Cooperative Bank Case Essay

1436 Words Feb 26th, 2013 6 Pages
Title of the Report:
Case Analysis of ‘The Cooperative Bank’

The Purpose:
The purpose of the report is to submit the analysis of The Cooperative Bank based on the Activity Based Costing methodology

To whom it is submitted (Name of the instructor):
Prof. Sandhya Bhatia,
Professor, Managerial Accounting,
Indian Institute of Management, Udaipur

Name of the Author:
Abhishek Sengupta
Anubhav Nigam
Ravindran Damodaran
Saurabh Srivastava

Date of Submission:
24 February 2013

Organization/Institute’s name (and logo):
Indian Institute of Management, Udaipur


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Current Account: The current accounts of those with low balances were unprofitable. The bank was targeting on making the product more attractive to profitable customers. The bank’s strategy should be to focus on both profitable and unprofitable customers:
• Profitable Customers – The bank should focus on improving the customer experience of these customers. The bank can do so by offering ‘Cross-Sales’ and Electronic Banking options. This strategy is also in line with the Bank’s strategy to reduce the cost-income ratio. The ‘Cross-Sales’ can reduce the Marketing and Sales Cost of the other products such as Credit Cards, Personal Loans and Electronic Banking will enhance customer experience and at the same time reduce overhead expenses.
• Unprofitable Customers – To improve overall customer profitability the bank should try to upgrade the unprofitable customers to profitable ones. It can introduce reward schemes for maintaining a minimum balance in the account. Such a move will encourage the customer to have high balances and the bank can also have increased revenue from interests.
Visa Account: As the Exhibit 8 denotes the net commission ($4349839) from the Visa Account is high as compared to the Net Interest ($4128509). So the motive of the Bank should be to encourage customers to perform more transactions. This can be accomplished by introducing point based systems wherein the consumers can exchange the accumulated points to gifts. The

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