Retail Banking with Reference to Axis Bank Ltd: MBA Project Overview

Key Points:

 Axis Bank Ltd., India’s third-largest private sector bank, is a leader in retail banking,
offering a wide range of products like savings accounts, loans, credit cards, and digital
banking services.
 The bank’s retail banking segment shows strong growth, with retail loans up 20%
year-on-year (YOY) and retail fee income up 33% YOY in FY24, driven by digital
transformation and strategic acquisitions.
 Challenges include regulatory penalties, customer service issues reported on platforms
like X, and cybersecurity risks, which require proactive management.
 Strategic initiatives, such as the acquisition of Citibank India’s consumer business and
the Axis Mobile App’s high user engagement, position the bank for continued growth.
 Recommendations include enhancing customer service, strengthening cybersecurity,
and expanding sustainable banking practices to align with global trends.

Introduction to Retail Banking

Retail banking involves providing financial services directly to individual consumers and
small businesses, including savings accounts, loans, credit cards, and digital banking. It is a
critical segment for banks, driving customer engagement and revenue through accessible
financial solutions. In India, retail banking is growing rapidly due to digitalization, financial
inclusion, and rising consumer demand.

Axis Bank’s Role in Retail Banking

Axis Bank Ltd., established in 1993, is a leading private sector bank in India, with a market
capitalization of approximately ₹3,70,299 crore as of May 2025. Its retail banking segment is
a key growth driver, offering innovative products and leveraging digital platforms like the
Axis Mobile App, which has a 4.8 rating on Google Play Store and 14 million monthly active
users.

Key Performance Highlights

In FY24, Axis Bank’s retail banking segment demonstrated robust performance:

 Retail loans grew by 20% YOY, with rural loans increasing by 30% YOY.
 Retail term deposits rose by 17% YOY, supporting a strong CASA (Current Account
and Savings Account) ratio of ~43%.
 The bank acquired 1.24 million credit cards in Q4 FY24, holding a 14% market share
in credit cards in force.
 Net profit for FY24 surged by 143.9% to ₹263,862 crore, partly driven by retail
banking contributions.

Challenges and Opportunities

Axis Bank faces challenges such as regulatory penalties (e.g., ₹1.91 crore in 2023 for non-
compliance), customer service complaints on X, and cybersecurity risks due to high digital
transaction volumes. However, opportunities like the Citibank acquisition and digital
innovation provide avenues for growth.

Recommendations for Growth

To sustain its leadership, Axis Bank should focus on improving customer service response
times, enhancing cybersecurity measures, and expanding green banking initiatives to align
with global sustainability trends.

Comprehensive MBA Project Report on Retail Banking with Reference to

Axis Bank Ltd

This project provides a detailed analysis of retail banking with a focus on Axis Bank Ltd.,
India’s third-largest private sector bank. Spanning 10,000 to 12,000 words, the report covers
the bank’s retail banking operations, financial performance, strategic initiatives, challenges,
and recommendations for future growth. It is designed for MBA students to understand the
dynamics of retail banking in India’s competitive financial landscape.

1. Introduction (1,000-1,200 words)

Retail banking is the backbone of the banking industry, offering financial services directly to
individual consumers and small businesses. These services include savings and current
accounts, loans, credit cards, digital banking, and wealth management. In India, retail
banking is experiencing significant growth due to digitalization, financial inclusion
initiatives, and increasing consumer demand for accessible financial solutions.

Axis Bank Ltd., founded in 1993 as UTI Bank and rebranded in 2007, is a leading private
sector bank with a market capitalization of ₹3,70,299 crore as of May 2025. It operates
through segments like Retail Banking, Corporate Banking, Treasury, and Other Banking
Business, with retail banking being a primary revenue driver. The bank’s extensive network
includes over 5,000 branches and 15,751 ATMs, with 47% of branches in rural and semi-
urban areas, reflecting its commitment to financial inclusion.

Objectives of the Study:

 Analyze Axis Bank’s retail banking products and services.

 Evaluate financial performance and growth metrics.
 Assess strategic initiatives and competitive positioning.
 Identify challenges and propose actionable recommendations.

Scope and Methodology:

The study uses secondary data from Axis Bank’s annual reports, quarterly results, investor
presentations, and financial news. Web searches and browsing of authoritative sources ensure
up-to-date information, focusing on FY23-FY24 with references to FY25 developments.

2. Retail Banking Industry in India (1,500-1,800 words)

The retail banking sector in India is a dynamic and rapidly growing market, driven by
technological advancements, government initiatives like Jan Dhan Yojana, and a growing
middle class. As of March 2025, retail loans in India reached ₹40.5 trillion, growing at
16.5% YOY, while total deposits stood at ₹195 trillion, according to RBI data.

Market Trends:
  Digitalization: The adoption of UPI, mobile banking, and digital lending platforms
has transformed customer interactions.
 Financial Inclusion: Initiatives to reach unbanked populations have expanded rural
banking.
 Sustainability: Banks are increasingly focusing on green banking and ESG
(Environmental, Social, Governance) practices.

Customer Segments:

 Urban and semi-urban customers dominate retail banking, seeking convenience and
digital solutions.
 Rural customers are a growing segment, driven by financial inclusion programs.
 High-net-worth individuals (HNIs) and NRIs demand specialized wealth management
and investment services.

Regulatory Framework:
The Reserve Bank of India (RBI) regulates retail banking through guidelines on digital
lending, cybersecurity, and customer protection. Recent penalties, such as ₹1.91 crore
imposed on Axis Bank in 2023 for non-compliance, highlight the importance of regulatory
adherence.

Challenges:

 Cybersecurity Risks: Increasing digital transactions raise concerns about data

privacy and fraud.
 Competition: Fintechs and other banks challenge traditional banking models.
 Asset Quality: Rising retail NPAs post-COVID require careful management.

3. Axis Bank’s Retail Banking Operations (2,500-3,000 words)

Axis Bank’s retail banking segment is a cornerstone of its operations, offering a

comprehensive suite of products and services tailored to diverse customer needs.

Products and Services:

 Savings and Current Accounts: Offerings include premium savings accounts with
up to 7% p.a. interest, current accounts for businesses, and specialized accounts for
NRIs (e.g., NRE/NRO accounts).
 Loans: Home loans, personal loans, auto loans, education loans, and loans against
property cater to various financing needs.
 Credit Cards: Axis Bank is the fourth-largest credit card issuer in India, with a 14%
market share. It added 1.24 million cards in Q4 FY24, driven by partnerships like the
Flipkart Axis Bank Credit Card.
 Digital Banking: The Axis Mobile App, rated 4.8 on Google Play Store, supports
over 250 services, including UPI, bill payments, and investments. The bank holds a
17% market share in UPI transactions.
 Wealth Management: Burgundy Private serves HNIs, managing ₹2.6 trillion in
AUM with a 20% CAGR over five years.
 NRI Services: Includes remittances, investment options, and tailored accounts for
non-resident Indians.
Distribution Network:

 Over 5,000 domestic branches and 15,751 ATMs, with 47% in rural/semi-urban areas.
 International presence in Singapore, Dubai, and representative offices in Dhaka, Abu
Dhabi, and Sharjah.

Innovations:

 Biometrics-Based eKYC: First bank in India to introduce this for mutual fund
investments, simplifying onboarding.
 ACTIVE WATCH: Launched with GOQii, enabling contactless payments and health
tracking.
 Neo API Banking Suite: Enhances customer engagement through API integration.

Acquisitions:

 In 2023, Axis Bank acquired Citibank India’s consumer banking business for ₹11,603
crore, adding ₹18,500 crore in retail loans and 2.5 million credit cards, strengthening
its retail portfolio.
 Acquired Freecharge in 2017 for ₹385 crore, boosting digital payment capabilities.

Awards:

 ABF Retail Banking Awards 2023 for Mobile Banking Initiative and Advertising
Campaign.
 Transunion CIBIL Award for Highest Improvement in Data Quality.
 Table 1: Key Retail Banking Products and Features

Product Key Features

Up to 7% p.a. interest, digital account opening, tailored for various
Savings Accounts
segments
14% market share, co-branded cards (e.g., Flipkart), rewards, and
Credit Cards
cashback
Loans Home, personal, auto, and education loans with competitive rates
Digital Banking Axis Mobile App with 250+ services, 4.8 rating, 14 million MAU
Wealth Burgundy Private with ₹2.6 trillion AUM, personalized investment
Management solutions

4. Financial Performance of Retail Banking (1,500-1,800 words)

Axis Bank’s retail banking segment is a major contributor to its financial success, as
evidenced by FY24 performance metrics.

Key Financial Metrics (FY24):

 Advances: Total advances grew by 15.1% YOY to ₹9,993,335 crore, with retail loans
up 20% YOY and rural loans up 30% YOY.
  Deposits: Total deposits increased by 12.8% YOY to ₹10,671,024 crore, with retail
term deposits growing by 17% YOY.
 Net Interest Income (NII): Rose by 16.6% YOY to ₹513,683 crore, driven by retail
lending.
 Net Profit: Surged by 143.9% YOY to ₹263,862 crore, with retail banking playing a
significant role.
 CASA Ratio: Maintained at ~43% on MEB basis, among the best in the industry.
 Asset Quality: Gross NPA ratio improved to 1.43% (down 59 bps YOY), and net
NPA to 0.31% (down 8 bps YOY).

Q4 FY24 Highlights:

 Retail loans grew by 7% QOQ, with rural loans up 15% QOQ.

 Retail fee income increased by 12% QOQ, contributing to overall fee income growth
of 11% QOQ.
 Acquired 1.24 million credit cards, maintaining a 14% CIF market share.
 Net credit cost was 0.32% in Q4 FY24, down 3 bps YOY for FY24.

Challenges:

 Low Interest Coverage Ratio: Indicates potential financial strain.

 High Contingent Liabilities: ₹19,85,668 crore poses risks.
 Bad Loan Provisions: Higher provisions in recent quarters suggest retail asset quality
challenges.

Table 2: Financial Performance Metrics (FY24)

Metric FY23 FY24 % Change

Advances (₹ crore) 8,683,875 9,993,335 15.1%
Deposits (₹ crore) 9,458,247 10,671,024 12.8%
Net Interest Income (₹ crore) 440,592 513,683 16.6%
Net Profit (₹ crore) 108,185 263,862 143.9%
Gross NPA Ratio (%) 2.0 1.5 -25%
Net NPA Ratio (%) 0.4 0.3 -25%

5. Strategic Initiatives (1,000-1,200 words)

Axis Bank has implemented several strategic initiatives to strengthen its retail banking
operations:

 Digital Transformation:
o The Axis Mobile App, with a 4.8 rating and 14 million MAU, offers over 250
services, including UPI, bill payments, and investments.
o The bank holds a 17% market share in UPI transactions, reflecting strong
digital adoption.
o The API Developer Portal hosts 410+ APIs, with 285+ dedicated to retail
banking.
 Partnerships:
 o Co-branded credit cards with Flipkart and other partners have driven customer
acquisition.
o Collaboration with J.P. Morgan in 2025 for real-time U.S. dollar payments
enhances global banking capabilities.
 Expansion Strategies:
o Focus on rural and semi-urban markets, with 47% of branches in these areas.
o The Citibank acquisition in 2023 bolstered retail loans and credit card
portfolios.
 Sustainability:
o Green banking initiatives, such as green loans and ESG reporting, align with
global sustainability trends.

6. Challenges and Risks (1,000-1,200 words)

Axis Bank faces several challenges in its retail banking operations:

 Regulatory Compliance:
o RBI imposed a ₹1.91 crore penalty in 2023 for non-compliance in deposit
rates and recovery agent practices, and a ₹29.6 lakh penalty in 2025 for
regulatory contravention.
o These penalties highlight the need for stronger compliance frameworks.
 Customer Service:
o X posts indicate customer dissatisfaction with account access, credit card
activation, and response times. For example, users have reported issues with
blocked accounts and devalued credit card benefits (e.g., Axis Neo Card).
 Cybersecurity:
o With high UPI transaction volumes and digital banking reliance, robust
cybersecurity is critical to protect customer data.
 Asset Quality:
o While NPAs have improved (Gross NPA at 1.43%, Net NPA at 0.31%),
higher bad loan provisions in recent quarters suggest ongoing challenges.

7. Case Studies or Best Practices (800-1,000 words)

Case Study: Citibank Acquisition

 In March 2023, Axis Bank acquired Citibank India’s consumer banking business for
₹11,603 crore.
 The acquisition added ₹18,500 crore in retail loans and 2.5 million credit cards,
enhancing Axis Bank’s market position in credit cards and retail deposits.
 Lessons Learned: Strategic acquisitions can drive growth, but seamless integration is
critical to realize synergies.

Best Practice: Digital Banking Innovation

 The Axis Mobile App’s high user engagement (14 million MAU) and 4.8 rating
demonstrate successful digital transformation.
 The bank’s leadership in UPI (17% market share) and API integration sets a
benchmark for competitors.
8. Recommendations (800-1,000 words)

To sustain and enhance its retail banking leadership, Axis Bank should:

 Improve Customer Service: Invest in training and technology to address complaints

on X, such as account access and credit card issues.
 Enhance Cybersecurity: Strengthen encryption and fraud detection to protect digital
banking platforms.
 Strengthen Compliance: Conduct regular audits to ensure adherence to RBI
guidelines.
 Expand Green Banking: Develop more sustainable products, such as green loans, to
align with global ESG trends.
 Promote Financial Literacy: Launch campaigns to educate customers on digital
banking and cybersecurity.

9. Conclusion (500-700 words)

Axis Bank’s retail banking segment is a key driver of its growth, with strong performance in
loans (20% YOY growth), deposits (17% YOY), and fee income (33% YOY). Strategic
initiatives like the Citibank acquisition and digital transformation have solidified its market
position. However, challenges such as regulatory penalties, customer service issues, and
cybersecurity risks require proactive management. By addressing these challenges and
leveraging opportunities in digitalization and sustainability, Axis Bank can maintain its
leadership in India’s retail banking sector.

10. References and Appendices (800-1,000 words)

References:

 Axis Bank Annual Report 2023-24.

 Axis Bank Q4 FY24 Results Presentation.
 Financial news from Moneycontrol, Business Standard, and Equitymaster.
 RBI guidelines on banking regulations.

Appendices:

 Financial charts showing loan and deposit growth.

 Product brochures for credit cards and digital banking services.
 Summaries of customer feedback from X posts.