CASE STUDY

BANKING INDUSTRY

As per the Reserve Bank of India(RBI), India’s banking sector is

sufficiently capitalized and well regulated. The financial and economic
conditions in the country are far superior to any other country in the
world. Indian banking industry has recently witnessed the roll out of
innovative banking models like payments and small finance banks.
Currently the Indian banking system consists of 27 public sector banks,
21 private sector banks, 49 foreign banks, 56 regional rural banks, 1562
urban cooperative banks and 94384 rural cooperative banks. In FY07-18,
total lending increased at a CAGR of 10.94% and total deposits increased
at a CAGR of 11.66%. India’s retail credit market is the fourth largest in
the emerging countries.
Simultaneously, Government of India have came up with various
investments/developments and several other initiatives in the form of
schemes which will infuse the next tranche of recapitalization. Banking
industry look forward for enhanced spending on infrastructure, speedy
implementation of projects and continuation of reforms are expected to
provide further impetus to growth. All these factors suggest that India’s
banking sector is also poised for robust growth as the rapidly growing
business would turn to banks for their credit needs. The banking sector is
laying greater emphasis on providing improved services to their clients
and also upgrading their technology infrastructure in order to enhance the
customer’s overall experience as well as give banks a competitive edge.
[SOURCE: www.ibef.org]

ICICI BANK LIMITED

ICICI Bank was originally promoted in 1994 by ICICI limited, an Indian

financial institution, and was its wholly-owned subsidiary. ICICI’s
shareholding in ICICI Bank was reduced to 46% through a public
offering of shares in India in fiscal 1998, an equity offering in the form of
ADRs listed on the NYSE in fiscal 2000, ICICI banks acquisition of bank
of madura limited in an all-stock amalgamation in fiscal 2001, and
secondary market sales by ICICI to institutional investors in fiscal 2001
and fiscal 2002. ICICI was formed in 1955 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.
ICICI Bank is India’s largest private sector bank by consolidated assets
stood at US$ 156.8 billion as on 30 september 2017. The bank and their
subsidiaries offer a wide range of banking and financial services
including commercial banking and retail banking, project and corporate
finance, working capital finance, insurance, venture capital and private
equity, investment banking, broking and treasury products and services.
Also the bank had a network of 4856 branches and 13792 ATMs with
having a presence across 17 countries, including India. The banks equity
share are listed in India on Bombay Stock Exchange(BSE) and the
National Stock Exchange(NSE) of India limited and their American
Depository Receipts(ADRs) are listed on the New York Stock
Exchange(NYSE). The bank is the first Indian bank listed on NYSE. The
role of ICICI has been crucial while the set up of a number of Indian
institutions for establishing financial institutions in the country over the
years i.e. by promoting NSE, help setting up CRISIL,etc.
Currently after ICICI bank limited’s earnings announcements in march
2018, it is expected to grow by 36.55% in the upcoming year relative to
the past 5 years average growth rate.
[SOURCE: www.icicibank.com, www.capitalmarket.com]

PUNJAB NATIONAL BANK

Punjab National Bank is one of the oldest banks in India having a virtual
presence in every important center of the country. The bank caters to a
wide variety of audience through spectrum of services including
corporate and personal banking, industrial finance, agricultural finance
and international finance.
Also being the, India’s first swadeshi bank, Punjab National Bank
commenced its operations on april12,1895 from Lahore with an
authorized capital of Rs 2lacs and working capital of Rs 20000. During
the long history of the bank, 7 banks have merged with PNB. Domestic
business of the bank is over 10lacs crore and the bank continues to
maintain its forte in low cost CASA deposits. The banks focused attention
on improving the asset quality resulted into decline in GNPA and NNPAs
by Rs 8886crore and Rs 13009crore respectively over march’18. As on
31 december’18, PNB is having 3 overseas branches in Hongkong, Dubai
and offshore banking unit in Mumbai and representative office at
Dubai(UAE). Also the bank stands at second position in number of
outstanding debit cards in the industry and number of outstanding credit
cards among all PSBs. To follow up the bank opened its first digital
branch- PNB DIGIHUT at head office, Dwarka and the concept is being
replicated at other major centers. Recently the bank has tied up with one
of the biggest E-commerce players “AMAZON” for providing lucrative
deals to the customers. There is a growing awareness that banks cannot
excel at every activity and that it may be easier and cheaper to outsource
non core activities. However, the threat of disintermediation in the
payments industry is both real and imminent, taking profits away from
traditional incumbent financial institutions.
In the previous year, the industry saw growth in the teens, though still
under performing the wider Indian stock market. Punjab National Bank
lags the pack with its earnings falling by more than half over the past year,
which indicates the company has been growing at a slower pace than its
banking peers. However, the future seems brighter as it expects an
industry beating growth rate of 73.65% in the upcoming year. Going
forward, the bank will continue to make efforts to maintain momentum in
recoveries in NPA accounts, augment CASA deposits and drive the
progress with focus on leveraging big and artificial intelligence.
[SOURCE: www.pnbindia.com, www.moneyworks4me.com, simplyway.st]