ICICI Lombard to expand its presence in rural sector

ICICI’s rural market share went up to 11% in FY 08 from 8% last year and they are hopeful of collecting a premium of
Rs540 crore in FY 08 from Rs230 crore last year

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PTI

Mumbai: ICICI Lombard plans to expand its presence in the rural sector across the country with a focus on weather and cattle
insurance, a top company official said.

“We plan to increase our rural market share to 11% in FY 08 from 8% last year. We are hopeful of collecting a premium of Rs540
crore in FY 08 from Rs230 crore last year,” Pranav Prasad, head, rural and agriculture business, ICICI Lombard, told reporters here.

“We have charted out a concerted plan to strengthen our reach across rural India and offer insurance products like weather
insurance, cattle insurance, health and personal accident insurance,” Prashad said.

The company plans to expand by activating rural marketing channels across 800 towns, which include rural marketing agents and
chains of rural retail outlets.

“ICICI Lombard has a range of insurance products designed specially for the rural and agricultural segment with cost effective
distribution mechanisms and equally robust processes for claims servicing,” Prashad said.

The company in conjunction with the World Bank-pioneered weather insurance in the country to cover vagaries of the weather for a
wide variety of crops to farmers. The claim settlement of weather insurance are determined by objective data capture by
independent weather stations

ICICI Bank to penetrate rural sector through mandis, kiosks

Business Standard
PUBLI SHED ON MAY 22, 2005

ICICI Bank is planning to set up mandi branches, kiosks, franchisees and partner microfinance institutions and non-government
organisations to boost its rural finance business.
In association with corporates, microfinance institutions and local authorities, the bank is developing supply-chain solutions in the agriculture
sector.
ICICI Bank has divided the rural market into R1, R2, R3 and R4 categories for identifying the rural markets. R1 and R2 represent thefarmers,
while R3 and R4 represents the poor landless labourers.
“ICICI Bank plans to increase its points of delivery five times - from 3,500 to 17,500 by March 2006,” said ICICI Bank executive director
Nachiket Mor.
He said the total demand for microfinance was around Rs 45,000 crore, while the supply was just about Rs 2,000 crore.
The bank will support over 200 microfinance institutions (MFIs) in creating an asset base of Rs 2,00,000 crore and also rollout “penetration
strategy” to cover 60 districts in the country.

ICICI Bank plans to embark on rural market penetration

Our Bureau

 
Mr K.V. Kamath, Managing Director and CEO, ICICI Bank, flanked by Mr K. Anji Reddy (right), Chairman, Dr Reddy's Laboratories, and Mr Sunil Alagh,
President, AIMA, at the the 32nd National Management Convention in Hyderabad on Friday. - P.V. Sivakumar

Hyderabad , Sept. 23

ICICI Bank Ltd plans to embark on a two-pronged strategy of rapid penetration into the rural market, unlocking the
power of technology, while laying special thrust on overseas expansion.

The Managing Director of ICICI Bank, Mr K.V. Kamath, said that the bank had restructured its operations about
four times in the last 10 years and continues to innovate to stay ahead in a rapidly eroding competitive advantage.

Speaking at the All India Management Association (AIMA) Convention, Mr Kamath said in 2000 while 94 per cent of
all transactions were made from the bank, the number has come down to 25 per cent.

While about 3 per cent of the total customers of the bank used ATMs in 2000, this number has swelled to 38 per
cent.

While about 2 per cent of the customers actually used the Internet banking in 2000, this has gone up to 27 per
cent.

So is the case with call centres, whose access has gone up from 1 per cent in 2000 to 10 per cent, although ICICI
expected this to be much more.

Speaking on `Innovation for the future' and how bank took to innovation, Mr Kamath said in the current
environment of volatility there is a need for constant innovation.

The annual technology operation expense per customer works out to barely 5-10 per cent of global banks, thanks
to open systems.

"The bank's in-house eLabs is behind these technology innovations," Mr Kamath said.
Referring to the likes of Nokia and Motorola, Mr Kamath said, "If the conventional approach to decision-making was
adopted in this fast-paced telecom industry, where board of directors decide before a decision is taken about the
next product, they would simply be out of business.

Therefore, such companies depend on their marketing and sales force to decide on what their next product could
be, based on customer feedback to researchers."

"ICICI went through a restructure process a decade ago and decided on a new paradigm to leverage technology for
service delivery and this has paid off significantly. Now, we believe the same can be done in the rural parts of the
country. Therefore, rural banking is the new area of focus through micro finance, rural Internet kiosks and low cost
ATMs. We see the rural market as the next big opportunity," he said.

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Micro CreditMicro Banking

ICICI Bank's commitment to the rural and urban low-income populations is based on the vision and
strategic opportunity to reach the large number of Indians lacking access to financial services today. By
focusing on three key enablers – partnerships, technology, and process & product innovation – ICICI
Bank has built the foundation for scaling the delivery of financial services to the poor. Through a wide
range of micro-credit and micro-savings offerings, ICICI Bank already touches the lives of millions of low-
income households across India, and is looking ahead to expand its services in the future.
Micro Credit
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  Micro Credit   | Micro Savings   | Business Correspondents

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Micro Credit
ICICI Bank provides financial assistance to the MFIs in the form of Term loan, Overdraft and Portfolio
Buyout facilities. The Bank has established a dedicated micro finance development team responsible for
providing these facilities to the MFIs.
Term Loan and Overdraft

Term loan is extended for on lending to micro finance clients. In addition to the above, the Bank extends
Over Draft (OD) facility to tide over temporary cash flow mismatches. These facilities are extended to
MFIs registered as Societies, Trusts, Not-for-profit Companies, Co-operatives, Credit co-operatives,
MACS, CDS and NBFC. 
Portfolio Buyout

ICICI Bank buys unencumbered, direct agricultural and/or weaker section portfolio originated by the MFI
(registered as NBFC) through the process of Direct Assignments. These are bilateral transactions that are
 entered into directly between the MFI and the Bank.
Above mentioned facilities are extended at the discretion of ICICI Bank.
Micro Savings
Recognising the need for easy savings facilities for its low-income customers, ICICI Bank has pioneered
the launch of micro-savings products under its 'Business Correspondent' model. ICICI Bank has
partnered with NGOs, Societies, and Trusts - its 'business correspondents' - to deliver savings services to
its low-income customers.

The micro-savings product provides the customer with access to a savings account with convenient
features. The product combines security, convenience (proximity, convenient opening times and minimal
paperwork), appropriate design (frequent deposits, small variable amounts and quick access) and positive
returns.

ICICI MF launches small investment plan for rural market

The scheme allows a rural investor to take exposure to the stock market for as little as Rs50 every month

Biju Mathew

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ICICI Prudential Mutual Fund on 25 April launched ‘micro systematic investment plan’ (MSIP) in association with KAS Foundation, a micro-
finance institution, to offer a mutual fund investment plan which allows a rural investor to take exposure to the booming stock market for as
little as Rs50 every month.

KAS Foundation is one among the 200 non-governmental organizations (NGOs) through which ICICI Bank has pioneered micro lending and
borrowing in rural India.
UTI was the first mutual fund to offer micro-investment option in mutual funds to the rural population. It follows the same structure of an
aggregator who interface between the mutual fund and the small rural investors. It has about one lakh rural investors signed up for its
pension plan through local organizations. UTI expects to add 10 lakh micro investors into its rank this year and plans to add more grass-roots
organizations into its network.

KAS Foundation, which started four years ago, now has a rural base of 5.25 lakh customers availing of micro credit from ICICI Bank, primarily
in Orissa and Maharashtra. These customers were split among 12,000 self-help groups spread over 24 districts in August 2005. The
foundation has plans to expand its outreach to at least 20,000 self-help groups by 2007.

KAS foundation will now sell growth-oriented mutual funds schemes to these customers. It will be an aggregator on behalf of its rural
customers and a single interface with the mutual fund. KSA, which interacts with its customers on a daily basis for servicing their loans and
other financial products, can now sell mutual fund units too without any additional cost. It would have been financially unviable for the ICICI
Mutual Fund to reach out and service such small investors otherwise.

“This model makes it economically viable for us to reach out to the rural customers through KSA and service investments as small as Rs50,”
said Pankaj Razdan, managing director, ICICI Prudential AMC. The mutual fund will replicate this model with the network of 199 NGOs that
ICICI Bank had built over the last four years. ICICI Bank had built micro-finance business worth Rs2,200 crore as on 31 March, 2006.

Nachiket Mor, deputy managing director of ICICI Bank, declined to reveal how much its micro-finance business has grown this year due to
regulatory constraint. “What I can say is that we have a market of 500 million people and we have only just started at the tip,” he said. ICICI
Bank has a total micro-finance customer base of 3.2 million, serviced through the network of 200 NGOs. ICICI Bank’s insurance subsidiaries—
ICICI Prudential Insurance and ICICI Lombard —offer micro-insurance policies, especially life and health insurance, to its micro-finance
customer base. With the micro systematic investment plan, ICICI Bank’s micro-finance aggregators now has a full suite of financial products
tailored for the rural customers.

ICICI Prudential Life connects with rural India through 'Pragati Ki Anokhi Paathshala'
Embarks on a national rural empowerment programme

Mumbai, Maharashtra, August 11, 2009 /India PRwire/ -- Education is the doorway to the wider world. India’s key challenge today is to
rapidly provide its rural students with opportunities and develop basic leadership and problem-solving skills, raise their command over the
English language and develop lateral-thinking capabilities. Keeping in mind the role of rural India in its overall developments, it is imperative
to to develop these skills and innate levels of creativity among children in rural India.

Cognizant of the ground realities in the hinterland, ICICI Prudential Life Insurance Company has undertaken a short yet intensive
programme, offering unique progressive educational model for the rural children of India through Pragati Ki Anokhi Paathsaala or PKAP.
PKAP aims to bring out the inherent creative skills amongst children and expose them to the unique and thought provoking learning
methods.

Speaking at the launch of this innovative rural connect programme, Mr. Sujit Ganguli, Senior Vice President and Head Marketing, ICICI
Prudential Life Insurance Company Limited, said, “PKAP is an innovative initiative that will provide educational value addition to the rural
children and their families. We are hoping to cover over 250 schools through this program and we are confident that it will provide a huge
impetus to thousands of rural students and help them further excel in their studies. Through PKAP, we aim to provide the necessary
exposure to lessons in life beyond education, which will help the rural kids to excel in their careers.”

PKAP:

A new approach to education

PKAP is a new age education concept where diligent methods are utilized to introduce certain value-based intellectual concepts to rural
children that will further help them in their day-to-day lessons. The focus of this concept is towards developing some innate skills, teach some
practical techniques and offer some performance enhancement skills in an interesting and fun-filled manner.

PKAP is divided in four parts:

1. Memory Enhancement: Visual & Interactive games

2. Communication Skills:

3. Tricks and Training:

4. Arthyudh

PKAP: Approach & Strategy

The approach of PKAP is multidimensional, which will empower the children with meaningful academic involvement at various levels. In
order to deliver the complex nature of these transcending educational methods in a simple yet effective manner ICICI Pru life has brought
together a group of trained teachers and experts who have a proven track record.

PKAP has been designed as a two-day applied and interactive module. This programme will target around 25-50 schools in each state. The
programme will be undertaken across key states such as Uttar Pradesh, Punjab, Kerala, Andhra Pradesh, Gujarat and Rajasthan.

Day 1 of PKAP is dedicated towards exposing the rural kids to various learning methods and is divided into 3 modules. The Memory
enhancement module comprises of visual and interactive games like card games and memory slate games which will help the children to
sharpen their memory and improve their observation skills.

Good communication skills being a vital requirement in todays professional and personal life, the second module addresses the same. Under
this module, the students are taught easy methods to remember homonyms (helps in differentiating meaning of various sounds), teaches
correct usage of prepositions through a fun filled session where the children are asked to enact words (to communicate the exact message).

The third module is called the 'Tricks and Training' which polishes mathematical skills through vedic math techniques (speedy math) and
helps solve difficult problems through logical reasoning methods. This module will assist the child to crack scholarship tests conducted at the
state level.

On Day 2, Arthyudh, an exclusive interactive session of the Paathshala is organised for parents. Parents are briefed about the activities
conducted with their children and are also presented with a comprehensive work-book for their children to continue with their training
exercises. In the session, parents are also educated about the need for financial planning for their child’s future educational needs.

Background on ICICI Prudential Life Insurance’s initiatives in rural India

Over the last two years, ICICI Prudential Life Insurance has invested significantly towards providing effective life insurance solutions to rural
India. The company has developed a comprehensive distribution network of small offices and strong advisor force to increase its proximity
with consumers from rural India. It has also developed a strong service infrastructure by providing local language call-centre support,
providing sales literature in local language, tie-ups with locally present kiosks to enable consumer pay their premiums etc, to help consumers
further understand the benefits of life insurance and clarify any doubts that they may have.

Products

· Lifestage Assure Regular Premium, with an in-built feature of automatic asset allocation and automatic transfer plans, which manages the
portfolio as per the age and risk appetite of the individuals, was recommended for rural India

· Anmol Nivesh and Sarv Jan Suraksha, the only micro insurance product in India that provides life cover to customers for a minimal
premium of Rs. 50/- p.a, were launched for the lower income groups

Distribution

· ICICI Prudential Life has scaled its operations and opened over 1,100 offices within the targeted rural segment. It has offices in rural areas
of Gujarat, Punjab, Rajasthan, Kerala, Andhra Pradesh and parts of Maharastra, UP, Haryana, Tamil Nadu, Karnataka and West Bengal

· Locals have been appointed to work in these rural offices to advise consumers on their financial needs.

· The company has also appointed over 45,000 advisors (agents) from above mentioned locations and trained them to assist the consumers.

Marketing

· The company has been participating in rural market fairs like Tarnetra in Gujarat, Pushkar, Kota, Medharam and Punjab Agricultural
University Fair in Ludhiana among others.

· Organises interactive street plays to educate consumers on the need for life insurance

· The company also conducted series of road shows and installed activity vans in key rural locations. It also invested in wall paintings with
over 1,572,000 sq ft painted across various rural regions of India.

Other initiatives

· To overcome the infrastructure barrier each of the 1,100 offices in rural India have been equipped with internet, printer, scanner, copier and
a telephone.

· ICICI Prudential Life is the only life insurance company in India to offer local language sales literature and customer support. As on March
31, 2009, the company offered customer support in ten languages including Hindi, Punjabi, Gujarati, Telugu, Malayalam, Kannada, Tamil,
Bengali and Marathi in addition to English.

· For easy premium paying options, rural consumers could approach any of the 400 post offices to pay their renew premiums
· ICICI Prudential Life has also partnered with e-governance kiosks in Andhra Pradesh - aponline.com and Rajasthan - emitra.com, to enable
consumers renew their policies in their kiosks.

· The company was the first life insurance company to partner with Suvidha Infoserve to enabled company’s policyholders to make their
premium payment at over 3,500 Suvidha outlets.

· The company also organized service camps, these interactive service kiosks provided consumers a platform to get responses to their
queries on their policies or clarify any other query.

The company has successfully sold over 2million policies in rural India and garnered over Rs. 3,795 mn of business. The business channel
accounts for over 7% of the overall business garnered by the company. In less than a year, the rural business accounts for over 17% of the
overall business of the states it is present in, such as Andhra Pradesh, Kerala, Punjab, Rajasthan and Gujarat.

Notes to Editor

About ICICI Prudential Life Insurance

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank and Prudential plc. It was one of the first players to
commence operations when the insurance industry was opened to the private sector in 2000. For FY09, the company garnered Rs. 15,356
crores of total premiums and has underwritten over 9 million policies since inception. The company has a network of 2,099 offices and
272,920 advisors. For the past eight years, ICICI Prudential has maintained its dominant position amongst life insurers in the country, with a
wide range of flexible products that meet the needs of the Indian customer at every step in life. To know more about the company, please
visit www.iciciprulife.com.

Except for the historical information contained herein, statements in this release which contain words or phrases such as “will”, “would”,
“aim”, “will likely result”, “believe”, ”expect”, “will continue”, “anticipate”, ‘”estimate”, “intend”, “plan”, “contemplate”, “seek to”, “future”,
“objectives”, “goals”, “project”, “should”, “will pursue”, and similar expressions or variations of such expressions may constitute “forward
looking statements”. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual
results to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include, but are not limited
to ICICI Bank’s ability to successfully implement its strategy in the field of insurance, our growth and expansion, technological changes,
investment income, cash flow projections, our exposure to market risks as well as the other risks detailed in the reports filed by ICICI Bank
(joint promoters of ICICI-Prudential Life Insurance Company Limited) with the Securities and Exchange Commission of the United States.
ICICI Bank undertakes no obligation to update forwar

ICICI Bank to increase focus on rural areas

BS Reporter / Mumbai June 11, 2010, 0:27 IST

The country’s largest private sector lender ICICI Bank plans to increase its presence in rural and semi-urban areas.

“As we focus on enhancing our capabilities to serve our corporate and retail customers across India’s towns and cities, it is also our endeavour to
proactively reach out to rural India and to the vast numbers of our people who do not have access to formal financial services,” managing director and
CEO Chanda Kochhar said in the bank’s annual report.

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The focus on rural areas ties in with the bank’s strategy to use its branch network to source most of its loans, rather than direct sales agents. Its direct
agriculture advances amounted to Rs 17,329 crore at the end of March 2010. The gross non-performing assets of agriculture and allied services stood
at 5.62 per cent of advances of this sector.

The bank added more than 500 branches last year to take its branch network to about 2,000.

The bank’s proposed merger with Bank of Rajasthan will also give a fillip to its plans to increase focus on rural and semi-urban areas. BoR has a total
of 463 branches of which 40 per cent are located in rural and semi-urban areas.

In 2005-06, ICICI Bank had stepped up its focus on rural areas. However, it suffered heavy losses on this front and had to press the pause button on its
rural foray. In 2006, the bank was cheated of Rs 200 crore at the central and state government warehouses in Kolhapur district, where it had not
engaged third-party collateral managers. In 2006-07, ICICI Bank made a provision of Rs 93 crore for losses from frauds pertaining to the warehouse
receipt-based financing for agricultural products.

The bank shrunk its rural loan book by 50 per cent to Rs 10,000 crore at the end of September 2007 from Rs 20,000 crore at the end of March 2007.

The bank has undertaken several initiatives to meet the needs of the rural market, including offering credit through micro-finance institutions, micro-
insurance and micro-investment products. It is extending financial support in the rural market, including farmers, traders, commission agents, small
processors and other medium- and large agri-corporates. The bank had about four million micro-finance borrowers with an outstanding portfolio of Rs.
3,179 crore as of March 31, 2010.

ICICI Bank sees big scope in rural credit

Our Bureau

ICICI Bank had worked out a strategy to cover the whole of rural India in the next three years.

Kolkata , Aug. 11

ICICI Bank is in the process of rolling out a new initiative to increase rural credit offtake. The bank would be
carrying out this exercise in partnership with corporate houses and micro-credit institutions.

This was announced by Mr K.V. Kamath, Managing Director and CEO of ICICI Bank, while addressing members of
Indian Chamber of Commerce on Thursday.

According to him, the next spurt of economic growth in India would come from the rural sector. So ICICI Bank had
worked out a strategy to cover the whole of rural India in the next three years.

"We have termed the project as No White Space. We would have our presence spread all over India, but it would
not be through opening of rural branches. Instead we can reach the farmers with the support of corporate houses
and self-help groups. Information technology would play a key role too," Mr Kamath said.

ICICI Bank has already started working with 40 micro-credit institutions and it would be increased to 70 by the end
of the current financial year. It hopes to create partnerships with 200 such institutions by 2008-09.

At present, ICICI Bank's rural credit off-take is Rs 10,000-11,000 crore through all the channels. Mr Kamath was
non-committal on the total amount of business he hopes to generate through micro credit organisations. He said
that it would be approximately 20-25 per cent of the total portfolio by the next three years.
Regarding the partnership with the corporate houses, he said that the bank was are looking at companies (dealing
with fertilisers, seeds or providing other inputs to the farm sector) which have a relationship with the farmers.

"We may provide the credit to these corporate houses. These companies in turn would pass it on to the farmers.
We have been talking with these companies for some time," he said.

According to him, one major area of growth in the rural sector is green vegetables because 60 per cent of the
production is lost due to lack of proper distribution system and marketing arrangements. "So we would have to
bring the rural mandis into our network too," he added.

Apart from the rural sector, he felt, credit offtake would be spurred by the growing interest of the Indian
companies in global acquisitions. He mentioned that a large number of mid-cap companies were looking at $200-
250 million overseas acquisitions.

He said new projects in the manufacturing arena would not generate much of credit offtake because corporate
houses now prefer more of organic capital, free cash flows and equity.

According to him, Rs 350,000 crore worth of projects are in the pipeline. Out of it Rs 150,000 crore would be
funded through cash flows, another Rs 150,000 crore through cash balances. Approximately Rs 50-60 crore would
come as equity and a bit as ECBs (external commercial borrowings).