Summer Training Report

Conducted at:


In partial fulfillment of the requirement for the award of the degree of MASTER OF BUSINESS ADMINISTRATION (Session 2008-2010)

Under the guidance of:
Mr. PARDEEP KUMAR (Business Development Executive)

Submitted by:
HITESH Roll No: 1208828


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The students of M.B.A are required to under go a practical training at some business enterprises after 1st year for six to eight weeks. This meant to give them exposure to practical aspects of business and first hand information pertaining to challenges ahead of them when they become full fledges managers. MBA is stepping – stone to Management career. In order to achieve practical, positive and concrete results the theoretical knowledge must be supplemented with exposure to real environment. I was fortunate that ICICI Bank, Karnal provided me an opportunity to undergo this summer training. This report is culmination of my work with Mr. Pardeep kumar, (BDE) at ICICI Bank, Karnal.

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In pursuit of an MBA, Has given me the opportunity to gain invaluable experience under the guidance of. Their continuous support and cooperation along with their valuable in hand experience about the Banking Industry (Investments) provided me with the conceptual understanding & practical approach needed to work efficiently for this project. Though a lot of hard work has gone into the making of this project, it would not have been possible without the assistance of many people their at ICICI bank. So, I would like to extend my sincere gratitude towards ICICI Bank Ltd. I would also like to thanks my colleagues and my family members for helping me throughout this project at various stages and in various forms, without whose support it would have been difficult for me to complete the project. I hope this report reflects that my learning’s in the past fourteen weeks is as beneficial to the organization as it has been to me.

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I HITESH do hereby declare that the training report entitled “ANALYSIS OF FINANCIAL & INVESTMENT OPTIONS OF ICICI BANK” Karnal submitted by me for the partial of fulfillment of degree of Master of Business Administration from MAHARISHI MARKENDSWER University, MULLANA is having original work conducted by me. The data and facts provided in the report are authentic to the best of my knowledge. I solemnly declare that the work done by me is original and no copy of it has been submitted to any other university for award of any other degree, diploma, and fellowship on similar


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26 61 69 71 80 81


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The Indian capital market has seen an unprecedented boom in its activity in the last decade. We can now boast of a very large investor population and substantial volumes of trade. Under this report I study the various investment options available to investor & their knowledge regarding invest. Mainly this project report is base on the study of analysis of financial & investment product of ICICI. 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, life and non-life insurance, venture capital and asset management. I also study Systematic investment plan .Systematic Investment Plan is a powerful tool with a strategy of not only preserving capital but also translating into substantial creation of wealth in the long run. Under this plan Investors invests a specific amount for a continuous period, at regular intervals. At the last I give some suggestion which one have to remember when he invests his money.

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ICICI Bank is the largest private sector bank and the second largest bank in the country in terms of assets. It is a pan-India player with around 1460 branches. The bank has boosted its overseas operations in the last three years and has now presence in 18 countries either through subsidiaries or representative offices. Together with its subsidiaries, ICICI Bank offers a complete spectrum of financial services and products ranging from commercial banking to investment banking, mutual fund to insurance. During the current year, the Bank has pursued a strategy of lightening the balance sheet and prioritizing capital conservation, liquidity management and risk containment given the challenging economic environment. The Bank has also placed strong emphasis on efficiency improvement and cost rationalization. During Q3-2009, the Bank continued with this strategy, while also taking advantage of market opportunities to increase its treasury income. In line with the above strategy, the loan book of the Bank stood at Rs. 212,521 crore (US$ 43.6 billion) at December 31, 2008.Current and savings account (CASA) deposits constituted 27.4% of total deposits at December 31, 2008 compared to 27.2% at December 31, 2007.

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The project involves Study of different financial instrument of ICICI Bank and simultaneously counseling the investors about the best financial and investment options available and to make them aware about the risk and return parameters of those investment instruments. Project also involves making of portfolio for the potential investors. It compares the traditional Investment Products with the Modern Investment Products and aims to create a balance between these two options by creating a portfolio where the investor would be able to generate maximum returns from his investments without taking a huge risk and it ultimately finds the best possible investment mix. To involve small investors in the stock market and to channelize their savings an interesting scheme of “Systematic Investment Plan (SIP)” has been introduced. As per my analysis, the SIP scheme has never given negative returns in any scheme amongst all the funds. It is an excellent ad safe way to enter into the mutual funds. Last but not the least extensive research was done on coming up with investment guidelines to

make it easier for potential clients to invest their money according to their own will.

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Banking is topic, practice, business or profession almost as old as the very existence of man, but literarily it can be rooted deep back the days of the Renaissance (by the Florentine Bankers). It has sprouted from the very primitive Stone-age banking, through the Victorian-age to the technologydriven Google-age banking, encompassing automatic teller machines (ATMs), credit and debit cards, correspondent and internet banking. Investment has always been a vicinity of concern not only to bankers but to all in the business world The axle of this study is to have a clearer picture of how people invest their money & where. In this light, the study in its first section gives a background to the study and the second part is a detailed literature review on banking and investment option of ICICI. The third part of this study is on hypothesis testing and use is made of a simple regression model. This leads us to conclude in the last section that ICICI banks with its investment options. Author: Felix Achou Takang; Haslem John A Keywords: deposits; Mutual Funds; SIP; Income scheme; Bonds; Maturity date; Liquidity; Surcharge; NPV. .

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 To study the various investment options which is available to customers?  To study the various financial & investment products of ICICI Bank.  Make comparison between various investment options.  To know the awareness of investment in people.  To know about the important tips for investing your money.

It is used for this project is judgment sampling which is one of type of non-probability sampling. As my research is on financial analysis there no as such requirement of any other sampling method.

Research design is the first and foremost step in methodology adopted for undertaking research study. It is overall plan for the collection and analysis of data in the research project. Thus it is an organized, systematic of data in the research to the formulation, implementation and control of research project, it can be 1) Exploratory 2) Descriptive 3) Casual or Experimental

The project methodology includes primary as well as secondary sources of data. The primary data was collected from the finance department of ICICI bank by directly interviewing them & direct interview of different people. - 13

The secondary data sources include company records, data pool, publish material.



This is the first step in the process. It forms the foundation of whole data:

Primary data: 1.
department. Non-structured interview with employees of finance department & others head of


Direct interview of different people.

Secondary Data: Company data pool, records and published materials TOOLS & TECHNIQUES OF ANALYSIS Organization of data:
The information/data collected during data collection process are Organizing and presented in comprehensible sequences to make them understandable. The data, thus obtained is them edited, classified, and put in a tabulated from to make it understandable.

Presentation of data:
After the data has been properly organized, it is ready for presentation. There are different modes of presentation like table, charts etc. The main objectives of presentation are to put collected data into an easy reliable form.

Analysis of data:
After organizing and presenting the data, the researcher then has to proceed towards conclusions by logical inferences. The whole data is then analyzed: -By bringing raw data to measured data -By summarizing the data -Applying analytical methods to manipulate the data so that their inter-relationship and quantitative meaning become evident.

Interpretation of data:

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Interpretation in our usage means to bring out the meaning of data or to convert mere data into information. From the analysis of data then various conclusions are drowned on the basis of logical inferences.


 whole.  

Since sample size is only 100, which is not a true representative of the population as a

Human biasness is also considered as a major limitation. Also that human behavior is not constant, so the response collected through the cannot be used for future reference.

questionnaire  whole.

Mostly population for the search was the population of Karnal. In such a small area

the result cannot be used for making the conclusion regarding the ICICI bank the nation as

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Banking in India is mainly governed by the banking regulation Act 1949 and RBI 1934.RBI and government of India exercise control over the banks from the opening of banks to their winding up by virtue of powers conferred under these statues. Banks in India fall under following categories: 1.) 2.) 3.) Body Corporate constituted under special Act. Company registered under companies Act 1956 or foreign companies. Co-operative society registered under co-operative society Act.

Banking is: “To LEND OR INVEST deposits of money from the public payable on demand and withdraw able by cheque, draft, and order.” EVOLUTION OF BANKING: The word bank is derived from the French word banque, which means a bench. If a banker failed his banquet (bench) was broken up by the people, hence the word bankrupt has come. In simple term it means a person who has lost all his money, wealth or financial resources.

Features of Banking: From the view of above authorities, we can derive the following basic characteristics of Banking: - 17

1. 2. 3. 4. 5.

Dealing in money Deposits must be withdraw able Dealing with credit Commercial in nature Nature of agent

SERVICES TYPICALLY OFFERED BY BANKS Although the type of services offered by a bank depends upon the type of the bank and the country, services provided usually include.      Directly take deposits from the general public and issue checking and saving accounts. Lend out money to companies and individuals (see moneylender) Facilitate money transactions such as wire transfer and cashers checks. Cash Checks. Issue credit cards, ATM, and debit cards online banking. Indian Banking The first bank in India, though conservative, was established in 1786. From 1786 till today, the journey of Indian Banking System can be segregated into three distinct phases. 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. New phase of Indian Banking System with the advent of Indian Financial & Banking Sector

Reforms after 1991. The Indian banking can be broadly categorized into Nationalized (government owned), private banks and specialized banking institutions. The banking in India is highly fragmented with 30 banking units contributing to almost 50% of deposit and 60% of advances. - 18

Indian nationalized banks (banks owned by the government) continue to be the major lenders

in the economy due to their sheer size and penetrative networks which assures them high deposit mobilization.  Industry estimate indicate that out of 274 commercial banks operating in India,223bank in

the public sector & 51 are in the private sector

Top 20 Banks in India With the advancement of technology and the birth of competition, banks are in the race of becoming the best in the country. With an eye upon customer satisfaction policy they are providing best of the best services with the minimum hazards. Banks like ABN AMRO introduced banking with a coffee. It made a tie-up with one of the best coffee bar in the country, Barista and remained open till late evening for customers with a setup of a coffee bar in the premises. Few banks have introduced world ATM card to make travelers across the globe more safe and secure. What else. Internet and Phone Banking is the call of the day for banks. In this race towards the best, we have selected top 20 banks in the country from all segments. It is not the ranking of banks but only for general information about the top banks in India. The following are best 20 banks which are currently operating in India under the guidelines of Reserve Bank of India (RBI)

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Abn Amro Bank In India Allahabad Bank In India American Express Bank In India Andhra Bank In India Bank Of India Canara Bank Central Bank Of India CITI Bank Corporation Bank HDFC Bank

HSBC Bank ICICI Bank IDBI Indian Overseas Bank Oriental Bank Of Commerce Punjab National Bank State Bank Of India (SBI) Standard Chartered Bank United Bank Of India Axis bank


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I CI CI Bank Lt d.
Company Overview

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ICICI Bank is India's second-largest bank with total assets of about Rs.399795 crore at December 31, 2008 and profit after tax of Rs. 1272 crore in the nine months ended December 31, 2008. ICICI Bank has a network of about 1416 branches. 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, life and non-life insurance, venture capital and asset management. After consideration of various corporate structuring alternatives in the context of the emerging competitive scenario in the Indian banking industry, and the move towards Universal banking, 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 would create the optimal legal structure for the ICICI group's universal banking strategy. In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. The merger was approved by shareholders of ICICI and ICICI Bank in January 2002, by the High Court of Gujarat at Ahmadabad in March 2002, and by the High Court of Judicature at Mumbai and the Reserve Bank of India in April 2002. Consequent to the merger, the ICICI group's financing and banking operations, both wholesale and retail, have been integrated in a single entity.

Highlights of company
 The profit after tax for Q3-2009 was Rs. 1,272 crore (US$ 261 million) which represents an increase of 25% over the profit after tax of Rs. 1,014 crore (US$ 208 million) in the quarter ended September 30, 2008 (Q2-2009). Profit after tax for the quarter ended December 31, 2007 (Q3-2008) was Rs. 1,230 crore (US$ 253 million).  Operating profit for Q3-2009 was Rs. 2,771 crore (US$ 569 million) which represents an Net interest income for Q3-2009 was Rs. 1,990 crore (US$ 409 million) compared to the net The Bank earned treasury income of Rs. 976 crore (US$ 200 million) in Q3-2009, primarily increase of 23% over operating profit of Rs. 2,259 crore (US$ 464 million) for Q3-2008.  interest income of Rs. 1,960 crore (US$ 402 million) for Q3-2008.  by positioning its treasury strategy to benefit from the decline in yields on government bonds.

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Operating expenses decreased 19% to Rs. 1,680 crore (US$ 345 million) in Q3-2009 from

Rs. 2,080 crore (US$ 427 million) for Q3- 2008. The cost/average asset ratio for Q3-2009 was 1.8% compared to 2.2% for Q3-2008.


ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse and Prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). ICICI Prudential's equity base stands at Rs. 9.25 billion with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. In the period April-December 2004, the company garnered Rs 8.6 billion of new business premium for a total sum assured of over Rs 73.6 billion and wrote nearly 345,000 policies. The company has a network of over 50,000 advisors; as well as 7 banc assurance tie- 23

ups. Today, ICICI Prudential has emerged as the No. 1 private life insurer in the country, with a wide range of flexible products that meet the needs of the Indian customer at every step in life


ICICI Lombard General Insurance Company Limited is a 74:26 joint venture between ICICI Bank Limited and the US-based $ 26 billion Fairfax Financial Holdings Limited. ICICI Bank is India's second largest bank, while Fairfax Financial Holdings is a diversified financial corporate engaged in general insurance, reinsurance, insurance claims management and investment management. Lombard Canada Ltd., a group company of Fairfax Financial Holdings Limited, is one of Canada's oldest property and casualty insurers. ICICI Lombard General Insurance Company received regulatory approvals to commence general insurance business in August 2001.


     

Mr. K. V. Kamath, Chairman Mr. Sridar Iyengar Mr. Lakshmi N. Mittal Mr. Narendra Murkumbi Dr. Anup K. Pujari Mr. Anupam Puri - 24

          

Mr. M.S. Ramachandran Mr. M.K. Sharma Mr. P.M. Sinha Prof. Marti G. Subrahmanyam Mr. T.S. Vijayan Mr. V. Prem Watsa Ms. Chanda D. Kochhar, Managing Director & CEO Mr. Sandeep Bakhshi, Deputy Managing Director Mr. N. S. Kannan, Executive Director & CFO Mr. K. Ramkumar, Executive Director Mr. Sonjoy Chatterjee, Executive Director


Current Structure ICICI Bank


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Asset Management


Proposed Structure

Other Subsidiaries

ICICI Financial Services

Assets Management

General Insurance

Life Insurance

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1.         


    2.          


3.     


4. 5.



8.     






ICICI Bank offers wide variety of Deposit Products to suit Investors requirements. Coupled with convenience of networked branches with over 1800 ATMs and facility of E-channels like Internet and Mobile Banking, ICICI Bank brings banking at Customers doorstep. There are three Options available to the investors.  Fixed Deposits - 29

 

Savings Account Recurring Deposit

Fixed Deposits
Safety, Flexibility, Liquidity and Returns!!!! A combination of unbeatable features of the Fixed Deposit from ICICI Bank Fixed Deposit  Wide range of tenures  Choice of investment plans  Partial withdrawal permitted  Safe custody of fixed deposit receipts  Auto renewal possible  Loan facility available Easy Deposit  Free Debit/ATM card  No need to open a Savings account.  Options of Easy Withdrawal and Easy Loan  Wide range of tenures  Auto renewal possible  Loan facility available

Benefits of Fixed Deposits
  A wide range of tenures, ranging from 15 days to 10 years, to suit your investment plan. Partial withdrawal is permitted in units of Rs 1,000. The balance amount earns the original Safe custody of your fixed deposit receipts. Auto renewal is provided. Loan facility is available upto 90% of principal and accrued interest. - 30

rate of interest.   

Choice of two investment plans: Traditional or Reinvestment.

Savings Account
ICICI Bank offers Savings Account with a host of convenient features and banking channels to transact through. Savings Account  Debit-cum-ATM card  Auto Invest Account  Internet Banking  Phone Banking  Anywhere Banking  Standing instructions  Nomination facility  Doorstep service

Special Savings Account  Comprehensive Banking  Solutions with added features  Anywhere Banking  Ideal for tax-exempt entities  Internet Banking

 The ICICI Bank Ncash debit card is a debit-cum-ATM card providing you with the Auto Invest Account Internet Banking is offered free of cost. convenience of acceptance at merchant establishments and cash withdrawals at ATMs.  

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Anywhere Banking - This facility entitles the account holder to withdraw or deposit cash You can give us various types of standing instructions like transferring to fixed deposit An average quarterly balance of Rs 5,000 only. Nomination facility is available. Interest is payable half-yearly.

upto a limit of Rs.50,000 across all ICICI Bank branches.  accounts at regular intervals.   

Senior Citizen Services
ICICI Bank offers an ideal Banking Service for those who are 60 years and above. The Senior Citizen Services from ICICI Bank has several advantages that are tailored to bring convenience.

Senior Citizen Services  Higher Interest Rates  Special Demand Loans against deposit  Free collection of outstation cheques drawn on our locations  Debit-cum-ATM card  Auto Invest Account  Internet Banking  Phone Banking  Anywhere Banking  Standing instructions  Nomination facility

Young Stars

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ICICI Bank helps children learn the value of finances and money management at an early age. Banking is a serious business and ICICI Bank aims to teach the young crowd how to manage their personal finances.

Recurring Deposits
When expenses are high, one might not be having adequate funds to make big investments. Through ICICI Bank Recurring Deposit one can invest small amounts of money every month that ends up with a large saving on maturity. So you enjoy twin advantages- affordability and higher earnings.

Recurring Deposit  Encourages savings  High interest rates of interest  Loans against deposits available  Non-applicability of Tax Deduction at Source (TDS)  Encourages savings without stress on your finances.  High rates of interest (identical to the fixed deposit rates).  Non-applicability of Tax Deduction at Source (TDS).

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Along with Deposit products and Loan offerings, ICICI Bank assists you to manage your finances by providing various investment options ranging from ICICI Bank Tax Saving Bonds to Equity Investments through Initial Public Offers and Investment in Pure Gold. ICICI Bank facilitates following investment products:
     ICICI Bank Tax Saving Bonds Government of India Bonds Investment in Mutual Funds Initial Public Offers by Corporate Investment in "Pure Gold"

Bonds are similar to Fixed Deposits. Like fixed deposit receipts, Bonds are normally issued by a bank, a financial institution or a company, for a fixed period. A specified rate of interest is payable to the investor at regular intervals. However, unlike Bonds, Fixed Deposits are not transferable. Also, while Bonds may be secured or unsecured, Fixed Deposits are always unsecured.

8% Savings Bonds (Taxable), 2003  Low risk.  Reasonable investment tenure.  Nomination facility available.  Cannot be traded in secondary market.  Interest income taxable. - 34

Customer can invest in IPO’s through ICICI Bank which offers hassle-free & convenient of investing in equities. ICICI Bank helps in gathering in-depth analyses of new IPO’s issues (Initial Public Offerings) which are about to hit the market.

Gold has been traditionally the most favored form of investment for Indians. In fact, India, even today is amongst the highest consumers of Gold in the world. However, the Gold market remains largely unorganized with reliability and convenience remaining the key issues for gold buyers in the country.ICICI Bank with its ‘Pure Gold’ offer attempts to bridge the gap between the need of the customers for buying gold and availability of an organized avenue to satisfy that need, by taking care of the two key components – Reliability and Convenience.

A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital apperceptions realized are shared by its unit holders in proportion to the numbers of units owned by them .Thus, Mutual fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified , professionally managed basket of securities at a relatively low cost.

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1 2 3

Fixed Deposit TRADITIONAL METHODS Savings Recurring Deposit


Less Than 3-8.5% p.a Less than 6% p.a 3.5% p.a

Taxable Taxable Taxable


ICICI Bank Tax Saving Bonds



Deductible From Taxable Income Tax Free


Government of India Bonds

No Risk



Investment in Mutual Funds


Average returns Depend On Market Fluctuations High or Low Depends on Market Conditions

Funds Under ELSS Deductible From Taxable Income Returns After One Year are Tax Free


Initial Public Offers by Corporate


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Investment in “Pure Gold”


Depends on the Growth in the Market


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Mutual Funds:
A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital apperceptions realized are shared by its unit holders in proportion to the numbers of units owned by them .Thus, Mutual fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified , professionally managed basket of securities at a relatively low cost. There are two basic types of mutual funds. "Open-ended" or "Open" mutual funds are the most common type of mutual funds. Investors may purchase units from the fund sponsor or redeem units at the valuation promised in the fund documents, usually on a daily basis. "Closed-ended" or "Closed" mutual funds are traded as financial securities, once they are issued, and holders must sell their units on the stock market to receive their funds back.

Open Mutual Funds
Open mutual funds are established by a fund sponsor, usually a mutual fund company. The sponsor has promised in the documents of the fund that it will issue and refund or units of the fund at the fund unit value. This type of fund is valued by the fund company or an outside valuation agent. Open mutual funds keep some portion of their assets in short-term and money market securities to provide available funds for redemptions. A large portion of most open mutual funds is invested in highly "liquid securities", which means that the fund can raise money by selling securities at prices very close to those used for valuations.

Closed Mutual Funds
Closed mutual funds are really financial securities that are traded on the stock market. A sponsor, a mutual fund company or investment dealer, will create a "trust fund" that raises funds through an underwriting to be invested in a specific fashion. The fund retains an investment manager to manage the fund assets in the manner specified. Once underwritten, closed mutual funds trade on stock exchanges like stocks or bonds. - 38

Aggressive Growth Funds
Aggressive growth funds aim to maximize capital gains (buy low and sell high). These funds may leverage their assets by borrowing funds, and may trade in stock options. These funds often have low, current yields. Because they don't invest for dividend income, and often have little cash in interest-bearing accounts, short-term yield is not optimized.

Growth Funds
Growth funds are similar to aggressive growth funds, but do not usually trade stock options or borrow money with which to trade. Most growth funds surpass the S&P 500 during bull markets, but do a little worse than average during bear markets. Just as in aggressive growth funds, growth funds are not aimed at the short-term market timer. The aggressive investor may find that they are an ideal complement for aggressive growth funds, as the differing investment strategies used by the two types of funds can produce maximum gains. The volatility of these funds makes them inappropriate as the sole investment vehicle for risk-averse investors. Examples: 1) 2) 3) Reliance Growth Fund HDFC Growth Fund Prudential ICICI Growth Fund

Growth-Income Funds
Growth-income funds are specialists in blue chip stocks. These funds invest in utilities, Dow industrials, and other seasoned stocks. They work to maximize dividend income while also generating capital gains. These funds are suitable as a substitute for conservative investment in the stock market.

Income Funds
Income funds focus on dividend income, while also enjoying the capital gains that usually accompany investment in common and preferred stocks. These funds are particularly favored by conservative investors. Examples: Tata Income Fund Birla Income Plus Fund Prudential ICICI Income Fund. - 39

International Funds
International funds hold primarily foreign securities. There are two elements of risk in this investment: the normal economic risk of holding stocks; as well as the currency risk associated with repatriating money after taking the investment profits. These funds are an vital aspect of many portfolios, but any individual fund may prove too volatile for the average investor as the sole investment.

Asset Allocation Funds
Asset allocation funds don't invest in just stocks. Instead, they focus on stocks, bonds, gold, real estate, and money market funds. This portfolio approach decreases the reliance on any one segment of the marketplace, easing any declines. A plus factor is limited by this strategy as well.

Precious Metal Funds
Precious metal funds invest in gold, silver, and platinum. Gold and silver often move in the opposite direction from the stock market, and thus these funds can provide a hedge against investments in common stocks.

Bond Funds
Bond funds invest in corporate and government bonds. A common misunderstanding among investors is that the return on a bond fund is similar to the returns of the bonds purchased. One might expect that a fund that owns primarily 8 percent-yielding bonds would return 8 percent to investors. In fact, the yield from the fund is based primarily on the trading of bonds, which are extraordinarily sensitive to interest rates. Mutual Funds can also be classified into three categories viz. Equity Funds, Debt Funds and Balanced Funds

These funds invest a major part of their corpus in equities. The composition of the fund may vary from scheme to scheme and the fund manager’s outlook on various scrips. The Equity Funds are subclassified depending upon their investment objective, as follows: Diversified Equity Funds Mid-Cap Funds Sector Specific Funds Tax Savings Funds (ELSS) Equity investments are meant for a longer time horizon. Equity funds rank high on the risk-return matrix. - 40

These Funds invest a major portion of their corpus in debt papers. Government authorities, private companies, banks and financial institutions are some of the major issuers of debt papers. By investing in debt instruments, these funds ensure low risk and provide stable income to the investors. Debt funds are further classified as:

Gilt Funds: Invest their corpus in securities issued by Government, popularly known as GoI debt
papers. These Funds carry zero Default risk but are associated with Interest Rate risk. These schemes are safer as they invest in papers backed by Government. Examples:Birla Gilt Fund,Prudential ICICI Gilt Investment.

Income Funds: Invest a major portion into various debt instruments such as bonds, corporate
debentures and Government securities.

MIPs: Invests around 80% of their total corpus in debt instruments while the rest of the portion is
invested in equities. It gets benefit of both equity and debt market. These scheme ranks slightly high on the risk-return matrix when compared with other debt schemes.

Short Term Plans (STPs): Meant for investors with an investment horizon of 3-6 months. These
funds primarily invest in short term papers like Certificate of Deposits (CDs) and Commercial Papers (CPs). Some portion of the corpus is also invested in corporate debentures.

Liquid Funds: Also known as Money Market Schemes, These funds are meant to provide easy
liquidity and preservation of capital. These schemes invest in short-term instruments like Treasury Bills, inter-bank call money market, CPs and CDs. These funds are meant for short-term cash management of corporate houses and are meant for an investment horizon of 1day to 3 months. These schemes rank low on risk-return matrix and are considered to be the safest amongst all categories of mutual funds. Examples: Birla Cash Fund, HSBC Cash Fund

These funds, as the name suggests, are a mix of both equity and debt funds. They invest in both equities and fixed income securities, which are in line with pre-defined investment objective of the scheme. These schemes aim to provide investors with the best of both the worlds. Equity part provides growth and the debt part provides stability in returns.

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Each plan of every mutual fund has three options – Growth, Dividend and dividend reinvestment. Separate NAV are calculated for each scheme.

Dividend Option :Under the dividend plan dividend are usually declared on quarterly or annual basis. Mutual fund reserves the right to change the frequency of dividend declared.

Dividend reinvestment option:Instead of remittances of units through payouts, Units holder may choose to invest the entire dividend in additional units of the scheme at NAV related prices of the next working day after the record date. No sales or entry load is levied on dividend reinvest.

Dividend Payout option:Dividend declared by the fund manager is remitted to the investors and NAV is reduced by that value.

Growth Option :Under this plan returns accrue to the investor in the form of capital appreciation as reflected in the NAV. The scheme will not declare the dividend under the Growth plan and investors who opt for this plan will not receive any income from the scheme. Instead of income earned on their units will remain invested within the scheme and will be reflected in the NAV.

Calculation of NAV

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Mutual funds provide following benefit to investors
• Professional Management

Mutual Funds provide the services of experienced and skilled professionals, backed by a dedicated investment research team that analyses the performance and prospects of companies and selects suitable investments to achieve the objectives of the scheme. • Diversification

Mutual Funds invest in a number of companies across a broad cross-section of industries and sectors. This diversification reduces the risk because seldom do all stocks decline at the same time and in the same proportion. You achieve this diversification through a Mutual Fund with far less money than you can do on your own. . • Return Potential

Over a medium to long-term, Mutual Funds have the potential to provide a higher return as they invest in a diversified basket of selected securities. • Flexibility

Through features such as regular investment plans, regular withdrawal plans and dividend reinvestment plans, you can systematically invest or withdraw funds according to your needs and convenience. • Choice of Schemes

Mutual Funds offer a family of schemes to suit your varying needs over a lifetime. • Well Regulated

All Mutual Funds are registered with SEBI and they function within the provisions of strict regulations designed to protect the interests of investors. The operations of Mutual Funds are regularly monitored by SEBI. - 43

- The bread and butter of the Mutual Funds industry

Buy Low and sell high, just four words sum up a winning strategy for the stock markets I ndian Market is a synonym for volatility and dynamism. National Stock Exchange is the most liquid exchange in the world. Predicting Indian Market is the most difficult task, almost an impossible one. The inability to time the market on a regular basis can leave an investor high and dry. However, ironically, the time in the market has historically shown more consistent success than timing the market. Though great returns from the market may not always be possible, stable and consistent returns are. And one of the best ways to get this return in this market of ours is the Systematic Investment Plan (SIP) offered by the mutual funds. SIP is a powerful tool with a strategy of not only preserving capital but also translating into substantial creation of wealth in the long run. Under this plan Investors invests a specific amount for a continuous period, at regular intervals. By doing this, the investor gets the advantage of rupee cost averaging, which means that by investing the same amount at regular intervals, the average cost per unit remains lower than the average market price, irrespective of how the market is - rising, falling or fluctuating i.e. with every fluctuation in the market the units are purchased systematically, thus resulting in averaging the purchase price. Whereas this is not true for a one-time investment. This is the reason why a SIP investor gets phenomenal rate of return compared to a one-time investor. Features of a systematic investment plan 1. To get a disciplined investment 2. To create value/wealth. 3. To avoid short-term fluctuations in the market. 4. Avoid risk of timing the market. How to start an SIP? 1. Start with an initial investment 2. Invest a fixed sum every month 3. Minimum investment – Rs.1000 per month 4. Post-dated cheques/standing instructions to the bank 5. Investments happen on the preset date in the specified scheme every month - 44

 An SIP reduces these risks by spreading the investments over a longer period of time, at An SIP reduces the average cost of investment in fluctuating markets SIP gives the advantage by allowing one to buy fewer units when the market is up and more Tax free returns after on year of investments.

various levels of the market.  

units when the market moves down, thus an investor buys at an average price. 

For Example:-Let us suppose that a person invests Rs.1,000 every month, in an equity fund using the SIP. The following table shows how investments would look in the two scenarios of fluctuating and rising market.


Amount Invested (Rs.)

Fluctuating Market

Rising Market

Purchase No. of Units Purchase No. of Units Price Price (Rs.) Purchased (Rs.) Purchased 10.00 8.20 7.40 6.10 5.40 6.00 8.20 9.25 10.00 11.25 13.40 14.40 100.00 121.95 135.14 163.93 185.19 166.67 121.95 108.11 100.00 88.89 74.63 69.44 1,435.90 10.00 10.50 11.00 11.50 12.00 12.40 12.90 13.35 14.00 14.50 15.00 15.50 100.00 95.24 90.91 86.96 83.33 80.65 77.52 74.91 71.43 68.97 66.67 64.52 961.11

Initial Investment 1 2 3 4 5 6 7 8 9 10 11 TOTAL

1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000

Average Unit Cost

(Rs. 12,000/1435.9) = Rs. 8.36

(Rs. 12,000/961.1) = Rs. 12.49

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Average Unit Price Assumed NAV @ Q12

(Sum of Purchase price / 12) = Rs. 9.13 Rs. 14.90

(Sum of Purchase price / 12) = Rs. 12.72 Rs. 16.00

Market Value (1435.9 units x Rs. 14.90) (961.11 units x Rs. 16.00) = = Rs. 21,395 Rs. 15,378

Therefore, the average unit cost is lower than average unit price irrespective of market rising or fluctuating. This happens because you get the advantage of buying more units when the market is low and averaging out the purchase price.

One time Investment vs. SIP
One-time Invtt Returns (since inception) 13.60 % -8.29% 13.58 % 12.82 % 28.87 % 22.25 % 9.34% 55.94 % 37.47 % 25.19 % SIP Returns (since inception) 22.88 % 23.05 % 23.33 % 13.21 % 36.55 % 37.37 % 18.77 % 58.20 % 42.10 % 24.76 %

Schem e

Pru ICICI Power Plan Pru ICICI Technology Fund Pru ICICI Balanced Fund Pru ICICI Child Care Plan (Study) Pru ICICI Child Care Plan (Gift) Pru ICICI Index Fund Pru ICICI FMCG Fund Pru ICICI Dynamic Plan Pru ICICI Tax Plan Pru ICICI Growth Plan

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Life Insurance is a contract that pledges payment of an amount to the person assured ( or his nominee) on the happening of the event insured against. The contract is valid for payment of the insured amount during  The date of maturity  Specified dates at periodic intervals,  Unfortunate death, if it occurs earlier. The various Insurance schemes dealt at ICICI Bank are: 1) Life Time Pension Plan. 2) Smart Kid 3) Life Time Plan. 4) Life Link Super

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(Tax rebate u/s 80 CCC)

ICICI Pru LifeTime
Life is about changes. Some you expect - marriage, children, retirement…and some you don’t sickness, disability, and death. We, at ICICI Prudential, believe that life should not have to be about fear of the unexpected and that you should be in control so as to overcome them. To be in total control of life’s situations you need total flexibility. A Policy that meets your changing needs over a Lifetime Your need for insurance is important, to protect your family but you also have an equal need to invest your money for greater returns. How do you strike a balance between these competing needs? Welcome to a new horizon in financial planning. ICICI Pru LifeTime gives you the flexibility and control in meeting your protection and investment needs. With this plan you have the freedom to direct your investment to get the benefit of market linked returns and choose the level of protection. And because you’re in charge you can accommodate your changing needs. But that’s not all. You can do all this too: Vary the amount of insurance protection vis-à-vis investment while maintaining the same premium Enhance insurance protection by adding Accident & Disability Benefit, Major Surgical Assistance, Critical Illness benefits at a nominal extra premium Top up your investment with a lump sum payment at any time Switch between our choice of plans – growth, balanced and income Enjoy tax benefits on the premium paid Total flexibility, Total control and Total protection – All in one go. How do I start? You can open an account with a Minimum Premium of Rs 18,000/- p.a. for annual mode Rs 9,000/- per half year for half-yearly mode Rs 4,500/- per quarter for quarterly mode Rs 1,500/- per month for monthly mode - 48

How does the plan work? You can choose a specified level of protection according to your need. Part of the premium paid will be used to pay for the death benefit and the rest is invested in plan of your choice. Entry into the plan will be based on the Unit Value applicable on the date of policy issue. The amount of premium towards death benefit decreases with the increase in the value of the units. How do you benefit? Death Benefit: In case of the unfortunate event of death, your near and dear ones are spared an uncertain future. They will be taken care of through our guaranteed death benefit. The nominee/s will receive the death benefit chosen (less any withdrawals) or value of the units, whichever is higher. 1 Withdrawal Benefit: There is no maturity date. Anytime after 3 years of commencement (provided you have paid premium for 3 full years) you can make withdrawals through partial or complete surrender of units.2 What are your flexibility options? a. Can you choose the kind of returns you want? Yes, you can. By choosing between our Growth Plan, Income Plan or Balanced Plan. Growth Plan: If high growth is your priority this is the plan for you. You can enjoy long-term capital appreciation from a portfolio that is invested primarily in equity and equity-related securities. Income Plan: If on the other hand your priority is steady returns, you can opt for the Income Plan. Here you can accumulate a steady income at a low risk across a medium to long term period. Balanced Plan: If you prefer a balance of growth and steady returns choose our Balanced Plan. This would ensure that your portfolio is invested in equity and equity-linked securities as well as in fixed income securities. b. But, what if you want to change your plan later? If at a later stage your financial priorities change, you can switch between the various plan options, and we also let you do this absolutely free once a year. c. What if you have more investible funds at the year-end than you had calculated? You can top up your investment (minimum Rs 10,000) at any time when you have surplus funds.

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d. What if you feel the need to increase your protection? At various stages of your life your liabilities may increase - marriage, children, a new home, children going off for higher studies…ICICI Pru LifeTime lets you increase your death benefit without any underwriting during special events3 or every third year upto 3 times. This increase is @ 25% of original death benefit or Rs 250,000 whichever is lower each time. You can also increase your protection at other times or for higher levels subject to underwriting rules. e. And, what if you want to decrease the death benefits? Over time your liabilities may decrease too, as various loans get paid off, your children become independent and so on. So, if you want to decrease your death benefits you can do that too, at any time. f. What if you are unable to pay the premiums? If after at least 3 years payments are made and you are unable to pay the subsequent premiums, the cover under the policy will continue and the premiums towards the life cover and riders will be debited from the unit fund. g. Can you get any add ons? We ensure that you are prepared for any eventuality, with a choice of riders along with the death benefits.     Double accident benefit Disability Benefits Critical Illness Surgical Assistance How is unit value calculated? Unit value is calculated bi-weekly on a forward pricing basis every Tuesday and Friday Unit Value = Market/ Fair Value of the relevant Plan’s Investments plus Current Assets less Current Liabilities and Provisions Number of Units outstanding under the relevant Plan

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What are the Tax benefits? The premiums paid by you are eligible for tax exemption u/s 88. Any amount paid to you in form of withdrawals or other benefits are completely tax-free u/s 10 (10D). What are the limits or conditions applicable? Age at entry Minimum age at entry: 0 years (completed years) Maximum age at entry: 60 years (completed years) What are the charges?  Allocation is 80% of premium in the first year, 92.5% in the second years and 96% from the third

year onwards   Mortality charge towards death benefit Annual administrative charges of 1.25% per annum of net assets and annual investment charge of

1% per annum of net assets   Initial charges of 1% on Top-ups One free switch every year after which a switching fee of 1% of the switching amount will be

levied. Any unutilized free switch cannot be carried forward. Note: In case the unit value is inadequate to cover charges, the policy will terminate. Find out if the ICICI Pru LifeTime policy suits you For more queries and detailed information, do call our ICICI Pru Advisor. That way, you can learn how best to cover your life!

Revision of charges
The Company reserves the right to change the investment charge at any time with prior approval from the Insurance Regulatory and Development Authority upto a maximum of 1.50% per annum of the net assets for each of the plans. The Company reserves the right to change the annual administrative charge at any time with prior approval from the Insurance Regulatory and Development Authority upto a maximum of 2% per annum of the net assets for each of the plans.

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The Company reserves the right to modify the Insurance charges and the Processing charge with prospective effect after a giving a notice of three months to the policyholders.

(Tax rebate u/s 80 CCC)

L i f e T i m e P e n s i o n P l a n gives the freedom to choose the amount of premium, and invest in market-linked funds, to generate potentially higher returns. On the future retirement date, the accumulated value of the units will be used to purchase an annuity - to provide the investor with regular income for life. Power to choose the protection level: One can choose from either a Zero sum assured or a sum assured, which will be equal to the product of the annual contribution and term. P o w e r t o c h o o s e t h e r e t i r e m e n t d a t e : We can also take advantage of market movements by choosing a vesting age between 45 - 75 years of age. P o w e r t o i n c r e a s e y o u r i n v e s t m e n t s : Usage of surplus funds to top-up investments during the deferment period. P o w e r t o i n v e s t i n a p l a n b a s e d o n y o u r p r i o r i t i e s : Choice amongst four funds, based on the investment objective and risk appetite. Facility of switch available between the various fund options,4 times a year.

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P o w e r t o i n c r e a s e / d e c r e a s e y o u r c o n t r i b u t i o n : Based on your requirements, increase or decrease contribution

ICICI Lombard General Insurance Company Limited. (ICICI Lombard) is a 74:26 venture between ICICI Bank, India's largest private sector bank and Lombard, one of the oldest property and casualty insurance companies in Canada. The company received regulatory approvals to commence general insurance business in August 2001. Mr.Sandeep Bakhshi, Managing Director, ICICI Lombard, is responsible for the non-life insurance business of ICICI Limited. He had joined ICICI in the year 1986, as an officer in the Operations Department in the Northern Zonal Office at Delhi. His job responsibilities included business development, project appraisals, project monitoring and business restructuring.

He was appointed Senior Vice President in 1996 and apart from project finance was also given the charge of the Risk Management for the Northern Zonal Office


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ICICI Bank Pure Gold
Gold has been traditionally the most favoured form of investment for Indians. In fact, India, even today is amongst the highest consumers of Gold in the world. However, the Gold market remains largely unorganized with reliability and convenience remaining the key issues for gold buyers in the country. ICICI Bank with its ‘Pure Gold’ offer attempts to bridge the gap between the need of the customers for buying gold and availability of an organized avenue to satisfy that need, by taking care of the two key components – Reliability and Convenience.

24 Carat ICICI Bank Pure Gold is imported from Switzerland. This Gold carries a 99.99% Assay Certification, signifying highest level of purity, as per international standards Convenience: - 54

ICICI Bank Pure Gold is competitively priced based on daily prices in the international bullion market. Currently, gold is available in 8 gram and 5 gram categories, subsequently other denominations will also be introduced ICICI Bank through its ICICI Bank Pure Gold offering wants you to get value for money. ICICI Bank is amongst the first banks in the country to have started perennial retailing of Gold through its branches. The retailing of gold is done in the form of 5 and 8 gm Gold Coins that are imported from Switzerland. The Gold coins come with an ‘ASSAY Certification’, indicating the highest quality of gold at 99.99% purity. Gold makes a great gift idea for valued relationships. . Gift your important relationships ‘ICICI Bank Pure Gold’ as a manifestation of your commitment to the relationship and its quality Some of the occasions when 'ICICI Bank Pure Gold' can be gifted are:       5 yrs. of service by an employee. As an Award for good performance. Marriage of an employee. Great gift idea on Festivals like Diwali, Christmas, Id, Durga Puja etc. Bonus for employees. Dealers for achieving Targets.

Some Interesting Aspects About ICICI Bank Pure Gold:  It is available in Tamper proof packaging that can be customized as per your requirement.  It is accompanied by 'Assay Certification' indicating the highest level of purity as per international standards.   It is available throughout the year. You can buy it through debit instructions to your account

ICICI Bank Pure Gold is of 24 Karat, 99.99% purity gold. Gold are sold in the form of round shaped coins. Gold are sold in 2 weights - 5gm and 8 gm.


- 55


1) Online Services: ICICI Bank provides online services of all it’s banking facilities. It also provides
D-Mart account facilities on-line, so a person can access his account from anywhere he is. [D-Mart is a dematerialized account opened by a salaried person for purchase & sale of shares of different companies.] 2) Advanced Infrastructure: Branches of ICICI Bank are well equipped with advanced technology to provide the customers with taster banking services. All the computerized machines are located in suitable manner & are very useful to the customers & staff of the bank. 3) Friendly Staff: The staff of ICICI Bank in all branches is very friendly & help the customers in all cases. They provide faster services along with bonding & personal relationship with the customers. 4) 12 hrs. Banking services: Compared to other bank ICICI bank provides long hrs. of services i.e. 8-8 services to the customers. This service is one of it’s kind & is very helpful for the customers who are in urgent need of money. 5) Other Facilities to the Customers & Employees: ICICI Bank also provides other facilities like drinking water facilities, proper sitting arrangements to the customers. And there are also proper Ventilation & sanitary facilities for the employees of the bank. 6) Late night ATM services: ICICI bank provides late night ATM services to the customers. The ATM centers of ICICI bank works even after 11:00pm. at night in certain branches.


1) High Bank Service Charges: ICICI bank charges highly to customers for the services provided by them when compared to other bank & that is why it is only in the reach of higher class of society. 2) Less Credit Period: ICICI bank provides credit facilities but only upto limited period. Even when the credit period is not over it sends reminder letters to the customers which may annoy them.


1) Bank –Insurance services: The bank should also provide insurance services. That means the bank can have a tie-up with a insurance company. The bank will advertise & promote the different policies introduced by the insurance company & convince their customers to buy insurance policies. 2) Increase in percentage of Returns on increase: The bank should provide higher returns on deposits in comparison of the present situation. This will also upto large extent help the bank earn profits & popularity. 3) Recruit professionally guided students: Bank & Insurance is a special non-aid course where the students specialize in the functioning & services of the bank & also are knowledge about various tax policies. The bank can recruit these students through tie-ups with colleges. Such students will surely prove as an asset to the bank. 4) Associate with social cause: The bank can also associate itself with social causes like providing relief aid patients, funding towards natural calamities. But this falls in the 4th quadrant so the bank should neglect it. THREATS

1) Competition: ICICI Bank is facing tight competition locally as well as internationally. Bank like CITI Bank, HSBC, ABM, Standered Chartered, HDFC also provide equivalent facilities like ICICI do and also ICICI do not have consistency in its international operation. 2) Net Services: ICICI Bank provides all kind of services on-line. There can be easy access to the email ids of the customers through wrong people. The confidential information of the customers can be leaked easily through the e-mail ids. 3) Decentralized Management: Each branch manager is given the authority of taking decisions in their respective branches. The decisions made by different managers are diverse and any one wrong decision can laid to heavy losses to the bank. 4) No Proper Facilities To Uneducated customers: ICICI Bank provides all services through electronic computerized machines. This creates problems to the less educated people. But this threat falls in the 4th quadrant so its negligible. The company can avoid this threat.

- 57

   Tailors its marketing campaigns to meet the needs of its target prospects Creates differentiated product offering for different segment Use of technology in tracking customer segment

 Core proposition – ‘Hum hain na’ – trust, credibility, total financial solution provider Modernization – process and physical evidence – technology as the backbone and (brought about through its cross selling effort)  accelerator

Need identification
   Adapting international practices to the local context Information system warehouse Product development department – continuously studies market and analyses

competitive landscape

Product differentiation
 Variants in various basic products like savings bank accounts to suit different customer base and customer needs

Product augmentation
 Redefinition of the banking products with extra benefits and features added to the products

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     Penetrative pricing aimed at achieving large market share Philosophy of profit through volume Effort to drive out competition Price leader in retail banking product Aggressive pricing facilitated through low cost of fund acquisition

Distribution Strategy
    Cross selling of products as a major area of focus Creation of concept of DSA (Direct Selling Agent) Creation of concept of DST (Direct Selling Team) Effort on the part of the bank to reach the customer rather than waiting for the Use of internet, mobile, ATM’s and other technological device to reach and serve the

customer  customers

Product Promotion
    Aimed at generating sales Communicates product features and benefits Mainly through print media Point of purchase promotion tools for different products to reach the relevant

customer segment

Public Relations
 Purpose - To deliver communication that is uniform in its message and yet Media relations Press conferences - 59 customized for specific target audiences  

 

Press Releases interviews


The government's new foreign direct investment (FDI) rules which, according to the banking sector, are rather ambiguous might likely be reviewed. The Reserve Bank of India (RBI) had recently raised issues concerning the rules, and other banks too are awaiting clarity of the new policy. As per the FDI guidelines given, the ownership of India's biggest private lender ICICI Bank would need to undergo a change - they would have to substitute their 'resident entities' status with a nonresident entities status. The gist of the government's new FDI policy is that in case an indirect FDI in an Indian company goes beyond 50 percent, the company's investment in its subsidiaries will be considered a foreign investment. In addition, the calculation of the indirect foreign investment in an Indian entity would also be based on a few other factors, like the sum total of FDI; the Non-Resident Indians' stake; American and global depository Receipts; foreign currency convertible bonds; and convertible preference shares. Though the policy has a bearing on the status of ICICI Bank and HDFC Bank, among others, the government stance is not clear enough. In this regard, Chanda Kochhar, the ICICI Bank Joint Managing Director, said: "Nothing has changed in ownership; we continue to be with same ownership for years. We are awaiting clarification of issues regarding foreign bank status."

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Profit & loss account:
* Profit before tax for the year ended March 31, 2009 (FY2009) was Rs. 5,117 crore (US$ 1,009 million), compared to Rs. 5,056 crore (US$ 997 million) for the year ended March 31, 2008 (FY2008). * Profit after tax for FY2009 was Rs. 3,758 crore (US$ 741 million) compared to Rs. 4,158 crore (US$ 820 million) for FY2008 due to the higher effective tax rate on account of lower proportion of income taxable as dividends and capital gains. * Net interest income increased 15% from Rs. 7,304 crore (US$ 1,440 million) for FY2008 to Rs. 8,367 crore (US$ 1,650 million) for FY2009. While the advances declined marginally year-on-year, the net interest income increased due to improvement in net interest margin from 2.2% in FY2008 to 2.4% in FY2009. * Operating expenses(including direct marketing agency expenses) decreased 14% to Rs. 6,835 crore (US$ 1,348 million) in FY2009 from Rs. 7,972 crore (US$ 1,572 million) in FY2008. The cost/average asset ratio for FY2009 was 1.8% compared to 2.2% for FY2008. * Profit before tax for the quarter ended March 31, 2009 (Q4-2009) was Rs. 1,071 crore (US$ 211 million) compared to Rs. 1,343 crore (US$ 265 million) for the quarter ended March 31, 2008 (Q42008), primarily due to lower level of fee income at Rs. 1,343 crore (US$ US$ 265 million) in Q42009 compared to Rs. 1,928 crore (US$ 380 million) in Q4-2008, partly offset by lower operating expenses and higher net interest income. The lower level of fee income was due to reduced investment and acquisition financing activity in the corporate sector and lower level of fees from distribution of retail financial products, reflecting the adverse conditions in global and Indian financial markets. - 61

* Profit after tax for Q4-2009 was Rs. 744 crore (US$ 147 million) compared to Rs. 1,150 crore (US$ 227 million) for Q4-2008.

Balance sheet:
During the year, the Bank has pursued a strategy of prioritizing capital conservation, liquidity management and risk containment given the challenging economic environment. This is reflected in the Bank's strong capital adequacy and its focus on reducing its wholesale term deposit base and increasing its CASA ratio. The Bank is maintaining excess liquidity on an ongoing basis. The Bank has also placed strong emphasis on efficiency improvement and cost rationalization. The Bank continues to invest in expansion of its branch network to enhance its deposit franchise and create an integrated distribution network for both asset and liability products. In line with the above strategy, the total deposits of the Bank were Rs. 218,348 crore (US$ 43.0 billion) at March 31, 2009, compared to Rs. 244,431 crore (US$ 48.2 billion) at March 31, 2008. The reduction in term deposits by Rs. 24,970 crore (US$ 4.9 billion) was primarily due to the Bank's conscious strategy of paying off wholesale deposits. During Q4-2009, total deposits increased by Rs. 9,283 crore (US$ 1.8 billion), of which Rs. 5,286 crore (US$ 1.0 billion), or about 57%, was in the form of CASA deposits. The CASA ratio improved to 28.7% of total deposits at March 31, 2009 from 26.1% at March 31, 2008. The branch network of the Bank has increased from 755 branches at March 31, 2007 to 1,438 branches at April 24, 2009. The Bank is also in the process of opening 580 new branches which would expand the branch network to about 2,000 branches, giving the Bank a wide distribution reach in the country. In line with the strategy of prioritizing capital conservation and risk containment, the loan book of the Bank decreased marginally to Rs. 218,311 crore (US$ 43.0 billion) at March 31, 2009 from Rs. 225,616 crore (US$ 44.5 billion) at March 31, 2008.

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Q u e s : 1 ) How old are you?



<25 25-40 41-60 61 and abov e



This question was asked to know in which category does the investor fall in: Young (<25%,25-40) Middle(41-60) Old(61and above) So from the fig. It is clear that the max. Customers were young Investors.

Q u e s : 2 ) Education?



6% 24%

Non Matric2 SSC/HSC Graduate Post graduate



From the fig it is clear that Most of the correspondents were well educated proving the fact that nowadays peoples literacy rate is increasing. - 64


18% 7% 19%


Student Salaried Business 51% Retired Self Employed18

From the fig. We get that max. Correspondents were salaried persons next were business persons and then came those who were having there own setup that is there own business like shops etc.

Ques 4) Do You Invest?




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The response for this question was full as all the 100 customers have invested their money in one or other form. Some in Fixed Deposits or saving accounts or Investments.

Q u e s 5 ) Where have you invested?
Saving Acount



Fixed Deposit



Recurring Deposit

Other Investments and Insurance Schemes

The above information helps us to understand the past portfolio of the customer so that he can be provided with the products that he has never explored. Although, customers with saving Accounts were max.

Ques 6) What is your anticipated Investment time frame?

So h rt 1% 6 2% 0 S o Md m h rt- e iu T rm e M d mT rm e iu e 3% 5 L n T rm og e

2% 9

This was asked to know, for how much the investor wants to keep his money in the market so that he can be given a investment option for that particular duration and which can maximize his returns. So, I - 66

found that most of the people were ready to invest their money in the market for a shorter- Medium Term i.e. for 1-3 yrs.

Ques 7) I am ready to take risk while investing as i know where there is risk, there are returns?



I Agree I Disagree I Somewhat Agree I Strongly Agree



This question helped me in deciding the portfolio mix of the customer. Mostly the customer wanted a mix of equity and debt in his portfolio so that he can earn profits from the portion invested in equity and some of his portion can be safe in debt securities.Although, Most of the Business people were ready to take risk to gain maximum returns.

Ques 8 ) Which answer best describes your level of knowledge on investment and its products?

0% 35% 33% Low M edium High 32% None

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This helped us in understanding that most of the customers surveyed were knowledgeable about the investments and different products, simultaneously. There were customers who were having little or poor knowledge about the investments so they needed to be made aware about investment

Ques 9) Are you invest your money in any ICICI investment options?

30% YES N O 70%

This show that few people are invested their money in ICICI investment options. The reason behind this is may be lack of awareness in people regarding ICICI investment products.

Ques 10) Where you invest your money in ICICI?

13% 40% Deposits Insurance 27% 20% Mutual Funds Others

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This question help me to understand that what are the preferred chose for investor to invest their money in ICICI.

Ques 11) Through which source you get information about ICICI investment options?

10% 23% 50% 17% Adv ertism ent Friends & fam ily Inv estm Agents ent O thers

Ques 12)Are you satisfied with ICICI?

1% 3


8% 7

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Most of the people are satisfied with their decision of investment in ICICI.The reason behind this is strong financial conditions of ICICI & good return they are received from ICICI.


  

Most of the investors are young age investors. Most of the investors are highly educated persons. 71% people invest their money in secure investment options like saving account, fixed

deposit & recurring deposits.   Only 16% investors invest their money in long term investment. 87% investors are ready to take risk. Because they are agree with this statement that “where

there is risk there are returns”.     ICICI provides large financial services and investment options. According to my survey few investors are invest their money in ICICI investment options. People have lack of knowledge regarding ICICI investment options. But most of the customers of ICICI are satisfied with ICICI.

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On the basis of my study I conclude that Indian banking sector is one of the leading sectors in India. The growth of Indian banking industries is very fast and constant. ICICI bank is emerging as a business leader in Indian banking industries. 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, life and non-life insurance, venture capital and asset management. People have lack of awareness regarding ICICI investment products. But the awareness is increasing day by day .Now investor prefer ICICI for invest their money because of the strong financial conditions & good returns of ICICI. Most of the customers of ICICI are satisfied with their decision of investing their money in ICICI.

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The sooner you invest, the more time your money will have to grow. If you delay, you will almost certainly have to invest much more to achieve a similar result.

Suppose you start investing in a diversified equity mutual fund through a SIP at age Your monthly investment Rs.5000/You stop investing at age 60 yrs Your total contribution Rs.15,00,000/Assuming compounded annualized returns from the fund of 15% your savings could grow to Rs.1,37,82,803 (over 1 crore) Rs.12,00,000/Rs.66,35,367 (over 66 lakhs) 60 yrs Rs.5000/35 yrs 40 yrs

A difference of just 5 years can lead to a wealth difference of Rs. 71 lakhs!!!!!!

THE DIFFERENCE TIME CAN MAKE If you started investing Rs.5000/- a month on your 40th birthday and If that investment grew by an average of 15%, it would be worth Rs.66, 35,367/- when you reach 60 years of age. If you started investing five years earlier at 35, years. and Assuming the same average annual growth of 15%, you would have Rs.1,37,82,803/- on your 60th birthday – Rs.71 lakhs more than you would have received if you had started investing 5 years later at age 40. - 74

The bottom line – your investments gain most from compounded interest when you have time on your side.

It is always a good idea to have some money in a deposit account in case of emergencies. Enough to cover three months’ living expenses is often a rough guide to how much money you need as cash with you. And make sure you can withdraw it when you need to, without penalties.

REASONS YOU MIGHT NEEDYOUR MONEY AT SHORT NOTICE: ---- making a major purchase ---- taking an unplanned holiday ---- seeing you through an emergency such as sudden hospitalization or job loss


There is absolutely no point having a stock market investment if you are going to lose sleep every time share prices go through a rough patch. It’s vital that you are realistic about your appetite for risk – an Investment Adviser may be help to help you decide how much risk you can tolerate.

“In many ways, the key organ for investing is the stomach, not the brain. What is your stomach going to do when an investment your brain selected declines for a year or two?”

--- Peter Lynch, Vice Chairman, Fidelity Management & Research Company (Former fund manager of Fidelity Magellan Fund)

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Returns on risk-free cash investments may sound respectable, but when you subtract the current rate of inflation you may not be so impressed. For significant long term growth you need to make your money work a little harder.

INFLATION – THE TICKING TIME BOMB If you have Rs.10, 000/- in a savings account earning 3% interest each year, in 20 years time, your saving would be worth Rs.18, 061/-. That’s a return of just over 80%. However, if inflation is about 7%, Rs.18, 601 would only be worth Rs.4, 668/- in today’s terms!!!!!

Only look at the stock market if you are prepared to put your money away for five to ten years, or perhaps even longer. If you are likely to need your money any sooner, keep it in a lower-risk investment so there is less chance of a fall in value just before you make a withdrawal. “If you’re going to need money within the near future to pay for college tuition or put a down payment on a house- the stock market is not the place to be. You can flip a coin over where the market is headed over the next year. But if you are in the market for the long haul – five, ten or twenty years – then time is on your side and you should stick to your long term investment plan.” --- Peter Lynch, Vice Chairman, Fidelity Management & Research Company (Former fund manager of Fidelity Magellan Fund)

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It’s rarely a good idea to have all your eggs in one basket. Depending on one’s goals and one’s attitude towards risk, an investor should spread his money across different types of investment – equities, bonds and cash. An investor should also try to diversify within each of these categories. With equities, for example a mutual fund will invest your money in a variety of companies but you may want to ensure you have a range of industry sectors too.


CASH – ADVANTAGES High level of security. You can get your money back quickly and easily. Interest will always be paid.

BOND – ADVANTAGES Interest is set in advance and paid regularly. The value of a Bond in the open market may go up. Paying interest on bonds is a higher priority for companies than paying dividends on shares. BONDS – DISADVANTAGES The bond issuer may default on interest payments or be unable to make the final repayment. The value of a bond in the open market may go down.

EQUITIES ADVANTAGES Equities can increase significantly in value. Dividends can increase as company profits increase.

CASH – DISADVANTAGES Interest rates are variable and currently very low. The best rates may only be Available on special terms or for larger amounts.

EQUITIES DISADVANTAGES Equities can also fall significantly in value. It’s very difficult to predict what will happen in the short term.

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Investing regularly can be a great way to build up a significant lump sum. The investor can also benefit from what is known as the concept of ‘Rupee cost averaging’. This means that, if an investor is investing in a mutual fund, over the years he will pay the average price for units. If the market goes up, the unit one already own will increase in value. If the market goes down, the next installment to be paid by the investor will fetch him more units.

The table below illustrates the power of rupee cost averaging. It compares the returns achieved by a lump-sum investor and an investor who saves the same amount every month for six months. LUMP SUM INVESTMENT SAVER Month Unit Amount Price Invested (Rs.) (RS.) 1 20 60000 2 18 3 14 4 22 5 26 6 20 Total Invested (Rs.) 60000 Average Price Paid 20 Total No. of Units Bought 3107 Value of Investment After Six Months (Rs.) 62140 Unit Bought 3000 20 3000 60000 REGULAR Amount Invested 10000 10000 10000 10000 10000 10000 60000 Units Bought* 500 555 714 454 384 500

As it is clearly evident from the above example that, the regular saver finishes with an investment that is worth more than the lump-sum investor’s after six months – even though the starting price, finishing price and average price are exactly the same.

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An investor should select investments on the basis of what is right for one’s personal circumstances and goals. If one is deciding on a mutual fund to invest in, then don’t opt for the one which is the flavor of the month, unless one is sure that it will be right for one’s needs in the years to come. And an investor should not assume that all funds investing in Indian equities are essentially the same – look at the details of what a fund invests in and check if one is comfortable with its investment style and objectives.

Funds that invest in specialist industry sectors have been very fashionable recently, but are they a good idea? The table below shows the performance of four different industry sectors over the past five years. As it is evident from the table below that no sector performed consistently well every single year. Industry Sector Information Technology(BSE IT INDEX) Public Sector Utilities(BSE PSU Index) Capital Goods (BSE CG Index) Consumer goods (BSE FMCG Index) 2000(%) -37.2 2001(%) -39.4 2002(%) 4.1 2003(%) 23 2004(%) 24.7














TABLE-3 - 79

When an investor is planning an investment, it can be tempting to wait for the market to reach a low point. But how will he know when this happens? The investor runs the risk of missing out on the significant rises that often occur in the early days of an upward trend. Even the experts cannot “time the market” with consistent success. It is better to choose an investment that one feels confident about and take a long term view, so that one has the time to ride out any ups and downs in the market.

Take a look at the returns from the Indian market (both actively managed funds and the BSE sensex 30) between 1996 and 2004. This analysis shows that missing just a few of the best days can significantly affect investment performance.

Compounded annualised returns
Missed Ten Best Days 30 25 20 15 10 5 0 Actively managed funds BSE Sensex Stayed Invested

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A portfolio that is right for you at one point in your life may not be quite so suitable a few years later. Your investments need to adapt to changes in your circumstances, such as getting married, having children or starting a business. It’s also a good idea to check that each of the funds in your portfolio is living up to your expectations. Talking to an investment advisor could help one decide whether you need to switch money between funds.

For the greatest long term growth potential one could simply invest all one’s money in equity mutual funds, right from the start of one’s investing period to the end. But, of course this would be a high risk strategy. The markets could dip just before you need the money. That’s why one needs to think about changing, modifying and reviewing one’s portfolio from time to time. One may want to aim for strong growth in the early years, and then, as the years go by, lock in any gains one has made and move into lower risk investments, such as bonds. As one gets closer to needing one’s money, lower risk bond and cash investments could be given more emphasis.

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Income scheme
A mutual fund scheme that invests in Government securities (Bonds issued by the RBI), Corporate bonds (Bonds issued by companies) and Money market instruments (Bonds used by banks and RBI to facilitate daily money management).

Instruments that pay a fixed agreed rate of return to the purchaser. Also called fixed income securities or debentures.

Maturity date
The date at which the investment is paid back.

The ability of any saving to payback the accumulated amount when required. Thus savings in real estate are less liquid than savings in gold as gold can be “liquidated “ (sold off) quickly while in general, disposing off real estate may take some time.

Additional tax based on tax calculated at base rate ex: - If applicable tax rate is 10% with 10% surcharge, on returns of 100, first the base tax will be calculated as Rs. 10 which will be Re. 1. Total tax will base tax + additional tax, i.e. Rs.10+ Re. 1 = Rs. 11

Exit Load
Amount charged by a mutual fund for withdrawal of savings before a predefined limit. The exit load is usually expressed as a percentage of amounts invested. Exit loads normally ranges from 0.1% to 5%

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Magazines  Outlook Money  Mutual Funds review (ICICI investment guide meant for internal  Business Today  Business World. Websites circulation)

       

Others Fact Sheets, Fund Statements and Web Sites of the various Fund Houses

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