Case Analysis SBI Kohinoor Business M
Case Analysis, SBI, Kohinoor Business Model
Q: Was the decision to attract ultra HNI customers through a separate dedicated branch a good idea?
A: HNI customers have requirement of privacy, personalised services, and exclusive banking facilities. The following reasons highlight the need for separate dedicated branch:
It was in keeping with SBI’s motto of being the “Banker to every Indian”. An ultra HNI expects best and instant service, e.g. banking round the clock. SBI could not have provided the same services at a branch where non-HNI customers also had their accounts, as this would alienate them.
The SBI Kohinoor Banjara branch received many account opening requests within a few days of its opening. In addition, it also broke even in 3-4 months compared to the normal tenure of 12-18 months, and the current profit figures justify the opening of the branch.
According to the Chief General Manager of the Kohinoor Branch, the deposits with the branch crossed 500 Cr. within the first year and the advances also have exceeded 150 Cr*.
Establishing Kohinoor brand of SBI making it exclusive to the segment of UHNIs in India.
*Source: The Hindu Business Line, November 7, 2012
Q: Critically evaluate the service design, customer selection and the employee selection strategy of SBI Kohinoor.
A:
Service Design: Amongst the services of SBI Kohinoor, it can be argued that the better services were those of Loans (diversified range), FOREX Services (Vacationing is ranked 1 in terms of expenditure), and other NRI services (large NRI population from AP due to the IT/ITeS boom). Other chargeable facilities like the Lockers generated additional revenues. However, the Financial Planning services were not mentioned. Other chargeable facilities at the SBI Kohinoor such as the conferencing/ coffee bars were rarely used.
Customer Selection:
Emphasis was laid on getting those customers who did not have their accounts with SBI.
Ultra HNI’s demanded exclusivity and privacy from their
Q: Was the decision to attract ultra HNI customers through a separate dedicated branch a good idea?
A: HNI customers have requirement of privacy, personalised services, and exclusive banking facilities. The following reasons highlight the need for separate dedicated branch:
It was in keeping with SBI’s motto of being the “Banker to every Indian”. An ultra HNI expects best and instant service, e.g. banking round the clock. SBI could not have provided the same services at a branch where non-HNI customers also had their accounts, as this would alienate them.
The SBI Kohinoor Banjara branch received many account opening requests within a few days of its opening. In addition, it also broke even in 3-4 months compared to the normal tenure of 12-18 months, and the current profit figures justify the opening of the branch.
According to the Chief General Manager of the Kohinoor Branch, the deposits with the branch crossed 500 Cr. within the first year and the advances also have exceeded 150 Cr*.
Establishing Kohinoor brand of SBI making it exclusive to the segment of UHNIs in India.
*Source: The Hindu Business Line, November 7, 2012
Q: Critically evaluate the service design, customer selection and the employee selection strategy of SBI Kohinoor.
A:
Service Design: Amongst the services of SBI Kohinoor, it can be argued that the better services were those of Loans (diversified range), FOREX Services (Vacationing is ranked 1 in terms of expenditure), and other NRI services (large NRI population from AP due to the IT/ITeS boom). Other chargeable facilities like the Lockers generated additional revenues. However, the Financial Planning services were not mentioned. Other chargeable facilities at the SBI Kohinoor such as the conferencing/ coffee bars were rarely used.
Customer Selection:
Emphasis was laid on getting those customers who did not have their accounts with SBI.
Ultra HNI’s demanded exclusivity and privacy from their