Bank Marketing in India: The State of the Art by J.D. Singh Administrative Staff College of India, Hyderabad
In this article Dr Singh presents an empirical study of 17 large com- mercial banks in India and examines the way the marketing function is managed in them. The important dimensions covered include ar- rangements relating to organising for marketing, the marketing infor- mation system, customer service and image, marketing planning and internal marketing. This article is the first of its kind on bank marketing in India.
INTRODUCTION Marketing came to banks in India in the early 1960s, in its most tradi- tional form - publicity and public relations. In spite of operating within the ...view middle of the document...
Some such steps include: launching innovative schemes; streamlining procedures to cut down on paper work and delays; introducing teller systems; effecting im- provements in the exteriors and interiors of branches; locating model, specialised and service branches; providing additional punch to their publicity efforts; forming customer service committees at the banks' offices; conducting customer relations programmes; setting up customer service departments at the head office of banks; organising courtesy weeks/fortnights, customer service campaigns and door-to-door surveys; setting up "May I help you?" counters and posting public relations of- ficers in large branches. These reponses reveal that banks have, perhaps, realised the need to systematise the marketing of their financial services and to rise above the narrow orientation of marketing as "publicity and public relations" held so dearly by them. It is within this background that the author undertook a study to ex- plore the extent to which the marketing orientation has permeated the commercial banks in India. The salient findings of the study are presented in this article.
The Sample The population chosen for the study comprised the State Bank of India, all the nationalised banks (numbering 20), the top ten private-sector banks in terms of total deposits as of December 31,1983, and those of the foreign banks which had at least one branch each in the four large metro- politan cities of India, namely Bombay, Calcutta, Madras and New Delhi. The number of such foreign banks was five. Thus, in all, 36 banks formed the population for the purpose of this study, of which 17 (47 per cent) responded favourably. The groupwise classifications of the banks surveyed, their total deposits, branch network and ratio of net profit to working funds are provided in Tables I to IV respectively.
Table I. Groupwise Classification of Banks
Number of Banks Response
Group Population received
State Bank of India 1 Nationalised banks 20 Private-sector banks 10 Foreign banks 5
1 (100%) 12 (60%) 3 (30%) 1 (20%)
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Table II. Sample Composition: Total Deposits of Banks Surveyed as on 31 December 1983
Range (£ million)
Up to 200 201 to 500 501 to 1000 1001 to 2000 2001 to 4000 More than 4000
Number of banks
3 3 3 3 4 1
(17.6%) (17.6%) (17.6%) (17.6%) (23.5%) (5.8%)
Table III. Sample Composition: Branch Network of Banks Surveyed as on 31 December 1983
Number of branches
Up to 300 301 to 600 601 to 1000 1001 to 1500 1501 to 2000 More than 2000
Number of banks
4 2 5 2 2 2
(23.5%) (11.8%) (29.4%) (11.8%) (11.8%) (11.8%)
Table IV. Sample Composition: Ratio of Net Profit/Working Funds* of the Banks Surveyed as on 31 December 1983
-0.050 to 0.050 0.051 to 0.100 0.101 to 0.150 0.151 to 0.200
Number of banks
1 5 8 3
(5.8%) (29.4%) (47%)
*This is ratio of profit after tax to working funds, the latter being defined as the average of...