INTRODUCTION

Customer relationship management has become a vital part for modern business
organizations especially for the service sector. Customer relationship management is
“the overall process of building and maintaining profitable customer relationships by
delivering superior customer value and satisfaction”.

Peoples’ Bank has etched its presence indelibly for 47 years in the lives of Sri
Lankan people, working on the philosophy of always looking at the big picture of
overall development on a bottom- up approach. Its philosophy of development has
continuously evolved on a sustainable platform and considering that even in
challenging times. It has ensured a consistent growth curve that emulates every stake
holder of People’s Bank. They strongly believe that they are firmly journeying
towards meeting the goals of their overall vision.

Peoples’ bank was inaugurated on 1st July 1961. The first branch was opened at Duke
Street. During the year eight more branches were opened. Today the Bank is
consisting of 327 Branches and 341 Service Centers.

The Bank obtained an A-rating from Fitch Ratings Lanka Ltd. indicating progress
from its earlier Rating level. Being the driver in peoples’ development was once again
proved true when the bank won Peoples’ Awards throughout the years. Bank’s ever
increasing portfolio of eleven million customers made the prime choice for winning
the ‘Service Brand of the Year’ for first time and retaining the ‘Banking and
Financial Services Brand of the Year’ for the third consecutive year. Within the
year of 2008 number of customers has been increased by 8.2%.

With the rapid growth of globalization and increasing customer needs and demands,
today the biggest challenge is to prepare ICT platform to cater for tomorrows needs.
Bank’s IT team has taken keen steps to meet this requirement by way of establishing a
robust cost effective integrated ICT solution with proper ICT governance which
aligned with the bank’s future vision and mission.

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Having already completed the Strategic Plan 2004 to 2008 successfully, the bank has
formulated a new Strategic Plan from 2009 to 2014 where the goals within this plan
are ambitious but achievable.

VISION

To be the Bank of the aspiring People of Sri Lanka: empowering People to become
value creating, competitive and self-reliant.

MISSION

FOR OUR CUSTOMERS

To take pride in providing an excellent service in the most caring,

responsive and professional manner.

FOR OUR OWNERS

To generate benefits for the national economy whilst being

independent and commercially viable.

FOR OUR EMPLOYEES

To create opportunities for our employees to benefit from their high

performance by becoming value creating, skilled, self-confident and
professional individuals who are also team players.

FOR OUR SOCIETY

To support empowerment sustainable development by contributing to

the enlistment of education, culture and environment island-wide.

OUR BUSINESS VALUES

We put our customers at the centre of everything, by minimizing bureaucracy,

demanding hands on management, quick decision making and implementation.

(Out of several business values we took only this one to our project which relates

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“THE BANK OF THE ASPIRING PEOPLE OF SRI LANKA”

Peoples’ Bank has hence been able to continue the consistent growth curve, even with
the intense competition from other commercial banks primarily due to understanding
the psyche of the people of Sri Lanka, with a closely knit customer relationship,
strengthened through the accessibility of the bank in all corners of the country, a team
that has ensured they ‘walk the talk’ and being able to match and sometimes exceed
the innovations prevalent in the industry.

In 1963 the bank commenced its pawning services for the benefit of their customers
and commenced a new Agriculture credit Scheme becoming the pioneer lender to
the small farm sector in 1967.

The ‘Athamaru’ Loan Scheme was introduced to finance economics activities of the
informal sector. The Investment Savings Scheme, a credit linked saving Scheme was
launched to attract regular savers.

In 1973 a Regionalization Programme commenced to decentralize the

administration and speed up customer service. A comprehensive Rural Credit
Scheme was launched to provide both production and consumption credit facilities.

The Bank initiated the ‘Ganu Denu’ practice, identifying itself with the traditions
of the Sinhala and Tamil New Year and encouraging customers to transact with the
bank at the auspicious time.

In 1981 the Extended Minor Savings Scheme was launched.

The Bank introduced a new Inland Bill Scheme for lending to the rural sector and
for financing agricultural activities in 1989. The People’s Visa Card was
introduced in association with Visa international and 24 branches were fully
computerized in 1990.

The 330 bank branches were operating throughout the country and 35 main branches
were fully automated. ‘Vanitha Vasana’, a savings scheme for women was
introduced in 1993.

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‘Guru Setha’, a new deposit mobilization and loan scheme catering to government
teachers was launched in 1995 with the co-operation of the Ministry of Education.

In 1996 ‘Suwa Sevana’ a credit package for Government sector health personnel was
launched. ‘Sisu Udana’ a new deposit scheme for school children was introduced.

The ‘Surathra’ loan Scheme was launched in 1997 to assist self-employment

projects. A special credit cum deposit scheme known as ‘Videshika’ was introduced
in collaboration with the Sri Lanka Foreign Employment Bureau to assist migrant
workers.

In 1999 bank launched ‘Isuru Udana’, a deposit scheme that encourages parents
and guardians to save for the benefit of their young charges. The ‘Jana Jaya’ savings
cum loan scheme was launched in 2000 and the newly introduced ‘Jaya Siri’ draw
offered attractive prizes for depositors.

In the year 2003 the bank introduced number of new services to their customers. The
Young Executive Saver’s (YES) Account was launched. And also the Housing Loan
product was repackaged and re-launched under the ‘Jaya Nivasa’ name. The new
Savings Scheme titled ‘Visrama Suvaya’ was launched for the pensioners. ‘The
first lesson in school’ was launched to inculcate savings habit among new students
entering year 1 classes where the initial deposit was matched one-to-one up to a
maximum of Rs. 500.

The on-line access to AMEX account was facilitated in 2006 enabling efficient
customer service by granting immediate credit on account incoming remittances.
‘Nidahase Upatha’ rewarded new life by giving Rs 500 to all babies born in the first
week of February.

People's Bank offers a varied range of globally accepted cards (Gold Credit Card,
Classic Credit Card) to suit customer requirements. It carries 51 days of interest free
credit and the lowest interest rate of 2.8% per month. Peoples’ bank offer free
supplementary card to Gold card holders.

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Moving into an era of technology banking and bringing the anywhere anytime
banking to its customers, the bank launched its latest service offer of Palm Top
Banking to its customers in 2008.

A notable advancement in the Bank’s remittance service with the introduction of

‘People’s e-Remittance’, a web-based remittance product supported by latest
technology to remit money from overseas within minutes.

Two new foreign currency deposit products were launched, viz., ‘Doo Daru
Ethera Isuru’ a foreign currency deposit product for children and ‘Special Foreign
Investment Deposit Account’ [SFIDA].

Bank introduced a pre-generated PET Card which is presented to customers as

soon as an account is opened. 883 customer service assistants were recruited into
our team during 2008 to enhance our existing customer service standards. Also
embarking on e-banking solutions our IT team has completed the initial stage of
Internet Banking and SMS Banking which will boost the delivery channels.

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CUSTOMER RELATIONSHIP STRATEGIES

Peoples’ Bank mainly considers that direct relationships with the customers are the
best way of building a long term relationships. Therefore they have no online
customer relationship system and mainly cater the customers over the counters.
Website is used to inquire information not for transaction. This has resulted in
building a long-term relationship with the customers. They ensure that once the
customer opens an account they do not leave the organization.

The following techniques are used;

• New customer does not mean a brand new customer. New customer could be
the same customer with a different need.

For an example, Mr. Pereira has a savings account in the bank for a long time.
One day he came to take a loan. He is the same customer but with a different
need. So from the point of view of the bank Mr. Pereira is a new customer.

Bank focuses on daily value addition system to attract and retain

customers.

• Physical techniques – cater to the customer through counters using face to

face method.

• Enforce customer service and works on the principle of “ as soon as

possible”

• Direct interaction with the customers - member of the bank calls the
customers and inquire about any problem or suggestions

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• Market research - Bank tries to get the qualitative responses from the
customers. This is conducted by a third party interview, so that customers
would have more freedom and this is done 5-6 times per year

• Corporate social responsibility projects ( This point will be discussed later)

• Trade associations and Clubs

• Customer get-togethers

• Promotion events - Bank annually carries out a promotion campaign on Grade

one students’ admissions. Bank encourages the habit of saving from the first
day of school by depositing additional Rs 500/- for each bank account opened
on that day.

• 80:20 Rule - Bank uses 80:20 rule where basic requirements are provided to all
the customers and profitable customers are given additional benefits such as;
gifts, diaries...etc. Normally the bank prints 600,000 calendars for their
customers every year (bank gives a calendar to each and every customer who
comes 1st January to the bank). And also for an example, when a customer
deposits a lump sum the managers talk with him and tries to build a good
relationship.

• Having a complaint box - Complaint boxes are kept in each and every branch
to collect ideas from customers in order to improve the customer satisfaction.
Bank’s idea is that customer complaints are very important to them in order to

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 achieve their targets. And also they are having a online inquiry system for
customers.

• The bank is targeting to have an Active Bank Account for each and every Sri
Lankan. And also to make “SMS BANKING’’ a domestic brand.

CORPORATE SOCIAL RESPONSIBILITY

The People’s Bank has a history of care for people and environment. The bank has
recognized the role within community and environment, which goes well beyond
being the bank of the people. The bank has made contributions to cultural and
religious activities, to the sectors of health and education and so much more. Through
these activities the bank has become even closer to the hearts of Sri Lankan people.

Examples for corporate social responsibility projects;

• Bank initiated projects to repair ten Provincial Hospitals and refurbish two
wards at the Cancer Hospital – Maharagama.

• Kuruwita Branch undertook the renovation of the Library at Kandangoda

Vidyalaya.

• The People’s Bank sponsored the Olympiad Junior Competition conducted

by the Dept. of Education to recognize students excelling in Mathematics
and Science.

• 12 students who were placed among the first three in the Mathematics,
Science, Commerce and Arts streams in the GCE A/L examination were

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 presented scholarships worth Rs 75000/-. Rs 60000/-, and Rs 40000/-
respectively.

• The bank also sponsored a CD containing Sinhala, Parli Jayamangala

Gatha and Narasiha Gatha. This CD will be distributed to Temples
islandwide and amongst the customers of the bank.

• Bank’s Buddhist Society made several important donations to worthy

courses, consisting of health aids, books, dry rations and plants and also
was instrumental in constructing and gifting a house to deserving family in
Nochiyagama.

• The bank’s Christian Guild made an important a valuable donation of a

Warm Air Hypothermia System to the Lady Ridgeway Children’s
Hospital, which significantly upgraded the hospital’s capacity in the line of
heart surgery.

• As the official banker to Asia’s largest cultural pageant, contributed Rs 2.5

Million towards the Esala Perahera in 2008.

PRODUCTS AND SERVICES

Peoples’ Bank mainly divides its products and services into four areas;

1. Personal Banking
2. Corporate Banking
3. Treasury Services
4. Development Banking

1. Personal Banking

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 I. Savings Accounts

Type of the Customer Base Savings Account

Infants Isuru Udana
Minors Sisu Udana
Young Savers YES
Ladies Vanitha Vasana
Senior Citizens Parinitha
Senior Citizens Pilgrimages Vandana
Teachers Guru Setha
Health Sector Employees Suwa Sewana
Farmers Harvest Savings Account
Pensioners Visrama Suvaya
Regular Savers Investment Savings
General Purposes Ordinary Savings Account (single/joint)
People who want to make their dreams Jana Jaya
true

II. Current Accounts

 Personal Accounts
o Individual
o Joint
 Business Accounts
o Sole Proprietorship
o Partnership
o Limited Liability Companies
o Statutory Bodies

III. Fixed Deposits

 1 month, 3 months, 6 months, 12 months, 24 months

 Certificates of Deposits
 No-transferable Savings Certificates
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  Negotiable Savings Certificates

IV. Loans

Some examples:

 Purchase of vehicles
 For education
 Pensioners loan
 Loans scheme for members of local govt. , employees abroad,
Telecom employees
 Swarna Pradeepa

V. Foreign Currency Accounts

 NRFC Accounts
 RFC Accounts
 RRFC Accounts
 RNNFC Accounts
 Sierra
 People’s e-Remittance

VI. Other Services

 ATMs
 Credit Cards
 Inter Branch
 International Money Transfers
 Inter Branch Money Transfers

2. Corporate Banking

 Cash management services

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  Trade finance
 Working capital finance
 Commercial papers
 Money market loans
 Project financing
 Foreign currency financing for Exporters

3. Treasury Services

5. Development Banking

There are number of services provide by the bank. Following are some of
them;

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  Athamaru Loan Scheme
 Govi Sahanaya – forward sales agreement
 “The Awakening North” Loan Scheme
 Small and Medium Enterprise Loans
 Micro Finance Loans
 Skills Development
 Industrial Loans
 Smallholder Plantation Entrepreneurship Development programme

STRENGTHS AND WEAKNESSES

STRENGTHS

 The main strength of People’s Bank is being close to the customer and having
direct relationships.
 Having wide number of branches all over the country.
 Having high concern for customers from top to bottom level of the
management.

WEAKNESSES

 Bank does not have a formal module for CRM, despite this they have
performed well and was awarded the Best Brand of the Year.
 No data base module

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 660 branches are not linked to the data warehouse. Therefore data mining is
not successful.
 No formal custom service standards.

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SUGGESTIONS TO IMPROVE

 There should be a specific customer relationship management unit in the

organization.

 As we are moving into a technological era, 660 branches should be linked

together to provide faster services to the customers.

 It would be easy to carry out their work to the Marketing Department if the
bank recruits Customer Relationship Managers. Because up to date the
Customer relationship Strategies are carry out by the Marketing Department

 It would be helpful to the bank to come closer to the hearts of Sri Lankan
people more than they do today.

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