GROWTH IN INDIAN BANKING SECTOR

Submitted By: Vikrant Baghi Rohit Aggarwal Yogeshwar Dhaliwal Ravinder Kumar Garg

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I hereby declare that the project title "Growth in Indian Banking Sector" is a work of our own an all reference sources have been accurately reported and acknowledged. We would also mention that our information gathered, analyzed and documented for this project is entirely in our possession which is authentic and genuine. We will mention that the work done is not purchased or acquired by any unfair means or any external sources. The data and the information presented in the report are accurate and updated to the best of our knowledge. However, for the purpose of the project, information already compiled in many sources has been utilized.

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Acknowledgement

We are grateful to thank our Dean Mr. Amit Baruah for giving us this great opportunity to do this project.

We also extend our thankfulness to our beloved parents and friends for their continuous encouragement at every moment.

India's Growing Banking Sector India's banking sector is booming at a great pace in spite of its relatively small size in comparison of its counterparts in other leading economies. Indian banking sector has been found lucrative by eminent players from the international world. For e.g., In India, Citibank and Standard Chartered Bank has more than half of all credit card receivables and personal loans, which has generated more than Rs. 200 crore of profit for both banks. In 2003, Oriental Bank of Commerce was listed by Forbes magazine in its 'Global 200 Best Companies' list. In 1990s, after a long gap of more than 20 years, the apex bank, Reserve Bank of India (RBI) has issued licenses to 9 new private banks. In this, Times Bank got merged with the HDFC Bank. The RBI also allowed Kotak Mahindra Finance Company to become a bank. These banks have shown their edge over each others with the introduction of new products and technologies. Most of the banks paid their focus on the retail sector and provide internet banking, phone banking and mobile banking services to their customers and have cornered one of the largest segments of the India's banking sector by targeting the India's growing middle income class. The Indian banking sector has seen a proliferation of new services which has shown an improvement in customer service. What is a Bank? A banker or bank is a financial institution whose primary activity is to act as a payment agent for customers and to borrow and lend money. In other words, an institution where one can place and borrow money and take care of financial affairs. Function of Banks
• • • • • Lending money to public (loans) Transferring money from one place to another (Remittances) Acting as trustees Keeping valuables in safe custody Government business

Types of Banks • • • • Public sector Banks Private sector Banks Co-operative Bank Development Bank/Financial institutions

Reserve Bank of India RBI is the banker to banks—whether commercial, cooperative, or rural. The relationship is established once the name of a bank is included in the Second Schedule to the Reserve Bank of India Act, 1934. Such bank, called a scheduled bank, is entitled to facilities of refinance from RBI, subject to fulfillment of the following conditions laid down in Section 42 (6) of the Act, as follows:

It must have paid-up capital and reserves of an aggregate value of not less than an amount specified from time to time. It must satisfy RBI that its affairs are not being conducted in a manner detrimental to the interests of its depositors. Services Provided By a Bank • • • • • •

Demat Account Lockers Cash Management Insurance Product Mutual Fund Product Loans ECS (Electronic clearance system) Taxes

An Overview

The country’s middle class accounts for over 320 million people. In correlation with the growth of the economy, rising income levels, increased standard of living, and affordability of banking products are promising factors for continued expansion.

The Indian banking Industry is in the middle of an IT revolution, focusing on the expansion of retail and rural banking. Players are becoming increasingly customer-centric in their approach, which has resulted in innovative methods of offering new banking products and services. Banks are now realizing the importance of being a big player and are beginning to focus their attention on mergers and acquisitions to take advantage of economies of scale and/or comply with Basel II regulation.

Now it is simple as instant messaging or dial a pizza. The government's regular policy for Indian bank since 1969 has paid rich dividends with the nationalization of 14 major private banks of India. They are as mentioned below: • • • Early phase from 1786 to 1969 of Indian Banks Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms. Indian banking system has reached even to the remote corners of the country. These three banks were amalgamated in 1920 and Imperial Bank of India was established which started as private shareholders banks. Punjab National . In fact. For the past three decades India's banking system has several outstanding achievements to its credit. he has a choice. mostly Europeans shareholders. The first bank in India. Gone are days when the most efficient bank transferred money from one branch to other in two days. Foundation Phase The General Bank of India was set up in the year 1786. To make this write-up more explanatory. was established in 1786. The most striking is its extensive reach. Phase II and Phase III. an account holder had to wait for hours at the bank counters for getting a draft or for withdrawing his own money. Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. The East India Company established Bank of Bengal (1809). From 1786 till today. The banking system of India should not only be hassle free but it should be able to meet new challenges posed by the technology and any other external and internal factors. the journey of Indian Banking System can be segregated into three distinct phases."Indian banking industry assets are expected to reach US$1 trillion by 2010 and are poised to receive a greater infusion of foreign capital. I prefix the scenario as Phase I. New phase of Indian Banking System with the advent of Indian Financial & Banking Sector Reforms after 1991. Money has become the order of the day. Today. The banking industry should focus on having a small number of large players that can compete globally rather than having a large number of fragmented players." History of Indian Banking Sector Without a sound and effective banking system in India it cannot have a healthy economy. In 1865 Allahabad Bank was established and first time exclusively by Indians. Next were Bank of Hindustan and Bengal Bank. This is one of the main reasons of India's growth process. It is no longer confined to only metropolitans or cosmopolitans in India. though conservative. Not long ago.

Indira Gandhi. Moreover.Bank Ltd. As an aftermath deposit mobilization was slow. To streamline the functioning and activities of commercial banks. Second phase of nationalization Indian Banking Sector Reform was carried out in 1980 with seven more banks. 1949 which was later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 1959: Nationalization of SBI subsidiaries. During those day’s public has lesser confidence in the banks. Reserve Bank of India came in 1935. It was the effort of the then Prime Minister of India. 1971: Creation of credit guarantee corporation. Expansion Phase Government took major steps in this Indian Banking Sector Reform after independence. Bank of India. major process of nationalization was carried out. Mrs. 1975: Creation of regional rural banks. In 1955. It formed State Bank of India to act as the principal agent of RBI and to handle banking transactions of the Union and State Governments all over the country. 1980: Nationalization of seven banks with deposits over 200 crore. the Government of India came up with The Banking Companies Act. Abreast of it the savings bank facility provided by the Postal department was comparatively safer. and Bank of Mysore were set up. 23 of 1965). Between 1906 and 1913. Indian Bank. Canara Bank. 1961: Insurance cover extended to deposits. This step brought 80% of the banking segment in India under Government ownership. The following are the steps taken by the Government of India to Regulate Banking Institutions in the Country: • • • • • • • • 1949: Enactment of Banking Regulation Act. 1955: Nationalization of State Bank of India. There were approximately 1100 banks. Seven banks forming subsidiary of State Bank of India was nationalized in 1960 on 19th July. 14 major commercial banks in the country was nationalized. Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the Central Banking Authority. was set up in 1894 with headquarters at Lahore. . mostly small. 1969. Bank of Baroda. it nationalized Imperial Bank of India with extensive banking facilities on a large scale especially in rural and semi-urban areas. 1969: Nationalization of 14 major banks. Central Bank of India. During the first phase the growth was very slow and banks also experienced periodic failures between 1913 and 1948. funds were largely given to traders.

staff productivity and profitability of banks. customer service. Till 1935 all the banks were in private sector and were set up by individuals and/or industrial houses which collected deposits from individuals and used them for their own purposes. the conversion of 8 State-owned banks (State Bank . In 1991. Measures were also taken to reduce the structural constraints that obstructed the growth of money market. In the absence of any regulatory framework.000%. The financial system of India has shown a great deal of resilience. The entire system became more convenient and swift. and banks and their customers have limited foreign exchange exposure. SBI Act was enacted in 1955 and Imperial Bank of India was transferred to SBI. under the chairmanship of M Narasimham. Banking in the sunshine of Government ownership gave the public implicit faith and immense confidence about the sustainability of these institutions. This is all due to a flexible exchange rate regime. BANK NATIONALISATION & PUBLIC SECTOR BANKING Organized banking in India is more than two centuries old. Consolidation Phase The phase started in 1985 when a series of policy initiatives were taken by RBI which saw marked slowdown in the branch expansion. a committee was set up by his name which worked for the liberalization of banking practices. credit management. Phone banking and net banking is introduced. On the recommendations of All India Rural Credit Survey Committee. Reforms Phase This phase has introduced many more products and facilities in the banking sector in its reforms measure. the bank failures were frequent. the branches of the public sector bank India rose to approximately 800% in deposits and advances took a huge jump by 11. the foreign reserves are high. they deemed appropriate and resultantly. Move towards State ownership of banks started with the nationalization of RBI and passing of Banking Companies Act 1949. Attention was paid to improving house-keeping. The country is flooded with foreign banks and their ATM stations. It is sheltered from any crisis triggered by any external macroeconomics shock as other East Asian Countries suffered. Similarly. Time is given more importance than money.After the nationalization of banks. these private owners of banks were at liberty to use the funds in any manner. the capital account is not yet fully convertible. Efforts are being put to give a satisfactory service to customers.

Scheduled Commercial Banks in India are categorized in five different groups according to their ownership and/or nature of operation. The expansion is significant in terms of geographical distribution. Resultantly the number of branches increased 7 fold (from 8321 to more than 60000 out of which 58% in rural areas) and no. PSBs undertook expansion of reach and services. All Scheduled Banks comprise Schedule Commercial and Scheduled Co-operative Banks. These bank groups are (i) State Bank of India and its associates. STRUCTURE OF THE BANKING INDUSTRY According to the RBI definition. Much of this expansion has taken place in rural and semi-urban areas. (iii) Regional Rural Banks. The PSBs including RRBs. (iv) Foreign Banks and (v) Other Indian Scheduled Commercial Banks (in the private sector). are eligible for inclusion in the Second Schedule to the Reserve Bank of India Act. which was closely followed by nationalization of 14 major banks in 1969 and another six in 1980. of people served per branch office came down from 65000 in 1969 to 10000.5 mn and (b) satisfy the RBI that their affairs are not being conducted in a manner detrimental to the interest of their depositors. 1934. and when included are known as ‘Scheduled Commercial Banks’. Keeping in view the objectives of nationalization. States neglected by private banks before 1969 have a vast network of public sector banks. Scheduled Cooperative banks consist of Scheduled State Cooperative Banks and Scheduled Urban Cooperative Banks . (ii) Nationalised Banks.of Bikaner and State Bank of Jaipur were two separate banks earlier and merged) into subsidiaries (now associates) of SBI during 1959 took place. account for 93% of bank offices and 87% of banking system deposits. commercial banks which conduct the business of banking in India and which (a) have paid up capital and reserves of an aggregate real and exchangeable value of not less than Rs 0. During 1968 the scheme of ‘social control’ was introduced.

was formed in 1950 with the amalgamation of four banks viz. . NRI and Commercial banking services. OBC is implementing a GRAMEEN PROJECT in Dehradun District (UP) and Hanumangarh District (Rajasthan) disbursing small loans. United Bank of India is one of the 14 major banks which were nationalized on July 19. Oriental Bank of Commerce (OBC). (1914).. This Public Sector Bank India has implemented 14 point action plan for strengthening of credit delivery to women and has designated 5 branches as specialized branches for women entrepreneurs. 1969. Comilla Union Bank Ltd.. Public Sector Banks in India Among the Public Sector Banks in India. Bengal Central Bank Ltd. Its predecessor. (1932). 19 Old Private Sector Banks. Comilla Banking Corporation Ltd. (1918). 22% in semi-urban areas. (1922) and Hooghly Bank Ltd. There are 71. 18% in urban areas and the rest (17 %) in the metropolitan areas. a Government of India Undertaking offers Domestic. the United Bank of India Ltd.177 bank offices spread across the country. 19 nationalised banks and the IDBI Ltd. The major bank groups (as defined by RBI) functioning are State Bank of India and its seven associate banks. in the Public Sector Banks. 8 New Private Sector Banks and 29 Foreign Banks. of which 43 % are located in rural areas.

It was incorporated in August 1994 as HDFC Bank Limited with registered office in Mumbai and commenced operations as Scheduled Commercial Bank in January 1995. It is one of the fastest growing Private Sector Bank in India. List of Private Banks in India • • Bank of Punjab Bank of Rajasthan . IDBI ranks the tenth largest development bank in the world as Private Banks in India and has promoted a world class institution in India. to set up a bank in the private sector banks in India as part of the RBI's liberalization of the Indian Banking Industry. With successive years of patronage and constantly setting new standards in banking. Bangalore has a pride of place for having the first branch inception in the year 1934. The first Private Bank in India to receive an in principle approval from the Reserve Bank of India was Housing Development Finance Corporation Limited. yet another Private Bank of India was incorporated in the year 1930. ING Vysya Bank has many credits to its account. ING Vysya. The first private bank in India to be set up in Private Sector Banks in India was IndusInd Bank.The following are the list of Public Sector Banks in India • • • • • • • • • • • • • • • • • • • Allahabad Bank Andhra Bank Bank of Baroda Bank of India Bank of Maharashtra Canara Bank Central Bank of India Corporation Bank Dena Bank Indian Bank Indian Overseas Bank Oriental Bank of Commerce Punjab & Sind Bank Punjab National Bank Syndicate Bank UCO Bank Union Bank of India United Bank of India Vijaya Bank Private Sector Banks Private banking in India was practiced since the beginning of banking system in India.

• • • • • • • • • • • • • • • • • • Catholic Syrian Bank Centurion Bank City Union Bank Dhanalakshmi Bank Development Credit Bank Federal Bank HDFC Bank ICICI Bank IDBI Bank IndusInd Bank ING Vysya Bank Jammu & Kashmir Bank Karnataka Bank Karur Vysya Bank Laxmi Vilas Bank South Indian Bank United Western Bank UTI Bank Banking Industry at a Glance Table 1: Indian Banking at a Glance Source: Reserve Bank of India Table 2: Number of Banks. Group Wise .

Table 3: Group Wise: Comparative Average Source: Reserve Bank of India. * Includes Industrial Development Bank of India Ltd. Table 4: Bank Groups: Key Indicators .Source: Indian Banks’ Association/ Reserve Bank of India.

. Major reforms initiatives Some of the major reform initiatives in the last decade that have changed the face of the Indian banking are:- • • Interest Rate Deregulation-Interest rates on deposits and lending have been deregulated with banks enjoying greater freedom to determine their rates. Government equity in banks has been reduced and strong banks have been allowed to access the capital market for raising additional capital.Source: Reserve Bank of India.

exposure limits. Banks have specialized committees to measure and monitor various risks and have been upgrading their risk management skills and systems. Like Punjab National Bank has come up with their new online payment service. it has already started doing tele-banking and mobile banking. Presently. It has also set up 25 ATMs in throughout the India and has signed agreement with other banks of the public sector for ATM sharing. Emergence of New Competitive Spirit in context of the customers Different economic reforms in the early 1990s have injected competition in the banking sector with the entrant of many new private and foreign players. SBI has more than 3000 computerized branches and over 1000 new ATMs. gold banking. Like State Bank of India (SBI) has set aside more than Rs 500 crore during its 3 years of time span for the up gradation of its IT systems along with the computerization and networking of branches. asset management. Opening of a fixed deposit. e-cheques. Transactions done through the internet cost relatively less as compare to visit bank branch.• • • • New private sector banks have been set up and foreign banks permitted to expand their operations in India including through subsidiaries. web based products. they hold more than 6% of assets and nearly 10% of profits. factoring. credit cards. leasing. United Bank of India (UTI) has started its computerization process in 1986 and so far it has completed its computerization work of more than 774 branches. debit cards has touched the sky of popularity. Banks and the Internet World Due to the advantages of inherent conveniences. infrastructure financing. Effect of New Technologies on Banks The Indian banking sector has seen an acceleration with the introduction of technological transformation like ATMs. 24x7 internet banking has proved to be an attractive service for the customers. telephone banking. Adoption of prudential norms in terms of capital adequacy.insurance. besides of course investment banking. In some of its branches. Notable features of the internet banking are • • Transfer of money to your account at the same bank's branch in another city. income recognition. . online banking. investment fluctuation reserve. facilitating the online railway reservation. Use of credit cards. Some banks also offer unique features of internet banking to their customers. etc. call centers etc. etc. provisioning. asset classification. which has grown by approximately 50% per year and by 2001. Similarly. Even the old public sector banks are keeping themselves tune with the new technological changes. The last half of the nineties has witnessed the massive growth of the new private banking players. which would ensure high level of service to customers and ensure unprecedented growth of the India. The RBI issued new bank licenses with the motive of forming a new cohort of private players. New areas have been opened up for bank financing like.

In this background. investments and rendering of financial services — essentially because of their relatively small size.less than 1% of GDP. But the decisions about mergers would require that a view be taken of the optimal number of banks in the country in the context of the opening up of the financial sector for foreign banks to acquire. Mergers & Acquisitions There has been in recent months a renewed interest in mergers and acquisitions in the banking sector in view of the growing openness of the Indian financial system. The undercurrent of thinking is that the larger the bank the higher its competitiveness and better its prospects of survival. tremendous development has been seen in the mortgage market. It is said that the only Indian bank that could compete internationally would be the State Bank of India. Mergers of banks took place in India in the 1960s under the direction of the Reserve Bank of India. HDFC Bank is quick enough in providing new products like car loans. The focal point of interest is about the size of the banking firm. As per an estimate. to 6593 in 1966 and to 9005 in 1969. Unviable . the number came down to 292 (of which 210 were non-scheduled) at end 1961. let us have a bit of contemporary history of mergers in India. credit disbursal. From 566 reporting commercial banks (of which non-scheduled banks were 474) at the end of 1951. Many banks like HDFC. Request for the cheque book. Checking of bank balance. India's mortgage assets have reached to nearly 2% of the India's GDP. and amalgamate with banks in the foreign bank category as well as with Indian banks. that too if consolidated with some mergers. The bank is also engage in loan pricing in various innovative ways for building healthy customer relationship. Stopping the clearance of cheque. debit cards etc. The number of bank offices increased sharply during this period: From 4151 in 1951 to 5012 in 1961. This argument implies that Indian banks are not in a position to compete for business internationally — in terms of funds mobilization. Retail Sector Growth Earlier the Indian mortgage market was minuscule. But after the introduction of economic reforms by the government. getting an impetus from the declination of the interest rates. The branch offices of scheduled commercial banks increased over this period while those of non-scheduled commercial banks declined. Which could heightened to the 20%. and to 85 (14 non-scheduled) by the end of 1969. personal loans. Personal loan is another area which is growing rapidly. Before dealing with these issues. SBI and ICICI has put the housing finance on their priority list.• • • • • Issuing of a banker's cheque or a demand draft. Credit card has emerged out as another important product of the personal finance which is growing rapidly. one needs to know the why mergers and their impact. to 100 (27 non-scheduled) at the end of 1966.

Finally. The 1960 episode was essentially an exercise for preserving banking stability.banks were weeded out. more recently. The complexities involved in mergers of public sector banking are rarely discussed. The merger of ICICI with ICICI Bank and the reverse merger of IDBI Bank with IDBI served multiple objectives. were not entirely for reasons of banking stability as such. mooted by the merging banks in the first instance and approved by the authorities. After this experiment. On the other hand. there is little of published empirical literature on the impact of mergers in banking in India. there were private banks mergers since about the late 1990s for diverse reasons including building up financial strength. undertaken for preserving banking stability. The above examples of mergers have been facilitated to a large extent by banking sector reforms that helped relax some of the restrictions on asset portfolio distribution. Unfortunately. capturing larger portion of the growing retail business and securing better regional presence. Second. The general literature on the subject views the impact from two angles: One based on . and. relatively strong banks. especially of female labour. Mergers of ICICI Bank and Bank of Madura. to an extent the advances in information technology have given banks the incentive to consolidate to scale up operations. the prominent among them being the mergers of Benares State Bank with Bank of Baroda in 2002. Also. Global Trust Bank with Oriental Bank of Commerce. they have opened the possibilities of actively promoting universal banking. However. mergers could lead to charging of higher fees for the services rendered. they helped to avoid the complex processes of restructuring the weaker of the units and to foster financial stability. These mergers. public sector bank mergers were not contemplated. especially if there is no `effective' competition or if smaller banks exhibit `herd behaviour' in imitating the bigger entities. they are not meant. improve efficiency or raise profits. problems of personnel integration cropped up. First. This process was accelerated when two scheduled banks failed in 1960. Much of the general literature on mergers in banking relates to private banking. as well as HDFC Bank and Times Bank are important examples. be as serious as when mergers lead to loss of availability of or access to credit or to lower employment. There were also mergers of private banks with public sector banks. In the early 1990s when the then National Bank of India was merged with Punjab National Bank. But these mergers were at the initiative of the authorities. This meant either closure or amalgamation with other. however. Implied is the argument that efficiency and profits would be assured once the economies of scale operate. Nedungadi Bank with Punjab National Bank in 2003. the institutions were strengthened financially. to cut costs. as recommended by the Travancore-Cochin Banking Inquiry Commission (1956). This negative aspect of mergers may not. at least in the short term. On the other hand.

however. each specializing in developing services in a broad region. They. empirical data supported the view that banks significantly improve their profit and operational efficiency following mergers. The question about the optimal number of banks in the country. There is no official view about the optimal number of banks in a country.accounting data and the other based on stock price reaction. The issue however could become complex if foreign banks are allowed to buy out Indian banks. The RBI has done well to be transparent by going in for public views on ownership and governance. studies in the US suggested that mergers based on former did not lead to significant gains either in efficiency or cost-saving. But there is need for intense research on the issue. This was not pursued. suggested that bidders often suffer negative returns partly because of high offer prices and partly because markets revise downward their expectations from the merger. before one takes a judgmental view about the number of Indian banks that could have international presence and could compete for international banking business. Good internal governance mechanisms and transparency practices need to be also in place. The proposition that banks would be `too large to fail' is passé as the 1990s financial crises experience shows. Besides the authorities should resist the temptation of taking a proactive stance in determining which Indian bank should have international presence. . While such a view would obviously be based on their financial strength. Banking stability is much more important. Till almost the mid-1990s. The Banking Commission recommended in 1972 that national banks be reorganized into two or three all-India banks and six other entities. Studies that use stock market data did not show gains from consolidation. More recently. and the associated issues of their capital adequacy and their capacity to help universalisation of banking are matters to be yet settled. State Bank of India Company Profile of SBI: State Bank of India (SBI) is India's largest commercial bank. in fact. In the present context of global financial market integration. But this alone cannot be a good ground for consolidation. One only hopes that political considerations do not influence the final view on the matter. SBI has a vast domestic network of over 9000 branches (approximately 14% of all bank branches) and commands one-fifth of deposits and loans of all scheduled commercial banks in India. Indian banks seeking international presence by exploiting the economies of scale and if possible of scope is an appealing argument. that by itself would not be enough. Instead they should allow banks to grow into international entities on their own internal dynamic impulses. What is also important is that it should not lower the number of banks to levels that destroy competition.

international and NRI products and services. the Foreign Department and the International Services division. If one measures by the number of branch offices and employees. State Bank of India (SBI) (LSE: SBID) is the largest bank in India. Established in 1806 as Bank of Calcutta. Roots: . the Foreign Offices division. fund management. Today. it is a regional banking behemoth. reducing its huge staff through Golden handshake schemes known as the Voluntary Retirement Scheme. primary dealership in government securities.the Domestic division. changing the attitude of its employees (through an ambitious programme aptly named 'Parivartan' which means change) as a large number of employees are very rude to customers. In 1955. SBI's International Banking Group delivers the full range of cross-border finance solutions through its four wings . 2). it is the oldest commercial bank in the Indian subcontinent.The State Bank Group includes a network of eight banking subsidiaries and several non-banking subsidiaries offering merchant banking services. computerizing its operations and 3). factoring services. credit cards and insurance. with the Reserve Bank of India taking a 60% ownership stake. through its vast network in India and overseas. In recent years the bank has focused on three priorities. The eight banking subsidiaries are: • • • • • • • • State Bank of Bikaner and Jaipur (SBBJ) State Bank of Hyderabad (SBH) State Bank of India (SBI) State Bank of Indore (SBIR) State Bank of Mysore (SBM) State Bank of Patiala (SBP) State Bank of Saurashtra (SBS) State Bank of Travancore (SBT) The origins of State Bank of India date back to 1806 when the Bank of Calcutta (later called the Bank of Bengal) was established. SBI provides various domestic. State Bank of India (SBI) has spread its arms around the world and has a network of branches spanning all time zones. 1). the controlling interest in the Imperial Bank of India was acquired by the Reserve Bank of India and the State Bank of India (SBI) came into existence by an act of Parliament as successor to the Imperial Bank of India. In 1921. With an asset base of $126 billion and its reach. The government nationalized the bank in 1955. the Bank of Bengal and two other Presidency banks (Bank of Madras and Bank of Bombay) were amalgamated to form the Imperial Bank of India. SBI is the largest bank in the world. which saw many of its best and brightest defect to the private sector.

The State Bank of India Act 1955. the Bank of Bombay (incorporated on 15 April 1840) and the Bank of Madras on 27 January 1921. enabling the State Bank of India to take over eight former State-associated banks as its subsidiaries. 1861: Paper Currency Act passed. The Imperial Bank of India continued as a joint stock company. 1809: This became the Bank of Bengal. authorized the Reserve Bank of India. at least in terms of issuing the currency. 1980s: When Bank of Cochin in Kerala faced a financial crisis. and were the result of the royal charters. January 27. The government amalgamated Bank of Bengal and two other Presidency banks. enacted by the Parliament of India. 1959: State Bank of India formed. which was renamed the Timeline: June 2. July 1. to acquire a controlling interest in the Imperial Bank of India. merged it with State Bank of India. April 15. 1921: All three banks amalgamated to form Imperial Bank of India. All these Presidency banks had been incorporated as joint stock companies. was established on 2 June 1806. the government . which is the central banking organization of India. 1955: nationalized.The State Bank of India traces its roots to the first decade of 19th century. State Bank of India (Subsidiary Banks) Act passed. July 1. later renamed the Bank of Bengal. 1806: The Bank of Calcutta established. January 2. when the Bank of Calcutta. Until the establishment of a central bank in India the Imperial Bank and its early predecessors served as India's central bank. 1843: Bank of Madras established. and named the reorganized banking entity the Imperial Bank of India. namely. 1840: Bank of Bombay established. becomes the first Indian bank to be State Bank of India on 30 April 1955.

Foreign Branches: SBI has branches in these countries: • • • • • • Australia Bahrain Bangladesh Belgium Canada Dubai . All the banks use the same logo of a blue keyhole.June 29. these banks with the State Bank of India to expand its rural outreach. They all use the "State Bank of" name followed by the regional headquarters' name. Associate Banks: There are seven other associate banks that fall under SBI. Currently. 2007: The Government of India today acquired the entire Reserve Bank of India (RBI) shareholding in State Bank of India (SBI). and one hopes. These were originally banks belonging to princely states before the government nationalized them in 1959. where it has 84 offices serving the international needs of the bank's foreign customers. the group is merging all the associate banks into SBI. consisting of over 314 million equity shares at a total amount of over 355 billion rupees. The State Bank group refers to the seven associates and the parent bank. • • • • • • • State Bank of Bikaner & Jaipur State Bank of Hyderabad State Bank of Indore State Bank of Mysore State Bank of Patiala State Bank of Saurashtra State Bank of Travancore Foreign Offices: State Bank of India is present in 32 countries. and in some cases conducts retail operations. emphasizing the development of rural India. In tune with the first Five the government integrated Year Plan. which will create a "mega bank". streamline operations and unlock value. The focus of these offices is India-related business.

K. State Bank of India has electronically networked most of its metropolitan. U. Following its arch-rival ICICI Bank. State Bank of India has often acted as guarantor to the Indian Government. most notably during Chandra Shekhar's tenure as Prime Minister of India.S. India. urban and semi-urban branches under its Core Banking System (CBS). The bank has the largest ATM network in the country having more than 5600 ATMs.A Subsidiaries and Joint Ventures: In addition to the foreign branches above. With more than 9400 branches and a further 4000+ associate bank branches.• • • • • • • • • • • • • • France Germany Hong Kong Israel Japan People's Republic of China Republic of Maldives Singapore South Africa Sri Lanka Sultanate of Oman The Bahamas U. though the Harshad Mehta scam in 1992 . with over 4500 branches being incorporated so far. SBI has these wholly owned subsidiaries and joint ventures: • • • • • Nepal State Bank Limited SBI Mauritius Indian Ocean International Bank (Mauritius) SBI Canada SBI California Growth: Mumbai. The State Bank of India has had steady growth over its history. the SBI has extensive coverage.

2007 SBI has 7236 ATMs. As per fortune 500-2007 following are the data for SBI in $ million. It is the only Indian bank to feature in the top 100 world banks in the Fortune Global 500 rating and various other rankings. No.547.000 domestic and 70 foreign offices and branches. ATM network.marred its image. According to the Forbes 2000 listing it tops all Indian companies. The first and the second phases of the project have already been completed and the third phase is still in progress. the premier Nationalized Indian Bank. 20. Internet banking and internal e-mail.000 branches have been covered. the bank has sought to expand its overseas operations by buying foreign banks. Stockholders' Equity 9.000 by the end of 2007 raising the total number to 8. In 2007 it moved up to 495.2 Group companies: • • • • • • • • SBI Capital Markets Ltd SBI Mutual Fund (A Trust) SBI Factors and Commercial Services Ltd SBI DFHI Ltd SBI Cards and Payment Services Pvt Ltd SBI Life Insurance Co. The new infrastructure has enabled the bank to further grow its ATM network with plans to add another 3. Vol. Corporate Details: This site provides comprehensive information on State Bank of India or SBI Bank.4. State Bank of India launched a project in 2002 to network more than 14. As of December 2006. Ltd . over 10. As of September 20.3.407. Profits 1.786.Bancassurance (Life Insurance) SBI Funds Management Pvt Ltd SBI Canada IT Initiatives: According to PM Network (December 2006. Assets 187. The new infrastructure serves as the bank's backbone.1. 12). carrying all applications. . Revenues 15. In recent years. Fortune Global 500 Ranking – 2007: SBI debuted in the Fortune Global 500[2] at 498 in 2006. State Bank of India is actively involved since 1973 in non-profit activity called Community Services Banking. such as the IP telephone network.119.600.

Activities: State Bank of India administrative structure is well equipped to oversee the large network of branches in India and abroad. Ltd. The State Bank of India 14 Local Head Offices and 57 Zonal Offices are located at important cities spread throughout the country. State Bank of India owns and operates the following subsidiaries and Joint Ventures – • • • • • • • State Bank Of India Credit Card State Bank Of India Online State Bank Of India USA State Bank Of India Services State Bank Of India Mutual Funds State Bank Of India Branch State Bank Of India NRI Account Banking Subsidiaries: • • • • • • • State Bank of Bikaner and Jaipur (SBBJ) State Bank of Hyderabad (SBH) State Bank of Indore (SBI) State Bank of Mysore (SBM) State Bank of Patiala (SBP) State Bank of Saurashtra (SBS) State Bank of Travancore (SBT) Foreign Subsidiaries: • • • • State bank of India International (Mauritius) Ltd State Bank of India (California) State Bank of India (Canada) INMB Bank Ltd. The Corporate Accounts Group is a Strategic .banking Subsidiaries: • • • • • SBI Capital Markets Ltd (SBICAP) SBI Funds Management Pvt Ltd (SBI FUNDS) SBI DFHI Ltd (SBI DFHI) SBI Factors and Commercial Services Pvt Ltd (SBI FACTORS) SBI Cards & Payments Services Pvt. Lagos Non. State Bank of India has 52 foreign offices in 34 countries across the globe.State Bank of India is India's largest bank amongst all public and private sector banks operating in India. (SBICPSL) Joint ventures: • SBI Life Insurance Company Ltd (SBI LIFE).

against Rs 23747. E-Pay. SME. thanks largely to the performance of its treasury. On a standalone basis.132. Corporate.025 crore.86 per cent higher at Rs 21. Moreover. SBI’s net profit went up 42. Domestic Treasury State Bank of India offers the following services to its customers: • • • • • • • • • • • • • Domestic Treasury.75 crore during the first quarter of the . Performance: State Bank of India.51 crore. today reported a 68.041. there was a 48.Business Unit of the Bank set up exclusively to fulfill the specialized banking needs of top corporate in the country. Safe Deposit Lockers.11 per cent rise in its consolidated net profit to Rs 2.52 per cent to Rs 33.758. RBIEFT. while total income was 29. While net interest income rose 4.43 crore during the corresponding period last year. NRI Services.03 per cent to Rs 2. ATM Services. Agriculture.53 crore during the first quarter of the current financial year.568.330. MICR Codes. Broking Services Revised Service Charge. SBI Vishwa Yatra Foreign Travel Card. Internet Banking. Foreign Inward Remittances.46 per cent rise in other income to Rs 3. the country’s largest lender.37 crore. Gift Cheques. State Bank of India has Colleges/Institutes/Training Centers that are the seats of learning and research and development. E-Rail. The bank’s total income went up 39.70 crore during AprilJune 2009. The main activities are • • • • • • • Personal Banking.30 per cent to Rs 5. International. It caters not only to the employees of State Bank of India but also other banks/establishments in India and abroad.

under which the bank was paying 10.075 crore during the quarter-ended June 2009.11 41. The treasury operations generated pre-tax profit of Rs 4.11 8491. .71 51.84 141.31) (85.current financial year.44 2.15 28238.96 18578.5 per cent interest in October. as against a loss of Rs 817 crore during the corresponding period last year.96 2640.42 1.40 2758.70 17524.18 4894.92 10827.53 15318.08 3523.000 day scheme.99 (5.79 1.48 2.47 33.28 1640.41 % Change The bank’s net interest income was affected due to a rise in interest payments that went up 38.29 8402.47 5168.55 Source: SBI 21.42 2009 24641.35 23747.01 39.52 394. Exceeds Expectations: (Rs crore) April-June 2008 Interest income Other income Total income Interest paid Total expenses Operating profit Non-tax provisions Net profit Gross NPA Net NPA Gross NPA % of advances Net NPA % of advances NPA data is for SBI standalone 20224.5 per cent due the deposit mobilization under the 1.43 13509.06) 68.000 crore on a daily basis for a few months.52 29. The scheme had resulted in a mop up of around Rs 1.81 6298.59 33132.

the decrease was to the tune of 63 basis points.589 crore. With operating expenses rising 51 per cent. there was an improvement. But compared with the March-end level of Rs 15. The level of gross non-performing assets went up over 41 per cent to Rs 15. .30 per cent at the end of June 2009. P.28 per cent to Rs 3.The pressure was also seen on the net interest margin (NIM). During the first quarter of the last financial year. as against a write-back of Rs 247 crore on loan-loss provisions.87 crore.673. Compared with the 2008-09.318 crore. Bhatt. SBI said it had restructured loans to the tune of Rs 8. which fell by 73 basis points over the last 12 months to 2. thanks mainly due to higher provision (of Rs 767 crore) for wage revision and a higher pension liability (Rs 429 crore).000 crore. at the end of the first quarter of the current financial year. there was a decline of nearly 89 per cent to Rs 172. In contrast during April-June 2009. bond yields were stable and the value of equities went up. Shri O.200 crore on investment depreciation.656 crore partly due erosion in the value of its bond and equity portfolio. NIM. SBI had provided Rs 1. SBI’s operating profit for the quarter fell by 7. Chairman. which went up to Rs 1.234 crore. Organization: State Bank of India is headed by Mr. The reversal of the provisions also masked the steep rise in provisions for bad debt. SBI Chairman O P Bhatt said he expected NIM to improve by four to six basis points during the second quarter but it would still be below his comfort level of 3 per cent. reflected in an increase of almost 50 per cent in the BSE Sensex. On non-tax provisions.73 crore as it reversed provisions of Rs 1.

the Government of India and representatives of Indian industry. Sri Lanka. Hong Kong. entry into new business segments. Qatar and Dubai International Finance Centre and representative offices in United Arab Emirates.Company Profile of ICICI: ICICI Bank is India's second-largest bank with total assets of Rs. venture capital and asset management. ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE). 2008 and profit after tax Rs. In 1999. ICICI was formed in 1955 at the initiative of the World Bank. and secondary market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. 3. China. The merger would enhance value for ICICI shareholders through the merged entity's access to low-cost deposits.849. an equity offering in the form of ADRs listed on the NYSE in fiscal 2000. ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. History: ICICI Bank was originally promoted in 1994 by ICICI Limited. South Africa. Malaysia and Indonesia.70 billion (US$ 82 billion) at September 30. ICICI transformed its business from a development financial institution offering only project finance to a diversified financial services group offering a wide variety of products and services. the managements of ICICI and ICICI Bank formed the view that the merger of ICICI with ICICI Bank would be the optimal strategic alternative for both entities. . and was its wholly-owned subsidiary. The merger would enhance value for ICICI Bank shareholders through a large capital base and scale of operations. branches in United States. and would create the optimal legal structure for the ICICI group's universal banking strategy.42 billion for the half year ended September 30. and the move towards universal banking. The principal objective was to create a development financial institution for providing medium-term and long-term project financing to Indian businesses. The Bank has a network of about 1. seamless access to ICICI's strong corporate relationships built up over five decades. Thailand. life and non-life insurance. Bahrain. The Bank currently has subsidiaries in the United Kingdom. Russia and Canada. ICICI Bank's acquisition of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001. In the 1990s. greater opportunities for earning fee-based income and the ability to participate in the payments system and provide transaction-banking services. an Indian financial institution. After consideration of various corporate structuring alternatives in the context of the emerging competitive scenario in the Indian banking industry. Bangladesh. Our UK subsidiary has established branches in Belgium and Germany. 17. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of investment banking.530 ATMs in India and presence in 18 countries. both directly and through a number of subsidiaries and affiliates like ICICI Bank. 2008.400 branches and 4. ICICI's shareholding in ICICI Bank was reduced to 46% through a public offering of shares in India in fiscal 1998. Singapore.

(These data are dynamic. about 4. ICICI Bank (BSE: ICICI) (formerly Industrial Credit and Investment Corporation of India) is India's largest private sector bank in market capitalization and second largest overall in terms of assets. ICICI Bank has formulated a Code of Business Conduct and Ethics for its directors and employees. and representative offices in Bangladesh. The Bank is expanding in overseas markets and has the largest international balance sheet among Indian banks.higher market share in various business segments. offshore banking units in Bahrain and Singapore. South Africa. . by the High Court of Gujarat at Ahmadabad in March 2002. ICICI Bank now has wholly-owned subsidiaries. venture capital and asset management. a network of over 1. both wholesale and retail. China. ICICI Personal Financial Services Limited and ICICI Capital Services Limited. The merger was approved by shareholders of ICICI and ICICI Bank in January 2002. with the objective of creating a development financial institution for providing medium-term and long-term project financing to Indian businesses. life and non-life insurance. the Boards of Directors of ICICI and ICICI Bank approved the merger of ICICI and two of its wholly-owned retail finance subsidiaries. Hong Kong and Sri Lanka. Timeline: 1955: The Industrial Credit and Investment Corporation of India Limited (ICICI) was incorporated at the initiative of World Bank.A. have been integrated in a single entity. Malaysia. Consequent to the merger. Mumbai and the National Stock Exchange of India Limited. and 24 million customers (at the end of July 2007). Overseas. the Government of India and representatives of Indian industry. ICICI Bank has got its equity shares listed on the stock exchanges at Kolkata and Vadodara. the Bank is targeting the NRI (Non-Resident Indian) population in particular. and by the High Court of Judicature at Mumbai and the Reserve Bank of India in April 2002.Ramaswami Mudaliar is elected as the first Chairman of ICICI Limited. particularly fee-based services. including an offshore unit in Mumbai. Mr. the ICICI group's financing and banking operations. Russia and the UK.) ICICI Bank is also the largest issuer of credit cards in India. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and specialised subsidiaries and affiliates in the areas of investment banking. 22 regional offices and 49 regional processing centres. Thailand. branches and representatives offices in 18 countries.399 branches. an advisory branch in Dubai. and its ADRs on the New York Stock Exchange (NYSE). In October 2001. with ICICI Bank. and access to the vast talent pool of ICICI and its subsidiaries. Indonesia. the United Arab Emirates and USA. This includes wholly owned subsidiaries in Canada. branches in Belgium. Bank has total assets of about USD 100 billion (at the end of March 2008).485 ATMs (at the end of September 2008).

the first loan by CDC for financing projects in India.ICICI emerges as the major source of foreign currency loans to Indian industry.Vaghul appointed the seventh Chairman and Managing Director of ICICI. 1958: Mr. Nadkarni appointed the sixth Chairman of ICICI. 1982: ICICI became the first ever Indian borrower to raise European Currency Units. ICICI. ICICI was also among the first Indian companies to raise funds from international markets.Siddharth Mehta appointed the fifth Chairman of ICICI. 1978: Mr. James Raj appointed the fourth Chairman of ICICI.L. 1961: The first West German loan of DM 5 million from Kredianstalt obtained. ICICI promotes Shipping Credit and Investment Company of India Limited. India's first professional credit rating agency. set up Credit Rating Information Services of India Limited. which was oversubscribed. 1988: Promoted TDICI . 1979: Mr.5%. Backbay Reclamation. the first public issue by any Indian entity in the Swiss Capital Market. 1960: ICICI building at 163. 1977: ICICI sponsored the formation of Housing Development Finance Corporation and manages its first equity public issue. inaugurated. Parekh appointed the third Chairman of ICICI. ICICI commences leasing business. N. of 3. H. Mr. . 1972: ICICI becomes the second entity in India to set up merchant banking services.6 crore.Mehta appointed the second Chairman of ICICI Ltd. 1987: ICICI signed a loan agreement for Sterling Pound 10 million with Commonwealth Development Corporation (CDC). 1985: Mr. 1956: ICICI declared its first dividend. 1986: ICICI became the first Indian institution to receive ADB Loans.India's first venture capital company. Besides funding from World Bank and other multi-lateral agencies. along with UTI. 1969: The first two regional offices set up in Calcutta and Madras. 1984: Mr. 1967: ICICI made its first debenture issue for Rs. The Corporation made a public issue of Swiss Franc 75 million in Switzerland. T. S.G.

launched in Pune. with ICICI Bank.100-seat Call Centre for Customer Care by phone and e-mail was set up in Hyderabad. Mr.car loans. ICICI announced takeover of Anagram Finance. . ICICI Bank Home Shoppe. 1999 : ICICI launched retail finance . ICICI Bank launched Private Banking. A 1. ICICI Asset Management Company set up. ICICI assigned higher than "Sovereign" rating by Moody’s. 2001: The Boards of ICICI Ltd and ICICI Bank approved the merger of ICICI Ltd. 1996: ICICI Ltd became the first company in the Indian financial sector to raise GDR. "E-Lobby". announced the takeover of ITC Classic Finance. India’s first mobile ATM. 2000 : ICICI Bank became the first commercial bank from India to get its stock listed on the NYSE. K. SCICI merged with ICICI Ltd. 1998: A new logo symbolizing the common corporate identity for the ICICI Group was introduced. ATM-on-Wheels. 2002: ICICI Ltd merged with ICICI Bank Ltd to create India’s second-largest bank in terms of assets. ICICI Bank launched India’s first CDO (Collateralized Debt Obligation) Fund named Indian Corporate Collateralized Debt Obligation Fund (ICCDO Fund). P. 1994: ICICI Bank set up. The name "The Industrial Credit and Investment Corporation of India Ltd" changed to "ICICI Ltd. home loans and loans for consumer durables." ICICI Ltd. a self-service banking centre and a first of its kind in India.1993: ICICI Securities and Finance Company Limited in joint venture with J.Kamath appointed the Managing Director and CEO of ICICI Ltd 1997 : ICICI Ltd was the first intermediary to move away from a single prime rate structure to a three-tier prime rates structure and introduced yield-curve-based pricing. ICICI becomes the first Indian company to get listed on the NYSE through an issue of American Depositary Shares. ICICI Bank announces merger with Bank of Madura.V. the first-ever permanent aggregation and display of housing projects in the county. is inaugurated in Pune. launched in Mumbai. Morgan set up.

2005: First rural branch and ATM launched in Uttar Pradesh at Delpandarwa. ICICI Bank and Visa jointly launched mChq – a revolutionary credit card on the mobile phone. ICICI Bank introduced 8 to 8 Banking wherein all the branches of the Bank would remain open from 8a. from Monday to Saturday. Representative office set up in China. India’s first ever "Visa Mini Credit Card". Kisan Loan Card and innovative. Mumbai. ICICI Bank introduced the concept of floating rate for home loans in India. was launched. ICICI Bank and CNBC TV 18 announced India’s first ever awards recognizing the achievements of SMEs. a home loan product that offers the dual benefit of higher eligibility and affordability to a customer. A subsidiary of ICICI Bank was set up in Canada. low-cost ATMs were launched in rural India. ICICI Bank introduced partnership model wherein ICICI Bank would forge an alliance with existing micro finance institutions (MFIs). a credit card 43% smaller in dimensions was launched. The MFI would undertake the promotional role of identifying. . India’s first multi-branded credit card with HPCL and Airtel launched. 2004: Max Money.m. ICICI Bank opened its 500th branch in India. training and promoting the micro-finance clients and ICICI Bank would finance the clients directly on the recommendation of the MFI.2003: The first Integrated Currency Management Centre launched in Pune.2% stake in ICICI Bank. The first offshore banking unit (OBU) at SEEPZ Special Economic Zone. ICICI Bank’s representative office inaugurated in Dubai. Temasek Holdings acquired 5.m. "Free for Life" credit cards launched wherein annual fees of all ICICI Bank Credit Cards were waived off. introduced. ICICI Bank’s UK subsidiary launched. ICICI Bank became the market leader in retail credit in India. ICICI Bank announced the setting up of its first-ever offshore branch in Singapore. a pioneering initiative to encourage the contribution of Small and Medium Enterprises to the growth of the Indian economy. to 8 p. Hardoi. Mobile banking service in India launched in association with Reliance Infocomm.

2007: ICICI Bank makes a USD 2 billion three-tranche international bond offering.Private Banking Masters 2005.‘NRI smart save Deposits’ – a unique fixed deposit scheme for nonresident Indians. Disha provides free credit counseling. ICICI Bank became the first private entity in India to offer a discount to retail investors for its follow-up offer. Introduced a new product . Acquired IvestitsionnoKreditny Bank of Russia. Representative offices opened in Thailand. financial planning and debt management services. ICICI Bank became the largest retail player in the market to introduce a biometric enabled smart card that allows banking transactions to be conducted on the field. A low-cost solution. .The Visa Signature Credit Card. Andhra Pradesh. Launched India’s first ever jewellery card in association with jewellery major Gitanjali Group. Becomes the first Indian company to make a simultaneous equity offering of $1. 2006: ICICI Bank became the first Indian bank to issue hybrid Tier-1 perpetual debt in the international markets. the United States and Japan.000 crore (approx $5 billion) from domestic and international markets through a follow-on public offer. ICICI Bank raised Rs 20. This event is the largest domestic invitation amateur golf event conducted in India. a nationwide Golf tournament for high networth clients of the Private Banking division launched. ICICI Bank became the largest bank in India in terms of its market capitalization. which becomes the largest bond offering by an Indian bank. Sangli Bank was amalgamated with ICICI Bank. Indonesia and Malaysia. ICICI Bank subsidiary set up in Russia. ICICI Bank’s GBP 350 million international bond offering marked the inaugural deal in the sterling market from an Indian issuer and also the largest deal in the sterling market from Asia. ICICI Bank became the first bank in India to launch a premium credit card -. Bhoomi puja conducted for a regional hub in Hyderabad. this became an effective delivery option for ICICI Bank’s micro-finance institution partners.8 billion in India. Financial counseling centre Disha launched.

21 billion) in a multi-tranche issue backed by four different asset categories. It is also the largest deal in Asia (ex-Japan) in 2008 till date and the second largest deal in Asia (ex-Japan and Australia) since the beginning of 2007. opens its first branch in Frankfurt ICICI Bank launched iMobile. Russia. launches its first branch in New York ICICI Bank enters Germany. 48.96 billion (equivalent of USD 1. ICICI Bank signed a multi-tranche dual currency US$ 1. construction equipment loans and professional equipment loans. ICICI Bank and British Airways launch a co-branded credit card. Launched Bank@Home services for all savings and current account customers residing in India ICICI Bank Eurasia LLC inaugurated its first branch at St Petersburg. ICICI Bank introduced SME Toolkit.along with DISH TV. finance and grow their business.The foundation stone for a regional hub in Gandhinagar. ICICI Bank launched the "Probationary Officer Programme". ICICI Bank became the first private bank in India to offer both floating and fixed rate on car loans. 2008: ICICI Bank enters USA. to help small and medium enterprises start. commercial vehicles loans. nationwide initiative to attract bright graduate students to pursue careers in banking. an online resource centre. designed to earn cardholders accelerated reward points with every British Airways flight or by spending on everyday purchases Personal Banking: • • • • • • Deposits Loans Cards Investments Insurance Demat Services . ICICI Bank concluded India's largest ever securitization transaction of a pool of retail loan assets aggregating to Rs. which will allow viewers to see information about the Bank's products and services and contact details on their DISH TV screens. a breakthrough innovation in banking where practically all Internet banking transactions can now be done easily on the mobile phone. In a first-of-its-kind. Gujarat was laid.5 billion syndication loan agreement in Singapore. ICICI Bank launches ICICIACTIVE-Banking Interactive Service .

2008. compared to Rs 4. against Rs 947 crore in the same period last fiscal. 2009 against Rs 244.391 crore earned in the corresponding period of fiscal 2007-08.96%.150 crore in the corresponding period last fiscal. ICICI Bank has scaled down its unsecured lending and would focus on enhancing the net interest income (NII). ICICI Bank’s profit after tax (PAT) plunged by around 11% to Rs 3. against 2.758 crore. 37% of corporate.2% in 2007-08. However.203 crore against Rs 10.696 crore. 10% rural and 4% of SME.4% in 2008-09. The bank’s provisioning for the fourth quarter of the fiscal 2008-09 rose by around 15% to Rs 1. With this. the country’s second largest bank. has seen its net profit fall by around 35% during the fourth quarter of 2008-09 to Rs 744 crore against Rs 1. The bank’s total loan book has share of 49% of retail. In view of rising bad loans.599 crore in 2007-08. As on March 31. . The bank’s total income for the reporting period went down by around 11% to Rs 9. 2009. For the financial year 2008-09.• Wealth management NRI Banking: • • • • • • Money Transfer Bank Accounts Investments Property Solutions Insurance Loans Business Banking: • • • • • • • Corporate net banking Cash Management Trade services FXonline SME services Online taxes Custodial services Performance: ICICI Bank.158 crore earned in 2007-08. ICICI Bank board has declared a dividend of Rs 11 per share. against Rs 39.348 crore as on March 31. The net interest margin improved marginally to 2. The bank expects a 5-10% loan growth in retail and corporate portfolios in the current fiscal 2008-09. The bank’s total income for the last financial year went down by marginally around 2% to Rs 38.431 crore deposits as on March 31. current and savings accounts (CASA) and feeincome. the bank is witnessing the sharpest decline in profit in over six years.085 crore. the bank’s NPA ratio was 1. The total deposits of the bank were Rs 218.

ICICI General. ICICI Securities. 2009 against Rs 226. Customers are now becoming increasingly conscious of their rights and are demanding more than ever before.The loan book of ICICI Bank also decreased to Rs 218. During the last fiscal.53% and 28.115 crore. ICICI Bank UK PLC and ICICI Bank Canada Research Objective: • • • To study whether the customers are satisfied with their services among ICICI bank and SBI bank To know about the Customer preferences among ICICI and SBI bank To give Suggestions to improve the services Review of Literature: The banking sector in India has made remarkable progress since the economic reforms in 1991.311 crore as on March 31. Factor Analysis. New private sector banks have brought the necessary competition into the industry and spearheaded the changes towards higher utilization of technology. The recent trends show that most banks are shifting from a “product-centric model” to a “customer-centric model” as customer satisfaction has become one of the major determinants of business growth. In this context. an attempt has been made in this study to analyze the factors that are essential in influencing the investment decision of the customers of the public sector banks. 2009 were 15. Organization: Chanda Kochhar has been appointed as non-executive chairperson of ICICI Life. ICICI Prudential Asset Management Company. For this purpose. The bank’s capital adequacy ratio and CASA as on March 31. 2008. has been used to identify .616 crore as on March 31. Keeping these in mind. which is the most appropriate multivariate technique. improved customer service and innovative products. the bank restructured loans aggregating to Rs 1. respectively.7%. prioritization of preferences and close monitoring of customer satisfaction have become essential for banks.

that contains a unique card number and some security information. money machine. SMS Banking etc. Key Words: Mobile Banking: Mobile banking (also known as M-Banking. in Portugal). hole-in-the-wall. Bancomat (in various countries in Europe and Russia). Multibanco (after a registered trade mark. such as an expiration date or CVC (CVV). credit union or building society. and Any Time Money (in India). this study also suggests some measures to formulate marketing strategies to lure customers towards banks. Mobile banking today (2007) is most often performed via SMS or the Mobile Internet but can also use special programs called clients downloaded to the mobile device. Secondly. payments etc. the customer is identified by inserting a plastic ATM card with a magnetic stripe or a plastic smartcard with a chip. bank machine. customers can access their bank accounts in order to make cash withdrawals (or credit card cash advances) and check their account balances as well as purchasing mobile cell phone prepaid credit. account transactions. mbanking.) is a term used for performing balance checks. cash point. Using an ATM. Security is provided by the customer entering a personal identification number (PIN).the groups of determinants. . Internet Banking: Online banking (or Internet banking) allows customers to conduct financial transactions on a secure website operated by their retail or virtual bank. Atm: An automated teller machine (ATM) is a computerized telecommunications device that provides the customers of a financial institution with access to financial transactions in a public space without the need for a human clerk or bank teller. via a mobile device such as a mobile phone. Factor analysis identifies common dimensions of factors from the observed variables that link together the seemingly unrelated variables and provides insight into the underlying structure of the data. cash machine. Core Banking System: Core Banking is a general term used to describe the services provided by a group of networked bank branches. On most modern ATMs. Bank Customers may access their funds and other simple transactions from any of the member branch offices. ATMs are known by various other names including automated banking machine.

Research Methodology .

Sampling Unit: The sampling units are customers of ICICI bank and SBI bank. the probability of any particular member of the population being chosen is unknown. Sampling Method: For this research we use non-probability sampling. Precision is the size of the estimating interval when the problem is one of estimating a population parameter. but only on a smaller scale. but generally the goal of study is to replicate the full scale experiment. Zikmund (1997) stated that in non-probability sampling. any income level. The design can then be adjusted in time. any income level. any occupation and any education level. This can turn out to be valuable: should anything be missing in the pilot.Sampling Design: Target Population: The target population in this research refers to the bank customers who are having an account in SBI bank and ICICI bank due to the convenience in collecting the data. Snow ball sampling is used to collect the data from the customers. Sample Size: Sample size depends on the desired precision from the estimate. Pilot Study: A pilot study can refer to many types of experiments. The respondents can be any gender. The respondents can be any gender. any occupation and any education level. The element in the population does not have any probability attached to their being chosen as sample subjects. Snow ball sampling will be applied in this research. Sampling Plan: The researcher is going to collect the data from the ATMS and also by visiting the bank. This research selects 60 respondents as the sample size due to limited of time by asking them that they are having an account in SBI bank and ICICI bank due to the convenience in collecting the data. Snow ball sampling refers to the procedure that involves the selection of additional respondents based on referrals of initial respondents. A pilot is often used to test the design of the full-scale experiment. it can .

The researcher has gave the questionnaire to the experts in banking field. Data Analysis: Appropriate statistical analysis will be adopted. Face Validity: Face validity refers to the collective agreement of the experts and researchers on the validity of the measurement scale. It was obtained from the customers. The data will be tabulated and analyzed. Data Collection Method: Our communication approach was basically structured questioning. Since the time is less the researcher has taken a sample of 30 people and it will not reveal the whole population of a country.be added to the experiment and chances are that the full-scale (and more expensive) experiment will not have to be re-done. Validity can be measured through several methods like face validity. . that is personal interview with the aid of printed questionnaires. criterion – related validity and construct validity. Research Methodology: Sources of Data: • • The data is basically primary in nature. Validity: The ability of a scale or a measuring instrument to measure what it is intended to measure can be termed as the validity of the measurement. For this comparative study the researcher has taken the face validity. Limitations of the Study: • • The study is limited to a particular branch of SBI and ICICI bank. content validity.

Data Analysis And Interpretation .

Table: 2 Gender of the Respondents Frequency Female Male Total 15 15 30 Percentage 48.8 100 Interpretation: From the above table 38.7 16. The respondent’s responses for the questions have been interpreted and a finding has been made based on the respondents responses. And 16.8% respondents are belonging to the category of above 55yrs.4 48. And 25.1 25.7% respondents are belonging to the age category of 25yrs-35yrs.1 16.1% respondents are belonging to the category of 36yrs-45yrs and 46yrs-55yrs.4 100 . Frequency Table for the Demographic Details of the SBI Respondent’s Table: 1 Age of the Respondents Frequency 25-35 yrs 36-45 yrs 46-55 yrs Above 55 yrs Total 12 5 5 8 30 Percentage 38.Data Analysis and Interpretation: The following information contains the data interpretation of the questionnaires.

7 29.0 45. And 45.Interpretation: From the above table 48.phil/PhD. And the remaining 48.7% of respondents are belonging to the category of school and professional course.0% of respondents are belonging to the category of UG.2 100 Interpretation: From the above table 9. Table:4 Occupation of the Respondent . And 29.2 9.2% of respondents are belonging to the category of M. And 3.2% of respondents are belonging to the category of PG.phil/PhD Total 3 9 14 3 1 30 Percentage 9.7 3.4% respondents are belonging to the category of male.4% respondents are belonging to the category of female. Table: 3 Educational Qualification of the Respondents Frequency School UG PG Professional Course M.

15.15.45. And 3.15.8% of respondents are falling under the income range between Rs.000 Above Rs.2 100 Interpretation: From the above table 54. 000. And 12. .2 3.25. And 3.2 10.001-Rs.001-Rs.000-Rs.000 Total 17 8 4 1 30 Percentage 54. 001-Rs. Table: 5 Income level of the Respondents Frequency Rs.6% of respondents are falling under the category of salaried person.6 3. 000.8 25.25.Frequency Salaried Person Professionals Supervisor Managerial Total 25 1 1 3 30 Percentage 80. 000.9% of respondents are falling under the income range between Rs. 000-Rs.35.25.35.25.8 12.45.5.0 100 Interpretation: From the above table 80.2% of respondents are falling under the category of professionals and supervisor.000 Rs.15. And 25. 000. 001-Rs.9 3.8% are falling under the income range between Rs.2% of respondents are falling under the income range between Above Rs.000 Rs.5. And 10% of respondents are belonging to the category of managerial.

And 9.2% of respondents are saying that the reason to choose SBI is Technology.7 . Table: 7 Type of Service Prefer the Most Frequency ATM Service Internet Banking 19 3 Percentage 61.7 3.9% of respondents are saying that the reason to choose SBI is they are provided more ATM facility.2 25.Table: 6 Reasons to Choose the Service Frequency Efficient Customer Service Time Saving Transaction Cost Technology More ATMs Total 14 8 3 1 4 30 Percentage 45.8% of respondents are saying that the reason to choose SBI is they are reducing our waiting time. And 12.3 9.7% of respondents are saying that the reason to choose SBI is Transaction costs. And 3.8 9.2% of respondents are saying that the reason to choose SBI is they are providing efficient customer service.9 100 Interpretation: From the above table 45.2 12. And 25.

Mobile Banking Core Banking System Total 3 5 30 9. Frequency Graph for the Demographic Details of the SBI Respondent’s Graph: 1 Graph: 2 .7 16.7% of respondents are preferred the internet banking and mobile banking. And 9.3% of respondents prefer the ATM service.1 100 Interpretation: From the above table 61. And 16.1% of respondents prefer the core banking system.

Graph: 3 Graph: 4 Graph: 5 Graph: 6 Graph: 7 Frequency Table for the Demographic Details of the ICICI Respondent’s Table: 8 Age of the ICICI Respondents Frequency 25-35 yrs Above 55 yrs Total 29 1 30 Percentage 96.3 100 .7 3.

7% of respondents are falling under the age group of 25yrs-35yrs.3 100 .7 70. And 3.Phil/Ph.0 3.D Total 2 21 6 1 30 Percentage 6. Table: 9 Gender of the ICICI Respondents Frequency Female Male Total 12 18 30 Percentage 40 60 100 Interpretation: From the above table 40% of respondents are belonging to the female category. And 60% of respondents are belonging to the male category.0 20.Interpretation: From the above table 96.3% of respondents are falling under the group of above 55yrs. Table: 10 Education Level of ICICI Respondents Frequency UG PG Professional M.

7% of respondents are belonging to the category of UG.7% of respondents belong to the category of salaried person.7 10. And 10% of respondents are belonging to the category of businessman and professionals.11 Occupation of the ICICI Respondents Frequency Salaried Person Businessman Professionals Managerial Total 23 3 3 1 30 76.000-Rs. Table 3. And 70% of respondents are belonging to the category of PG.0 3.5.3 100 Percentage Interpretation: From the above table 76.Phil/Ph.3 .15.0 10. Table: 12 Income Level of the ICICI Respondents Frequency Rs.Interpretation: From the above table 6.3% of respondents are belonging to the category of managerial. And 3. And 20% of respondents are belonging to the category of professionals. And 3.D.000 16 Percentage 53.3% of respondents are belonging to the category of M.

3 Efficient Complaints Handling 8 Time Saving 4 .15.001-Rs.7 3.45.3% of respondents are falling under the income level of Rs. 001-Rs.7 13.3 100 Interpretation: From the above table 53. 000.000 Rs.35. 000Rs.45. And 3. And 6.25. 001-Rs.000 Above Rs. 001-Rs.001-Rs. Table: 13 Reason for Choosing ICICI Services Frequency Efficient Customer Service 8 Percentage 26.7 26.7 30.Rs. And 30% of respondents are falling under the income level of Rs.45.7% of respondents are falling under the income level of Rs. 000.5. 000 and Rs.000 Rs. 000.15.25.0 6.001-Rs.000 Total 2 9 2 1 30 6.35.45.35. 000.25.3% of respondents are falling under the income level of above Rs.35.15.25.

3% of respondents are saying that the reason to choose ICICI is they are reducing our waiting time.3 13.3 100 Interpretation: From the above table 26.7% of respondents are saying that the reason to choose ICICI is they are providing efficient customer service and efficient complaint handling.3 100 Interpretation: .7% of respondents are saying that the reason to choose ICICI is Transaction costs. Table: 14 Type of Services Prefer the Most Frequency ATM Service Internet Banking Mobile Banking Core Banking System Total 13 9 4 4 30 Percentage 43. technology and reliable.3 30.7 13. And 6.3 13.0 13. And 13.Transaction Costs Technology Reliable Total 2 4 4 30 6.

.From the above table 43. And 30% of respondents are preferred the internet banking.3% of respondents prefer the core banking system and mobile banking.3% of respondents prefer the ATM service. And 13.

But SBI bank is little bit below the line in customer complaints handling when compared to ICICI bank. .Graph: 8 Graph: 9 Graph: 10 Graph: 11 Graph: 12 Graph: 13 Graph: 14 Conclusion: • • Since both the banks are competing equally with each other.

The age group of 25yrs . request for cheque book in ATM.15. etc.• The ICICI bank is little bit below the line in concentrating on female customers when to SBI bank.000. Many of the respondents are not aware of the many services rendered by the ICICI bank.000 . The male gender is mostly having an account in ICICI bank. The income level of the respondents who are having an account in ICICI bank falling under the income level of Rs.000. etc. The bank has to take some initiatives. The age group of 25yrs – 35yrs respondents mostly is having an account in SBI bank. Recommendation: • • • Since many of the respondents are not aware of their key services. The income level of the respondents who are having an account in SBI bank falling under the income level of Rs. Many of the respondents are saying the reason to choose the services of the SBI bank is because they are good in efficient customer service. Sum Of the respondents to choose the ICICI bank is because the bank is more reliable to the customers. Many of the respondents are not aware of the many services rendered by the SBI bank. end of the day balance in mobile. Findings: • • • • • • • • • • • • Sum Of the respondents to choose the SBI bank is because the bank is proving more ATM facility to the customers. They can post demo of all these services in their bank website. The few are deposit of cash in ATM.000 – Rs. end of the day balance in mobile. The few are deposit of cash in ATM. The both gender are equally having an account in SBI bank. Many of the respondents are saying the reason to choose the services of the ICICI bank is because they are good in efficient customer service and efficient complaint handling.Rs. request for cheque book in ATM. The bank can post a list of services that they are rendered to the customers inside the bank Premises. 5.35yrs respondents mostly is having an account in ICICI bank. .15. 5.

com www.wikipedia. The SBI bank can concentrate on customer complaints handling. The ICICI bank can concentrate on the female gender.P.rbi. The bank can also send a post to their customers by informing there services and how to proceed with that and all details they can mention it in the post. Gupta Websites: • • • • www.in www.googlesearchengine.com www.iba. BIBLIOGRAPHY: Research Methodology Statistical Analysis – S.• • • • They can concentrate more on the respondents are falling under the age group 25yrs – 35yrs.org.com .

Name: 2.25.000 c) Rs.000 e) Above Rs.45.35. 45.000 d) Rs.001-Rs.Rs. Educational Qualification: a) Illiterate □ b) School □ c) UG □ d) PG □ e) Professional Course □ f) Others □ c) □ 46 – 55 yrs d) □ above 55 yrs 5.5. Age: a) □ 25yrs. In which bank do you have an account? a) ICICI bank □ b) SBI bank □ .35. Gender: a) Male □ b) Female □ 4.000 b) Rs. Occupation: a) House wife □ b) Students □ c) Salaried person □ d) Business man □ e) Professionals □ f) Supervisor □ g) Managerial □ h) pensioner □ 6.000 – Rs.000 7. Income level: a) Rs.15.001-Rs.25.001.35 yrs b) □ 36 yrs .15.45yrs 3.Questionnaire Personal details 1.

2= disagree. ATM services are useful for me to deposit cash and cheques ATM services are useful for me to request for cheque book ATM services are useful for me to get the enquiry statement 1 2 3 4 5 . 5= strongly agree S. What is the reason to choose the services of the bank? a) Efficient customer service □ b) efficient complaints handling □ c) Time saving □ d) transaction costs □ e) technology f) Others _________ pls specify 9.8. 4= agree.no ATM Service 1 2 3 4 5 I am facing problems in withdrawing cash from ATM. I am facing problems like insufficient cash in ATM. What type of services do you prefer the most? a) ATM service b) Internet Banking c) Mobile Banking d) Core banking system e) Others _____________ pls specify Customer service questionnaire Please use (/) mark to give your responses for the following questions 1=strongly disagree. 3= neutral.

Mobile banking is useful for me to Stop inward/outward cheques. Mobile banking is useful for me to know the cheque details Mobile banking is useful for me to know the Debit/credit above certain limit in my account. Internet Banking 1 2 3 4 5 Internet banking helps me to transfer funds from the bank to the personalized transactions Internet banking saves me time for the banking transactions Internet banking helps me in bill payments Internet banking secures the money transactions Internet banking helps in online trading Mobile banking 1 2 3 4 5 6 7 Mobile banking is useful for me to know the end of day account balance. Mobile banking is useful for my bill payments Mobile banking helps me to know about the debit/credit details Mobile banking provides me a support for ticketing. recharging mobiles etc. Core Banking system 1 2 3 4 Core banking system helps me to transfer funds from different branches Core banking system makes me convenient to know about the deposit details Core banking system helps me to protect my personal information Core banking system helps me for the ATM service transactions .of my account.

5 Core banking system helps me for the internet banking transactions .

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