Product Development Process
(Product Life Cycle, BSBDA, KYC/OVDs, GEAP Architecture, USP, Positioning, SB Interest Rules)
How does a bank CREATE a new product? Like a Bollywood movie — idea → script → audition → shoot → release → hit or flop! This chapter reveals the entire product development pipeline.
Banky Thinks “Product Life Cycle” = Washing Machine Cycle 🔄
Banky heard “Product Life Cycle” and thought it was about how long products last before they break. Time to learn the BUSINESS life cycle!
Why Read This?
Real Life Benefit
What Will You Learn?
Key Words Explained
Introduction (low sales) → Growth (break-even, profits start) → Maturity (PEAK sales) → Staleness (sales flatten) → Decline (product fades). Core products (SB, CA, FD) stay in maturity FOREVER — they’re indispensable!
Replaced “No-Frills” per RBI 10 Aug 2012. No minimum balance. Max 4 withdrawals/month (incl ATM). Free ATM/Debit card. No charges for non-operation. Can’t hold another SB in same bank (close within 30 days). Simplified KYC = treated as Small Account.
Credits: ≤₹1L/year. Withdrawals: ≤₹10K/month. Balance: ≤₹50K. Valid 12+12=24 months max. No foreign remittance without KYC. CBS branches only.
Generic (core SB/CA/FD) → Expected (passbook, cheque book) → Augmented (Internet Banking, free collection) → Potential (cardless ATM withdrawal). Products evolve! ATM card was augmented, now it’s core.
Full Chapter — Simply Explained
💰 SB Interest Deregulation
Before 25 Oct 2011: RBI fixed SB rate for ALL banks. After: banks set OWN rates. Uniform up to ₹1L. Differential above ₹1L (no discrimination). Daily product basis since 1 Apr 2010. Quarterly rests (some Pvt = monthly). Current A/c: 0% interest (RBI prohibition). No withdrawal limits. OD permitted.
📋 KYC/OVD — 6 Official Documents
6 OVDs: Passport, DL, Voter ID, NREGA Card, Aadhaar, NPR Letter. ONE is enough for ID+address. 4 KYC elements: Customer Acceptance + Risk Management + CIP + Monitoring. Risk updation: High=2yr, Medium=8yr, Low=10yr. V-CIP (video KYC) = on par with face-to-face. PAN required except for TD≤₹50K and BSBDA.
🆕 5 Stages of New Product Development
1. Idea Generation (market research, staff suggestions) → 2. Screening (felt need? infrastructure ready?) → 3. Concept Testing (customer feedback on the IDEA) → 4. Business Analysis (cost-benefit, market share) → 5. Development, Test Marketing & Launch. Real case: PSB “Visa Loan” for Gulf workers — idea from customers → massive hit!
🎯 USP, Positioning & Branding
USP: The ONE unique feature. Citibank’s “Un-Fixed Deposit” = FD returns + cheque liquidity. Positioning (Jack Trout): “Not what you do to the product, but what you do to the MIND.” Early starter wins. Branding: Product Branding (catchy names — “Pushpaka” for car loan) + Corporate Branding (bank’s image).
Exam Angle
🎯 High-Priority Facts
- PLC (IGMSD): Introduction→Growth→Maturity→Staleness→Decline. Growth=sales PICK UP (not stagnant!).
- GEAP: Generic→Expected→Augmented→Potential. All 4 valid=answer(d).
- Term Deposit = NOT retail ASSET. It’s a LIABILITY! (exam trap)
- BSBDA: No min balance. 4 withdrawals/mo. Free ATM. Can’t hold another SB. 10 Aug 2012.
- Small Account: ₹1L credit/yr. ₹10K withdrawal/mo. ₹50K max balance. 12+12mo. Photo+signature.
- SB deregulated 25 Oct 2011. Uniform up to ₹1L. Differential above ₹1L. Daily product since 1 Apr 2010.
- Current A/c: 0% interest. No withdrawal limits. OD OK. CASA component.
- 6 OVDs (PaDVoNA): Passport, DL, Voter, NREGA, Aadhaar, NPR. ONE enough.
- KYC updation: High=2yr. Medium=8yr. Low=10yr. V-CIP = face-to-face par.
- PAN required for accounts (except TD≤₹50K & BSBDA). Cash>₹50K needs PAN.
- Overdue FD = SB rate. FD receipt = NOT negotiable instrument.
- 5 New Product stages (ISCBA): Idea→Screen→Concept→Biz Analysis→Dev/Launch.
- Jack Trout: “Positioning = what you do to the MIND.”
📝 Practice Questions
Memory Tricks
Trick 1
Trick 2
Trick 3
Trick 4
Trick 5
Trick 6
Trick 7
Trick 8
Visual Map
Last-Minute Revision Cards
⚡ Chapter 6 in 10 Lines:
- PLC (IGMSD): Introduction→Growth→Maturity→Staleness→Decline. Core products never decline.
- GEAP: Generic→Expected→Augmented→Potential. Products evolve — ATM card was augmented, now core.
- BSBDA: 0 balance, 4 withdrawals/mo, free ATM card. Replaced No-Frills (10 Aug 2012). Can’t hold another SB.
- Small Account: ₹1L credit/yr, ₹10K withdrawal/mo, ₹50K max balance. 12+12 months max.
- SB deregulated 25 Oct 2011. Uniform up to ₹1L. Differential above ₹1L. Daily product since 1 Apr 2010.
- Current A/c: 0% interest (RBI). No limits. OD OK. CASA component.
- 6 OVDs (PaDVoNA): Passport, DL, Voter, NREGA, Aadhaar, NPR. KYC: H=2yr, M=8yr, L=10yr.
- New Product Dev (ISCBA): Idea→Screen→Concept→Biz Analysis→Dev/Test/Launch.
- USP+Positioning+Branding: USP=unique feature. Positioning=mind slot. Branding=catchy names.
- FD=LIABILITY (not asset!). FD receipt≠negotiable. Overdue FD=SB rate.
Banky says: “IGMSD! GEAP! BSBDA=0-4-FREE! Small=1-10-50-24! PaDVoNA! 25Oct2011! ISCBA! FD=LIABILITY! This golden Module B is LOADED!” 📚🏆
Next: Chapter 7 — Credit Scoring! 🚀