A PROJECT REPORT

ON
FINANCIAL SERVICES
OF
BANKS

Submitted to University of Mumbai in

Partial fulfillment
Of the requirement of the
Degree of B.Com
BANKING & INSURANCE

Under guidance of
PROF. RUEEN PATEL

VPMS
K.G Joshi College of Arts
N.G Bedekar College of Commerce
Thane (E)
Academic Year: 2010-11

BY-
JEMINI.J.PATIL
 ACKNOWLEDGEMENT

In completing this project I am deeply conscious of my debt to all

those, without whose warm support, enragement & guidance this project was
not possible to complete. I am specially greatful to Prof Rueen Patel my
guide to this project, She actually gave the life to this project and guidance
of my parents & friends this project took shape. They also provided me
much needed criticism & encouragement.

Jemini Patil

DECLARATION
 I am Jemini J. Patil studying in T.Y.Banking & Insurance hereby
declare that I have done a project on Financial Services provided by
Banks. As required by the university rules, I state that the work presented in
this thesis is original in nature and to the best my knowledge, has not been
submitted so far to any other university.

Whenever references have been made to the work of others, it is

clearly indicated in the sources of information in references.

Student
(Jemini. J. Patil)

Place: Thane
Date: October, 2010

EXECUTIVE SUMMARY
Banks are the Financial Institution which satisfies the individual & group
goals with proper systems of rules, regulations, policies, services,
procedures & strategies. To achieve the goals and objectives the main
component of the banks are the customers.

Banks are the diversified financial services company that provide a range of
services to customer including retail banking, venture capital, private equity,
working capital finance etc.

The aim of the banks is to provide state-of-the-art, low cost and efficient
banking services, with a focus on increasing fee-based income. New
innovative products are been offered, even a small investor is able to invest
in such products.

Indias financial services sector is expected enjoy generally strong growth

during coming years, driven by rising personal incomes, financial sector
liberalization and the growth of a more consumer oriented, credit-oriented
culture. This is expected to lead to increasing demand for financial products,
including consumer loans as well as investment products.

INDEX
SR NO PARTICULARS PG NO

1 Overview of Banking
1.1 Introduction to Banks
1.2 History of Banks
1.3 Functions of Banks
1.4 Banking Products
1.5 Introduction to Financial Services
1.6 Features of Financial Services
1.7 Importance of Financial Services
1.8 Sources of Revenue
1.9 Objectives of Financial Services
1.10 Causes of Financial Innovation
1.11 Present Scenario of Financial Services

2 Channels through which Products & Services are

offered
2.1 Branches
2.2 Mobile Banking
2.3 Telephone Banking
2.4 Internet Banking
2.5 ATM

3 Products & Services of Banks

3.1 Deposits
3.2 Credit Cards
3.3 Loans
3.4 Investments

4 Innovative Financial Products & Services

5 Overview of ICICI Bank
5.1 History of ICICI Bank
5.2 Introduction of ICICI Bank
5.3 Products and Services
5.4 Awards and Recognitions
6 Data Analysis & Interpretation

7 Conclusion
8 Suggestion

9 Bibliography

10 Annexure
 LIST OF DIAGRAMS

SR.NO PARTICULARS PG.NO

1 1.3 Functions of Banks
1.8 Classification of Financial Services

2 Various Channels of Services

3 3.1 Types of Deposits
3.2 Types of Credit Cards
3.3 Various types of Loans
3.4 Alternative Avenues for Investment
 CHAPTER- 1
OVERVIEW OF BANKING
 CHAPTER 1

OVERVIEW OF BANKING
1.1 INTRODUCTION TO BANK

A bank has been described as an institution engaged in accepting deposits

and granting loans. It is the institution which deals in money and credit. It
can also be described as an institution which borrows idle resources, makes
fund available to those who need it and helps in cheap remittance of money
from one place to another. In the modern time term bank is used in wider
term. Now it does not refer only to particular place of lending and depositing
money but it also acts as an agent which looks after the various financial
problems of its customers.
1.2 HISTORY OF BANKS:

The banking system in India is based on British banking company which is

largely branch banking. Commercial banks in India were started during the
latter half of 19th century Bank of Bengal, Bank of Bombay and Bank of
Madras were later amalgamated to form one bank called as Imperial bank of
India under the Imperial bank of India Act 1920. The Imperial bank carried
with business of commercial bank manages the public debt office of central
and state government. The second half of 19th century saw establishment of
Bank of Baroda, Allahabad bank, and Punjab National Bank. These banks
were set up by merchants and traders to combined trading with banking.
These led to the series if failures of banks. The strengthening of banking
system took place after the establishment of Reserve Bank of India, 1939 as
is empowers to regulate the banking money, inspection of mergers and
acquisition in terms of Banking Companies Act 1949 which later came to be
known as Banking Regulation Act 1949.
1.3 FUNCTIONS OF BANKS
Though borrowing and lending constitute the main functions of banking, yet
they are not only functions of commercial banks. Commercial banks are
involved in diversified activities and perform varieties of function. The
functions of a modern bank are classified under the following heads:

CHART: FUNCTION OF BANKS

A
G
O E
N F U
T
C N C
H A
T I
E Y C O
A
R D C N
V E
A P
N T I
C N
E G
O
F
1.4 BANKING PRODUCTS

Banks in India have traditionally offered mass banking products. Most

common deposit products being Savings Bank, Current Account, Term
deposit Account and lending products being Cash Credit and Term Loans.
Due to Reserve Bank of India guidelines, Banks have had little to do besides
accepting deposits at rates fixed by Reserve Bank of India and lend amount
arrived by the formula stipulated by Reserve Bank of India at rates
prescribed by the latter. PLR (Prime lending rate) was the benchmark for
interest on the lending products. But PLR itself was, more often than not,
dictated by RBI. Further, remittance products were limited to issuance of
Drafts, Telegraphic Transfers, and Bankers Cheque and Internal transfer of
funds.

In view of several developments in the 1990s, the entire banking products

structure has undergone a major change. As part of the economic reforms,
banking industry has been deregulated and made competitive. New players
have added to the competition. IT revolution has made it possible to provide
ease and flexibility in operations to customers. Rapid strides in information
technology have, in fact, redefined the role and structure of banking in India.
Further, due to exposure to global trends after Information explosion led by
Internet, customers - both Individuals and Corporate - are now demanding
better services with more products from their banks. Financial market has
turned into a buyer's market. Banks are also changing with time and are
trying to become one-stop financial supermarkets.
A few foreign & private sector banks have already introduced customized
banking products like Investment Advisory Services, SGL II accounts,
Photo-credit cards, Cash Management services, Investment products and Tax
Advisory services. A few banks have gone in to market mutual fund
schemes. Eventually, the Banks plan to market bonds and debentures, when
allowed. Insurance peddling by Banks will be a reality soon. The recent
Credit Policy of RBI announced on 27.4.2000 has further facilitated the
entry of banks in this sector. Banks also offer advisory services termed as
'private banking' - to "high relationship - value" clients.
1.5 INTRODUCTION TO FINANCIAL SERVICES

The Indian financial services industry has undergone a metamorphosis since

1990. During the late seventies & eighties, the Indian financial services
industry was dominated by commercial banks and other financial institution
which cater to the requirements of the Indian industry. The economic
liberalization has brought in a complete transformation in the Indian
financial services industry.

The term Financial Services in a broad sense means mobilizing and

allocating savings. Thus it includes all activities involved in the
transformation of savings into investment. The financial service can also be
called financial intermediation. Financial intermediation is a process by
which funds are mobilized from a large number of savers and make them
available to all those who are in need of it and particularly to corporate
customers. Thus, financial service sector is a key area and it is very vital for
industrial developments. A well developed financial services industry is
absolutely necessary to mobilize the savings and to allocate them to various
investable channels and thereby to promote industrial development in a
country. Financial services, through network of elements such as financial
institution, financial markets and financial instruments, serve the needs of
individuals, institutions and corporate. It is through these elements that the
functioning of the financial system is facilitated. Considering its nature and
importance, financial services are regarded as the fourth element of the
financial system.
1.6 FEATURES OF FINANCIAL SERVICE

Customer-Oriented: Like any other service industry financial service

industry is also a customer-oriented one. That customer is the king
and his requirements must be satisfied in full should be the basic
tenent of any financial service industry. It calls for designing
innovative financial products suitable to varied risk-return
requirements of customer.
Intangibility: Financial services are intangible and therefore, they
cannot be standardized or reproduced in the same form. Hence, there
is a need to have a track record of integrity, reputation, good corporate
image and timely delivery of services.
Simultaneous Performance: Yet another feature is that both
production and supply of financial services have to be performed
simultaneously. Therefore, both suppliers of services and consumers
should have a good rapport, clear-cut perception and effective
communication.
Dominance of Human Element: Financial services are dominated by
human element and thus, they are people-intensive. It calls for
competent and skilled personnel to market the quality financial
products. But, quality cannot be homogenized since it varies with
time, place and customer to customer.
Perishability: Financial services are immediately consumed and
hence inventories cannot be created. There is a greater need for
 balancing demand and supply properly. In other words, marketing and
operations should be closely inter-linked..

1.7 IMPORTANCE OF FINANCIAL SERVICES

Economic Growth: The financial service industry mobilizes the

savings of the people and channels them into productive investment
by providing various services to the people. In fact, the economic
development of a nation depends upon these savings and investment.
Promotion of Savings: The financial service industry promotes
savings in the country by providing transformation services. It
provides liability, asset and size transformation service by providing
large loans on the basis of numerous small deposits. It also provides
maturity transformation services by offering short-term claim to
savers on their liquid deposit and providing long-term loans to
borrowers.
Capital Formation: The financial service industry facilitates capital
formation by rendering various capital market intermediary services
capital formation in the very basis for economic growth. It is the
principal mobilizer, of surplus funds to finance productive activities
and thus it promotes capital accumulation.
Provision of Liquidity: The financial service industry promotes
liquidity in the system by allocating and reallocating savings and
investment into various avenues of economic activity. It facilitates
easy conversion of financial asset into liquid cash at the discretion of
the holder of such assets.
 Financial Intermediation: The financial service industry facilitates
the function of intermediation between savers and investors by
providing a means and a medium of exchange and by undertaking
innumerable services.
Contribution to GNP: The contribution of financial services to GNP
has been going on increasing year after year in almost all countries in
recent times.
Creation of Employment Opportunities: The financial service
industry creates and provides employment opportunities to millions of
people all over the world.
1.8 SOURCES OF REVENUE

Accordingly, there are two categories of sources of income for a financial

service company namely: fund based &fee- based. Fund-based income
comes mainly from interest spread, lease rentals, income from investments
in capital market and real estate. On the other hand, fee based income has its
sources in merchant 1 .Issue Management banking, advisory
services, custodial 2 .Portfolio Management services, loan
syndication etc. 3 .Capital Restructuring income has its sources in
merchant banking, 4 .Loan Syndication advisory services,
custodial services, 5 .Merger & Acquisition loan syndication etc. A
major part of 6 .Corporate Councelling income is earned
through fund-based 7 .Foreign Collaborations activities. At the same
time, it involves a large share of expenditure in the form of interest &
brokerage. It means that such companies should have to compromise the
quality of its investment. On the other hand fee-based income does not
involve much risk.
1 .Leasing
2 .Hire Purchase CLASSIFICATION OF FINANCIAL

3 .Discounting SERVICES
4 .Loans
5 .Venture CapitalActivities
Fund-based Fee-based
6 .Housing Finance Activities
7 .Factoring
1.9 OBJECTIVES OF FINANCIAL SERVICES

Fund raising: Financial services help to raise the required funds from
a host of investors, individuals, institution and corporate. For this
purpose, various instruments of finance are used.
Funds deployment: An array of financial services is available in the
financial markets which help the players to ensure an effective
deployment of funds raised. Services such as bill discounting, parking
of short-term funds in the money market, credit rating &securitization
of debts are provided by financial services firms in order to ensure
efficient management of funds.
Specialized services: The financial service sector provides
specialized services such as credit rating, venture capital financing,
lease financing, mutual funds, credit cards, housing finance, etc
besides banking and insurance. Institutions and agencies such as stock
exchanges, non-banking finance companies, subsidiaries of financial
institutions, banks & insurance companies also provide these services.
Regulation: There are agencies that are involved in the regulation of
the financial services activities. In India, agencies such as the
Securities and Exchange Board of India (SEBI), Reserve Bank of
India (RBI) and the Department of Banking and Insurance of the
 Government of India, regulate the functioning of the financial service
institutions.
Economic growth: Financial services contribute, in good measure, to
speeding up the process of economic growth & development.

1.10 CAUSES OF FINANCIAL INNOVATION

Financial intermediaries have to perform the task of financial innovation to

meet the dynamically changing needs of the economy. There is a dire
necessity for the financial intermediaries to go for innovation due to
following reasons:

Low profitability: The profitability of the major financial

intermediary, namely banks has been very much affected in recent
times. There is a decline in the profitability of traditional banking
products. So, they have compelled to seek out new products which
may fetch high returns.
Keen competition: The entry of many financial intermediaries in the
financial sector market has led to severe competition among
themselves. This keen competition has paved the way for the entry of
varied nature of innovative financial products so as to meet the varied
requirements of the investors.
Economic liberalization: Reform of the financial sector constitutes
the most important component of Indias programme towards
economic liberalization. The recent economic liberalization measures
have opened the door to foreign competitors to enter into our domestic
market. Deregulation in the form of elimination of exchange controls
 and interest rate ceilings have made the market more competitive.
Innovation has become a must for survival.
Improved communication technology: The communication
technology has become so advanced that even the worlds issuers can
be linked with the investors in the global financial market without any
difficulty by means of offering so many options and opportunities.
Hence, innovative products are brought into the domestic market in no
time.
Customer service: Nowadays, the customers expectations are very
great. They want newer products at lower cost or at lower credit risk
to replace the existing ones. To meet this increased customer
sophistication, the financial intermediaries are constantly undertaking
research in order to invent a new product which may suit to the
requirement of the investing public. Innovations thus help them in
soliciting new business.
Global impact: Many of the providers and users of capital have
changed their roles all over the world. Financial intermediaries have
come out of their traditional approach and they are ready to assume
more credit risks. As a consequence, many innovations have taken
place in the global financial sector which has its own impact on the
domestic sector also.
Investor awareness: With a growing awareness amongst the
investing public, there has been a distinct shift from investing the
savings in physical assets like gold, silver, land etc. to financial assets
like shares, debentures, mutual funds etc. To meet the growing
awareness of the public, innovation has become the need of the hour.
1.11 PRESENT SCENARIO OF FINANCIAL SERVICES

Conservatism to dynamism:
At present, the financial system in India is in a process of rapid
transformation, particularly after the introduction of reforms in the
financial sector. The main objective of the financial sector reforms is
to promote an efficient, competitive and diversified financial system
in the country. This is essential to raise the allocative efficiency of
available savings and to promote the accelerated growth of the
economy as a whole. The emergence of various financial institution
and regulatory bodies has transformed the financial services sector
from being a conservative industry to a very dynamic one.
Emergence of Primary Equity Market: The capital markets have
become a popular source of raising finance. The aggregate funds
raised by the industries have gone from Rs. 5976 crore in 1991-92 to
Rs. 32382 crore in 2006-07. Thus the primary market has emerged as
an important vehicle to channelize the savings of the individuals and
corporates for productive purposes and thus to promote the industrial
& economic growth of our nation.
Concept of Credit Rating: The investment decisions of the investors
have been based on factors like name recognition of the company,
reputation of promoters etc. now, grading from an independent agency
would help the investor in his portfolio management and thus, equity
grading is going to play a significant role in investment decision
making.
 Now it is mandatory for non-banking financial companies to get
credit rating for their debt instruments. The major credit rating
agencies functioning in India are:
i. Credit Rating Information Services of India Ltd.
ii. Credit Analysis and Research Ltd.
iii. Investment Information and Credit Rating Agency.
iv. Duff Phelps Credit Rating Pvt. Ltd.
Process of Globalization: The process of globalization ha paved the
way for the entry of innovative financial products into our country.
The government is very keen in removing all obstacles that stand in
the way of inflow of foreign capital. India is likely to enter the full
convertibility era soon. Hence, there is every possibility of
introduction of more and more innovative financial services in our
country.
Process of Liberalization: The government of India has initiated
many steps to reform the financial services industry. The Government
has already switched over to free pricing of issues from pricing issues
by the Controller of capital issues. The interest rates have been
deregulated. The private sector has been permitted to participate in
banking and mutual funds and the public sector undertakings are
being privatized. The financial service industry in India has to play a
positive and dynamic role in the years5 India has to play a positive
and dynamic role in the years to come by offering many innovative
products to suit to the varied requirements of the millions of
prospective investors spread throughout the country.
 CHAPTER- 2

VARIOUS CHANNELS THROUGH

WHICH SERVICES & PRODUCTS ARE
OFFERED

CHAPTER-2
VARIOUS CHANNELS THROUGH WHICH PRODUCTS &
SERVICES ARE OFFERED BY BANKS
 CHARTS: VARIOUS CHANNELS OF SERVICES

BMIT B R M A I T N ON E T C B L E IH E L R E P E N SH E B O T A N N B E K A B NI N A K G N I N K GI N
A A T M G
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CRPL
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SBTN
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2.1 BRANCHES

A branch, banking center or financial center is a retail location where a bank,

credit union, or other financial institution offers a wide array of face-to-face
and automated services to its customers.
In the period from 1100-1300 banking started to expand across Europe and
banks began opening branches in remote, foreign locations to support
international trade. Historically, branches were housed in imposing
buildings, often in a neo-classical architecture style. Today, branches may
also take the form of smaller offices within a larger complex, such as a
shopping mall.

Traditionally, the branch was the only channel of access to a financial

institutions services. Services provided by a branch include cash
withdrawals and deposits from a demand account with a bank teller,
financial advice through a specialist, safe deposit box rentals, bureau de
change, insurance sales, etc. As of the early 21st Century, features such as
Automated Teller Machine (ATM), telephone and online banking, allow
customers to bank from remote locations and after business hours. This has
caused financial institution to reduce their branch business hours and to
merge smaller branches into larger ones. They converted some into mini-
branches with only ATMs for cash withdrawal and depositing; computer
terminals for online banking and cheque depositing machines.

Some financial institutions, to show a friendlier image, offer a boutique or

coffee house-like environment in their branches, with sit-down counters,
refreshments, interactive displays. Some branches also have drive-through
teller windows or ATMs.

2.2 MOBILE BANKING

Mobile banking also known as M-Banking, SMS Banking is a term used for
performing balance checks, account transactions, payment etc. Over the last
few years, the mobile and wireless market has been one of the fastest
growing markets in the world and it is still growing at a rapid pace. With
mobile technology, banks can offer services to their customers such as doing
funds transfer while travelling, receiving online updates of stock price or
even performing stock trading while being stuck in traffic.

A specific sequence of SMS messages will enable the system to verify if the
client has sufficient funds in his or her wallet and authorize a deposit or
withdrawal transaction at the agent.

Many believe that mobile users have just started to fully utilize the data
capabilities in their mobile phones. In Asian countries like India, China,
where mobile infrastructure is comparatively better than the fixed-line
infrastructure, and in European countries, where mobile phone penetration is
very high, mobile banking is likely to appeal even more.

Mobile Banking Services

Account Information
1) Mini-statement and checking of account history
2) Alerts on account activity
3) Monitoring of term deposits
4) Access to loan statements
5) Access to card statements
6) Mutual fund/ equity statements
7) Pension plan management
8) Insurance policy management
9) Status on cheque, stop payment on cheque
10) Ordering cheque books
11) Balance checking in the account
12) Recent transactions
13) Due date of payment
14) PIN provision
15) Blocking of cards
Payments, Deposits, Withdrawals and Transfers
 1) Domestics and international fund transfers
2) Micro-payment handling
3) Mobile recharging
4) Commercial payment processing
5) Bill payment processing
6) Peer to Peer payments
7) Withdrawal at banking agent
8) Deposit at banking agent

2.3 TELEPHONE BANKING

Telephone banking is a service provided by a financial institution , which

allows its customers to perform transactions over the telephone. Most
telephone banking services use an automated phone answering system with
phone keypad response or voice recognition capability. To guarantee
security, the customer must first authenticate through a numeric or verbal
password or through security questions asked by a live representative.

With the obvious exception of cash withdrawals & deposits, it offers

virtually all the features of an automated teller machine: account balance
information and list of latest transactions, electronic bill payments, funds
transfers between a customers accounts.etc

Usually, customers can also speak to alive representative located in a call

centre or a branch, although this feature is not always guaranteed to be
offered 24/7. In addition to the self-service transactions listed earlier,
telephone banking representatives are usually trained to do what was
traditionally available only at the branch: loan applications, investments
purchases and redemptions, cheque book orders, debit card replacements,
change of address, etc

Banks which operate mostly or exclusively by telephone are known as

phone banks. They also help modernize the user by using special technology.

2.4 INTERNET BANKING

Internet banking or E-banking means any user with a personal computer and
a browser can get connected to his bank -s website to perform any of the
virtual banking functions. In internet banking system the bank has a
centralized database that is web-enabled. All the services that the bank has
permitted on the internet are displayed in menu. Any service can be selected
and further interaction is dictated by the nature of service. The traditional
branch model of bank is now giving place to an alternative delivery channels
with ATM network. Once the branch offices of bank are interconnected
through terrestrial or satellite links, there would be no physical identity for
any branch. It would a borderless entity permitting anytime, anywhere and
any how banking

INTERNET BANKING SERVICES

1) Bill Payment Service: You can facilitate payment of electricity and

telephone bills, mobile phone, credit card and insurance premium bills
as each bank has tie-ups with various utility companies, service
providers and insurance companies, across the country. To pay your
bills, all you need to do is complete a simple one-time registration for
each biller. You can also set up standing instructions online to pay
your recurring bills, automatically. Generally, the bank does not
charge customer for online bill payment.
2) Fund Transfer: You can transfer any amount from one account to
another of the same or any another bank. Customers can send money
anywhere in India. Once you login to your account, you need to
mention the payees account number, his bank and the branch. The
transfer will take place in a day or so, whereas in a traditional method,
it takes about three working days.
3) Credit Card Customers: With Internet banking, customers can not
only pay their credit card bills online but also get a loan on their cards.
If you lose your credit card, you can report lost card online.
4) Investment: You can now open an FD online through funds transfer.
Now investors with interlinked demat account and bank account can
easily trade in the stock market and the amount will be automatically
debited from their respective bank accounts and the shares will be
credited in their demat account. Moreover, some banks even give you
the facility to purchase mutual funds directly from the online banking
system.
 5) Recharging your Prepaid Phone: Now just top-up your prepaid
mobile cards by logging in to Internet banking. By just selecting your
operator's name, entering your mobile number and the amount for
recharge, your phone is in action within no time.
6) Shopping: With a range of all kind of products, you can shop online
and the payment is also made conveniently through your account. You
can also buy railway and air tickets through Internet banking.

2.5 AUTOMATED TELLER MACHINE (ATM)

Automated Teller Machine is a mechanism which enables the customer to

withdraw money from his account without visiting the bank branch. An
ATM card is issued to the customer by the bank in order to make cash
withdrawals at cash machine. This service helps the ATM customer to
withdraw money even when the banks are closed. This can be done by
inserting the card in the ATM and entering the Personal Identification
Number & secret password.

ATMs act as off-site branches of banks and provide almost all services that
are available from a manually operated branch. The customer can, not only
withdraw cash, but also deposit money, get account statements, enable
transfer of funds etc. The customer who wants to deposit cash should put the
notes in the pouch available at the ATM counter close it, seal it by signing &
put it in the slot provided for this purpose. The bank staff will collect the
packet when they come for loading cash in the machine & credit the amount
to the account. However, the customer has to sign an undertaking with the
bank that he would not dispute on the amount credited. ATM has gained
prominence as a delivery channel for banking transactions in India. Now
customers will not be levied any fee on cash withdrawals using ATM &
debit cards issued by other banks. This will in turn increase usage of ATMs
in India. ATM allows customers:

To view account information

To deposit cheques or cash
To order cheques and receive cash.

Benefits of ATM:

To the ATM Customer

1) ATM customer can utilize any possible facility availed from the ATM
e.g. balance enquiry, withdrawal, deposits, etc
2) Anytime banking, 24 hours a day, 7 days a week has become a main
service to the ATM customers who cannot manage to visit bank during
banking hours
3) Convenience acts as a tremendous psychological benefit all the time
4) Cash withdrawal from any branch through ATM

To the Bank

1) Innovative, secure, competitive and presents the bank as technology

driven in the banking sector market.
2) Reduces customer visits to the branch & thereby human intervention.
3) Inter-branch reconciliation is immediate thereby reducing chances of
fraud.
4) It acts as a value added product to the bank so that the banks can
attract more new generation customers.

CHAPTER- 3
VARIOUS PRODUCTS &
SERVICES OF BANKS
 CHAPTER-3

VARIOUS PRODUCTS & SERVICES OF BANKS

3.1 Deposits

Banks provide various deposit schemes for keeping the savings of people.
Some of these schemes are common in nature. Banks have to comply with
the Know Your Customer (KYC) norms introduced by the Reserve Bank of
India while opening & allowing operations in the accounts. A few deposit
schemes offered by banks are as follows:

CHART: TYPES OF DEPOSITS

Current
Account

Safe-Deposits Fixed
Lockers D eposit

Demat Savings
Account A ccount

R eccuring
Deposit
1) Current Account:

Current account is primarily meant for businessmen, firms, companies

and public enterprises etc. that have numerous daily banking
transactions. Individuals generally do not open this account. Current
accounts are meant neither for the purpose of earning interest nor for
the purpose of savings but only for convenience of business hence
they are non-interest bearing accounts. In a current account, a
customer can deposit & withdraw any amount of money any number
of times, as long as he has funds to his credit.

As per RBI directive, banks are not allowed to pay any interest on the
balances maintained in Current Accounts. However, in case of death
of the account holder his legal heirs are paid interest at the rates
applicable to Savings bank deposit from the date of death till the date
of settlement. Because of the large number of transactions in the
account and volatile nature of balances maintained, banks usually levy
certain service charges for opening a Current Account.

2) Fixed Deposits:

Bank Fixed Deposits are also known as Term Deposits. In a Fixed

Deposit Account, a certain sum of money is deposited in the bank for
a specified time period with a fixed rate of interest. The rate of interest
for Bank Fixed Deposits depends on the maturity period. It is higher
in case of longer maturity period. There is great flexibility in maturity
period & it ranges from 15 days to 5 years. The interest can be
 compounded quarterly, half-yearly or annually and varies from bank
to bank. Loan facility is available against bank fixed deposits upto 75-
90 % Premature withdrawal is permissible but it involves loss of
interest.

Fixed deposits with banks are nearly 100% safe as all the banks
operating in the country, irrespective of whether they are nationalized,
private or foreign are governed by the RBIs rules & regulations and
give due weightage to the interest of the investors.

3) Savings Bank Account:

Savings Bank accounts are meant to promote the habit of saving

among the citizens while allowing them to use their funds when
required. The main advantage of Savings Bank Account is its high
liquidity and safety. Savings Bank Account earn moderate interest.
The rate of interest is decided and periodically reviewed by the
government of India. Savings Bank Account can be opened in the
name of an individual or in joint name of the depositors.

The minimum balance to be maintained in an ordinary savings bank

account varies from bank to bank. It is less in case of public sector
banks and comparatively higher in case of private banks. Savings
Bank Account can now be accessed through ATMs & internet.

4) Recurring Deposit Account:

Under recurring deposit account, a specific amount is invested in bank

on monthly basis for a fixed rate of return. The deposit has a fixed
tenure, at the end of which the principal sum as well as the interest
 earned during that period is returned to the investor. Recurring Bank
Account provides the element of compulsion to save at high rates of
interest applicable to Term Deposits along with liquidity to access
those savings any time. Loan/ Overdraft facility is also available
against Recurring Bank Deposits.

The deposit for RD account is paid in monthly installments and each

subsequent monthly installment has to be made before the end of the
month and is equal to the first deposit. In case of default in payment,
penalty is levied for the delayed deposit.

5) Demat account:
Some banks are depository participants. These banks offer demat
accounts to their corporate clients. Demat account is just like a bank
account where actual money is replaced by shares. Just as a bank
account is required if we want to save money or make cheque
payments, we need to open a demat account in order to buy or sell
shares. A Demat Account holds portfolio of shares in electronic form
and obviates the need to hold shares in physical form. The account
offers a secure and convenient way to keep track of shares and
investment without the hassle of handling physical documents that get
mutilated or lost in transit. The Securities and Exchange Board of
India (SEBI) mandates a demat account for share trading involving
more than 500 countries.
Benefits of Demat Account
Protection against loss, theft, mutilation etc
Transfer of shares immediately
Shorter settlement cycles
Protection against bad deliveries.
6) Safe-Deposit Lockers:
Safe deposit locker is a facility provided by banks to their customers
to keep their valuables like jewellery, title deeds etc. Safe deposit
locker is a steel cabinet having multiple cubicles. The safe deposit
locker is kept inside the safe room and can be accessed only with the
permission of the bank officials. A customer who is in need of a locker
has to approach the bank. Customer has to mention a password in the
application form for identification purpose when he comes for
operating the locker. The customer has to remit annual rent for using
the locker facility. The customer has full privacy in operating the
locker.
As per RBI guidelines, the place where the locker is kept should be
segregated from the place where cash and valuables are stored using
iron grill. When the customer wants to open the locker, he has to
identify himself by telling the password and sign in a register noting
the date and time of opening the locker which will be countersigned
by the bank officials. The agreement of locker is a contract of
bailment and the bank can terminate the agreement and demand the
customer to vacate locker if any of the terms and conditions in the
agreement are violated or the annual rent is not remitted for a long
period. At present all the banks are having safe deposit locker facility.
3.2 CREDIT CARDS:

Credit cards are innovative ones in the line of financial services offered by
commercial banks. Credit card culture is a old hat in the western countries.
In India, it is relatively a new concept that is fast catching on. Since the
plastic money has today become as good as legal tender more people are
using them in their day-to-day activities. A credit card is a card or
mechanism which enables cardholders to purchase goods, travel and dine in
a hotel without making immediate payments. It is a convenience of extended
credit without formality. Credit cards can be classified as follows:

CHART: TYPES OF CREDIT CARDS

OLD CREDIT CARDS NEW CREDIT CARDS

C r e C d i o t r C p o a rr d
a t e C r e d i t C a r d
s

C h a C r g h e a r C g ea r C d a r d

I n - s I t n o - r s e t o C r ea r C d a r d

B u s B i n u e s s i s n e C s a s r C d a r d

S m a S r m t C a r a t r C d a r d

D e b D i t e C b i a t r C d a r d

A T M A T C M a r C d a r d

V i r t V u ia r l t u C a a l r C d a r d
Old types of Credit Cards:

1) Credit Card:
It is a normal card whereby a holder is able to purchase without
having to pay cash immediately. Generally, a limit is set to the amount
of money a cardholder can spend a month using the card. At the end
of every month, the holder has to pay a percentage of outstanding.
Interest is charged for the outstanding amount which varies from 30 to
36 per cent per annum. An average consumer prefers this type of card
for his personal purchase.
2) Charge Card:
A charge card is intended to serve as a convenient means of payment
for goods purchased at Member Establishments rather than a credit
facility. Instead of paying cash or cheque every time the credit card
holder makes a purchase, this facility gives a consolidated bill for a
specified period, usually one month. There are no interest charges and
no spending limits either. The charge card is useful during business
trips and for entertainment expenses which are usually borne by the
company. Andhra Bank card, BOB cards, Can card, Diners Club card
etc. belong to this category.
3) In-Store Card:
The in-store cards are issued by retailers or companies. These cards
have currency only at the issuers outlets for purchasing products of
the issuer company. Payment can be on monthly or extended credit
basis. For extended credit facility interest is charged. In India, such
cards are normally issued by Five Star Hotels, resorts and big hotels.

NEW TYPES OF CREDIT CARDS

1) Corporate Credit Cards:
Corporate cards are issued to private and public limited companies
and public sector units. Depending upon the requirements of each
company, operative Add-on cards will be issued to the persons
authorized by the company. The name of the company will be
embossed on Add-on cardholder. The transactions made by Add-on
cardholders are billed to the main card and debits are made to the
Companys Account.
2) Business Card:
A business card is similar to a corporate card.it is meant for the use of
proprietary concerns, firms, firms of Chartered Accountants etc. This
card helps to avail of certain facilities for reimbursement and makes
their business trip convenient.
3) Smart Card:
It is a new generation card. When a transaction is made using the card,
the value is debited and the balance comes down automatically. Once
the monetary value comes down to nil, the balance is to be restored all
over again for the card to become operational. The primary feature of
smart card is security. It prevents card related frauds & crimes.
4) Debit Cards:
Debit card is popularly known as ATM card on the move. The debit
card gives the freedom to access savings or current account through
ATMs at merchant locations. Debit cards are also issued independent
of ATM in which case the card is presented to the merchant
establishment at the time of purchase as in a case of credit card.
However, the account of the card holder will be debited instantly
when the charge slip is presented by the merchant establishment
instead of the card holder remitting the money as is being done in the
case of credit card. Therefore, the card holder has to keep sufficient
 balance in his account before he uses the card. The debit card does
have a daily limit which could be somewhere around Rs 15000 at
ATMs and Rs 10000 at merchant locations. This again is subject to the
balance available in the account.
5) ATM Card:
An ATM (Automated Teller Machine) card is useful to a card holder
as it helps him to withdraw cash from banks even when they are
closed. This can be done by inserting the card in the ATM installed at
various bank location.
6) Virtual Card:

A virtual card is a card that can be generated by anybody at any time

provided he has already registered his name in the Banks website.
One can also set monetary limits for each card, usually limited to the
value of the item he intends to purchase and the value should be
limited to his bank balance or the credit limit. This completely
prevents misuse. It is a kind of facility offered to existing cardholders
at free of cost.

3.3 LOANS

It is an arrangement by which a bank advance loans against any security like

jewels, shares or debentures or insurance policy or personal security of the
borrower. The interest is payable on the entire loan amount as decided by the
bank. Loans can be classified as follows:

CHART: VARIOUS TYPES OF LOANS

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1) Personal loans:
 The personal loans are granted to any customer or the non-custome if
the bank is satisfied with the repayment capacity of the borrower. The
borrower should have a steady income. Installment can be paid by
depositing post dated cheques, authorization to debit the amount to the
borrowers savings or current account, authorization to transfer
interest on term deposit to the loan account, authorization to deduct
the installment from the salary by the employer and remit to the bank
etc. The interest varies from bank to bank. Normally banks allow 12
months to 60 months for repayment.

Banks also charge time processing fee ranging from 1 to 3 percent per
annum. Personal loans are generally unsecured because in most cases
there is no primary security. Therefore, many banks demand collateral
security in the form of landed property, gold ornaments, third party
guarantee etc. Some banks instead of third party guarantee insist that
another person should join as co-obligant. Many banks prefer co-
obligant as a guarantor because a co-obligant signs the original loan
documents along with the borrower & therefore has a joint liability.
The documentation is quite simple because there will be only a
promissory note.

2) Housing Loans:
Housing loans are given as direct loans and indirect loans. Direct
loans are those loans given to the individuals or group of individuals
including co-operative societies. The indirect loans are the term loans
granted to housing finance institution, housing boards etc primarily
engaged in the business of supplying serviced land and constructed
house units. Banks are permitted to extend term loans to private
 builders. Banks are also granting loans under priority sector for
housing purpose.
Eligibility:
Any person above 21 years but below the age of 65 years having
sufficient disposable income, can avail housing loan from a bank.
Some banks permit even upto 70 years if the borrower can produce
proof of sufficient income to repay the loan. A self-employed person
can also avail of housing loan, subject to compliance of the income
criteria.
Amount of Loan:

The loan amount starts from Rs 2 lakh. However for weaker sections
the loan can be availed even for a small amount. The maximum
amount of loan is decided after considering the disposable income of
the borrower. While calculating the income eligibility spouses income
can also be considered. The other factors considered for deciding the
repayment capacity are age, qualification, status of assets, liabilities,
stability and continuity of occupation and savings history etc.

3) Educational Loans:
Educational loans are extended with the aim to provide financial
support from the banking system to deserving students for pursuing
higher education in India & abroad. The main emphasis is that every
student should get an opportunity to pursue education with financial
support from the banking system on affordable terms and conditions.
All banks are offering educational loans, but the schemes differs from
bank to bank. The scheme aims at providing financial assistance on
reasonable terms to the poor and needy to undertake basic education.
Student Eligibility:
 The student should be an Indian national and should have secured
admission to professional courses through entrance test process or
should have secured admission to foreign university. The student have
scored minimum 60 percent in the qualifying examination for
admission to graduation courses.
Repayment:
Course period + 1 year or 6 months after getting job, whichever is
earlier. The loan has to be repaid in five to seven years from
commencement of repayment. If the student is not able to complete
the course for the reasons beyond his control, sanctioning authority
may at his discretion consider such extensions as may be deemed
necessary to complete the course.
Security:
Up to Rs 2 lakh:- no security

Above Rs 2 lakh:- collateral security equal to 100 % of the loan.

Amount of guarantee of third person known to bank for 100% of the
loan amount.

4) Automobile Loans:
Banks are extending credit for purchase of new two or four wheeler
for personal or professional use. Bank finance is also available for
purchase of used cars less than 3 years old. Each bank has formulated
their own schemes. Vehicle finance has now become one of the highly
profitable area and therefore banks and other financial institutions are
competing with each other for attracting the customers, even by
offering some concessions. As a result, the margin, interest rate &
eligibility criteria differ from one bank to the other. The loans are to
be repaid in 36 to 60 equated monthly instalments. The maximum
 amount of loan is limited to 3 times of net income annual salary
subject to a maximum of Rs 10 lakh.
Security:
Hypothecation of vehicle financed by the bank.
Banks lien to be noted with the transport authorities.
Guarantee of the spouse

In case of unmarried, third party guarantee of sufficient means

or other collateral securities acceptable to the bank.

5) Mortgage Loans:
Mortgage loan is a financing arrangement in which a lender extends
finance for acquisition of real estate against the security of the real
estate purchased out of the loan. The borrower executes a mortgage
deed which registers a lien on the property in favour of the lender. The
title will be re-transferred when the borrower repays the loan in full
with interest. Banks provide loan/overdraft facility against mortgage
of property at low rate of interest to people engaged in trade,
commerce and business and also to professionals and self employed,
partnership firms, companies, NRIs and individuals with high net
worth including salaried people. The product provides an opportunity
to customers to borrow against a fixed asset at short notice.

Repayment:
The loan has to be repaid within a period of eight years by way of
equated monthly installments. The repayment shall commence from
the month subsequent to the month in which final disbursement is
made or 6 months from the first disbursement, whichever is earlier. In
 case of agriculturists the repayment is related to the generation of
farm income from crops & other subsidiary activities.

3.4 INVESTMENT

Investment is the employment of funds with the aim of getting return on it. It
is the commitment of funds which have been saved from current
consumption with the hope that some benefits will receive in future. Thus, it
is a reward for waiting for money. Savings of the people are invested in
assets depending on their risk and return. Investment avenues are the outlets
of funds. In India, investment alternatives are continuously increasing along
with new developments in the financial market. An investor can himself
select the best avenue after studying the merits and demerits of different
avenues. Even financial advertising, newspapers supplements on financial
matters and investment journals offer guidance to investors in the selection
of suitable investment avenues.

CHART: ALTERNATIVES AVENUES FOR INVESTMENT

P u b li G O
G o c
I
ld P ro v In v e
S a v
&B o n id e n t in g
s tm
Sd is l RF eu n d
s
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v& e r a l
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D e b E s n u e s
e n tu n d
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1) Public Provident Fund (PPF):

Public Provident Fund is one attractive tax sheltered investment
scheme for middle class and salaried persons. It is even useful to
businessmen and higher income earning people. The PPF scheme is
very popular among the marginal income tax payers.

Features of PPF scheme

The PPF scheme is for a period of 15 years but can be extended

at the desire of the depositor
The depositor is expected to make a minimum deposit of Rs
100 every year
 The PPF account is not transferable, but nomination facility is
available
Tax exemption on investment is made.

A compound interest at 8% per annum is paid

2) Government of India Savings Bond:

The GOI has recently started issuing 6.50% bonds which are
reasonably attractive and secured investment for individuals and
institutions.
Features of Savings Bonds
Interest 6.50%. Interest is payable half yearly or cumulative.
Interest payment is exempted from income tax.
Maturity period of 5 years
Cumulative facility available. Rs 1000 become Rs 1377 after 5
years.
Nomination facility is available

3) Real Estate Properties:

Investment in the real estate is popular due to high saleable value after
some years. Such properties include buildings, commercial premises,
industrial land, plantations, farmhouses, agricultural land etc. They
purchase such properties at low prices and do not sale them unless
there is substantial increase in the market price. The resale price will
be attractive in due course when they can recover 4 times the price
paid. This is one attractive as well as profitable avenue for investment.

4) Investment in Gold, Silver:

In India, there is attraction for gold and silver since the early historical
period. These two precious metals are used for making ornaments and
 also for investment of surplus funds over a long period. The prices of
both the metals are continuously increasing. These metals are highly
liquid, also provides a sense of security to the investors. The benefit of
capital appreciation is also available. As a result, investment in gold
and silver is one avenue for investment.

5) Bonds & Debentures:

It is possible to purchase bonds and debentures of joint stock
companies for investment purpose. Debenture indicates loan given to
the company at a specific rate of interest. Debentures are more
popular than shares due to the safety and security available. Easy
transferability by endorsement and delivery. Investment exempted
from wealth-tax. Maturity period from 5-25 years.

CHAPTER- 4
INNOVATIVE FINANCIAL
PRODUCTS & SERVICES
 CHAPTER- 4
INNOVATIVE FINANCIAL PRODUCTS AND
SERVICES

1) Merchant Banking:

A merchant banker is a financial intermediary who helps to transfer

capital from those who possess it to those who need it. Merchant
banking includes a wide range of activities such as management of
customer securities, portfolio management, project counseling and
appraisal, underwriting of shares and debentures, loan syndication,
acting as banker for the refund orders, handling interest and dividend
warrants etc. Thus, a merchant banker renders a host of services to
corporate and thus promotes industrial development in the country.

2) Loan Syndication:

This is more or less similar to consortium financing. But, this work is

taken up by the merchant banker as a lead manager. It refers to a loan
arranged by a bank called lead manager for a borrower who is usually
a large corporate customer or a Government Department. The other
banks who are willing to lend can participate in the loan by
 contributing an amount suitable to their own lending policies. Since a
single bank cannot provide such a huge sum of loan, a number of
banks join together and form a syndicate.

3) Leasing:

A lease is an agreement which a company or a firm acquires a right to

make use of capital asset like machinery, on payment of a prescribed
fee called rental charges. The lessee cannot acquire any ownership to
the asset, but he can use it and have full control over it. He is expected
to pay for all maintenance charges and repairing and operating cost. In
countries like the U.S.A., the U.K. and Japan equipment leasing is very
popular and nearly 25% of plant and equipment is being financed by
leasing companies. In India also, many financial companies have
started equipment leasing business by forming subsidiary companies.

4) Mutual Funds:

A mutual fund refers to a fund raised by a financial service company

by pooling the savings of the public. It is invested in a diversified
portfolio with a view to spreading and minimizing risk. The fund
provides Investment Avenue for all small investors who cannot
participate in the equities of big companies. It ensures low risk, steady
returns, high liquidity and better capital appreciation in the long run.

5) Factoring:

Factoring refers to the process of managing the sales ledger of a client

by a financial service company. In other words, it is an arrangement
under which a financial intermediary assumes the credit risk in the
 collection of book debts for its clients. The entire responsibility of
collecting the book debts passes on to the factor. His services can be
compared to del credre agent who undertakes to collect debts. But, a
factor provides credit information, collects debts, monitors the sales
ledger and provides finance against debts. Thus, he provides a number
of services apart from financing.

6) Forfeiting:

Forfeiting is a technique by which a forfeitor (financing agency)

discounts an export bill and pay ready cash to the exporter who can
concentrate on the export front without bothering about collection of
export bills. The forfeitor does so without any recourse to the exporter
and the exporter is protected against the risk of non-payment of debts
by the importers.

7) Venture Capital:

A venture capital is another method of financing in the form of equity

participation. A venture capitalist finances a project based on the
potentialities of a new innovative project. It is in contrast to the
conventional security based financing. Much thrust is given to new
ideas or technological innovations. Finance is being provided not only
for start-up capital but also for development capital by the financial
intermediary.

8) Reverse Mortgage:
 In 2007-08, the National Housing Bank and commercial banks have
introduced an innovative product viz., reverse mortgage to enable the
senior citizens to fetch value out of their property without selling it. In
normal mortgage, a home buyer borrows money to finance his home.
In a Reverse Mortgage (RM) the owner of a house property surrenders
the title of his property to a lender and raises money. Again, in normal
mortgage the borrower gets 60-70% of the money upfront. But, in a
RM generally the lender does not pay the entire amount. On the other
hand, he pays out a regular sum each month for the agreed time. The
owner, normally a senior citizen, can use the property and stay with his
spouse for the rest of their lives. Thus, the owner can ensure a regular
cash flow in times of need and enjoy the benefit of using the property.
Usually, after the death of the owner, the spouse can continue to use
the property. In case, both die during the period of the RM scheme the
lender will sell the property, take his share and distribute the rest
among the heirs. It is called reverse mortgage because the payment
steam is reversed. Instead of making monthly payments to the
lender, as in the case of a regular mortgage, a lender makes regular
payments to the senior citizen. A RM facilitates to convert an
immovable asset into an income generating one

9) New Products in Forex Market:

New products have also emerged in the forex markets of developed

countries. Some of these products are yet to make full entry in Indian
markets. Among them, the following are the important ones:

i. Forward Contracts:
 A forward transaction is one where the delivery of a foreign
currency takes place at a specified future date for a specified
price. It may have a fixed maturity for, e.g., 31 st May or a
flexible maturity for, e.g., 1st to 31st May. There is an obligation
to honour this contract at any cost, failing which, there will be
some penalty. Forward contracts are permitted only for genuine
business transactions. It can be extended to other transactions
like interest payments.

ii. Options:
As the very name implies, it is a contract wherein the buyer of
the option has a right to buy or sell a fixed amount of currency
against another currency at a fixed rate on a future date
according to his option. There is no obligation to buy or sell,
but namely call options and put options. Under call options, the
customer has an option to buy and it is the option to sell under
put option. Option trading would lead to speculation and hence
there are much restrictions in India.
iii. Futures:
It is a contract wherein there is a agreement to buy or sell a
stated quantity of foreign currency at a future date at a price
agreed to between the parties on the stated exchange. Unlike
options, there is an obligation to buy or sell foreign exchange
on a future date at a specified rate. It can be dealt only in a
stock exchange.
iv. Swaps:
 A swap refers to transaction wherein a financial intermediary
buys and sells a specified foreign currency simultaneously for
different maturity dates-say, for instance, purchase of spot and
sale of forward or vice versa with different maturities. Thus,
swaps would result in simultaneous buying and selling of the
same foreign currency of the same value for different
maturities to eliminate exposure of risk. It can also be used as a
toll to enter arbitrage operations, if any, between two countries.

CHAPTER 5

OVERVIEW OF ICICI BANK

 CHAPTER 5

OVERVIEW OF ICICI BANK

5.1 HISTORY OF ICICI BANK

ICICI Bank was originally promoted in1994 by ICICI Limited, an Indian

financial institution, and was its wholly owned subsidiary. ICICIs
shareholding in ICICI Bank was reduced to 46% through a public offering of
shares in India in India in fiscal 1998. ICICI Bank was formed in1995 at the
initiative of the World Bank, the Government of India and representatives of
Indian industry. The principal objective was to create a development
financial institution for providing medium-term and long-term project
financing to Indian businesses. In the 1990s, ICICI transformed its business
from a development financial institution offering only project finance to a
diversified financial services group offering a wide variety of products and
services, both directly and through a number of subsidiaries and affiliates
like ICICI Bank. In 1999, ICICI become the first Indian company and the
first bank or financial institution from non-Japan Asia to be listed on the
NYSE.

After consideration of various corporate structuring alternatives in the

context of the emerging competitive scenario in the Indian banking industry,
the management of ICICI & ICICI Bank formed the view that the merger of
ICICI with ICICI Bank would be optimal strategic alternative for both
entities and would create the optimal legal structure for the ICICI groups
universal banking strategy.

5.2 INTRODUCTION OF ICICI BANK

ICICI Bank is the largest private sector bank in India in terms of market
capitalization. It is also the second largest bank in India in terms of assets
with a total asset of Rs. 3,674.19 billion (US$ 77 billion) as on June 30,
2009, the total profit after tax has been Rs. 8.78 billion. Formerly known as
Industrial Credit and Investment Corporation of India, ICICI Bank has an
extensive network of 1,544 branches with about 4,816 ATMS located across
India and in 18 other countries. ICICI Bank serves about 24 Million
customers throughout the world. It is considered as one of the Big Four
Banks in India along with State Bank of India, HDFC Bank and Axis Bank.

ICICI Bank provides a wide range of banking products and financial

services to its retail and corporate customers. It has a wide variety of
delivery channels and specialized affiliates and subsidiaries that ensure the
flow of its offerings in the areas like investment banking, venture capital,
life and non-life insurance and asset management. This bank is also Indias
largest credit card issuer. The equity share of ICICI Bank is listed on various
stock exchanges like NSE, BSE, Calcutta Stock Exchange and Vadodara
Stock Exchange etc. Its ADRs are also listed on the New York Stock
Exchange.

ICICI Bank also has the largest international balance sheet among all the
banks in India. It is also expanding its business in the overseas market at an
enviable pace. In Q2 September 2008, ICICI Bank recorded a 1.15% growth
in net profit over Q2 September 2007 to reach at Rs 1,014.21crores. The
current and savings account (CASA) ratio of bank also went up from 25% in
2007 to 30% in 2008

Vision

Our vision is a world free of poverty in which every individual has the
freedom and power to create and sustain a just society in which to live.

Mission

Our mission is to create and support strong independent organisations which

work towards empowering the poor to participate in and benefit from the
Indian growth process.
5.3 PRODUCTS & SERVICES:

ICICI Bank offers a host of products and services to its clients. The various
types of services are as follows:

1) Deposits
Savings Account
Advantage Deposit
Special Savings Account
Life Plus Senior Citizens Savings Account
Fixed Deposits
Security Deposits
Recurring Deposits
Young Stars Savings Account
Advantage Woman Savings Account
Self Help Group Accounts
Family banking
2) Cards
ICICI Bank is Indias largest issuer of credit cards. It also offers other
types of card. The various cards offered by ICICI bank are as follows:
Consumer Cards
Credit Cards
Travel Cards
Debit Cards
Commercial Cards
Corporate Cards
Prepaid Cards
Purchase Cards
Distribution Cards
 Business Cards
3) Loans
Home Loans
Loan against Property
Personal Loans
Car Loans
Two Wheeler Loans
Commercial Vehicle Loans
Loans against Securities
Loan against Gold Ornaments
Pre-approved Loans
4) Investments
ICICI Bank Tax Saving Bonds
Mutual Funds
Government of India Bonds
Initial Public Offers by Corporate
Foreign Exchange Services
ICICI Bank Pure Gold
Senior Citizens Savings Scheme
5) NRI Services
Money Transfer
Bank Accounts
Investments
Home Loans
Insurance
Loan against
6) Insurance
ICICI Bank offers various types of insurance.
Home Insurance
Health Insurance
Health Advantage Plus
Family Floater
Personal Accident
Travel Insurance
Individual Overseas Travel Insurance
Student Medical Insurance
 Motor Insurance
Car Insurance
Two Wheeler Insurance
Life Insurance
ICICI Pru Life Time Gold

5.4 Awards and Recognitions

ICICI Bank was voted as the Most Trusted Brand among private
sector banks in the 2010 Economic Times Brand Equity Most
Trusted Brands Awards and ranked 7th in the list of the Top 50 service
brands.
ICICI Bank received the 2010 World Finance UK award for:
i. Excellence in Remittance Business, Worldwide
ii. Excellence in NRI Services, Worldwide
iii. Excellence in Private Banking Business, APAC Region
For a sixth time in a row, ICICI Bank has received the Most Preferred
Auto Loan Brand in the Financial Services category at the CNBC
Consumer Awards.
ICICI Bank has won Gold in the Readers Digest Trusted Brands 2010
Consumer award in the Finance category for.
i. Best Bank
ii. Best Credit Card Issuing Bank
ICICI Bank amongst the top 3 to receive the FE-EVI Green Business
Leaders Award, in the banking industry.
 ICICI Bank wins the Asian Banker Award for Best Banking Security
System.
Forbes 2000 most powerful listed companies survey ranked ICICI
Bank 4th among the Indian companies and 282nd globally.
ICICI Bank wins the Asian Banker Award for Excellence in SME
Banking 2009.
Mr. N. Vaghul, Former Chairman, ICICI Bank was awarded the
Padma Bhushan.

CHAPTER- 6

DATA ANALYSIS &

INTERPRETATION
 CHAPTER- 6

DATA ANALYSIS AND INTERPRETATION

Q1) Awareness of people regarding various types of financial services

provided by the banks

Awareness about financial services

19%

50% aware
Fully Had an idea No idea Total
23%
9%

Interpretation

From the above chart we came to know that, overall percentage

of service class people having complete knowledge about different types of
services provided by the bank is 37%, those having some idea about it is
46% and the percentage of people having no awareness of various services
provided by the bank is 17%. It can reasonably, be concluded that nearly
85% of the population is having awareness about newly introduced services.

Q2 Awareness of various banking services provided by banks

Awareness about different Banking Services

30.00%
25.00%
20.00%
15.00%
10.00% Percentage
5.00%
0.00%

Interpretation

Banks constitute various channels through which services are provided in

terms of ATMs, Debit Card, Credit Card, Phone Banking, Mobile Banking,
Internet Banking etc, of which the first six have been covered. Amongst
these ATM scores the largest used service status (26.03%) as indicated by
above figures. Close on the heels is Debit card (17.75%), Credit card
(14.79%), while phone banking lags behind by scoring the least (11.83 %.)

Q 3) Sources from which the respondents get the knowledge about the
innovative financial services.

Sources of Awareness about various innovative financial products

4% Personal Visit
15%
Executive from Bank
26%
Advertisements
21% Friends/Relatives
Others

34%

Interpretation
The above table indicates the percentage distribution of awareness avenues,
the major are in favour of advertisements, which score 34% among different
avenues such as personal visit, executives of the banks, advertisements and
friend/relatives. While the least score is for personal visit and that of other
sources.

Q4) Is your Bank following the Know Your Customer (KYC) norms in
providing services.

Formulation of KYC norms

Yes 33% No

67%

Interpretation

The above table indicates the KYC norms followed by the banks. The
banks are providing the customer with proper information about
 various banking services. The banks are trying to find the expected
service of the customer.

Q5) Growth rate of credit cards

Number of credit cards

0.8

0.5

0.3
0.3

0.0
0.6
2007 2008 2009

(0.2)
Interpretation

The above table indicates the growth rate of credit cards, which scores
0.3 million in the year 2008 and it has grown upto 0.6 million in
2009.The growth rate is 100%. This indicates that the distribution of
credit cards is on large scale. The ICICI Bank is considered as largest
issuer of credit cards.

CONCLUSION
 CONCLUSION

The project of Financial Services of Banks was undertaken at ICICI Bank

Ltd. Working under this project I learned various services in detail which
banks generally follow.

It also helped in gaining knowledge about different concepts provided under

different services .

The Financial Services of the Banks has become very vital in the smooth
operation of the banking activities. The Project work has certainly enriched
the knowledge about the effective management of the various services in
Banking Sector.
Lastly as according to data collection we conclude that given findings and
suggestions need to be considered which can prove to be effective to the
Banks.

SUGGESTIONS
 SUGGESTIONS

Prevention against frauds of Credit Cards

To take necessary action against defaulters
Providing with proper information relating to various services
Guidance for investment in various securities in order to protect the
interest of investors.
Approaching the customers for investment in innovative financial
services.
Special schemes to be provided on some types of services
BIBLIOGRAPHY
 BIBLIOGRAPHY

BOOKS:

Financial Services & Systems

- K.K. Sasidharan
- Alex Mathews
Financial Markets & Services
- Gordon
- Natarajan

Web Sites:

www.wikipedia.com

www.icici bank.com

www.google.com
www.ask.com

ANNEXURE
 ANNEXURE

1) Which type of financial services are offered by Banks?

2) Which types of Credit Cards are provided to the customers?

3) What kind of actions are taken by the banks against defaulters?

4) Is the bank following RBI guidelines from time to time?

5) What are the steps taken by the bank to settle the claims?

6) Which type of innovative financial services are provided by the

bank after LPG?

7) Are the new customers attracted by the physical environment of

the bank?
8) What are the future plans of the bank?