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CHAPTER I INTRODUCTION AND RATIONALE OF THE STUDY

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1.1

Introduction to the title:

Title: A study and an analysis of the effect of financial inclusion and digitization on retail banking sales

Introduction:

Digital Transformation is far beyond just moving from traditional banking to a digital world. It is a vital change in how banks and other financial institutions learn about, interact with and satisfy customers. An efficacious Digital Transformation begins with an understanding of digital customer behavior, preferences, choices, likes, dislikes, stated as well as unstated needs, aspirations etc.. And this transformation leads to the major changes in the organizations, from product-centric to customer-centric view. On top of that a lot of emphasis is laid on financial inclusion of all the strata of society in the banking services. Non inclusion is not an option and could not be an option in the near future. It may affect sales of the existing products in the banking industry. With the emergence of payment banks and regulatory bodies aligned towards the well being of payment banks, it has become an obligation to study the effect of financial inclusion on the existing sales,.

Financial Inclusion

Financial inclusion enables improved and better sustainable economic and social development of the country. It helps in the empowerment of the underprivileged, poor and women of the society with the mission of making them self-sufficient and well informed to take better financial decisions. Financial inclusion takes into account the participation of vulnerable groups such as weaker sections of the society and low income groups, based on the extent of their access to financial services such as savings and payment account, credit insurance, pensions etc. Also the objective of financial inclusion exercise is easy availability of financial services which allows maximum investment in business opportunities, education, save for retirement, insurance against risks, etc. by the rural individuals and firms.

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The penetration of financial services in the rural areas of India is still very low. The factors responsible for this condition can be looked at from both supply side and demand side and the major reason for low penetration of financial services is, probably, lack of supply. The reasons for low demand for financial services could be low income level, lack of financial literacy, other bank accounts in the family, etc. On the other hand, the supply side factors include no bank branch in the vicinity, lack of suitable products meeting the needs of the poor people, complex processes and language barriers. Since 2005, the Reserve Bank of India (RBI) and the Government of India (GOI) have been making efforts to increase financial inclusion. Measures such as SHG-bank linkage program, use of business facilitators and correspondents, easing of Know Your Customer (KYC) norms, electronic benefit transfer, separate plan for urban financial inclusion, use of mobile technology, bank branches and ATMs, opening and encouraging ‘no-frillaccounts’ and emphasis on financial literacy have played a significant role for increasing the use of formal sources for availing loan/ credit. Measures initiated by the government include, opening customer service centers, credit counselling centers, Kisan Credit Card, Mahatma Gandhi National Rural Employment Guarantee Scheme and Aadhar Scheme. These renewed efforts are more focused than the earlier measures which were more general in nature having a much wider scope. Though the measures were initiated earlier, their impact on the rural population needs to be analysed and reframed in order to understand the present scenario in the rural areas.

Digitization

Digital Transformation is far beyond just moving from traditional banking to a digital world. It is a vital change in how banks and other financial institutions learn about, interact with and satisfy customers. An efficacious Digital Transformation begins with an understanding of digital customer behavior, preferences, choices, likes, dislikes, stated as well as unstated needs, aspirations etc.. And this transformation leads to the major changes in the organizations, from product-centric to customer-centric view. A study by CGI entitled, Understanding Financial Consumers in the Digital Era sheds some light on the desires of today’s digital consumer. Interestingly, at a time when financial institutions seem to be in a lock-step with each other, consumers are raising the bar on their expectations. And, according to the study by CGI, they are willing to leave where they currently bank if their needs are not met. As customers continue to change their channel usage patterns, banks and credit firms need to focus on delivering a seam- less customer experience across various touch points. More than just an axiom, Omni-channel banking is a prospect to take bottom-line on higher note by gaining insights from customers’ channels, behavior and preferences. Today’s custom- ers are more sophisticated and tech savvy, and to cater to their specific

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needs, each customer needs a unique experience from banking. They want the companies to understand their unstated needs as well as their likes. So, it should come as no surprise that these customers are expecting similar kind of response and service from banking institutions too. From researching new services, opening an account, checking balance, conducting transactions, loans, credits, wealth man- agement, customer support, delivering an Omni-channel experience has become a key to success in this competitive market place.

1.2

Significance of study

1.2.1 Sales Sales performance management is the major direction which could be and needs to be aligned with the digitization and financial inclusion. Product features alignment is an important aspect which needs to be taken into consideration. For example, axis bank has aligned its savings bank account in the rural areas to be flexible for financial inclusion. The savings bank accounts needs to be maintained with ₹5000 average balance where in the urban banks accounts are maintained at the average of ₹10000 per month. Moreover the products like axis ASAP account with a limited number of transactions is a digital account which is ideal for students and it may affect sales of general savings account as there was no provision for students before.

1.2.2 Organizing market There are some benefits provided to the employees working under organised sector like they get the advantage of job security, add on benefits are provided like various allowances and perquisites. They get a fixed monthly payment, working hours and hike on salary at regular intervals. The sector, which is registered with the government is called an organised sector. In this sector, people get assured work, and the employment terms are fixed and regular. A number of acts apply to the enterprises, schools and hospitals covered under the organised sector. Entry into the organised sector is very difficult as proper registration of the entity is required. The sector is regulated and taxed by the government. 1.2.3 Sales performance measurement A sales evaluation helps you determine which salespeople perform well and which don't. With that information, you can reward your sales team members according to their performance. Through the evaluation, salespeople may learn of your expectations and set their goals accordingly. You may develop training and counseling programs for the sales

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team based on the results of the sales evaluation. The evaluation may also lead to a promotion for strong salespeople and termination for weak salespeople. 1.2.4 Operations alignment The third important question to be addressed by the rest of your organization is “how do you allocate resources over the next year, so you can continue to “run” your business on a day to day basis, AND at the same time begin to invest to “change” your business in pursuit of your long-term vision?” The strategy team has been thinking, ‘in a perfect world what you would like to become’. The team members on the front lines however, have to address the real world of what it takes to deliver products or services and sell and support customers each day. A strategy for balancing short term and long-term priorities can only be answered by supporting the team members who do the work to understand the vision and by providing all possible assistance to help them figure out the best way to get there. The end result of this discipline is a roadmap of operating plans and change initiative plans to guide the next year. 1.2.5 Reach assessment Emphasis is laid on financial inclusion of all the strata of society in the banking services. Non inclusion is not an option and could not be an option in the near future. It may affect sales of the existing products in the banking industry. With the emergence of payment banks and regulatory bodies aligned towards the well being of payment banks, it has become an obligation to study the effect of financial inclusion on the existing sales,.

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CHAPTER II INDUSTRY PROFILE

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Indian Banking Industry

Introduction As per the Reserve Bank of India (RBI), India’s banking sector is sufficiently capitalised and well-regulated. The financial and economic conditions in the country are far superior to any other country in the world. Credit, market and liquidity risk studies suggest that Indian banks are generally resilient and have withstood the global downturn well. Indian banking industry has recently witnessed the roll out of innovative banking models like payments and small finance banks. RBI’s new measures may go a long way in helping the restructuring of the domestic banking industry.The digital payments system in India has evolved the most among 25 countries with India’s Immediate Payment Service (IMPS) being the only system at level 5 in the Faster Payments Innovation Index (FPII).*

2.1Market Size The Indian banking system consists of 27 public sector banks, 22 private sector banks, 44 foreign banks, 56 regional rural banks, 1,589 urban cooperative banks and 93,550 rural cooperative banks, in addition to cooperative credit institutions. Bank credit grew at 12.64 per cent year-on-year to Rs 85.511 lakh crore (US$ 1,326.78 billion) on May 11, 2018 from Rs 75.91 lakh crore (US$ 1,131.47) on May 12, 2017.

1.3

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Investment/ Developments

The bank recapitalisation plan by Government of India is expected to push credit growth in the country to 15 per cent and as a result help the GDP grow by 7 per cent in FY19 ^. Public sector banks are lining up to raise funds via qualified institutional placements (QIP), backed by better investor sentiment after the Government of India's bank recapitalisation plan and an upgrade in India's sovereign rating by Moody's Investor Service. The total value of mergers and acquisition during FY17 in NBFC diversified financial services and banking was US$ 2,564 billion, US$ 103 million and US$ 79 million respectively @. The biggest merger deal of FY17 was in the microfinance segment of IndusInd Bank Limited and Bharat Financial Inclusion Limited of US$ 2.4 billion @. In May 2018, total equity funding's of microfinance sector grew at the rate of 39.88 to Rs 96.31 billion (Rs 4.49 billion) in 2017-18 from Rs 68.85 billion (US$ 1.03 billion) #.

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1.4

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Government Initiatives

A new portal named 'Udyami Mitra' has been launched by the Small Industries Development Bank of India (SIDBI) with the aim of improving credit availability to Micro, Small and Medium Enterprises' (MSMEs) in the country. Mr Arun Jaitley, Minister of Finance, Government of India, introduced 'The Banking Regulation (Amendment) Bill,2017', which will replace the Banking Regulation (Amendment) Ordinance, 2017, to allow the Reserve Bank of India (RBI) to guide banks for resolving the problems of stressed assets. Under the Union Budget 2018-19, the government has allocated Rs 3 trillion (US$ 46.34 billion) towards the Mudra Scheme and Rs 3,794 crore (US$ 586.04 million) towards credit support, capital and interest subsidy to MSMEs. In March 2018, the Government of India launched Pradhan Mantri Vaya Vandana Yojna (PMVVY) to provide elderly people Rs 10,000 (US$ 155.16) pension per month. This scheme has an investment limit of Rs 15 lakh (US$ 23,273.86). In May 2018, the Government of India provided Rs 6 trillion (US$ 93.1 billion) loans to 120 million beneficiaries under Mudra scheme. As on January 4, 2018, the Lok Sabha has approved recapitalisation bonds worth Rs 80,000 crore (US$ 12.62 billion) for public sector banks, which will be accompanied by a series of reforms.A two-year plan to strengthen the public sector banks through reforms and capital infusion of Rs 2.11 lakh crore (US$ 32.5 billion), has been unveiled by the Government of India that will enable these banks to play a much larger role in the financial system and give a boost to the MSME sector. In this regard, the Lok Sabha has approved recapitalisation bonds worth Rs 80,000 crore (US$ 12.62 billion) for public sector banks, which will be accompanied by a series of reforms, according to Mr Arun Jaitley, Minister of Finance, Government of India. The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017 Bill has been passed by Rajya Sabha and is expected to strengthen the banking sector.

1.5

Road Ahead

Enhanced spending on infrastructure, speedy implementation of projects and continuation of reforms are expected to provide further impetus to growth. All these factors suggest that India’s banking sector is also poised for robust growth as the rapidly growing business would turn to banks for their credit needs.

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Also, the advancements in technology have brought the mobile and internet banking services to the fore. The banking sector is laying greater emphasis on providing improved services to their clients and also upgrading their technology infrastructure, in order to enhance the customer’s overall experience as well as give banks a competitive edge. Many banks, including HDFC, ICICI and AXIS are exploring the option to launch contactless credit and debit cards in the market shortly. The cards, which use near field communication (NFC) mechanism, will allow customers to transact without having to insert or swipe. Mr Bill Gates, Co-founder of Microsoft Corp, has stated that India will move quite rapidly to a digital payments economy in as little as seven years, based on the introduction of digital payment banks combined with other things like direct benefit transfers, universal payments interface and Aadhaar.

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Major Players

HDFC Bank Going by market capitalization, HDFC Bank is the largest bank in India. Its market cap is pegged at about INR 261,226.94 crore.As of end 2014, the bank boasted of a strong network of 3,659 branches in 2,287 cities.To facilitate NRI banking, the bank also has overseas branches in Bahrain, Hong Kong, Abu Dhabi, Kenya and Dubai.HDFC Bank has over 11,633 ATMs and a customer base of over 28 million. It is also ranked 45th among the top 50 banks of the world. Employing over 69,065 employees, HDFC Bank is one of the strongest contenders.

State Bank of India With a market capitalization of about INR 216,128.73 crore, SBI is the second most-valued bank in India It and is perhaps the most trusted one, being a state-owned bank. The bank has a strong network of over 13,000 branches spread across the nation and has about 190 foreign offices in 36 countries. Along with HDFC Bank, SBI also features among the top 50 global banks (going by market capitalization). It is also one of the largest employers in the country and provides employment to over 220,000 personnel. SBI manages assets worth about USD 390 billion in all.

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ICICI Bank Limited ICICI Bank is the third largest entity in the Indian banking space, with a market capitalization of INR 184,547.26 crore.ICICI Bank has a customer base of over 2.5 million and boasts of an extensive network of 4050 branches across the country. With 12,475 ATMs and assets worth USD 99 billion, the bank is currently celebrating 60 years of existence. ICICI was formed as a World Bank initiative in 1955.The bank is headquartered in Vadodara, Gujarat and has an international presence in 19 countries. The bank’s employee strength was estimated at over 72,000 last year when it overtook HDFC Bank in terms of people employed.

Axis Bank With a market capitalization of about INR 134,685.68 crore, Axis Bank takes its place at the fourth position among Indian banks.Founded in 1994 as UTI Bank, Axis Bank now has a network of 2402 domestic branches and 12922 ATMs spread across the nation.The bank also has seven international offices including the ones in Hong Kong, Singapore, Colombo, Dubai, Abu Dhabi, and Shanghai.Axis Bank employs over 37,901 employees and is reported to have net assets worth about USD 53 billion.Apart from retail banking, Axis Bank also operates in NRI Services, Investment banking and treasury operations and corporate banking.

Kotak Mahindra Bank Kotak Mahindra Bank, headed by Mr. Uday S Kotak, and with a market capitalisation of INR 109,631.60 crore comes next. Kotak Mahindra Bank is currently poised for a spectacular growth due to an all-stockmerger with ING Vysya Bank. Kotak Mahindra shall now become the fourth largest private bank in the country in terms of the business done.The combined banking company will now have a network of 1,214 branches across the country. The bank is likely to have an employee strength of about 30,000 after the merger. The combined market capitalisation is estimated to be about INR 1.25 lakh crore.

IndusInd Bank Founded in 1994, Hinduja Group owned IndusInd Bank has a market capitalisation of about INR 50,100.41 crore. The bank employs over 15,500 employees and has a network of 638 branches and 1238 ATMs across the country. With international offices in London and

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Dubai, IndusInd Bank is known for its strong remittances business. The bank has an exceptionally strong business base in Mumbai, Delhi, and Chennai.

Bank of Baroda Bank of Baroda is another large PSU banking company in India with a market capitalization of about INR 38601.08 crore.The bank is estimated to have over 5193 branches and 38,737 employees. With a significant presence in about 25 countries, the Bank of Baroda balances out NRI services with rural and agricultural finance. The bank is one of the major banking operators in India’s rural sectors.

Yes Bank Yes Bank was incorporated in the year 2004 by Mr. Rana Kapoor and Mr. Ashok Kapoor, and currently has a market capitalisation of about INR 35,169.20 crore.With a strong network of about over 630 branches in 375 cities, and with over 1150 ATMs spread across the country, Yes Bank is among the fastest growing banks of India. The bank employs about 12000 employees and has high ambitions for the years to come.

Punjab National Bank Founded in 1894, Punjab National bank is one of the oldest banks in India. Unlike most Indian banks that have their headquarters in Mumbai or Gujarat, the Punjab National Bank has its headquarters in Delhi and has a market capitalization of about INR 30312.73 crore. Like other PSU banks, the bank has a major focus on agricultural and rural financing but also has a widespread international presence.The bank has 8.9 crore customers, 6081 branches in India and abroad and a network of 6940 ATMs spread across the country.

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Canara Bank

Canara Bank is another PSU that has made its mark in the Indian banking sector with a market capitalization of about INR 18630.10 crore. Nationalised in 1976, the bank has a network of about 3600 branches spread across the country. With 7599 ATMs, the bank is among the first PSUs in the country to emphasise on e-banking and online services. Apart from commercial banking, Canara Bank has also become a strong provider of corporate banking services in India.

*Market Capitalisation data – BSE as of 10, April 2015 The banking in India started with the establishment of the General Bank of India in 1786. Later the Bank of Hindustan was also established. However, both the banks are not in functional state currently. It's the State Bank of India, which is currently the oldest bank in India in existence, established in 1806. Since the beginning, due to huge market potential, a number of banking companies have come up in India, which include both, public sector as well as private sector banks. However, the list of top 10 banking companies in India has mostly been dominated by the State Bank of India (SBI). Since the initial days, the State Bank of India has dominated the Indian banking industry accounting for nearly 20% of the Indian banking system's deposit base. It also has got almost 20% of the credit portfolio.

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CHAPTER III ORGANIZATIONAL PROFILE AND BUSINESS OVERVIEW

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Name of the organization : Axis Bank Ltd 3.1 Company’s Vision and Mission To be the preferred financial solutions provider excelling in customer delivery through insight, empowered employees and smart use of technology

Core Values     

Customer Centricity Ethics Transparency Teamwork Ownership

3.2 Senior Management Shikha Sharma (Managing Director and Chief Executive Officer - Axis Bank) Mrs Shikha Sharma is the Managing Director & CEO of Axis Bank, India’s third largest private sector bank in India. Mrs Sharma joined Axis Bank in 2009 and as a leader adept at managing change, she has focused on transforming Axis Bank into a Bank with strengths across a wide range of Corporate and Retail Banking products. At Axis Bank, she has focused on strengthening its retail lending franchise, enlarged its investment banking & advisory capabilities and developed a comprehensive portfolio of products in the payments space. Mrs Sharma has more than three decades of experience in the financial sector having begun her career with ICICI Bank in 1980. In her 29-year tenure with the ICICI group, Mrs Sharma was instrumental in setting up ICICI Securities–a joint venture between ICICI and JP Morgan, besides setting up various group businesses for ICICI, including investment banking and retail finance. In her last assignment at ICICI, as Managing Director & CEO of ICICI Prudential Life Insurance Company, she built and contributed remarkably to make it the number 1 private sector Life Insurance Company in India. V Srinivasan (Deputy Managing Director - Axis Bank) Mr.V. Srinivasan, joined Axis Bank as the Executive Director - Corporate Banking in 2009 and was elevated as a Director on the Board of Axis Bank in October 2012. He has more than two decades of experience in the financial services industry and has worked in the areas of Corporate Banking, Investment Banking, Treasury and Foreign Exchange Management. Before joining Axis Bank, Mr. Srinivasan was Managing Director and Head of Markets with J. P. Morgan, India. He has served on various RBI Committees including the Technical Advisory Committee, Committee for Repos and Committee for STRIPS. He has also held the positions of Chairman, Fixed Income Money Market and Derivatives Association of India (FIMMDA) and Chairman, Primary Dealers Association of India (PDAI). Currently, he is a member of the CII National Committee on Banking.

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Rajesh Dahiya (Executive Director (Corporate Centre) - Axis Bank) Shri Rajesh Dahiya is an Engineer with a Masters in Human Resources Management. With over 25 years of experience, He was the Group Executive & Head-Corporate Centre at Axis Bank, prior to his appointment as an Executive Director (Corporate Centre) of the Bank. In his earlier role, he supervised all functions under Corporate Centre – Audit, Human Resources, Compliance, Company Secretary, Corporate Communications, Administration & Security, Corporate Real Estate Services, Chief Business Relations Officer (CBRO), Ethics & Sustainability and Law. In addition, he was also overseeing the functioning of Axis Bank Foundation. Before joining Axis Bank in June 2010, he was associated with Tata Group for 20 years where he handled various responsibilities across functions such as Human Resources, Manufacturing, Exports, Distribution and Institutional Sales. His last assignment before joining Axis Bank was with Tata Tea Limited where he was responsible for integrating various products of Tata Tea, Himalaya & Tetley under a common distribution channel. In his earlier role in Tata Group, he was Vice President – HR and Head - Tata Administrative Services (TAS). He also headed the Human Resources function for Rallis India Pvt. Ltd. Rajiv Anand (Executive Director (Retail Banking) - Axis Bank) Shri Rajiv Anand is a rank holding qualified Chartered Accountant and holds a Bachelor’s degree in Commerce. He has over 25 years of experience in the financial services industry & was the Group Executive & Head, Retail Banking at Axis Bank. His portfolio includes Retail Liabilities, Retail Lending & Payments, Branch Banking, Retail Operations, Digital Banking, Marketing and Retail Products. He has held key management positions at leading global financial institutions and has diverse experience in the financial services sector. He joined the Bank from its asset management arm, Axis Asset Management Co. Ltd., where he held the position of Managing Director & CEO. In his previous roles, he has managed Investments, balance sheet management & money market and bond trading. He has also been very successful as a Debt Fund Manager and has won several accolades for the same. He brings strengths in capital markets and building new businesses to his responsibilities at the Bank.

3.3 Corporate profile Axis Bank is the third largest private sector bank in India. The Bank offers the entire spectrum of financial services to customer segments covering Large and Mid-Corporates, MSME, Agriculture and Retail Businesses.. With its 3,703 domestic branches (including extension counters) and 13,814 ATMs across the country as on 31st March 2018, the network of Axis Bank spreads across 2,163 cities and towns, enabling the Bank to reach out to a large cross-section of customers with an array of products and services. The Bank also has ten overseas offices with branches at Singapore, Hong Kong, Dubai (at the DIFC), Shanghai and Colombo; representative offices at Dubai, Abu Dhabi, Dhaka and Sharjah and an overseas subsidiary at London, UK. Axis Bank is one of the first new generation private sector banks to have begun operations in 1994. The Bank was promoted in 1993, jointly by Specified Undertaking of Unit Trust of India (SUUTI) (then known as Unit Trust of India), Life Insurance Corporation of India (LIC), General Insurance Corporation of India (GIC), National Insurance Company Ltd., The New India Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India

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Insurance Company Ltd. The share holding of Unit Trust of India was subsequently transferred to SUUTI, an entity established in 2003. With a balance sheet size of Rs. 6,91,330 crores as on 31st March 2018, Axis Bank has achieved consistent growth and with a 5 year CAGR (2012-13 to 2017-18) of 15% in Total Assets, 12% in Total Deposits, 17% in Total Advances.

3.4 Business Overview The Retail Banking segment continues to be a key driver of the Bank’s overall growth strategy. It encompasses a wide array of products and services across deposits, loans, investments and payment solutions which are delivered through multiple channels to the Bank’s customers. The Bank has over the years developed long-term relationships with its customers by being their preferred financial solutions partner on account of its excellent customer delivery through insights and superior services. The Bank has also succeeded in making banking simple for masses by smart use of technology. The Bank has always focused on meeting the financial needs of its customers by providing high quality products and services through regular customer engagement in convenient manner. During the year, the Bank continued to focus on increasing its retail deposits base, particularly demand deposits. Savings Bank deposits crossed Rs. One lac crores and have grown at a Compounded Annual Growth Rate (CAGR) of 21% over the last five years. As on 31 March, 2016, the Bank had over 172 lac savings account customers, registering a growth of 15%. As on 31 March, 2016, the retail term deposits grew 14.42% and stood at Rs. 121,955 crores, constituting 64.69% of the total term deposits compared to 59.86% last year. The Retail Assets portfolio has grown at a Compounded Annual Growth Rate (CAGR) of 31% over the last five years. The Bank continued to increase its share of retail loans to total advances which stood at 41% compared to 29% in March 2012. Including SME loans that qualify as regulatory retail, the share of retail loans to total loans would be 46%. The retail loans portfolio continues to be focused on secured products, predominantly mortgages. Secured loan products accounted for 86% of retail loans, of which Home loans accounted for 45%, retail agricultural loans accounted for 17%, auto loans 9%, loans against property 8%, personal loans and credit cards were 11%, while non-schematic loans comprising loan against deposits and other securities accounted for 10%. Despite a subdued property market in fiscal 2016, the Home Loan industry grew well at around 18%. The Bank’s Home Loan book size grew by 17%. During the year, Super Saver Home Loan was launched where customer can park his short term funds and save interest on his loan to the extent of excess funds parked. Rural agricultural lending was another focus area for the Bank. The Bank launched Rural & Semi Urban (RUSU) Home loans, a Home loan product specifically for Rural and Semi-Urban customer. As on 31 March, 2016, the Bank’s outstanding loans in the agricultural sector grew at a healthy 29% to Rs.23,218 crores from Rs.17,960 crores last year. Asha Home loans increased by 201% from Rs.628 crores as on 31 March, 2015 to Rs.1,891 crores as on 31 March, 2016. The Bank is one of the largest debit card issuers in the country, with a base of over 155 lacs. The Bank had over 24 lac credit cards in force as of 31 March, 2016, making it the 4th largest credit card issuer in the

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country. The credit cards portfolio saw a substantial increase in spends by 44%, to Rs.19,432 crores from Rs.13,535 crores last year. The Bank is also one of the largest acquirers of pointof-sale terminals in the country with an installed base of around 3 lacs. The Bank achieved 54% YoY growth in volumes from E-commerce merchants with Rs.6,927 crores spend in FY16 against Rs.4,504 crores in FY15.

3.5 Promoters Axis Bank Ltd. has been promoted by the largest and the best Financial Institution of the country, UTI. The Bank was set up with a capital of Rs. 115 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 11.56% 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 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 investors.

3.6 Awards and recognition        

Axis Bank wins the Best Loyalty Program in Financial Sector - Banking at the Customer Loyalty Awards 2018 Axis Bank wins the Best Rewards Program for the 4th consecutive year at the Customer Loyalty Awards 2018 Axis wins the Champion of Champions – Loyalty Program of the Year at the Customer Loyalty Awards 2018 Axis Bank wins the Best Contact Centre at the Customer Experience Awards 2018. Axis Bank wins Best Use of Analytics for Business Outcome at the IBA Banking Technology Awards 2018 Axis Bank wins Best Use of Digital and Channels Technology at the IBA Banking Technology Awards 2018 Axis Bank won the Best Performing Bank – Private at the UTI Mutual Fund and CNBC TV18 Financial Advisor Awards 2017-18 Axis Bank has been awarded as the Second Best Perfoming Private Bank in APY for FY 17-18

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CHAPTER IV TASK UNDERTAKEN

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4.1

Task undertaken 

Basically the task was to study the financial inclusion and the projects undertaken by the bank to respond to the norms of the government for the same.

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Initially it was quite difficult to get the data from the customers as it lacked reliability if information because the effect on sales could be properly analyzed with the help of a sales team.

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Not much information was available with the branch with respect to the digitization and its effect on the overall banking operation. Effect on sales was far beyond the scope of the data available

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The sales team’s unavailability with the branch was a major issue as the research included surveying them.

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The data on financial inclusion was not available with the branch as the financial inclusion process managers work on a different platform altogether.

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CHAPTER V LITERATURE REVIEW

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1. EMERGING TRENDS IN BANKING SECTOR IN INDIA (With Special Reference to Digitization) by Dr. Karuna Gupta, Mr. Ravindra Arya, Mr. Vineet Goel The Banking sector is now witnessing a new wave of evolution with innovations in the fintech space, especially with the proliferation of prepaid wallets. Indian Banking Industry has shown considerable resilience during the return period. The second generation returns will play a crucial role in further strengthening the system. Indian banking system will further grow in size and complexity while acting as an important agent of economic growth and intermingling different segments of the financial sector. It is sure that the future of banking will offer more sophisticated services to the customers with the continuous product and process innovations. Adoption of stringent prudential norms and higher capital standards, better risk management systems, adoption of internationally accepted accounting practices and increased disclosures and transparency will ensure the Indian Banking industry keeps pace with other developed banking systems. Finally the banking sector will need to master a new business model by building management and customer services. Banks should contribute intensive efforts to render better services to their customer. Nationalized and commercial banks should follow the Recent trends and to get advantage of opportunities in changing banking scenario.

2. Capgemini and MIT Center of Digital Business, “The Digital Advantage: How Digital Leaders Outperform Their Peers in Every Industry”, November 2012

Banks need to consider the amount of cultural change that will accompany transformational initiatives for process digitization to be successful. Transformational solutions need the backing of management at all levels because they bring about radical changes in a bank’s operations. The key is to introduce the practice of end-to-end process ownership, adopt new ways of working and better integrate the different organizational entities - such as the business, IT and change management units. Banks should appoint a digital czar or a digital steering committee with top management representation in order to help drive acceptance of transformational programs across the organization. Banks should also set up digital units or centers of excellence to promote the re-use of business processes and best practices across the organization.

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Process digitization is as much a people journey as it is a technological one. Its impact will be felt across the organization through better, faster and more efficient ways of doing things from launching and marketing new products, to delivering compliance, and tracking benefits delivered on large programmes. The possibilities offered by process digitization, therefore, are not limited only to achieving efficiency in the process itself, but expand into the significant opportunities of managing the business

3. FINANCIAL INCLUSION IN INDIA: AN ANALYSIS by DR. ANURAG B. SINGH, and PRIYANKA TANDON

Access to financial services such as savings, insurance and remittances are extremely important for poverty alleviation and development. In order to achieve the goal of total financial inclusion, policymakers, banks, MFIs, NGOs and regulators have to work together. In addition to cooperating with other stakeholders, policymakers who believe that microfinance can help them to speed up financial education programs that allow their citizens to realize the economic potential of microfinance. Basic financial literacy programs can help achieve better results in poverty alleviation.

Two other factors have often been cited as the consequences of financial exclusion. First, it complicates day-to-day cash flow management being financially excluded means households, and micro and small enterprises deal entirely in cash and are susceptible to irregular cash flows. Second, lack of financial planning and security in the absence of access to bank accounts and other saving opportunities for people in the unorganized sector limits their options to make provisions for their old age.

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CHAPTER VI OBJECTIVES AND SCOPE OF PROJECT

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6.1

Objectives of the project

Primary Objectives   

To study the role of banks in financial inclusion To study the effect of financial inclusion on sales To study the effect of digitization on sales

Secondary objective 

6.2

To study the overall digital transformation in banking

Scope of the project 

Sales Sales performance management is the major direction which could be and needs to be aligned with the digitization and financial inclusion. Product features alignment is an important aspect which needs to be taken into consideration. For example, axis bank has aligned its savings bank account in the rural areas to be flexible for financial inclusion. The savings bank accounts needs to be maintained with ₹5000 average balance where in the urban banks accounts are maintained at the average of ₹10000 per month. Moreover the products like axis ASAP account with a limited number of transactions is a digital account which is ideal for students and it may affect sales of general savings account as there was no provision for students before.



Organizing market There are some benefits provided to the employees working under organised sector like they get the advantage of job security, add on benefits are provided like various allowances and perquisites. They get a fixed monthly payment, working hours and hike on salary at regular intervals. The sector, which is registered with the government is called an organised sector. In this sector, people get assured work, and the employment terms are fixed and regular. A number of acts apply to the enterprises, schools and hospitals covered under the

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organised sector. Entry into the organised sector is very difficult as proper registration of the entity is required. The sector is regulated and taxed by the government. 

Sales performance measurement A sales evaluation helps you determine which salespeople perform well and which don't. With that information, you can reward your sales team members according to their performance. Through the evaluation, salespeople may learn of your expectations and set their goals accordingly. You may develop training and counseling programs for the sales team based on the results of the sales evaluation. The evaluation may also lead to a promotion for strong salespeople and termination for weak salespeople.



Operations alignment The third important question to be addressed by the rest of your organization is “how do you allocate resources over the next year, so you can continue to “run” your business on a day to day basis, AND at the same time begin to invest to “change” your business in pursuit of your long-term vision?” The strategy team has been thinking, ‘in a perfect world what you would like to become’. The team members on the front lines however, have to address the real world of what it takes to deliver products or services and sell and support customers each day. A strategy for balancing short term and long-term priorities can only be answered by supporting the team members who do the work to understand the vision and by providing all possible assistance to help them figure out the best way to get there. The end result of this discipline is a roadmap of operating plans and change initiative plans to guide the next year.

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Reach assessment Emphasis is laid on financial inclusion of all the strata of society in the banking services. Non inclusion is not an option and could not be an option in the near future. It may affect sales of the existing products in the banking industry. With the emergence of payment banks and regulatory bodies aligned towards the well being of payment banks, it has become an obligation to study the effect of financial inclusion on the existing sales,.

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CHAPTER VII METHODOLOGY

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Research Design



Type of research : The research methodology for this project is partly exploratory

and partly descriptive in nature. 

Tool for data collection : Interview of the sales team will be done to collect the

primary data for exploratory research. 

Sampling method :



Population : sales team from branches ( nigdi, ravet, chinchwad,dapodi, thermax

Purposive or deliberate sampling and convenience .

chowk,dehu road, pimpri) 5 people from other branches and 10 from chinchwad

branch. Total of 40 people for survey) 

Size of population : 40



Sample size: 29 ( considering 95% confidence level and 10 % margin of error)

Z 2 * (p) * (1-p) ss = c2

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Digitization Questionnaire

Details (Name,Job title) 

1 Do you think the digital transformation is affecting sales positively?  Yes  No (If no Why?)



2 As compared to previous records, are more leads generated through web registrations now?  Yes  No(If no what could possibly be the reason )

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3What according to you is the conversion rate of those leads as compared to other leads?

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 Very high  High  Same as other leads  Low  Very low 4 What function of the sales process consume most of your time? i) Calling new leads ii) Following up on qualified leads iii) Customer meeting iv) Travel v) Information providing and convincing

5Which is the most common medium by which customers gather information, according to you? i) Internet(general) ii) Bank website iii) At branch iv) Friends and family

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v) From advertising and promotions 

6On a scale of 1 to 5 how much is axis bank’s website mobile friendly?  Very friendly  Friendly  Neutral  Not friendly  Not friendly at all



7 Do you think the crm system gives you adequate amount of information about the customers?  Yes  No (if no why)



8 Do you think you could close the sales call much better if you had more information at your disposal?  Yes  No



9 What is more effective for lead generation?



 Strategic alliance ( partnership and tie ups)  CRM  Reference  Walk ins at branch 10 Are the competitors more digitally acquainted?  Yes - How  No  Cant say



11 Do you think the sales of savings account will decline with the emergence of payment banks? For example, students have lower transaction rate and hence don’t require a savings a account with balance maintenance of Rs 10000 monthly.  Yes  No( if no why)

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Financial Inclusion Keeping in view the goal of bringing banking services to an identified 72,800 villages with a population above 2,000 by March 2012, and thereafter progressively to all villages over a period, banks were advised that while preparing their Annual Branch Expansion Plan, they should allocate at least 25 per cent of the total number of branches proposed to be opened during a year to unbanked rural (Tier V and Tier VI) centres. With the aim of providing enhanced banking services in Tier II centres, the general permission being granted to domestic scheduled commercial banks for opening branches in Tier III to Tier VI centres was extended to opening branches in Tier II centres (with population of 50,000 to 99,999 as per Census 2001) without the need to take permission from the Reserve Bank in each case, subject to reporting Research on market building approach to financial inclusion

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References

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EMERGING TRENDS IN BANKING SECTOR IN INDIA (With Special Reference to Digitization) by Dr. Karuna Gupta, Mr. Ravindra Arya, Mr. Vineet Goel



Capgemini and MIT Center of Digital Business, “The Digital Advantage: How Digital Leaders Outperform Their Peers in Every Industry”, November 2012



FINANCIAL INCLUSION IN INDIA: AN ANALYSIS by DR. ANURAG B. SINGH, and PRIYANKA TANDON



https://www.investopedia.com/terms/f/financial-inclusion.asp



http://www.cgap.org/about/faq/what-financial-inclusion-and-why-it-important

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

https://www.hcltech.com/technology-qa/what-are-the-advantages-of-digitalization-inbanking



Report of RBI on ”Trend and progress of banking in India”

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https://rbi.org.in/scripts/PublicationReportDetails.aspx?ID=836#CH1

Conclusion For standing out on a global platform India has to look upon the inclusive growth and financial inclusion is the key for inclusive growth .There is a long way to go for the financial inclusion to reach to the core poor according to K.C.Chakrabarty RBI Deputy Governor “Even today the fact remains that nearly half of the Indian population doesn‟t have access to formal financial services and are largely dependent on money lenders”. Mere opening of nofrill bank accounts is not the purpose or the end of financial inclusion while formal financial institutions must gain the trust and goodwill of the poor through developing strong linkages with community-based financial ventures and cooperative. Financial Inclusion has not yielded the desired results and there is long road ahead but no doubt it is playing a significant role and is working on the positive side .

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