changed from providing good services to all the bank customer, it has been shifted to
providing good services to few premium customer who are able to keep funds in their
accounts and can be a proﬁtable deal for the bank.
In fact, nowadays, the basic banking activities are getting squeezed and more and more
staffs are engaged insales and marketing activities to generate revenue.The basic activities
like cheque clearing, account opening, service request, fund transfers, foreign exchange
services etc. which were earlier processed in the branch premises, are shifted to centralized
unit, so that the staff can focus on maintaining customer relationship and sell the ﬁnancial
products to the customers to meet the proﬁtability targets of the bank. This kind of bank
practices is having another facet, that staff majorly focuses on wealthy or premium
customers and a common or poorcustomer is neglected knowingly or unknowingly. It’s not
only the customers who suffers but also the bankers who feels immense pressure to
complete the target to remainin the organization and get yearly appraisal.
Modern marketing conceptof CRM (Customer relationship management) has emerged as
a tool for maintaining a continuous relationshipwith the prospect and premium customers
and sell the product or provide services to them with an ease. However, gradually this
concept is getting distorted bydemanding the favor from the customer by pushing them to
purchase the banking products (for which targets are provided to the staff) in lieu of
banking services provided to them with an ease. In the rat race of making proﬁt and
acquiring the maximum number of premium customers, CRM is a tool that binds the
customer with the banker. In this race of achievingthe number one position in the industry,
sometimes bankers indulge inmalpractices to accomplish the targets. This study will cover
the reasons responsible for sales malpractices in banking industry and try to evaluate the
reasons which are affecting sales practicesin India adversely. In this paper, we will ﬁnd out
the sales approach used by the bankersand how it affects the sales misconduct and different
categories of the customer.
Data have been collected from Private and Public bank customer for a comparative
analysis. Private and public banks are distinguished on the basis of the ownership of the
banks. In addition, data arecollected from Mass and Class customer. This classiﬁcation has
been done on the basis of the type of account maintained by the customer. If a customer
is maintaining a normal savingaccount or a low variant account that customer is termed as
Mass customer. Mass customers are those who keep and maintain their accounts for the
basic purpose like salary credits, maintaining small savings and doing small investments.
They are basically less revenue generatingcustomers.
On the other hand, Class customers are those who maintain a premium or a high-end
account with the banks, they would like to enjoy a superior bank services in lieu of their
money, they keep a handsome amount in their accounts and invest large amount in the
banking products. Account maintenance and banking relationship is a matter of reputation
The ﬁrst section is related with the identiﬁcation of the determinants of the sales
misconduct/mis-selling which adversely affect the Indian retail banking sector. Second
section discuss about the type of sales approach used by different types of banks (Bank
categorization is based on ownership i.e. Private banks and Public sector banks) and its
impact on various customercategories, also we try to ﬁnd out that does sales approach leads
to malpractices in thebanking industry.
1.1 What is sales misconduct
Misconduct can be deﬁned as violation of standards or law, willingly or unknowingly.
Misconduct is a broader term which includes behavioral,operational, sales and many more