back. And the customer-pulling exercise is just a transition process in Indian banking industry as a result of that effort.
Deepanjan Banerjee
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