ICICI Bank warms up to customers

ICICI Bank, after aggressively growing its retail loans book over the last five years, is now banking on a reworked business model that seeks to focus on customer service and tapping the opportunities offered by the less affluent in urban areas.

The bank sees business in advising people having Rs 5-10 lakh wealth and also serving the 31 million people with monthly income of less than Rs 3,000. The bank has 1.8 lakh customers with no-frills accounts, which provide basic banking services without the need to maintain a large minimum balance.

The bank garnered about 33 per cent market share in consumer banking since it made a serious beginning about five years ago and had a retail loans portfolio of Rs 1,18,000 crore as on December 31, 2006.

The bank has launched a "First Call Resolution" initiative that seeks to resolve queries at the first contact and the bank claims the move has increased the percentage of customer issues resolved at the first instance to 93 per cent from 72 per cent about six months ago.

"We tend to look at interest rates to judge competitiveness, but there are a few other factors such as speed of decision-making and ease of documentation. Service is the key differentiator," said V Vaidyanathan, executive director, ICICI Bank.

The bank was targeting segments of population which had been left untouched by the expansion of banking services in the urban areas so far in addition to newer opportunities emerging from the small and medium enterprises (SME) segment and the large companies.

The capital expenditure plans of large companies were estimated to have more than tripled to Rs 10,00,000 crore from Rs 3,00,000 crore about three years ago, which provided an excellent opportunity for banks in terms of both fund-based and fee-based businesses, Vaidyanathan said.

He said there were 11 million SMEs in the country which offered banks a market of about Rs 3,00,000 crore deposits, Rs 3,50,000 crore of loans and Rs 6,000 crore of fee market. SMEs now were in a growth phase unlike five years ago when they were not keen on investing and needed both equity and loan financing for their expansion.

As part of its customer service initiative, the bank is launching a network of credit counselling centres under the banner of Disha Financial Counselling through its subsidiary, ICICI Trusteeship Services, within a week. Initially, there will be about 11 such centres manned by retired employees of the Reserve Bank of India (RBI), State Bank of India (SBI) and ICICI Bank.

These centres will extend debt-counselling services to customers of all banks and not just restrict them to ICICI Bank customers.