Researchjournalis Journal of Finance

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Vol. 1 | No. 1 November | 2013 1

www.researchjournali.comMrs.C.PappeswariAssistant Professor of commerce,Govindammal Aditanarcollege for women,Tiruchendur,ThoothukodiDistrict,TamilnaduMrs.S.RajalakshmiAssistant Professor of commerce,Govindammal Aditanarcollege for women,Tiruchendur,ThoothukodiDistrict,TamilnaduCREATIVITY ANDINNOVATIONS INFINANCIAL PRODUCTSACOMPARATIVESTUDY BETWEEN ICICIAND HDFC BANKS INTHOOTHUKUDI AREA Researchjournalis Journal of Finance Vol. 1 | No. 1 November | 2013 2

www.researchjournali.comAbstractCreativity implies evaluation of ideas ; generation of new thinking, new aims, perspectives and in turnthe ability to think beyond the unthinkable .Creative thinking ability facilitates the ability to realizeInnovation - Innovation and creativity are like hand in the glove . They are both very intricatelyconnected. Banks are offering various innovative and creative products like Internet banking, Home loans,Mutual Funds, Credit and Debit cards, Insurance, ATMs, Mobile banking etc., today, the banks have becomeone stop shops . Offering a vast array of financial products since liberalization.1. IntroductionThe banking sector has gone through innumerable twists and turns in the post-independence era andespecially in context of the retail banking. Retail banking segment in the banking industry is continuouslyundergoing product innovations, product of reengineering , adjustments and alignments as upgradedtechnology has brought a revolution in this sector and it is attributed to observations by prominent committeeslike Narsimha committee on financial sector Reforms and Ranga Rajan Committee on Mechanization. It hasbecome imperative and essential for the innovative products to increase their market share in todays dynamicand competitive market area.Most of the Indian banks have been retail banks in their business composition. The term retail bankingencompasses various financial products different type of deposit account housing consumer auto and othertypes on loan accounts, demat facility, insurance, mutual fund, credit and debit cards, atms , stock broking ,payment of utility bills and other technology based services, banks have evolved from ugly duckling to thegolden goose. A customer is no more a customer of the branch; he is the customer of the bank. This newdefinition of customer has become relevant of AAA banking (any time anywhere, any how banking) cateringto diverge customer groups, simply speaking it takes care of diverse banking needs of an individual.2. Industrial Credit And Investment Corporation Of India Limited(ICICI)ICICI Ltd is an private sector financial institution established in 1955. It has been set up with the object ofpromoting industrial development in the country. Ithas obtained loans from the government of India, theWorld Bank and certain other foreign sources. The ICICI is managed by a board of directors as perregulations said in its Articles and Companies Act, 1956. The board consists mainly of industrialists, legaland financial experts with a government nominee and a few foreigners.Researchjournalis Journal of Finance Vol. 1 | No. 1 November | 2013 3

www.researchjournali.comThere are 2035 branches across India. 1000 branches in outside India. ICICI has largest coverage of branchesof ATMs among private banks in India and them also.3. Housing Development Finance Corporation(HDFC)The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an inprinciple approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of theRBIs liberalization of the Indian banking industry in 1994. The bank was incorporated in August 1994 in thename of HDFC bank limited, with its registered office in Mumbai, India. HDFC bank commenced operationsas a scheduled commercial bank in January 1995. HDFC bank has 2544 branches and over 10,000 ATMs, in1399 cities in India, and all branches of the bank are linked on an online real- time basis.4. Statement Of The ProblemAll private banks in the country are providing a variety of financial products, which depict creativity andconstant innovation of financial products as per the needs of their customer base. The main reason forselecting this topic is to compare and highlight the star performers in the financial products offered by ICICIand HDFC bank and to identify the creative and innovative products being offered by them and to givesuggestions to these banks to enhance creativity and innovations in their offerings.5. Review Of Previous StudiesThe present study is based on the following review.Das1(2002) has attempted to develop an objective method for ranking the nationalized banks, by analyzingthe performance of 17 public sector banks.Swami and Subrahamanyam 2(1994) has tried to study the inter bank different in the performance of publicsector banks in India with the help of the Taxonomic method. It was found that many banks had widedisparities in their measures of performance.1. Das MR 2002 An objective method for Banking Nationalized Banks . EPW vol.37, No.5, pp. 437-4482. Swami BG and Subrahamanyam G 1994, comparative performance of public sector banks in India ,prajaan vol.21, No.2,pp .185-195.Noulas and Katkan 3(1996) conducted a study to examine the technical and scale efficiency of banks.Bhattacharya et al4(1997) and Sathya (2005) have studied the impact of privatization on the performance ofbanks. The results of the studies were, however, contradictory. Researchjournalis Journal of Finance Vol. 1 | No. 1 November | 2013 4

www.researchjournali.comSaha and Ravisankar5(2000) rates 25 public sector banks using the data development analysis (DEA). Astudy on technical efficiency and benchmarks performance of 68 commercial banks has been conducted byMukherjee et al (2002.)3. Noulas AG and Ketkar KW (1996), Technical and Scale deficiency in the Indian Banking sectorInternational Journal of Development Banking, vol.14, No.2, pp.19-27.4. Bhattacharya A, Lovell CAK pankaj Sahy (1997). The impact of liberalization on the productiveEfficiency of Indian Commerical Banks, European Jouranl of operational Research , vol.98, pp.175-212.5. Saha Asish and Ravisanker TS (2000), Rating of Indian Commercial Banks. A DEA approach,European journal of operational of operational Research vol.124, pp. 187-203.6. Scope Of The StudyThe study is concerned with the comparison of creativity and innovations in financial products of industrialcredit Investment Corporation of India and housing development finance corporation bank with reference toThoothukudi area. They aim at identifying the socio economic profile of the respondents, sources ofawareness about bank, type of accounts maintained by the respondents, facilities availed by the respondentsfrom bank. Besides creativity and innovations in financial products is identified and to find out of therelationship between the socio- economic profile of the respondents and their level of perception towards the ffinancial products of both the banks.7. Objectives Of The Study1. To identify the socio-economic profile of the respondents in industrial credit Investment Corporation ofIndia and housing development finance corporation bank.2. To understand the various deposits and loans offered by ICICI and HDFC.3. To analyze the insurance and investment pattern of ICICI and HDFC.4. To study the card usage in ICICI and HDFC.5. To offer suitable suggestions which focus on creativity and innovations on various financial products.8. Research DesignIn order to study the relationship between the personal profile of the respondents and their level of perceptiontowards the creativity and innovations in various financial products of banks, the following hypotheses wereframed.1. The level of perception is independent of the gender of the respondents.2. The level of perception is independent of the age of the respondents.Researchjournalis Journal of Finance Vol. 1 | No. 1 November | 2013 5

www.researchjournali.com3. The level of perception is independent of the educational qualification of the respondents.4. The level of perception is independent of the occupational status of the respondents.5. The level of perception is independent of the monthly income of the respondents.6. The level of perception is independent of the marital status of the respondents.7. The level of perception is independent of the size of the family of the respondents.8. The level of perception is independent of the nature of family of the respondents.Geographical CoverageThe present study has been carried out in Thoothukudi Area. which covers Veerapandiyan patanam andThoothukudiPeriod Of StudyThe researcher herself carried out the field work for this study. It was conducted during the period from June2013 to October2013. The researcher have used questionnaire for collecting the data. The study was collectedon Sundays and holidays. Care was taken to ensure completeness and accuracy in the questionnaires.Methodology And ToolsThis section describes the methodology which includes the collection of data, the construction ofquestionnaire and pre-test, the sampling design and the scheme of analysis.Collection Of DataThis study is compiled with the help of both primary and secondary data. The primary data were collecteddirectly from the respondents with the help of questionnaire. Secondary data were collected from books andJournals.Construction Of Questionnaire And Pre- TestQuestionnaire in this study has been structured by the researcher herself. The variables to be studied havebeen identified in the preliminary questionnaire with some respondents. The variables thus identified havebeen converted into appropriate questions. A pre- test was conducted. The questionnaire was conducted. Thequestionnaire was pre- tested and revised in the light of the experience gained from the pre- test.Sampling DesignWith a view to study, A comparative study on creativity and innovations in financial products of ICICI andHDFC bank in Thoothukudi Area, 45 respondents from ICICI bank 45 respondents from HDFC bank. Therespondents were selected by adopting convenient sampling technique.Researchjournalis Journal of Finance Vol. 1 | No. 1 November | 2013 6

www.researchjournali.comScheme Of AnalysisThe information collected through the questionnaire was analysed and tabulated. To test the relationshipbetween the level of perception towards the creativity and innovations in financial products of banks andSocio economic profile of the customers. Chi-Square test is used.Limitations Of The StudyThe limitations of the study area, The convenience sampling method is followed in selecting the respondents. So the results of the studymay be biased. The data collection was made only during the month of June 2013. So the short period of study is also aconstraint.Profile Of The RespondentsGender out of 45 respondents from ICICI bank, 23(51 percent) respondents were male and 22(49 percent)respondents were female. Out of 45 respondents from HDFC bank, 24(53 percent) respondents were femaleand 21(47 percent) respondents were maleAge- out of 45 respondents from ICICI bank, 16(35 percent) respondents have between 25-35 years of age,12(27 percent) respondents have below 25years of age, 12(27 percent) respondents have between 36-45 yearsof age and the remaining 5(11 percent) respondents have above 45years of age. Out of 45 respondents fromHDFC bank, 17(38 percent) respondents have between 25-35 years of age, 15(33 percent) respondents havebetween 36-45 years of age, 7(16 percent) respondents have below 25 years of age and the remaining 6(13percent) respondents have above 45years of age.Educational Qualification- out of 45 respondents from ICICI bank, 14(31 percent) respondents havefinished graduates, 12(27 percent) of them have studied higher secondary, 11(24 percent) of them havestudied Up to SSLC, 6(13 percent) of them have completed post graduates, 2(5 percent) of them have finishedprofessional course. Out of 45 respondents from HDFC bank, 16(36 percent) respondents have studied highersecondary, 13(29 percent) of them have completed graduates, 7(15 percent) of them have studied professionalcourse, 6(13 percent) of them have post graduates, 3(7 percent) of them have studied up to SSLC. out of 45respondents from ICICI bank, 14(31 percent) respondents have finished graduates, 12(27 percent) of themhave studied higher secondary, 11(24 percent) of them have studied Up to SSLC, 6(13 percent) of them havecompleted post graduates, 2(5 percent) of them have finished professional course.Researchjournalis Journal of Finance Vol. 1 | No. 1 November | 2013 7

www.researchjournali.comStatus- out of 45 respondents from ICICI bank, 13(29 percent) respondents were housewives, 9(20 percent)of them were working as private employees, 8(18 percent) of them were working as government employees,7(16 percent) of them were doing business, 6(13 percent) of them were farmers, 2(4 percent) of them wereworking as professional. Out of 45 respondents from HDFC bank, 13(29 percent) respondents werehousewives, 11(25 percent) of them were working as professional, 10(22 percent) of them were working asprivate employees, 7(16 percent) of them were working as doing business, 2(4 percent) of them were workingas government employees, 2(4 percent) of them were farmers.Monthly Income- out of 45 respondents from ICICI bank, 15(33 percent) respondents have monthly incomebetween `10,000 `20,000, 14(31 percent) of them have monthly income between ` 20,000 `30,000,11(25 percent) of them have monthly income of below `10,000, 5(11 percent) of them have monthly incomeof above `30,000.Out of 45 respondents from HDFC bank, 17(38 percent) respondents have monthly incomebetween `10,000 `20,000, 13(29 percent) of them have monthly income of below `10,000, 8(18 percent) ofthem have monthly income of above `30,000, 7(15 percent) of them have monthly income between `20,000 `30,000.Marital Status- out of 45 respondents from ICICI bank, 30(67percent) respondents were married andremaining 15(33 percent) of them were unmarried.Out of 45 respondents from HDFC bank, 29(64 percent)respondents were married and the remaining 16(36 percent) of them were unmarried.Family Size- out of 45 respondents from ICICI bank, 22(49 percent) respondents have 4-6 members in theirfamily, 17(38 percent) of them have below 4 members in their family, 6(13 percent) of them have more than 6members in their family.Out of 45 respondents from HDFC bank, 22(49 percent) respondents have 4-6members in their family, 15(33 percent) of them have below 4 members in their family, 8(18 percent) of themhave more than 6 members in their family.Nature Of Family- out of 45 respondents from ICICI bank, 30(67 percent) respondents were living in jointfamilies, 15(33 percent) of them were living in nuclear families.Out of 45 respondents from ICICI bank,29(64 percent) respondents were living in joint families, 16(36 percent) of them were living in nuclearfamilies.9. Data Analysis And InterpretationThe Table 1, reveals that out of 45 respondents from ICICI bank, 9(20 percent) respondents have receivedthe facility of investment, 8(18 percent) of them have received the facility of payment, 7(16 percent) of Researchjournalis Journal of Finance Vol. 1 | No. 1 November | 2013 8

www.researchjournali.comthem have received the facility of forex, 6(13 percent) of them have received the facility of accounts &deposits, 6(13 percent) of them have received the facility of loans, 5(11 percent) of them have received thefacility of cards, and the remaining 4(9 percent) of them have received the facility of access to the bank.Out of 45 respondents from HDFC bank, 11(24 percent) respondents have received the facilities of loans,5(11 percent) of them have received the facilities of cards, 5(11 percent) of them have received the facilitiesof investment 5(11 percent) of them have received the facilities of forex, 3(7 percent) of them have receivedthe facilities of accounts & deposits, 3(7 percent) of them have received the facilities of payment and theremaining 3(7 percent) of them have received the facilities of access to the bank.From the Table 2, it was clear that out of 45 respondents from ICICI bank, 17(38 percent) respondents werein the category of high level perception, 15(33 percent) respondents were in the category of medium levelperception and 13(29 percent) respondents were in the category of low level perception towards the creativityand innovations in financial products of banks. Out of 45 respondents from HDFC bank, 17(38 percent)respondents were in the category of high level perception, 14(31 percent) respondents were in the category ofmedium level perception, 14 (31 percent) respondents were in the category of low level perception towardsthe creativity and innovations in financial products of banks.From the Table 3 shows that the application of chi-square test, it is clear that in case of ICICI bank, level ofperception towards the creativity and innovations in financial products is independent of gender, age,educational qualification, family income of the respondents, marital status family size and nature of thefamily. In case of HDFC bank, level of perception towards the level of creativity and innovations in financialproducts is independents of gender, age, educational qualification, nature of the respondents, family incomeof the respondents, marital status, family size and nature of family.10. Findings Of The StudyFrom the analysis carried out with the above said objectives and hypothesis the following are the majorfindings of the study. 51 percent of the respondents were male in ICICI bank, and in case of HDFC bank 53 percent of therespondents were female. 35 percent of the respondents were in the age group of 25-35 years in ICICI bank, and in case of HDFCbank 38 percent of the respondents were in the age group of 25 -35 years.31 percent of the respondents have completed graduate in ICICI bank and 36 percent of the respondentshave studied higher secondary in HDFC bank.Researchjournalis Journal of Finance Vol. 1 | No. 1 November | 2013 9

www.researchjournali.com 29 percent of the respondents were house wives in ICICI bank and incase of HDFC bank 29 present ofthe respondents were house wives. Majority of the respondents have family income between ` 10,000 -` 20,000 in both the banks. Majority of the respondents were married in both the banks. Majority of the respondents have 4 -6 members in their family in both the banks. Majority of the respondents lived in the joint families in both the banks By the application of chi-square test it is clear that in case of ICICI bank, level of perception towards thecreativity and innovations in financial products is independent of gender, age, educational qualification,family income of the respondents, marital status family size and nature of the family. In case of HDFC bank, level of perception towards the level of creativity and innovations in financialproducts is independents of gender, age, educational qualification, nature of the respondents, familyincome of the respondents, marital status, family size and nature of family.11. RecommendationsOn the basis of the findings, the following suggestions were given.ICICI Bank: ICICI bank to take initiative to launch various awareness programmes for frequent Accountsand deposits campaign and Loan mela. ICICI bank should take proper care for replenishing the money in ATMs. ICICI has to revamp its help desk making it more customers friendly. Sufficient number of staff may be appointed so as to meet needs of all customers like updatingof pass book, replacement of damaged cards etc.HDFC Bank:Even though the private sector banks are perceived to be successful in their creativity and innovations infinancial products of banks, the following suggestions may also be considered. HDFC bank has definitely improved their inside ambience and parking space. Banks should open branches and ATMs at prime locations. Equal treatment to all customers an essential pre-requisite to retain all types of customers.General Suggestions: HDFC bank should introduce more number of ATMs, as these are comparatively lesser thanICICI bank.Researchjournalis Journal of Finance Vol. 1 | No. 1 November | 2013 10

www.researchjournali.com An effort on the part of these banks is required to introduce consolidated ATMs in whichservices should be provided by making a provision catering to offer swipes from the ATM ofother banks in order to enhance customer convenience. As per the usage of plastic money, there should be constant awareness provided to clientsregarding exploitative implication of plastic money on ones savings. Any creativity and innovative product to be launched by these banks should be done catering toneeds and technology adaptability of the customers of each and every stratum. ICICI bank needs to enhance the star performing product range.12. ConclusionDelivering superior creativity and innovations in financial products appears to be a pre requisite for success ofany financial firms. Creativity and innovations in financial products should be used as a strategic tool to get acompetitive advantage over the competitors. With the increasing levels of globalization of the Indian bankingindustry and adoption of universal banks, the competition in the banking industry has intensified. Anywhereand anytime banking has now become a reality. Recognition of creativity and innovations in financialproducts now acts as a competitive weapon. In this study, analysis has been made of the creativity andinnovative in financial products rendered by ICICI and HDFC bank. The suggestions offered would enablethe bank to strengthen its relationship with the existing customers and increase the number of new customers.13. ReferencesBooks1)Aggarwal B.P., Commercial Banking in India, classical publishing company, New Delhi, 2001.2)S.N.Maheshwari Banking law and practices, Kalyani publication.3)Vasanthi, principle of Bank management himalaya publication, Mumbai.Journals1) Das MR 2002 An objective method for banking the nationalized banks. EPW Vol.37, No.5,PP.437-448.2) Swami BG and Subrahamanyam G 1994, comparative performance of public sector banks in India ,prajnan vol.21, No.2, PP.185-195.3) Noulas & Katkan (1996) conducted a study to examine the technical and scale efficiency of banks.Websites1) www.hdfc.com.Researchjournalis Journal of Finance Vol. 1 | No. 1 November | 2013 11

www.researchjournali.com2) www.icici.com3) www.financial products@google.co.in Table 1: Innovative Financial Product Facilities Offered By The BankInnovativefinancialproductsICICI bank HDFC bankNo. ofRespondentsPercentageNo. ofRespondentsPercentageAccounts &deposits6 13 3 7Loans 6 13 11 24Investment 9 20 5 11Cards 5 11 15 33Forex 7 16 5 11Payment 8 18 3 7Access to thebank4 9 3 7Total 45 100 45 100Source: Primary dataTable 2: Level Of PerceptionLevelICICI bank HDFC bankNo. ofRespondentsPercentageNo. ofRespondentsPercentageHigh 17 38 17 38Medium 15 33 14 31Low 13 29 14 31Total 45 100 45 100Source: Primary dataResearchjournalis Journal of Finance Vol. 1 | No. 1 November | 2013 12

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