ICICI Bank: Reaching Global Markets through Technology

Amar KJR Nayak1 The story of ICICI Bank indeed is quite exciting as we look into how the company has internationalized its business vis-a-vis the other banks from India. With the least number of international bank branches as compared to many of the other Indian banks, it stands tall in terms of its share of international business, especially in the foreign remittance business. In a short period of time, it has grown to be the largest bank in the private sector with a global foot print. Its share of international remittance business among the banks in India has risen from 4% in 2003-04 to about 30% today while retaining over 75% of the total online international remittance business in India. How did it grow so fast? Did it face any challenges at home or outside to achieve these successes? What have been its strategies in the internationalization process of its business? In other words, what have been the secrets of its success? Several pertinent questions come to mind when we look at the pace of growth of this company in a highly turbulent and competitive world of international banking that has been guarded for years by the well established, highly networked, international banks and remittance business houses. Let us explore some of the following issues to understand the company’s approach towards internationalization and how it broke through the old guards of international banks and remittance business houses.

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Why did ICICI Bank want to internationalize its business? Why did ICICI Bank choose to get into remittance business? What are the various sources of foreign remittance? How did the company reach the customers without physical presence? What are the various products on remittance business? What have been the challenges working with international partners and markets etc?

What were the basic strategies of ICICI Bank to succeed in its international operation?

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Amar KJR Nayak, PhD., Strategic Management, Xavier Institute of Management, Bhubaneswar, India

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How critical was technology in the global remittance business? What are its problems of delivery in India? What are the technological challenges that the company faces?

Not only was the company faced with the challenge of competition from other established players in the industry but also from potential customers for international banking and remittance business. A few quotes below highlight this point.

My family lives in Ernakulam. Who other than SBI will get money to my parents? --US respondent Why should I choose a different bank when my family has been using SCB since 1990? --US respondent

World Banking & Remittance Business:
The history of banking started with the transaction between goldsmith and people. As a token of receiving gold the goldsmith used to issue a receipt. In this process the goldsmith started issuing receipts for specific values of gold, and it became the first banknotes. With the start of the industrial era goldsmiths turned into full-fledged bankers. Indeed they have played a major role in the initial phase of industrialization. To further increase their power and influence, these banking groups started influencing governments or monarchies and strategically utilized the service of these governments or monarchies for their self interest. And as a result only those politicians came to power who have played according to the will of banking groups. In the twentieth century these banking groups were able to discover a new way of money transformation, which identifies that by periodically restricting the money supply, crashes within the emergent stock exchanges of the world could easily be engineered, and one can examine this statement from the example of famous Wall Street Crash of 1929. In economic terms it will be categorized as transfer of wealth rather than destruction of wealth. In the later stage these groups were concentrating on destabilizing a multitude of traditional cultures and creating a series of homogenized trading blocks to replace them.

Banking has been the stronghold of established business houses. It was more so in the foreign remittance business. Large Exchange Houses with huge banking and distribution 101

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networks gave little scope for other banks to enter this business. ICICI Bank, though energetic did not have the nature of infrastructure to enter in to the international markets. Even some of the Indian Banks had more overseas branches than ICICI Bank had. It had only about six years of experience as a bank operating in the retail segment. Entering into such an international banking and foreign remittance business was a tough call for ICICI Bank in 2001. How did the company make inroads to such a global industry? While the inflows in the world remittance business has grown by about 90% over the period 2002-07, the inflow of remittance business in the developing countries has grown by nearly 110% during the same period. Out of a total inflow of remittances of $ 318 billion in the world, developing countries accounted for $ 240 billion. The highest growth of 136% has been in the upper middle income countries. Interestingly, on the other hand, the outflows of remittances from the developing countries have been as high as 226% during 2002-07 (see Exhibit 1). The market for remittance business to India during 1975-2003 is best illustrated in Exhibit 1b.

India, Mexico and Philippines have been the top remittance receiving countries for over a decade now. China, Spain, and many others have also shown significant growth during the same period. Remittances received by India have grown from US$ 8,453 million to US$ 27,607 million during the period 2002-06 (see Exhibit 2).

Why have been there such high growths in the developing countries? Is it the Diaspora of the developing countries in the industrially advanced countries? Is the differential in interest rates in the industrially advanced country the cause for the movement of foreign capital to the developing countries? The annual rate of interest in Japan is the lowest with around 1-2% for short term loans up to one year period. Similarly, the rate of interest in USA, Europe, and Great Britain ranges between 3-6% as compared to 10-18% in several developing countries like India (see Exhibit 3).

Indian business through export and Import has also grown several times over during the last two decades. From a crisis of foreign exchange in 1991, India has moved far ahead from it. From US$ 5.63 billion foreign currency reserve in 1991, the amount stood at US$ 199.17 billion in March 2007. NRI deposit in India has also grown by over 300% during 102

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the same period (see Exhibit 4 & 5). See also Exhibit 6 for the inflows, outflows and local withdrawal figures for the period 1999-2008. How have these factors contributed to the foreign remittance business?

Indian Banking Industry:
In 1786, the first bank in India got established. The General Bank of India was set up in the year 1786 and subsequently the Bank of Hindustan and Bengal Bank came into existence. In 1809 East India Company established Bank of Bengal, Bank of Bombay in 1840, and Bank of Madras in 1843 as independent units and called it Presidency Banks. Allahabad Bank was established in 1865, exclusively by Indians. The Reserve Bank of India was established in the year 1935. The Government of India came up with the Banking Companies Act, 1949 to streamline the functioning and activities of commercial banks. This was later changed to Banking Regulation Act 1949 as per the amendment act of 1965.

After independence the government took major steps in banking sector reforms. It nationalized many banks and formed State Bank of India to act as the principal agent of RBI to handle banking transactions all over the country. The Government instituted a number of policies such as (i) (ii) (iii) (iv) (v) (vi) (vii) 1949: Enactment of Banking Regulation Act 1955: Nationalization of State Bank of India 1959: Nationalization of SBI subsidiaries 1961: Insurance cover extended to deposits 1969: Nationalization of 14 major banks 1971: Creation of credit guarantee corporation 1975: Creation of regional rural banks

(viii) 1980: Nationalization of seven banks with deposits over INR 2000 million

As the Indian economy opened up, several foreign banks came to India. ATM stations, phone banking and net banking were introduced in the country. Slowly the customers were introduced to foreign exchange. Indian banking industry’s business has increased from US$ 469.4 billion in 2002 to US$ 1171.29 billion in 2007. The aggregate deposits 103

repayment of family debt. 2004). and open. foreign remittances accounted for about 3% of India’s GDP. to provide a cushion against emergencies or in some cases as funding for small investments.2 percent as on January 4. The recipients often depend on remittances to cover day-to-day living expenses.Journal of Case Research Vol. With all these achievements Indian banks started aspiring to become global and have a global presence. making it an area of interest across domestic financial services sector. The categories have no absolute dividing lines but are useful for helping to clarify some of the payment issues that arise with remittances. franchised. All these types are different primarily according to how a network of access points is created and linked. India is the largest receiver of remittances in the world market with about US$ 28 billion in 2006. has contributed over 3% since 2001-02 (see Exhibit 7). gold and silver brought through 104 . Indeed. and procedures to link those access points to enable settlement and messaging). Private transfers that earlier contributed less than 1 % of GDP in India. and the Middle East with a major share coming from USA. negotiated. Setting up subsidiaries and investing in joint ventures were other modes for international expansion. Remittance Business & Indian Banks: Remittances include different kinds of monies that flow from migrants to their families. Many Indian banks started to expand their branches in foreign countries. and gift money for family celebrations. 1 Issue ii of Scheduled Commercial Bank have risen from 17. it needs to have some kind of network (access points where funds can be captured and disbursed. This flow of funds from migrant workers back to their families in their home country is an important source of income in many developing economies. Europe. For a remittance service to work. community development like building of a temple. These include regular amounts of money that are important for the family budget. 2008.8 percent in 2005-06 to 25. Remittances are unlike market flows of money for they are not sensitive to interest rate movements and are relatively stable (RBI. local withdrawals or redemptions from NRI deposits. It is possible to divide remittance service into various categories like unilateral. Private transfers have been routed to India through various means like inward remittances. money sent for investment like the purchase of land or the building of a house. This large amount of remittance came from various countries and regions like USA.

What has been driving the growth of private transfers including the foreign remittances to India? Is it the huge Indian Diaspora spread across the world? Indians comprise about 58 % in Mauritius.A (1. 9 each in Fiji and Singapore (for details see Exhibit 9).E. According to the World Bank the value of migrant remittance is increasing at a rate of 10% every year.. There has been steady rise in all these various categories of private transfers (see Exhibit 8). remittance charges.2 million).68 million) and South Africa (1. Indian immigrants follow a varied profile across geographies providing cheap labour in the GCC countries and to meet the needs of specialized software developers. 22 branches in U. each with a distinct set of customer segments that have diverse remittance needs and behavior.A. The regulatory changes in the banking industry and the ever increasing demands of the global Indian compound the 105 . doctors. Over a million Indians live in several of the industrially developed countries like U. Several Indian banks have branches in many foreign countries. 11 branches in Hong Kong. The Indian remittance market comprises of multiple corridors. engineers. viz.K.. With rapid changes in the regulatory policies of the Government. donations to charitable/religious institutions in India. For the statistics of banks in India see Exhibit 10.S. which offers significant business opportunities for banks and income through three ways. Indian banks are also well spread in many foreign countries.1 million). blue-collar workers and white-collar workers. personal gifts. 10 % in Oman and 7% in Singapore.9 million).Journal of Case Research Vol. Australia (1. 38% in Fiji. etc. and Bank of India has 21 foreign branches (see Exhibit 11). There are a large number of banks in India with wide networks. forex income & float income. (2. India has turned out to be a hot spot of business activity in the world. Europe and Australia. This creates two distinct types of immigrant. Many people from this large Indian Diaspora look forward to remit some of their income back to India for various purposes. and nurses in US. 19% in Bahrain. U. State Bank of India has 33 foreign branches. Allahabad Bank has 40 foreign branches.K. 1 Issue ii passenger baggage. large deposits and huge manpower to tap the opportunities in the foreign remittance business and other private transfer business. 37% in U.

ICICI Ltd.Journal of Case Research Vol. ICICI Bank acquired Bank of Madura and in 2002. ICICI Bank had 17 subsidiaries. ICICI sponsored the formation of Housing Development Finance Corporation. With the liberalization and privatization processes in India since 1991. ICICI Bank emerged as a formidable force in the banking industry. History & Evolution of ICICI Bank: The Industrial Credit and Investment Corporation of India Limited (ICICI) was created in the year 1955 with an joint initiative of the World Bank. Besides funding from the World Bank and other multi-lateral agencies. Indian banking industry. In 1977. and studying the internationalization process of ICICI Bank through the remittance business is exciting to analyze.V. and representatives of Indian industry. In 1999. along with two other group companies.. was merged with ICICI Bank. Competition among the Indian banks is also well poised. ICICI set up ICICI Bank in 1994. customer base and delivery / technology platforms. the Government of India. ICICI was also the first Indian institution to receive ADB loans. ICICI was the major source of foreign currency loans to the Indian industry. for a common objective of creating a development financial institution for providing medium-term and long-term project financing to Indian businesses. N. Through these mergers. 2007. Apart from this ICICI was also among the first Indian companies to raise funds from international markets. the Indian banking industry had taken a different turn during the period 1991-2000. Later in 2000. Kamath took over as 106 . With the new regulations in the banking industry and increasing opportunities for retail banking. When K. through an issue of American Depository Shares. Different banks have different strengths and have different strategies on aspects like retail/product capability. ICICI was listed on the New York Stock Exchange. global Indians spread across the continents. Vagul had steadily built ICICI as a development financing institution through its early years and subsequently ICICI had successfully set up ICICI Bank in 1994. As on March 31. and reorganization. See Exhibit 13 and Exhibit 14 for the evolutionary path of ICICI Bank. 1 Issue ii dynamics of business for the banks in India (see Exhibit 12 for the challenges that the Indian banking industry have been facing). In the above context of worldwide banking.

Journal of Case Research Vol. Around this time. If at all they entered the international banking. The top executives including K. how should ICICI Bank invest to get a share of the international banking business? Who should manage the international operations? Will the existing manpower in the bank be sufficient and be able to handle both the domestic and the international operations? In order to achieve growth. With many large banks with large network of branches in India and abroad. the company was looking for growth for the future. the banking industry in India was fast changing with several banking deregulations underway and increasing competition in the market. Third. Today. the Board of ICICI Bank decided to expand into international markets. How did the managers succeed in implementing their plans and ideas? 107 . in which products they should begin. whether corporate or retail. International Banking: By June 2001. it looked into the alternative modes of servicing the customers based in different parts of the world. it evaluated on how to leverage its banking and business network to expand in the international markets. However. The Board of ICICI Bank asked Lalita Gupte to lead the internationalization process.V. it looked into the existing model. Second. He also wondered if technology was a solution to handle some of these problems and would it also help in the company’s growth plans. First. It is further supported by nearly 300 technical people and 150 operational people. The management team of international business deliberated on the international strategy of the firm. Kamath. Subsequently. 1 Issue ii the CEO of ICICI Bank in 1996. how did the company realize the plans it set forth for itself. where the bank followed its customers. Bhargav Dasgupta and Lalita Gupte wondered if they should enter the world markets and whether they would be able to compete outside their domestic turf. the International Business Group has grown significantly and the IB Group consists of over 3000 people. Kamath wondered how to manage the manpower. the bank had a high employee turnover to the extent that it could destabilize the operations of the bank. ICICI Bank with a total income of INR 14690 million and successful domestic operation with a short span of its inception. Bhargav Dasgupta was invited to join Gupte to build the international banking business of ICICI Bank.

ICICI Bank focused on the international remittance business to begin with. The commission/charges of the company for the different types of remittances vary from 0. viz.4 million customers and had grown at about 74%. The company undertook a detailed study of the leading players from India. foreign remittance to India and the size of Indian Diaspora spread across the globe. what were complexities that the company had to resolve in order to operate in the international remittance business? How could the technology be used seamlessly across the international borders? 108 . the State Bank of India with about 50 million customer base had about 17% growth.8 million customers had about 130 ATMs and 11 branches and grew at about 14%. Nostro worked with the help of SMART software that is a middle ware called the Customer Delivery Channel Interface (CDCI).2%. 1. Does the company earn only from these commissions or does it earns from other means? Did it benefit anything from the currency float for sometime? While the company did create different accounts to cater to the international remittance and that there was possibly a good margin in the business. The Vostro system was essentially for customers with Indian Rupee Account and Nostro was for other customers..125% to 0. It had 400 branches and 600 ATMs (see Exhibit 15). Citi Bank with 1. For its international remittance business. During the period. type of product/service and proposition and the mode of platform for the delivery of services. the company offered two major routes. However. 130 branches. The various banking services of the company and the key features of each are provided in Exhibit 16.Journal of Case Research Vol. ICICI Bank had over 5 million customers and had grown at 76%.. The details of the charges are provided in Exhibit 17.e. to provide remittance services from anywhere to India. the company first focused to operate in the India corridor i. the Vostro Account and the Nostro Account. HDFC had over 200 ATMs. The world remittance business has several major corridors. With nearly 9000 branches and 100 ATMs it had a large reach in the country. 1 Issue ii International Remittance Business: Having scanned the world market on international banking with specific reference to world remittance business. 1996-2001.

” “Given the anti-money laundering issue in international money transfers understanding the ‘Know your Customer’ norms in different countries were crucial for us to operate safely in this business” “It was indeed very different experience to work with our foreign partners. the issues of reconciliation because of various differences in different countries and minor errors in data entry could block the whole transaction process. Often. adopt architectural changes in our technology and develop several expertise to service our international clients seamlessly. 1 Issue ii Transactions had to be done across different regulatory frameworks of different countries. IB Division 109 . different systems and processes in different banks based in different countries. We had some difficulties in the beginning and had to accept the different working styles in other countries. our partners in USA and Europe used the bottom-up approach for scaling up. with thousands of automated transactions in a day. minor manual data entry errors or technical errors could lead to severe restrictions to overall transaction process. GM. While banks are used to deal with all these issues through their manual transactions in the domestic business. DGM. international partners with different working styles.Journal of Case Research Vol. Further. problems of reconciliation has been like a nightmare in this business” Girish Nayak. While we in India followed a top-down approach for scaling up any of our business models. IB Division “Our major concern in the international remittance business has been the ‘reconciliation of accounts’. With thousands of transactions every day registered from different countries.” Anchal Kapoor. “We needed to understand the clearing system in India and in other countries. the problems indeed were unlimited especially when technology was to be used to intermediate most of these international transactions. regulatory norms of different countries. Views of a few senior executives from the International Business Division given below indicate the nature of complexities involved. understand the technological interfaces. different time zones with different operating hours of people.

See Exhibit 19 for the details of each offer. the top management team responsible for the international business had the following thoughts. The overall strategy of the Group can be put into an analogy of a beautiful building with solid foundation and strong pillars supporting the structures as illustrated in Exhibit 19 b. how would a young bank from a developing country develop the network to challenge the existing well established highly networked international bank and exchange houses? How did the company plan to leverage with the correspondence banks and to leverage technology for its internationalization plans? With regard to these issues. Retail Banking. The ICICI Group strategy is summarized in Exhibit 18. The company identified international banking as a key opportunity. we have been able to garner presence and distribution reach as we set up operations globally.Journal of Case Research Vol. it offered the online Product web-based access and alliance partners. The top management of ICICI Bank seems to have had a clear reason for the expansion of its business world-wide as can be seen from the statement below. “We believe that we have to serve our customers anywhere in the world” K V Kamath. 1 Issue ii International Remittance Strategies: ICICI as an organization is divided into six major product divisions like. In the traditional model. CEO However. Micro-Banking and Agri-Business. ICICI Bank chalked out different strategies for different markets. Our Unique Selling Proposition/Point (USP) has 110 . International Banking. In the Innovative Model. First head of International Business Group (IBG) “Adopting the alliances model. Rural. so we will leverage our correspondent relationship with other banks” Lalita Gupte. Government Banking and Corporate Centre. aiming to cater to the cross-border needs of clients and leveraging the domestic banking strengths to offer products internationally. “We cannot physically be everywhere our clients are. it offered partner bank based products and bank branch based products.

products and services. Technology Issues: While the standard mode of collection and transfers of foreign remittances were through physical outlets of the banks or the exchange houses. It also launched a partnership with Mees Pierson. 1 Issue ii been the use of technology as a differentiating factor to garner larger share of the NRI Bhargav Dasgupta. where it tied up with universities and companies from where students and employees were likely to migrate to foreign countries for different purposes. To tap the opportunities in the remittance market in India ICICI launched a remittance product in association with US based Wells Fargo to enable non resident Indians in the US to send money to India directly from their Wells Fargo account to their beneficiary’s ICICI Bank account in India in just 24 hours. if the company adopted the technology route. In the above context.” Vol. The fixed cost of setting up a physical outlet and the variable cost of maintaining a set-up have generally been very high both in India and more so in the industrially advanced countries. The objective was to target NRI when they were either visiting or leaving India. Fortis’ private banking arm to provide a full range of high net worth products and services to ICICI’s clients in India and abroad. It also had a focused marketing approach in the domestic market. ICICI Bank was very weak on this type of resource base to compete with the well established exchange houses and banks. In the domestic market it had alliances with the airlines and travel houses. what would be issues of implementing the technology for dealing with foreign remittance business? What were the initial costs of investments in technology? How did 111 .Journal of Case Research remittance business. The company adopted technology as a solution to most of its business transaction. Exhibit 20 shows the details of the initiative that ICICI Bank had undertaken in the domestic front during 1996-2001. Former Director & Core Team Member of the initial IBG The company had substantially used the alliances and partner model in the domestic market and it tried to replicate the same in the international markets. The company set up an internet portal for NRI to transfer money to India.

it needed the collaborations with several correspondents. Pramati layer as server.40 million USD. the business became round the clock (24*7). How did they convince the foreign partners to agree to their mode of money transfer? How did the company tie-up with the banks for serving the beneficiaries of the remittances? While the people had no option but to send money in the traditional way. 1 Issue ii the company target the customers? What kind of technology platforms would the company use? Did the company have a technology policy? What were methods of organization to introduce technology for various businesses? What were the major challenges in technical support? What would be the next technological challenge for the company? Did the company have an advantage of having no experience of foreign remittance business in the traditional mode? The company went in for using technology for carrying out its remittance business. It spent about 10 million USD toward the initial cost of technology investments in remittance business alone and today it spends about 30 . How would the company handle this situation? Can the company work only on a fire fighting basis or needed to root fix the technical problems? As per the NEFT routing 112 . foreign banks. the software professionals with easy access to internet were early to adopt the technology solutions to money transfer that the company offered. viz. Even though the company adopted the electronic route to transfer money. it dedicated only about 100 million USD to expand to seven countries. Oracle database management system and the Sun Solaris Platform be compatible to each other? How critical were the issues of memory capacity processing speed in the business? With technology as the mode of remittance transfer. and agents.Journal of Case Research Vol. the exchange houses. What would be the difficulty if the company used different systems? Would java based Windows operating system. When the company decided to enter the international market. Setting up the technology platform was a critical issue. Further the speed of delivery and tracking facility were additional advantages in the mode proposed by the company. Money could be delivered with in 3-7 days if correspondent was a foreign bank and within 2-3 days if the correspondent was an Indian bank..

Views from a few senior executives from the Technology Group given below highlight various issues. ISB is yet another key issue in the whole system. Technology Group If the company were to move from ‘anywhere to India route’ to ‘anywhere to anywhere route’ in the remittance business. The technology policy is aligned to our business requirements. 1 Issue ii norms and IBRD regulations of punching time that is between 2PM-4PM. Seetharaman. what would be the technological challenges? How does the company handle the issue of scalability? Today the average number of transaction is about 8000 per day in the India corridor. get the best deal from the vendors. how would this change if the company were to go ‘anywhere to anywhere transaction’. session management.” “The top management identifies the technology edge and estimates the enterprise wide technology requirements. annual budgetary proposals are made by the Technology Group. Further. Based on the needs of business groups. The need for highly skilled manpower. DGM. Technology Group With regard to the technology policy of the company: “The policy of the technology group has been to spend judiciously.Journal of Case Research Vol.” M.S. AGM. the pressures to carry out the transactions increased substantially. lean teams operating round the clock. Each team of technical experts works on a specific problem. and parallel operations could have been some ways to handle the challenges posed. These proposals are then given to the Managing Director for approval. providing connectivity. Make full utilization of the memory and the CPU capacity. There are about 5-6 Group Heads of technology and each Group Head leads 3-4 team leaders. taking into account the know your customer regulations in different countries and incorporating fields for different types of data to capture all relevant information to meet regulatory norms in different countries from where the bank received remittance business. and make full use of the servers to their optimal levels.” Indranil Ghosh. Will the Unix system serve its future capacity requirement? 113 . “Our challenge was to develop standard application programming interface (API) and standard messaging protocols.

ICICI Bank accumulates all the remittances and carries out a bulk transaction at one go. the core banking system (Finacle) of ICICI Bank. On an average. and Treasury. About 180 correspondents operate through the Vostro Account and about 40 correspondents operate through the Nostro Account. 1 Issue ii Operational Issues: The company had two types of accounts viz. The SWIFT message with remittance details from the correspondents. The issue of concern in the operations is when there is non-straight through transaction resulting in non reconciliation of accounts. On an average there has been as much as 6065% non-straight through process (STP) transactions in the Nostro system in the beginning. Vostro INR Account and Nostro Account.Journal of Case Research Vol. three different types of Nostro Accounts were initially created that are for NRI Accounts.000 remittance transactions a year. Today. how will the operations be managed? While an appropriate design of the architect and platforms with largely compatible technology may be adopted to meet the memory capacity and processing speed. With a 24*7 hours operating system in the global remittance business. Further. How would the company deal with these complexities? The company deals with nearly 8000 transactions a day that come from different countries and from different banks and it gets about 2 hours to punch in the client and beneficiary details for routing transfers to 114 . a swift code is generated and that is then passed on to the Finacle Core Banking system of ICICI Bank. Credit Services. ICICI Bank still gets about 20% non-STPs in the Nostro system and about 8% non-STP occurs in the Vostro system. foreign exchange rate system. what would be the typical operational issues when dealing with foreign transactions that might originate in any of the foreign countries (with a set of banking rules and regulation) and need to be remitted in India? ICICI Bank can receive payments from different banks and the payments to the beneficiary of the remittance may be remitted in a different bank. The automatic process involves talking of different systems with each other. For every transaction. and the NEFT system have to process and clear the data for completion of a transaction and receipt of money (INR) at ICICI Bank in Mumbai. Instead of a one to one transaction. the company today handles about 8000 remittance transactions a day and about 100..

A strong team of about 150 operational professionals are dedicated to remittance business in the company. and NEFT solve the problems of non STPs? What if other correspondent banks or agents are not using the same systems? How much of errors occur because of human error in data entry? The number of non ICICI Banks that used NEFT has risen from 13. The operations team works closely with the remittance business group. “We have leveraged our good relationship with Infosys to develop the Finacle Core Banking system to meet our needs and to fully integrate our core banking system with the SWIFT system. Finacle. 1 Issue ii India through the NEFT.000 today. the 115 . GM.000 a few years ago to 40. Would the operational issues be resolved through such portals for foreign remittance transactions? How much can the integration of the various systems of SWIFT. What kind of operational problems will the company face? A NRI could choose to transact through Money2India. Operations Group Why would a customer prefer demand draft (DD) to electronic fund transfer? With DD a beneficiary can credit the money to any of his or her accounts in India. Eighty of them are based in Mumbai (in Western India) and seventy are based in Hyderabad (in Southern India). Integrating systems within ICICI Bank is another issue. Foreign Exchange Rate. We are also trying to convert non electronic transaction like the transaction through demand draft to electronic transaction and we have been fairly successful in reducing the volume of demand draft transactions from 2530% to 13%. Further. DD is easy to deliver to beneficiaries based in remote and rural India that are unconnected with the electronic systems. Name matching is also used to bypass syntax errors in data entry. the foreign remittance portal of the ICICI Bank (see Exhibit 21 for the steps to transaction). The basic Finacle Core Banking system has been developed by Infosys Technologies. When a new product is proposed by the Business Group.Journal of Case Research Vol.” Jegannath Shreenivas. However. this has been modified and upgraded to meet the needs of ICICI Bank. We are trying to integrate our Finacle Core Banking system with the other systems that we interact with.

Toronto Downtown. Surrey. Hong Kong. Moscow and Kaluga. However. Scarborough. the operations group and the technology group had Technology Forums every quarter. Wembley. Russia and Canada. It is the largest bank among the private sector banks in India. Southall. Dubai International Finance Centre and Qatar Financial Centre and representative offices in the United States. The product and process needs to be approved by the Product and Process Committee before any product is undertaken to the product launch stage. ICICI Bank today has a global foot print with subsidiaries in the United Kingdom. The operations group has more intensive reviews and dialogues. The operation group has periodic reviews with International Business group. The future plans and strategy of the company can be read through the comments (given below) of the top management: 116 . South Africa. Vancouver. Brampton. Bangladesh. UK has received regulatory approvals for establishing a branch in Frankfurt. Malaysia. The company has also had a huge growth and has had healthy financial position (see Exhibit 24). Germany. since 2006. Bahrain. Leicester. Thailand. China. See Exhibit 23 for the company’s global presence. Belgium. ICICI Bank has more than 450. Technology Forums are organized every month. Birmingham. ICICI Bank. Toronto East. In the initial years. and Indonesia. The Finacle Customer Relationship Management system helps the operations group to lodge their requirements/complaints to the technology group and the daily Management Information System (MIS) further aids the dialogue process between operations and technology groups. As per the current statistics. for the last three years. It has built a large number of subsidiaries which add to the networking and business strength of the company (see Exhibit 22 for list of subsidiaries).Journal of Case Research Vol. 1 Issue ii technology. Manchester.000 NRI customers managed by or serviced by the branches in locations like London. ICICI Bank & Remittance Business Today: ICICI Bank has grown in size and strength within a short span of time. operations and the legal teams meet to assess the support requirement. United Arab Emirates. The company has been looking forward for engaging fully with the growth of the Indian economy. Sri Lanka. bank branches in Singapore.

we believe that India will sustain high growth rates for the foreseeable future. as we move to the next level in terms of scale of operations.” “The bank expects one-fourth of its balance sheet from the overseas business and also aiming to make a position among the top ten banks of the world within next five years. We seek to support this strategy with financial and human capital. We are continuing our focus on retail banking. Vaghul. Indian corporations are today undertaking large projects. partnering our customers and the nation in achieving growth and prosperity. offering best-in-class products to Indian corporations going global and the Indian Diaspora by leveraging our international presence and strong technological capabilities. accessing capital to support growth when necessary. We are partnering Indian companies by providing the right product and advisory skills to aid their rising global aspirations. will be a key success factor as India grows and globalizes. with relevance in the global context. driven by the knowledge economy and industrial resurgence. Rural India continues to be significantly untapped market and presents a major growth opportunity. Kamath. Looking ahead. As an Indian financial services group. to which rural growth could bring an additional new dimension. Achieving size and scale aligned to the needs of a fast growing modern economy. Chief Executive Officer “The last fiscal saw a significant scale-up of our international operations and expansion of our global footprint to 18 countries. We are now a preferred international bank. Our corporate banking strategy takes a unified global view 117 . furthering our transformation into a global bank.V.” N.” K. we seek to facilitate and participate in this growth process by making a wide range of financial products and services available on a large scale. 1 Issue ii “ICICI Bank is seeking to participate in India’s growth process by leveraging its strong competencies in various segments of the business. which we are seeking to address through innovative products and delivery mechanisms.Journal of Case Research Vol. we see ourselves as the premier provider of financial services in India and to Indian customers overseas. Chairman “Looking ahead. Our products and services for the NRIs were supplemented by offerings to the local customers. big-ticket overseas acquisitions and rising huge capital from international markets.

” “We are now India’s biggest bank in terms of overseas business is concerned and from here we are aiming at a contribution of 25 per cent from international business in 2008. 118 . 1 Issue ii of our clients and offers them a comprehensive suite of commercial and investment banking products apart from the working capital loans and project finance.Journal of Case Research Vol. Joint MD and Chief Financial Officer2 2 The designations of executives given in the case were as when the case was being studied and written in the year 2008.” Chanda Kochhar.

1 Issue ii Questions for Discussion 1. What are the international strategies of ICICI Bank that are unique and are not applicable to other Indian companies? 5. What are the major issues of internationalization that the above case throws up? 2. What were the challenges faced by ICICI Bank while entering new markets? 3.Journal of Case Research Vol. What are the international strategies of ICICI Bank that would be applicable to other Indian companies going international? 4. How did ICICI Bank successfully operationalize its international strategy? 119 .

1 Issue ii Exhibit 1: World Remittance Trends 2007 (in $ billion) Inflows Developing Countries East Asia and the Pacific Europe & Central Asia Latin America & the Caribbean Middle-East & North Africa South Asia Sub-Saharan Africa 2002 116 29 14 28 15 24 05 2003 144 35 17 35 20 30 06 2004 161 39 21 41 23 29 08 2005 191 47 29 49 24 33 09 2006 221 53 35 57 27 40 10 Change 2007e 06-07 240 8% 58 39 60 28 44 11 10% 10% 6% 7% 10% 5% Change 02-07 107% 97% 175% 115% 86% 81% 116% Low Income Countries Middle Income Countries (MICs) Lower MICs Upper MICs 32 84 55 29 39 105 68 37 60 02 206 2003 24 100 23 147 40 121 76 45 67 03 231 2004 31 113 22 166 46 145 90 55 68 04 263 2005 36 124 24 183 56 166 102 63 72 04 297 2006 44 136 27 207 60 179 112 67 74 04 318 2007 - 9% 8% 10% 6% 88% 114% 103% 136% High Income OECD countries 53 High Income non-OECD countries 01 World 170 Outflows Developing Countries High Income OECD High Income non-OECD World 2002 20 88 23 131 3% 40% 1% 298% 7% 87% Change Change 06-07 02-07 23% 10% 15% 13% 226% 64% 20% 74% Source: Remittance Trends 2007 by World Bank 120 .Journal of Case Research Vol.

1 Issue ii Exhibit 4b: The Market for Remittances to India Source: Reserve Bank of India.Journal of Case Research Vol. 2004 121 .

2008 Source: ICICI Bank Website.54 5. 284 2004 20. 589 5. 830 6. 749 796 10 2. 196 1. 627 5.35 3.67 * Subject to revision without further notice # Subject to cap on maturity date to October 31. 1 Issue ii Exhibit 2: Workers’ Remittances – Major Remittance Receiving Countries* Sr.19 4. 107 1.64 1. No. 224 569 1. 277 2006 27.62 5. 035 10. 453 4.14 3. 607 23.12 1. 341 3. 668 5. 339 5. 613 8. 454 5. 560 5. 113 *figures are in US $ million Source: RBI Monthly Bulletin. 330 5. 165 3.81 6. 057 5.26 EURO 4. 296 3.77 GBP 5. 221 3. 943 2005 23. 1 2 3 4 5 6 7 8 9 10 Country India* Mexico Philippines China Spain Indonesia Romania Morocco Egypt Pakistan 1996 8. 495 5. 481 6. Business Banking 122 . 506 5. 017 4.11 JPY 0. 754 4. 518 20. 012 16.Journal of Case Research Vol. 700 18 4. 617 4. 672 2. February 2008 Exhibit 3: Rate of Interest (%)* – Country wise & Period wise SL NO 1 2 3 4 Period 7 days to 30 days 31 days to 90 days 91 days to 180 days 180 days to 1 year # USD 3. 054 12.

4 63842.3 43826.0 Source: Reserve Bank of India.3 26330.4 33218.5 126331.5 21881.4 18537.5 18145.Journal of Case Research Vol.6 83535.7 49670.5 19410.3 61412.3 39132.9 103090. 1 Issue ii Exhibit 4: Total Imports and Exports from India ($ million) Year Exports Total Imports Total 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 16612.7 36822.9 33469.4 44560.1 78149.2 22238.5 51413.4 41484.2 17865.4 36675.7 35006.2 28654.7 50536.2 24072.1 21219.4 149165.6 23306.1 111517.7 190566.7 52719. Import figure 123 .5 31794.5 42388. Export.

1 Issue ii Exhibit 5: Foreign Currency Reserves and NRI Deposits in India As of March 1991 March 1992 March 1993 March 1994 March 1995 March 1996 March 1997 March 1998 March 1999 March 2000 March 2001 March 2002 March 2003 March 2004 March 2005 March 2006 March 2007 *figures are in $ billion Source: Reserve Bank of India Foreign Currency Reserve 5.68 23.42 29.585 8.17 28.43 20.07 25.19 21.16 17.28 54.39 20.281 2004-05 8.639 9.988 2001-02 11.52 33.071 2005-06 17.28 41.454 13.95 141.907 12.10 112.046 15.10 76.768 2006-07 (Apr-Sep) 8.035 15.Journal of Case Research Vol.25 25.51 151.214 2003-04 14.914 2007-08 (Apr-Sep) 10.69 26.546 6.22 9.846 6.37 20.83 9.835 2006-07 19.593 10.83 19.865 6.120 4.24 Exhibit 6: Inflows and Outflows from NRI Deposits and Local Withdrawals Year Inflows Outflows 5.681 7.405 2000-01 8.17 NRI Deposit 13.82 13.431 *figures are in US $ million Source: RBI Monthly Bulletin.97 36.236 10.04 42. February 2008 124 .50 21.26 32.72 12.123 1999-00 7.98 15.300 5.37 32.221 Local Withdrawals 4.49 38.69 17.208 8.435 2002-03 10.644 10.672 8.62 199.727 8.

578 9.733 125 .8 11.120 4.7 2.7 2.3 16.5 12.4 18.914 10.455 13.607 5.123 *figures are in US $ million Source: RBI Monthly Bulletin.2 1990-91 1995-96 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 Source: RBI Monthly Bulletin.075 24.0 18.8 3.1 8.300 2006-07 (Apr-Sep) 6.2 22.0 3.5 13.760 17.3 13.3 3.1 18.644 10.7 3.8 17.1 3.8 19.290 13.585 8.546 6.747 6.026 2.992 12. February 2008 Exhibit 8: Trends and Composition of Private Transfers to India Year Inward remittance for family maintenance 7.951 28. February 2008 12.561 Local withdrawals/ redemptions from NRI deposits 4.6 12.0 Share in Current Receipts (Percent) 8.2 21.Journal of Case Research Vol.168 2.065 15.907 12.973 10.199 2.0 29.155 1.4 2.951 18.423 7.434 8.379 9.208 Gold and Silver brought through passenger baggage 13 10 13 18 19 27 16 27 17 11 Personal gifts/ donations to charitable/ religious institutions in India 734 581 623 613 1.0 17.189 22.1 25.454 13.727 8. 1 Issue ii Exhibit 7: Select Indicators of Private Transfers to India Year Amount (US $ billion) 2.1 15.182 21.241 992 Total 1990-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 (Apr-Sep) 9.4 3.9 Private Transfer (Percent to GDP) 0.

Journal of Case Research Vol.000 336.224 % ID 1.425.142.583 4.656.000 102.678. 1 Issue ii Exhibit 9: Country-wise size of Indian Diaspora and number of Indian Bank branches Country Australia Bahrain Fiji France Germany Hongkong Israel Japan Kenya Maldive Island Mauritius Oman Singapore South Africa Thailand U.35 58 10 7 2 37 4 1 BIB 1 3 9 2 1 11 1 4 4 1 8 4 9 2 1 8 22 6 22 Note: CP: Country Population IDP: Indian Diaspora Population ID: Indian Diaspora BIB: Branches of Indian Banks Source: Government of India.136 65.457 281.344.898.000 1.200.000 1.230.444.390 6.738 IDP 1.431.600.000 130.720 44.590 269.000 688.441.883 126.000 307.000 85.178 82.686 6.500 9000 715.345 893. S.000 950.354 60.829 65.421.091.212 60.756 312.602 3.829. 90.400 10.906 441.276.371 2. E United Kingdom U.700. Indian Diaspora Web.000 2.000 1.765 1.563.000 50. A Others CP 18. 2007 126 . A.02 19 38 1 1 3. Reserve Bank India.099.000 33.500 45.000 35.001.

60 22022 328.59 2. SBI – State Bank of India Source: Reserve Bank of India.54 3. Authors’ research 127 . SBT – State Bank of Travancore.25 85180 467.23 4.04 37604 924.88 11.00 2.36 15998 523.64 5.97 14037 SBI 9556 ICICI 713 Canara 2689 UBI 2285 Indian Overseas 1824 HDFC 638 OBC 1253 Allahabad 2104 UTI 501 Corporation 922 Andhra 1202 SBP 787 Citibank 39 Vijaya 1033 Standard Chartered 87 SBT 717 SBM 651 PNB 841 ABN AMRO 28 Karnataka 426 *figures are in INR 10 million Note: PNB: Punjab National Bank.37 435521 1027.59 58786 637.17 3.00 2. 1 Issue ii Exhibit 10: Statistics of Banks in India (2006-07) SL NO 20 12 17 19 10 1 14 13 8 3 4 11 5 9 7 15 16 6 2 18 Bank No of No of Investment Offices Employees 185388 33321 46359 27536 23861 21477 14730 20379 9980 11880 13831 11329 5194 10765 7321 11607 9604 9325 3549 4456 149149 91258 45226 27982 23974 30565 19808 18746 26897 14417 14301 12358 16021 12018 11902 9562 6990 6693 6407 5048 Business Profit Per Deposits Per Employee Employee 357.04 68740 607. OBC – Oriental Bank of Commerce.Journal of Case Research Vol.79 42357 536.21 3.00 4.13 68298 742.97 59544 1024.34 19319 1011.48 17.20 19.13 2. UBI – Union Bank of India.24 39184 1360.14 41454 599.00 7.33 37875 455.00 9. UTI – Now Axis Bank.00 3.76 3.86 3.24 142381 509. SBP – State Bank of Patiala SBM – State Bank of Mysore.96 30984 398.61 63996 456.00 6.62 34174 506.06 4.00 230510 548.

BoI – Bank of India. PNB – Punjab National Bank. DFIC – Dubai International Financial Centre Source: Department of Banking Operations & Development. 1 Issue ii Exhibit 11: Branches of Indian Banks out side India Name of the Country Afghanistan Australia Bahamas Bahrain Bangladesh Belgium Cayman Island Channel Islands China Fiji France Germany Hongkong Israel Japan Kenya Maldive Island Mauritius Oman Seychelles Singapore South Africa South Korea Sri Lanka Thailand United Arab Emirates United Kingdom United States of America Total SBI AHB BoB BoI Canara Bank — — — — — — — — — — — — 1 — — — — — — — — — — — — Indian Bank — — — — — — — — — — — — — — — — — — — — 1 — — 2 — IOB PNB Syndicate Bank — — — — — — — — — — — — — — — — — — — — — — — — — UCO Bank — — — — — — — — — — — — 2 — — — — — — — 2 — — — — ICICI Bank — — — 1 — — — — — — — — 1 — — — — — — — 1 — — 1 — UTI Bank — — — — — — — — Total — 1 1 2 4 1 — — 1 — 1 1 1 1 2 — 1 — 1 — 1 1 — 3 — — — — — — — — — — — — — 1 — — — — — — — — — — — — — — 1 — — 1 — — — 9 — — — — — — — 8 3 1 1 1 — — — — — — — — — 1 1 1 — 1 — 2 — 2 4 — — — — 1 — — — — — — — — — — — — — — — — 2 — — — — — — — 1 — 1 1 1 1 — — — — — — — — — — — — — — — — — — — — — — — — 1 1 2 3 4 2 1 1 2 9 2 1 11 1 4 4 1 8 4 1 9 2 1 7 1 — — — 1 — — — — — — — 1 — — — — 1(DIFC) 6 — — 6 8 — 6 — 1 — — — — — — — 1 — — 1(DIFC) — — — 8 22 3 33 — 1 1 40 2 21 — 2 — 3 — 6 — 1 — 1 — 4 — 5 — 2 6 119 Notes: AHB – Allahabad Bank. 128 . Reserve Bank of India.Journal of Case Research Vol. IOB – Indian Overseas Bank. BoB – Bank of Baroda.

ECS Limited. During the year 2000-2005. Authors’ research 129 . Banking industry in India is undergoing a major transformation due to changes in economic conditions and continuous deregulation. • • • • • • • • • • • • • • • Source: RNCOS Report. Cost efficiency. The banks need some transformation initiatives in various fields for the emerging challenges. Indian Banking system is one of the largest banking networks in the world The retail-banking sector contributes 1/5th of the overall bank credit. Strategy. Banks need to access low cost funds and simultaneously improve the efficiency. 1 Issue ii Exhibit 12: Indian Banking Challenges & ICICI Bank • • • • • With a chain of more than 65. Marketplace has been redefined with new rules. Implementing organization wide initiatives involving people. The competency gap needs to be addressed otherwise there will be missed opportunities. ICICI was the first Indian institution to be licensed by Qatar Financial Centre (QFC).000 branches. In 2006 ICICI Bank has shown a continuous growth in its profit. Brand. Re-engineering of the key business processes. The retail-banking sector of India will reach a worth of $310 billion by the year 2010. These initiatives includes areas like. operational flexibility and decontrolled interest rate and liberalized norms for foreign exchange. Right Sizing and matching of skills. Innovating products to capture customer ‘mind share’ to begin with and later the wallet share. Investing in state of the art technology as the backbone to ensure reliable service delivery.55 billion. predicted by the experts. Change management and creating a new mind set. the entire assets of the banking industry increased with a compound annual growth rate of 14% touching a worth of $523 billion from $ 271 billion. Customers have become demanding and the loyalties are diffused. process and technology to reduce the fixed costs and the cost per transaction. ICICI Bank set-up an International Banking Group to implement a focused strategy for its international banking business. Organization Restructuring. The Indian retail-banking sector is growing at a rate of 122% per annum. Continuous deregulation has made the banking market extremely competitive with greater autonomy. As on December 31. 2006 ICICI Bank had an asset base of around US$ 67 billion.Journal of Case Research Vol.2 billion from $ 1. The profits of Indian banking industry jumped at a compound annual rate of 26% touching a worth of $ 5. Creating a high performing organization.

ICICI became the first Indian institution to receive ADB Loans ICICI Securities and Finance Company Limited in joint venture with J. Managed its first equity public issue. Changed to ICICI Ltd and ICICI Ltd announced the takeover of ITC Classic Finance. ICICI Bank was listed on the NYSE through an issue of American Depositary Shares.Journal of Case Research Vol. launches its first branch in New York ICICI Bank enters Germany.5 billion syndication loan agreement in Singapore ICICI Bank Eurasia LLC inaugurated its first branch at St Petersburg. ICICI made its first debenture issue for INR 60 million. merged with ICICI Bank ICICI Bank announced the setting up of its first ever offshore branch in Singapore The first offshore banking unit (OBU) at Seepz Special Economic Zone. which was oversubscribed The first two regional offices in Calcutta and Madras set up ICICI sponsored the formation of Housing Development Finance Corporation. the United States and Japan Acquired Ivestitsionno Kreditny Bank of Russia ICICI Bank became the largest bank in India in terms of its market capitalization ICICI Bank subsidiary set up in Russia Representative offices opened in Thailand. 130 . inaugurated. Indonesia and Malaysia Sangli Bank amalgamated with ICICI Bank ICICI Bank signed a multi-tranche dual currency US$ 1. Mumbai. The name The Industrial Credit and Investment Corporation of India Ltd. and ICICI Bank approved the merger of ICICI with ICICI Bank. Russia ICICI Bank enters US.8 billion in India. ICICI Bank announces merger of Bank of Madura The Boards of ICICI Ltd. launched ICICI Bank’s representative office inaugurated in Dubai Representative office set up in China ICICI Bank’s UK subsidiary launched ICICI Bank subsidiary set up in Canada Mobile Banking Service in India launched in association with Reliance Infocomm India’s first multi-branded credit card with HPCL and Airtel launched First Indian company to make a simultaneous equity offering of $ 1. ICICI building at 163. Backbay Reclamation. Morgan set up ICICI Bank set up Through the merger of Industrial Credit and Investment Corporation of India Ltd (ICICI) and Shipping Credit and Investment Corporation of India Ltd (SCICI) by their initial capital contribution of 75:25 respectively.P. 1 Issue ii Exhibit 13: Evolutionary Path of ICICI Bank Year 1955 Milestone The Industrial Credit and Investment Corporation of India Limited (ICICI) incorporated at the initiative of the World Bank. ICICI Ltd. opens its first branch in Frankfurt ICICI Bank announces in May 2008 to open 4 new offices in USA 1960 1967 1969 1977 1986 1993 1994 1997 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: ICICI Bank Ltd. the Government of India and representatives of Indian Industry.

Created both challenges and opportunities. This was the period when obstacles like oil stock came into picture. and set up country’s first rating agency. ICICI had consolidated and broad based the financial system by setting up state level financial and technical institutions and the countries first finance institution with housing specialization. But ICICI enabled consumption-led growth by accelerating the availability and affordability of retail finance and bringing world class technology to banking.Journal of Case Research Vol. 131 . A phase of Green Revolution and an emerging need in the various sectors. ICICI was among the World’s first development banks in the private sector. Reorganization (1965 – 1974). A phase. During this period ICICI was assisted with over 400 companies. To cater these needs ICICI has started export finance. Liberalization (1985 – 1994). to quickly emerge as an important source of foreign currency loans in the country. because of the India’s move towards global economy. concessional funding in industrially backward areas and loans for small enterprisers. 1 Issue ii Exhibit 14: Development of ICICI Bank Industrialization (1955 – 1964). and by this it became the first Indian bank to list on the New York Stock Exchange and emerged as a leading universal bank in India. Globalization (1995 – 2004). first venture capital company and entered into asset management and banking. India began to open up which leads to the private enterprise and free play of market forces and ICICI saw the opportunity to diversify to meet the requirements of the new paradigm. to facilitate import of industrial machinery and technology. Consolidation (1975 – 1984).

000 branches 100 ATMs Indian Private Sector Banks Foreign Banks in India Citibank Full range of products and services 1. 1996-2001 Indian Public Sector Banks Leading State Bank of Players India Retail/Product Basic product capability and suite franchise in India 50 mm customers Growth – 17% Basic proposition with many product and service gaps Aided by large reach in India Branch based banking 9. Internal Documents. 1 Issue ii Exhibit 15: Share of different Indian Banks in NRI Market.8 million customers Growth – 13.Journal of Case Research Vol.4 million customers Growth – 74% Not a focus area at the moment NRI proposition Technology platform Networked branches 130 branches 200 ATMs IVR/call centers Mobile banking Internet banking Source: ICICI Bank.6% Strong product and service offer focused on HNW customer Limited by network in India Networked branches 11 branches 130 ATMs IVR/call centers Internet banking ICICI Bank Full range of products & services 5 million customers Growth – 76% Core products and service elements in place for strong proposition Networked branches 400 branches 600 ATMs IVR/call centers Mobile banking Internet banking HDFC Bank Full range of products services 1. 2001 132 .

If accounts are with other banks. Dedicated helpdesk for backup and tracking 8. 2. distribution is achieved through bank drafts/ cheques by courier 4. Access to our network spread across all major centres 2. Competitive tariff 1. 10. 7. 2. INR Agency Clearing Services 3. 5. 1. Routing of payment through our internal electronic network if the account is with any of our branches 3. 7. 4. 4. Advising and confirming of documentary letters of credit Confirmation/reassurance of standby LCs and guarantees Documentary collections/open account transactions Payment processing and distribution Advising and confirming of documentary credits Negotiation of documents Computerised processing ensuring speedy services Waterfall management of cash flows Acting as paying and receiving agent Foreign Exchange agent Safekeeping and Custody for the underlying Account administration Cash escrows and post construction management of cash flows Investment services Regulatory Liaison Advisory Services Electronic reporting via the Internet or specialist on-line system. 5. Web/SWIFT messaging facility 2. Internet access to account 3. Web based messaging facility/SWIFT based 4. On-line access to INR account if maintained 6. 8. 1 Issue ii Exhibit 16: International Banking Services Services Key Features 1. 6. 6.Journal of Case Research Vol. Convenience in funding/providing cover 1. 3. 5. Customised MIS 5. 3. 2. 6. 1. 9. MT 950/940 facility 7. 4. 2008 133 . Cover funding through INR account/ or through foreign currency accounts 5. Customised MIS reporting Clearing of customer cheques through our code as a sub member Facility to issue demand drafts payable across all our branches by your branch/branches Collection of Cheques/instruments through our network Funds transfer service from other centres to your branch/branches through our network Facility to issue bankers cheque with our sort code Customised MIS and a dedicated helpdesk Automated INR Payment Services VOSTRO Accounts Cross Border Trade Services Trust and Retention Account Services Source: ICICI Bank Website. Funding convenience 6.

MTs.Journal of Case Research Vol.125% minimum INR 1000 0. 0.15% minimum INR 1500 Towards payment of bills directly received by imports 0. 1 Issue ii Exhibit 17: ICICI Bank Remittance Charges Type of Transaction Commission/Charges Remittances – Inward (Inward remittances received in foreign currency) TTs. draft on us in respect of which cover has been received in the nostro account or cover to be obtained by drawing on remitting bank/their agents Where the credit is to accounts maintained with any of our branches INR 500 Where the payment is to be made to other banks located in places where our branches are present. e-business.125% minimum INR 100 0.2% or min INR 1000 Remittances – Outward On all Foreign Currency Remittances Other than for payment of imports 0.15% minimum INR 1500 Towards advance payment for imports 0. 2008 134 .15% minimum INR 2000 Remittance-Outward Commission on lieu of Exchange Where remittance is made to the debit of same currency account Where cover is reimbursed in the same currency Any other case where the bank doesn’t earn any exchange margin Forward foreign exchange contracts For booking sale/purchase contracts Extension/early deliveries/cancellation (in full or part) 0.125% minimum INR 100 INR 2000 INR 2000 • All Charges are exclusive of the service tax plus cess and service is to be charged as per the applicable service tax laws Source: ICICI Bank Website.

2001 Exhibit 19: ICICI Strategies for Different Markets Traditional Models Network of Partner banks in key origination markets. internet banking. Internal Document.Journal of Case Research Vol. 2007 135 . checks. structuring expertise. enable Wires and Check processing for initiation Remittance initiation using Bank’s overseas branches. cards for initiation and a wider choice for distribution of remittances Specialized transfer products in various geographies in alliance with key banks through both online and offline modes. for offshore account holders Partner bank based Products Bank Branch based Products Innovative Models Online Product-Webbased access Web-based interface with online account debit. Alliance Products Source: CashTech Solutions. wires. 1 Issue ii Exhibit 18: ICICI Group Strategy Domestic Retail Banking Global Corporate & Investment Banking International Retail Banking Rural Banking Enhance share of retail deposits and sustain leadership position in credit franchise Leverage corporate relationships. balance sheet and global syndication capability Leverage NRI opportunity and technology capabilities Invest for future growth V A L U E S H A R E H O L D E R Insurance & Asset Management Enhance and leverage market leadership position Source: ICICI Bank.

Journal of Case Research Vol. 1 Issue ii Exhibit 19 b: ICICI Bank’s Growth Plan. 2001 Targeting the opportunity Market Potential Competition Product Proposition Overseas Platform Strong domestic customer acquisition support 136 .

Internal Document. 1996-2001 Potential partners/targets Airlines Travel houses Objective Potential services Alliances Target NRIs when they are leaving/coming back to India Target students who are likely to go overseas Target employees going overseas Target NRIs when they are more likely to come back/need services Co-branded credit cards Discount on travel services Focused marketing Universities with high potential from NRI perspective Software companies Festivals Diwali Christmas Student loans Bridge cards Gift services Source: ICICI Bank.Journal of Case Research Vol. 2001 137 . 1 Issue ii Exhibit 20: Initiatives of ICICI Bank in the domestic front.

The money is transferred from his US bank account after 1 to 2 working days to ICICI Bank. 2006 138 . • • • • • • • *The dollars are converted in Mumbai and the rupee equivalent is credited to the ICICI Bank account of the beneficiary on the 5th working day after transfer from the US bank account Source: Business Line.Journal of Case Research Vol. Once the validation is done. which is the clearing network for electronic funds transfer in the US. 1 Issue ii Exhibit 21: Foreign Remittance Steps: New York – Mumbai* • • “X” a remitter. It does this by making two small deposits and a withdrawal. ICICI Bank in Mumbai receives the payment instruction from ICICI bank New York via SWIFT. 03. “X” will be informed about this and he can initiate the process of transferring money. he must provide the details of the beneficiary such as Name. the type of account that he holds and the 9 digit routing number (a number given by the US Fed to identify every branch in the US) ICICI Bank will validate the account for security reasons within 3 days. Aug. Bank Account. After logging on to the Money2India website. Address. Currency etc. In the event of the beneficiary having a different bank account (non-ICICI Bank) it may take another day. must register himself as a user with Money2India Web site “X” can opt to transfer money through the Automated Clearing House. New York. “X” needs to provide detail such as his US bank account number.

ICICI Trusteeship Services Limited 1. Formerly known as ICICI Securities Limited ICICI Wealth Management Inc. ICICI Lombard General Insurance Co. ICICI Bank Canada ICICI Wealth Management Inc. It has not yet been capitalized and is yet to commence operations. 2. 10. ICICI Home Finance Company Limited 9. 4.3 ICICI Bank Eurasia Limited Liability Co. ICICI Investment Management Company Ltd. 139 . ICICI International Limited 1. ICICI Prudential Life Insurance Company Ltd. 5. ICICI Venture Funds Management Co. ICICI Securities Inc.5 6.7 7. 6. Ltd. 5. ICICI Prudential Asset Management Co. 4. 4. 3. Formerly known as ICICI Brokerage Services Limited.Journal of Case Research Vol. 2. 3.4 6. Ltd. Ltd. Subsidiary of ICICI Securities Limited Formerly known as Prudential ICICI Trust Limited Subsidiary of ICICI Securities Holdings Inc. International ICICI Bank UK Plc. 7. 1 Issue ii Exhibit 22: Subsidiaries of ICICI Bank Domestic 1. ICICI Prudential Trust Limited 6 7. was incorporated as a subsidiary of ICICI Canada in fiscal 2007. Formerly known as Prudential ICICI Asset Management Company Limited. ICICI Securities Holdings Inc. 2. ICICI Securities Limited1 ICICI Securities Primary Dealership Limited2 3. 8. 5.

000 Indian Diaspora: 336. 2008 Indian Diaspora: 1.765 Indian Diaspora: 2.829 140 .Journal of Case Research Vol.000 Indian Diaspora: 190.000 UK USA GCC Fiji Mauritius Australia Indian Diaspora: 714.392.718 Indian Diaspora: >1. 1 Issue ii Exhibit 23: Global Foot Prints of ICICI Bank.200.678.

Journal of Case Research Vol. 1 Issue ii 141 .

28 12533.13 7332.65 5968.23 PBDITA/Total 77.Journal of Case Research Vol.09 6.66 1598.86 10.80 1048.33 13.99 24663.49 35450.93 .33 1423.56 12899. 1 Issue ii Exhibit 24: ICICI Bank: Financial Details (in INR 10 million) Mar98 12mths Total Income 347.34 29957.47 1200.92 3981.08 Investments Equity shares Debt instruments Group companies Non-group companies Source: CMIE Data Base Mar99 Mar00 Mar01 12mths Mar02 12mths Mar03 12mths Mar04 12mths Mar05 12mths Mar06 12mths Mar07 12mths 12mths 12mths 642.44 4.00 261.70 0.97 44051.80 2.35891.55 6009.50 53012.2516.70 72.83 2424.18 8345.91 - 14.76 Net Worth 266.45 9.23 4400.31 8360.49 .66 13.96 7283.98 22555.66 71.14 83.23 2762.30 43435.00 78.37 2066.95 39846.66 13.69 4768.40 48666.35 71547.97 2995.41 1861.623 PAT net of 50.61 15.44 - 13.15 589.75 Borrowings 192.15 10.09 63.86 14.10 1469.06 4.43 161.52 50487.08 GFA: Gross Fixed Asset.88 4072.71 70127.82 Income (%) PAT net of P 14.33 1149.05 10.37 10.26 367.07 37343.30 4812.93 18.03 11.29158.11 41753.56 6298.45 & E /Tot inc (%) RONW 22.17 3.97 9.39 ROCE 16.25 3.21 5525. RONW: Return on Net Worth.58 75.26 P&E GFA 218.03 73.65 7233.17 8.64 69.62 6594.57 19368.67 31238.23 12949.47 79.83 .30 70661.57 308.98 5090.40 91257.68 4494.53 17.81 2860.42 22.47 4918.38 20.51 1312.55 9.37 12069.39 64.70 3861.01 782.56 608.80 58969.08 35462.19 2492.04 -2.56 315.23 253.45 105.89 659. ROCE: Return on Capital Employed 142 .54 3107.

Tarun Khanna & Ramana Nanda. 306-507-1. Business Line – August 03. http://www. Xavier Institute of Management. CMIE Data Base.org/books/GoingGlobal-Strategies_ovw. Company Annual Reports.nriinternet.pdf 8. Bhubaneswar 3. Path to Globalization.pdf 9. Xavier Institute of Management. Bhubaneswar 4. ISI Emerging Markets.com 2.iupindia. Harvard Business School 11. http://www.com 6.unescap.bis. Bhubaneswar 5.org/drpad/publication/fin_2206/part4. ICICI’s Global Expansion. http://www. September 27.Journal of Case Research Vol. Xavier Institute of Management. http://www. SANSCO Data Base. 2006. ICICI Bank. ECCH 143 . 1 Issue ii References: 1. 9-706-426. Boris Typsin & Ashok Som.org/review/r050321g. ESSEC Business School. http://www.icicibank.asp 10. 2006 7.

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