DISSERTATION REPORT

ON

Effects Of Merchant Banking On Financial

Growth Of ICICI At Dehradun
IN PARTIAL FULLFILLMENT FOR THE DEGREE OF

BACHELOR OF BUSINESS ADMINISTRATION

BATCH (2016-19)

SUBMITTED TO : SUBMITTED BY :

Neetika Gupta Om Patel

Sem. 6th
 ACKNOWLEDGEMENT
This report has been made possible with the cooperation of many persons whom I wish to
express my gratitude and appreciation. I am very grateful to the people who supported me
to transform the report in the materialistic form

I am thankful to MISS Neetika Gupta at BCAS, Dehradun for her gratitude during
my dissertation and giving me full cooperation and also valuable information and
guidance, without which it would not be possible for me to complete the manuscript.

I would also thanks librarian and staff members of BCAS , Dehradun for
providing me the required books in this field and my friends who where always there to
assist me at odd hours also.

(Om Patel)

BBA 6th sem

 DECLARATION

I Om Patel declare that I myself worked on the topic " Effects Of Merchant Banking On
Financial Growth Of ICICI At Dehradun The data and the information is collected by
myself and no third party has helped me in doing so. I have completed the research
analysis. I have not submitted this report to any other institute or University for the award
of any other degree.

PLACE: Dehradun (Om Patel)

BBA 6th sem.

CONTENTS

CHAPTER-1

INTRODUCTION

INTRODUCTION ABOUT THE TOPIC

INDUSTRTY PROFILE

COMPANY PROFILE

CHAPTER-2

REVIEW OF LITERATURE

CHAPTER-3

RESEARCH METHODOLOGY

CHAPTER-4

DATA ANALYSIS & INTERPRETATION

CHAPTER-5

FINDINGS & SUGGESTIONS

CONCLUSIONS

BIBLIOGRAPHY

QUESTIONAIRE
CHAPTER-1

INTRODUCTION ABOUT
THE TOPIC
INDUSTRY PROFILE
COMPANY PROFILE
CHAPTER-2

REVIEW OF
LITERATURE
CHAPTER-3

RESEARCH
METHODOLOGY
CHAPTER-4
DATA ANALYSIS &
INTERPRETATION
CHAPTER-5

FINDINGS &
SUGGESTIONS
CONCLUSION
 BIBLIOGRAPHY

Introduction
Meaning of merchant banking
Original Definition: A Merchant Bank is a British term for a bank providing various
financial services such as accepting bills arising out of trade, providing advice on
acquisitions, mergers, foreign exchange, underwriting new issues, and portfolio
management.
The Focus Definition: A Merchant Bank can be generally described as a financial
services company with a private equity investment arm offering investment banking and
ancillary services as well. Because a merchant bank acts not only as an advisor and
broker but also as a principal, a merchant bank has a longer term approach than a typical
investment bank and is highly concerned with the viability of each investment
opportunity and providing the right advice for a strong partnership with each client
company.
In banking, a merchant bank is a traditional term for an Investment Bank. It can also be
used to describe the private equity activities of banking. This article is about the history
of banking as developed by merchants, from the Middle Ages onwards.
Amidst the swift changes sweeping the financial world, Merchant Banking has emerged
as an indispensable financial advisory package. Merchant banking is a service-oriented
function that transfers capital from those who own to those who can use it. They try to
identify the needs of the investors & corporate sector & advice entrepreneurs what to do
to be successful.
The merchant banking has been defined as to what a merchant banker does. A merchant
Banker has been defined by Securities Exchange Board Of India (Merchant Banker)
rules, 1992, as ³Any person who is engaged in the business of issue management either
by making arrangements regarding selling, buying or subscribing to securities or actingas
manager, consultant, advisor or rendering corporate advisory services in relation to
such issue management.´
MERCHANT BANKING HISTORY

In late 17th and early 18th century Europe, the largest companies of the world was merchant
adventurers. Supported by wealthy groups of people and a network of overseas trading posts, the
collected large amounts of money to finance trade across parts of the world. For example, The
East India Trading Company secured a Royal Warrant from England, providing the firm with
official rights to lucrative trading activities in India. This company was the forerunner in
developing the crown jewel of the English Empire. The English colony was started by what we
would today call merchant bankers, because of the firm's involvement in financing, negotiating,
and implementing trade transactions.The colonies of other European countries were started in the
same manner. For example, the Dutch merchant adventurers were active in what are now
Indonesia; the French and Portuguese acted similarly in their respective colonies. The American
colonies also represent the product of merchant banking, as evidenced by the activities of the
famous Hudson Bay Company. One does not typically look at these countries' economic
development as having been fueled by merchant bank adventurers. However, the colonies and
their progress stem from the business of merchant banks, according to today's accepted sense of
the word.Merchant banks, now so called, are in fact the original "banks". These were invented in
the middle Ages by Italian grain merchants. As the Lombardy merchants and bankers grew in
stature on the back of the Lombard plains cereal crops many of the displaced Jews who had fled
persecution after 613 entered the trade. They brought with them to the grain trade ancient
practices that had grown to normalcy in the middle and far east, along the Silk Road, for the
finance of long distance goods trades.

The Jews could not hold land in Italy, so they entered the great trading piazzas and halls of
Lombardy, along side the local traders, and set up their benches to trade in crops. They had one
great advantage over the locals.

Christians were strictly forbidden the sin of usury. The Jewish newcomers, on the other hand,
could lend to farmers against crops in the field, a high-risk loan at what would have been
considered usurous rates by the Church, but did not bind the Jews. In this way they could secure
the grain sale rights against the eventual harvest. They then began to advance against the delivery of
grain shipped to distant ports. In both cases they made their profit from the present discount
against the future price. This two-handed trade was time consuming and soon there arose a class
of merchants, who were trading grain debt instead of grain.
Traditional merchant banking
Merchant Banking, as the term has evolved in Europe from the 18th century to today,
pertained to an individual or a banking house whose primary function was to facilitate
the
business process between a product and the financial requirements for its
development. Merchant banking services span from the earliest negotiations from a
transaction to its actual consummation between buyer and seller.

In particular, the merchant banker acted as a capital sources whose primary activity
was
directed towards a commodity trader/cargo owner who was involved in the buying,
selling, and shipping of goods. The role of the merchant banker, who had the expertise
to
understand a particular transaction, was to arrange the necessary capital and ensure
that
the transaction would ultimately produce "collectable" profits. Often, the merchant
banker also became involved in the actual negotiations between a buyer and seller in a
transaction.

Modern merchant banking

During the 20th century, however, European merchant banks expanded their services.
They became increasingly involved in the actual running of the business for which
the
transaction was conducted. Today, merchant banks actually own and run businesses
for their own account, and that of others.

Since the 18th century, the term merchant banker has, therefore, been considerably
broadened to include a composite of modern day skills. These skills include those
inherent in an entrepreneur, a management advisor, a commercial and/or investment
banker plus that of a transaction broker. Today a merchant banker is who has the
ability
to merchandise -- that is, create or expands a need -- and fulfill capital requirements.
The
modern European merchant bank, in many ways, reflects the early activities and
breadth of services of the colonial trading companies.

Professional merchant bankers must have:

1) an understanding of the product, its industry
and operational management;
2) an ability to raise capital which might or might not be
one's own (originally merchant bankers supplied their own capital and thereby took
an equity interest in the transaction);
3) and most importantly, effective skills in concluding a transaction - the actual sale
of the product and the collection of profit. Some people
might question whether or not there are many individuals or organizations that have
the
abilities to fulfill all three areas of expertise.

Who are merchant bankers

-Merchant banks are private financial institution.

-Their primary sources of income are PIPE (Private Investment In Public Entities)
financings and international trade.

-Their secondary income sources are consulting, Mergers & Acquisitions help and
financial market speculation.

-Because they do not invest against collateral, they take far greater risks than
traditional
banks.

-Because they are private, do not take money from the public and are international in
scope, they are not regulated.

-Anyone considering dealing with any merchant bank should investigate the bank and
its
managers before seeking their help.

-The reason that businesses should develop a working relationship with a merchant
bank
is that they have more money than venture capitalists. Their advice tends to be more
pragmatic than venture capitalists.

Function of merchant banks

1. Consulting advice on going public and international business.

2. Advice and help in taking your company public. If they are unwilling to supply
Investment Banking bridge loans, they have a low cost strategy for taking your
company public.
3. They do PIPE (Private Investment in Public Equities) financings.
4. They can advise or help with a company¶s M&A strategy.
5. They are essential advisors for companies seeking to become multinational
corporations
Services provided by merchant banks

 A merchant account allows a business to accept credit cards, debit cards, gift cards and
other forms of electronic payment. This is also widely known as payment processing or
credit card processing.
 Merchants, or business owners who receive payment for their goods or services, must
apply
for a merchant account. The merchant account may or may not be established based on
several factors of which risk is the most important. Merchants who own businesses
with poor or no credit may find it difficult to establish a merchant account.
 A Payment Gateway is an e-commerce service that authorizes payments for e-
businesses
and online retailers. It is the equivalent of a physical POS (Point-of-sale) terminal
located
in most retail outlets. Payment gateways encrypt sensitive information, such as credit
card numbers, to ensure that information passes securely between the customer and
the merchant.
 A Payment Service Provider (PSP) offers merchants online services for accepting
electronic payments by credit card or other payment methods such as payments based
on
online banking.
 Typically, a PSP can connect to multiple acquiring banks and card networks, thereby
making the merchant less dependent of financial institutions - especially when
operating
internationally.
 Furthermore, a PSP can offer reconciliation services, risk management and multi-
currency
functionality.
 Electronic bill payment is a feature of online banking, similar in its effect to a giro,
allowing a depositor to send money from his demand account to a creditor or vendor
such
as a public utility or a department store to be credited against a specific account. The
payment is optimally executed electronically in real time, though some financial
institutions or payment services will wait until the next business day to send out the
payment. The bank can usually also generate and mail a paper cheque to a creditor who
is not set up to receive electronic payments.
Type Private
BSE & NSE:ICICI,

NYSE: IBN
Company
Industry Banking
Insurance
profile
Capital Markets and allied
industries

Founded 1955 (as Industrial Credit and

Investment Corporation of India)

Headquarters ICICI Bank Ltd.,

ICICI Bank Towers,
Bandra Kurla,
Mumbai, India

K.V. Kamath,Chairman
Chanda Kochhar, Managing
Director & CEO
Sandeep Bakhshi, Deputy
Managing Director
Key people N.S. Kannan, Executive Director &
CFO
K. Ramkumar, Executive Director
Sonjoy Chatterjee, Executive
Director

Products Loans, Credit Cards, Savings,

Investment vehicles, Insurance etc.

Revenue ▲ USD 15.06 billion

 Introduction to ICICI bank
History
 1955: The Industrial Credit and Investment Corporation of India Limited
(ICICI) was incorporated at the initiative of World Bank, the Government of
India and representatives of Indian industry, with the objective of creating a
development financial institution for providing medium-term and long-term
project financing to Indian businesses. Mr.A.Ramaswami Mudaliar elected as
the first Chairman of ICICI Limited. ICICI emerges as the major source of
foreign currency loans to Indian industry. Besides funding from the World
Bank and other multi-lateral agencies, ICICI was also among the first Indian
companies to raise funds from international markets.

 1956 : ICICI declared its first dividend of 3.5%.

 1958 : Mr.G.L.Mehta appointed the second Chairman of ICICI Ltd.

 1960 : ICICI building at 163, Backbay Reclamation, inaugurated.

 1961 : The first West German loan of DM 5 million from Kredianstalt

obtained.

 1967 : ICICI made its first debenture issue for Rs.6 crore, which was
oversubscribed.

 1969 : The first two regional offices in Calcutta and Madras set up.

 1972 : The second entity in India to set up merchant banking services. : Mr.
H. T. Parekh appointed the third Chairman of ICICI.

 1977 : ICICI sponsored the formation of Housing Development Finance

Corporation. Managed its first equity public issue.

 1978 : Mr. James Raj appointed the fourth Chairman of ICICI.

 1979 : Mr.Siddharth Mehta appointed the fifth Chairman of ICICI.

 1982 : 1982 : ICICI became the first ever Indian borrower to raise European
Currency Units. : ICICI commences leasing business.

 1984 : Mr. S. Nadkarni appointed the sixth Chairman of ICICI.

 1985 : Mr. N.Vaghul appointed the seventh Chairman and Managing Director
of ICICI.

 1986 : ICICI became the first Indian institution to receive ADB Loans. :
ICICI, along with UTI, set up Credit Rating Information Services of India
Limited, India's first professional credit rating agency. : ICICI promotes
Shipping Credit and Investment Company of India Limited. : The Corporation
made a public issue of Swiss Franc 75 million in Switzerland, the first public
issue by any Indian entity in the Swiss Capital Market.

 1987 : ICICI signed a loan agreement for Sterling Pound 10 million with
Commonwealth Development Corporation (CDC), the first loan by CDC for
financing projects in India.

 1988 : Promoted TDICI - India's first venture capital company.

 1993 : ICICI Securities and Finance Company Limited in joint venture with J.
P. Morgan set up. : ICICI Asset Management Company set up.
 1994: ICICI established Banking Corporation as a banking subsidiary.formerly
Industrial Credit and Investment Corporation of India. Later, ICICI Banking
Corporation was renamed as 'ICICI Bank Limited'. ICICI founded a separate legal
entity, ICICI Bank, to undertake normal banking operations - taking deposits, credit
cards, car loans etc.
 1996 : ICICI Ltd became the first company in the Indian financial sector to raise GDR.
: SCICI merged with ICICI Ltd. : Mr. K.V.Kamath appointed the Managing Director
and CEO of ICICI Ltd

 1997 : ICICI Ltd was the first intermediary to move away from single prime rate to
three-tier prime rates structure and introduced yield-curve based pricing. : The
name The Industrial Credit and Investment Corporation of India Ltd changed to ICICI
Ltd. : ICICI Ltd announced the takeover of ITC Classic Finance.
 1998 : Introduced the new logo symbolizing a common corporate identity for the
ICICI Group. : ICICI announced takeover of Anagram Finance.
 1999 : ICICI launched retail finance - car loans, house loans and loans for consumer
durables. : ICICI becomes the first Indian Company to list on the NYSE through an
issue of American Depositary Shares.
 2000 : ICICI Bank became the first commercial bank from India to list its stock on
NYSE.
 2001: ICICI acquired Bank of Madura (est. 1943). Bank of Madura was a Chettiar
bank, and had acquired Chettinad Mercantile Bank (est. 1933) and Illanji Bank
(established 1904) in the 1960s. In October 2001, the Boards of Directors of ICICI
and ICICI Bank approved the merger of ICICI and two of its wholly owned retail
finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital
Services Limited, with ICICI Bank.

 2002 : The merger was approved by shareholders of ICICI and ICICI Bank in January
2002, by the High Court of Gujarat at Ahmadabad in March 2002, and by the High
Court of Judicature at Mumbai and the Reserve Bank of India in April 2002.
Consequent to the merger, the ICICI group's financing and banking Operations, both
wholesale and retail, have been integrated in a single entity. At the same time, ICICI
started its international expansion by opening representative offices in New York
and London. In India, ICICI Bank bought the Shimla and Darjeeling branches that
Standard Chartered Bank had inherited when it acquired Grindlays Bank.

 2003 : The first Integrated Currency Management Centre launched in Pune. ; ICICI
Bank announced the setting up of its first ever offshore branch in Singapore. ; The
first offshore banking unit (OBU) at Seepz Special Economic Zone, Mumbai,
launched. ; ICICI Bank’s representative office inaugurated in Dubai. ; Representative
office set up in China. : ICICI Bank’s UK subsidiary launched. ; India’s first ever "Visa
Mini Credit Card", a 43% smaller credit card in dimensions launched. ; ICICI Bank
subsidiary set up in Canada. ; Temasek Holdings acquired 5.2% stake in ICICI Bank. ;
ICICI Bank became the market leader in retail credit in India. In the UK it established
an alliance with Lloyds TSB. It also opened an Offshore Banking Unit (OBU) in
Singapore and representative offices in Dubai and Shanghai.

 2004 : Max Money, a home loan product that offers the dual benefit of higher
eligibility and affordability to a customer, introduced. : Mobile banking service in
India launched in association with Reliance Infocomm. : India’s first multi-branded
credit card with HPCL and Airtel launched. : Kisan Loan Card and innovative, low-
cost ATMs in rural India launched. : ICICI Bank and CNBC TV 18 announced India’s
first ever awards recognizing the achievements of SMEs, a pioneering initiative to
encourage the contribution of Small and Medium Enterprises to the growth of
Indian economy. : ICICI Bank opened its 500th branch in India. : ICICI Bank
introduced partnership model wherein ICICI Bank would forge an alliance with
existing micro finance institutions (MFIs). The MFI would undertake the promotional
role of identifying, training and promoting the micro-finance clients and ICICI Bank
would finance the clients directly on the recommendation of the MFI. : ICICI Bank
introduced 8-8 Banking wherein all the branches of the Bank would remain open
from 8a.m. to 8 p.m. from Monday to Saturday. : ICICI Bank introduced the concept
of floating rate for home loans in India. At the same time, ICICI opened a
 representative office in Bangladesh to tap the extensive trade between that
country, India and South Africa.

 2005 : First rural branch and ATM launched in Uttar Pradesh at Delpandarwa,
Hardoi. ; "Free for Life" credit cards launched wherein annual fees of all ICICI Bank
Credit Cards were waived off. ; ICICI Bank and Visa jointly launched mChq – a
revolutionary credit card on the mobile phone. ; Private Banking Masters 2005, a
nationwide Golf tournament for high networth clients of the private banking
division launched. This event is the largest domestic invitation amateur golf event
conducted in India. ; First Indian company to make a simultaneous equity offering of
$1.8 billion in India, the United States and Japan. ; ICICI acquired Investitsionno-
Kreditny Bank (IKB), a Russia bank with about US$4mn in assets, head office in
Balabanovo in the Kaluga region, and with a branch in Moscow. ICICI renamed the
bank ICICI Bank Eurasia. Also, ICICI established a branch in Dubai International
Financial Centre and in Hong Kong.ICICI Bank became the largest bank in India in
terms of its market capitalization. ; ICICI Bank became the first private entity in India
to offer a discount to retail investors for its follow-up offer.

 2006 : ICICI Bank became the first Indian bank to issue hybrid Tier-1 perpetual debt
in the international markets. : ICICI Bank subsidiary set up in Russia. ; Introduced a
new product - ‘NRI smart save Deposits’ – a unique fixed deposit scheme for
nonresident Indians. : Representative offices opened in Thailand, Indonesia and
Malaysia. ; ICICI Bank UK opened a branch in Antwerp, in Belgium ; ICICI Bank
became the largest retail player in the market to introduce a biometric enabled
smart card that allow banking transactions to be conducted on the field. A low-cost
solution, this became an effective delivery option for ICICI Bank’s micro finance
institution partners. ; Financial counseling centre Disha launched. Disha provides
free credit counseling, financial planning and debt management services. ; Bhoomi
puja conducted for a regional hub in Hyderabad, Andhra Pradesh.

 2007 : ICICI Bank‘s USD 2 billion 3-tranche international bond offering was the
largest bond offering by an Indian bank. ; ICICI amalgamated Sangli Bank, which was
headquartered in Sangli, in Maharashtra State, and which had 158 branches in
Maharashtra and another 31 in Karnataka State. Sangli Bank had been founded in
1916 and was particularly strong in rural areas. With respect to the international
sphere, ICICI also received permission from the government of Qatar to open a
branch in Doha. Also, ICICI Bank Eurasia opened a second branch, this time in St.
Petersburg. ; ICICI Bank raised Rs 20,000 crore (approx $5 billion) from both
domestic and international markets through a follow-on public offer. ; ICICI Bank’s
GBP 350 million international bond offering marked the inaugural deal in the
sterling market from an Indian issuer and also the largest deal in the sterling market
 from Asia. ; Launched India’s first ever jewellery card in association with jewelry
major Gitanjali Group. ; ICICI Bank became the first bank in India to launch a
premium credit card -- The Visa Signature Credit Card. ; Foundation stone laid for a
regional hub in Gandhinagar, Gujarat. ; Introduced SME Toolkit, an online resource
centre, to help small and medium enterprises start, finance and grow their business.
; ICICI Bank signed a multi-tranche dual currency US$ 1.5 billion syndication loan
agreement in Singapore. ; ICICI Bank became the first private bank in India to offer
both floating and fixed rate on car loans, commercial vehicles loans, construction
equipment loans and professional equipment loans. ; In a first of its kind, nation
wide initiative to attract bright graduate students to pursue a career in banking,
ICICI Bank launched the "Probationary Officer Programme". ;Launched Bank@home
services for all savings and current a/c customers residing in India ; ICICI Bank
Eurasia LLC inaugurated its first branch at St Petersburg, Russia.

 2008 : ICICI Bank enters US The US Federal Reserve permitted ICICI to convert its
representative office in New York into a branch.; ICICI Bank enters Germany, opens
its first branch in Frankfurt ; ICICI Bank launched iMobile, a breakthrough innovation
in banking where practically all internet banking transactions can now be simply
done on mobile phones. ; ICICI Bank concluded India's largest ever securitization
transaction of a pool of retail loan assets aggregating to Rs. 48.96 billion (equivalent
of USD 1.21 billion) in a multi-tranche issue backed by four different asset
categories. It is also the largest deal in Asia (ex-Japan) in 2008 till date and the
second largest deal in Asia (ex-Japan & Australia) since the beginning of 2007. ; ICICI
Bank launches ICICIACTIVE - Banking Interactive Service - along with DISHTV, which
will allow viewers to see information about the Bank's products and services and
contact details on their DISHTV screens. ; ICICI Bank and British Airways launch co-
branded credit card, which is designed to earn accelerated reward points to the card
holders with every British Airways flight or by spending on everyday purchases.

2009: ICICI Bank Board appoints Mr K. V. Kamath as non-executive Chairman and Ms Chanda Kochhar as
Managing Director & CEO effective May 1, 2009, while the existing non-executive Chairman Mr N Vaghul
retires after completing his term on April 30, 2009 ; ICICI bank ties up with BSNL Cell One for bill
payments, it will facilitate bill payment for BSNL Cell One users through www.icicibank.com across all
the 27 circles of BSNL. ; ICICI Bank Limited acting through its Hong Kong Branch (ICICI Bank) signed an
agreement on Export Credit Line totaling up to US$100 million with the Japan Bank for International
Cooperation (JBIC) which constitutes the international wing of Japan Finance Corporation. ; ICICI Bank
Limited acting through its Hong Kong Branch (ICICI Bank) signed a loan agreement with the Export-
Import Bank of China (China Exim) for USD 98 million under the Two- step Buyer Credit (Export Credit)
arrangement. ICICI Bank is the first Indian Bank to have entered into this arrangement with China Exim ;
ICICI Bank with Singapore Airlines launched “ICICI Bank Singapore Airlines Visa Platinum Credit Card”,
the Card has exclusive privileges especially designed for the members. ; ICICI Bank announced an
association with mChek, India’s leading mobile payment solutions provider, to facilitate mChek services
to all ICICI Bank Debit and Credit Card customers. These are electronic cards issued to the customers
with mChek application on their mobile phone. ; Ms Chanda Kochhar took charge as the Managing
Director & CEO of ICICI Bank from May 1, 2009.

Icici bank today

ICICI Bank (BSE: ICICI) (formerly Industrial Credit and Investment Corporation of India)
is India's largest private sector bank by market capitalisation and second largest overall in terms
of assets. Trotal assets of Rs. 3,562.28 billion (US$ 77 billion) at December 31, 2009 and profit
after tax Rs. 30.19 billion (US$ 648.8 million) for the nine months ended December 31, 2009.
The Bank also has a network of 1,640+ branches (as on February 11, 2010) and about 4,721
ATMs in India and presence in 18 countries, as well as some 24 million customers (at the end of
July 2007). ICICI Bank offers a wide range of banking products and financial services to
corporate and retail customers through a variety of delivery channels and specialised subsidiaries
and affiliates in the areas of investment banking, life and non-life insurance, venture capital and
asset management. (These data are dynamic.) ICICI Bank is also the largest issuer of credit cards
in India. ICICI Bank has got its equity shares listed on the stock exchanges at Kolkata and
Vadodara, Mumbai and the National Stock Exchange of India Limited, and its ADRs on the New
York Stock Exchange (NYSE). The Bank is expanding in overseas markets and has the largest
international balance sheet among Indian banks. ICICI Bank now has wholly-owned
subsidiaries, branches and representatives offices in 18 countries, including an offshore unit in
Mumbai. This includes wholly owned subsidiaries in Canada, Russia and the UK (the subsidiary
through which the HiSAVE savings brand is operated), offshore banking units in Bahrain and
Singapore, an advisory branch in Dubai, branches in Belgium, Hong Kong and Sri Lanka, and
representative offices in Bangladesh, China, Malaysia, Indonesia, South Africa, Thailand, the
United Arab Emirates and USA. Overseas, the Bank is targeting the NRI (Non-Resident Indian)
population in particular.

ICICI reported a net profit of Rs. 3,758 crore (US$ 741 million) for FY2009. The bank's Current
and savings account (CASA) ratio increased to 28.7% at March 31, 2009 from 26.1% at March
31, 2008. Increase of Rs. 5,286 crore in CASA deposits in quarter ended March 31,2009.
ICICI Bank is one of the Big Four Banks of India with State Bank of India, Axis Bank and
HDFC Bank

icici bank group

Business profile
Products & Services

Personal Banking

 Deposits
 Loans
 Cards
 Investments
 Insurance
 Demat Services
 Wealth Management

NRI Banking

 Money Transfer
 Bank Accounts
 Investments
 Property Solutions
  Insurance
 Loans

Business Banking

 Corporate Net Banking

 Cash Management
 Trade Services
 FXOnline
 SME Services
 Online Taxes
 Custodial Services

Head Office
ICICI Bank
9th Floor, South Towers
ICICI Towers
Bandra Kurla Complex
Bandra (E)
Mumbai.
Phone: 91-022-653 7914
Website: www.icicibank.com

Board of directors
 Board Members

Mr. K. V. Kamath, Chairman

....................................................

Mr. Sridar Iyengar

....................................................

Mr. Homi R. Khusrokhan

....................................................

Mr. Lakshmi N. Mittal

................................................

Mr. Narendra Murkumbi

.................................................

Dr. Anup K. Pujari

.................................................

Mr. Anupam Puri

..................................................

Mr. M.S. Ramachandran

..................................................

Mr. M.K. Sharma

..................................................

Mr. V. Sridar

Prof. Marti G. Subrahmanyam

.........................................................

Mr. V. Prem Watsa

.........................................................

Ms. Chanda D. Kochhar,

Managing Director & CEO

.........................................................

Mr. Sandeep Bakhshi,

Deputy Managing Director

.........................................................

Mr. N. S. Kannan,
Executive Director & CFO

.........................................................

Mr. K. Ramkumar,
Executive Director

.........................................................
 Mr. Sonjoy Chatterjee,
Executive Director

Board committee
Audit Committee 
Board Governance Remuneration &
Nomination Committee

Mr. Sridar Iyengar, Chairman Mr. M. K. Sharma, Chairman

Mr. M. K. Sharma, Alternate Chairman Mr. K. V. Kamath
Mr. Narendra Murkumbi Mr. Anupam Puri
Mr. V. Sridar Prof. Marti G. Subrahmanyam

Corporate Social Responsibility Committee Customer Service Committee

Mr. M. K. Sharma, Chairman Mr. K. V. Kamath, Chairman

Dr. Anup K. Pujari Mr. Narendra Murkumbi
Ms. Chanda D. Kochhar Dr. Anup K. Pujari
Mr. M. S. Ramachandran
Mr. M.K. Sharma
Ms. Chanda D. Kochhar

Credit Committee Fraud Monitoring Committee

Mr. K. V. Kamath, Chairman Mr. M. K. Sharma, Chairman

Mr. Narendra Murkumbi Mr. K. V. Kamath
Mr. M. S. Ramachandran Mr. M .K. Mr. Narendra Murkumbi
Sharma Ms. Chanda D. Kochhar
Ms. Chanda D. Kochhar
Mr. Sandeep Bakhshi

Risk Committee Share Transfer & Shareholders'/ Investors'

Grievance Committee

Mr. K. V. Kamath, Chairman Mr. M. K. Sharma, Chairman

Mr. Sridar Iyengar Mr. Narendra Murkumbi
Dr. Anup K. Pujari Mr. N. S. Kannan
Prof. Marti G. Subrahmanyam
Mr. V. Prem Watsa
Ms. Chanda D. Kochhar
Committee of Executive Directors
Ms. Chanda D. Kochhar, Chairperson
Mr. Sandeep BakhshiMr. N. S. Kannan
Mr. K. Ramkumar
Mr. Sonjoy Chatterjee
Business objectives

 Vision
To be the leading provider of financial services in India and a major global bank.

 Mission
 We will leverage our people, technology, speed and financial capital to: be the banker of first
choice for our customers by delivering high quality, world-class service.
 Expand the frontiers of our business globally.
 Play a proactive role in the full realisation of India’s potential.
 Maintain a healthy financial profile and diversify our earnings across businesses and
geographies.
 Maintain high standards of governance and ethics.
 Contribute positively to the various countries and markets in which we operate.
 Create value for our stakeholders.
Services provided by icici

INVESTMENT SERVICES

 DematServices
A Demat Account allows employees transact in shares instantaneously in a safe and secure
manner.
 ReliefBonds/MutualFunds/Insurance
Salary Account customers can now invest in Government of India relief and savings bonds, a
basket of mutual funds, foreign exchange facilities and Insurance products through ICICI Bank.

 GoldCoin
Employees can buy 24 karats Pure Gold, which ICICI Bank brings to you. Each coin comes to you
straight from Switzerland. Refined to 99.99% fine gold and sealed with a unique Certificate of
Authencity- guaranteeing you its purity.

FOREX SERVICES
ICICI Bank's Foreign Exchange Services will help you organize your foreign exchange in the most hassle
free manner. Whether its Foreign Currency, Travelers Cheques or Travel Card, ICICI Bank Foreign
Exchange Services is a one-stop solution to your foreign exchange requirement.

NRI SERVICES
Wherever people may be, in India or abroad, ICICI Bank has created a wide range of products and
services that provide customers complete financial solutions. Helping them to make the right decisions at
the right time and can be rest assured that they are in the safe and trustworthy hands of ICICI bank.

Deposit Products:

1. NRE Account: An NRI can open a Non-Resident External Account(NRE Account)with any bank in
India. The account not only lets customers manage their money that they earn in India (as permitted by
FEMA Regulations) but also of the money earned abroad. The money in the account and the interest
earned on it can be sent back outside India without any authorization from RBI. The Account can be
opened and funded in any permissible currency, and is later converted into Indian Rupees. This Account
offers dual benefits of high returns as offered by the fixed deposits and liquidity as offered by the savings
account. The Account helps customers take care of all their financial needs, quickly and conveniently. In
addition to attractive rupee interest rates customers get free money transfers, easy access for the customer
as well as for his/her family back in India, and a free mandate card for the loved ones in India.

2 . NRO Account: The Non-Resident Ordinary Account (NRO Account) allows customers to hold the
money they have earned in India such as rent, dividends, pensions etc. They can open the account and
can fund it in any permissible currency and is later converted into Indian Rupees. NRO account offers
attractive exchange rates upon conversion of foreign currency into Indian Rupees. This account to offers
high returns and liquidity. However, the interest earned on the principal amount in the account can be
sent back after the deductions of tax in India.

3. FCNR Account:A Foreign Currency Non Resident Account (FCNR Account) allows customers to
maintain funds as Term Deposits in various foreign currencies, thereby guarding customers against
fluctuating exchange rates. Under this account both the principal amount and the interest can be sent back
fully, and are taxable in India. The tenures range from 12 to 36 month

4. RFC Account: By opening a Resident Foreign Currency Account (RFC Account) customers can
maintain funds as Term deposits in various foreign currencies even after they have returned to India. Both
the principal and the interest can be remitted outside India. The tenures range from 1month to 36months.
Advisory Services
Private Equity Placement

ICICI Bank's Small Enterprises Group's (SEG) Investment Banking team is dedicated to provide you niche
and exclusive investment banking services.

The ICICI Bank Edge

 Capital Raising
At times for a growing company, the amount of capital that a promoter can infuse in the
business becomes limited. Businesses can be self sufficient for capital needs in their nascent and
initial growth phases. However to meet expansion and growth plans, external capital is
imperative. We at ICICI Bank, with our lending experience, fully understand this and help clients
raise equity to fund growth. We have developed a strong network of domestic and international
investors who are keen to partner with such success stories in India and these players solicit our
advice for investing into such companies. .
 Buy And Sell Side Advisory
Inorganically adding growth to a business or hiving off non-core activities or opportunity to
realize right value for the business created or an instance of taking a company on a bigger scale
are the ways to strategize today. We at ICICI Bank provide assistance on both buy side and sell
side transaction. With a large client franchise built, more than 10,000 asset clients and
international linkages in developed economies, ICICI Bank can bring in the best synergy partner
to conclude a sell side or buy side advisory assignment.
 Special Situation Solutions
Backed by institutional legacy, in-depth understanding and linkages with key stakeholders in the
process of turnaround, ICICI Bank's Investment Banking team can design solutions for special
situations like CDR, BIFR, OTS, etc. Count on us to turn around the capital structure of your
company and bring in additional capital for growth.
Online Services
ICICI Bank provides a variety of online services.now these is no need of walking up to the bank branch,
every time you need to do your banking. As you can do a lot of it online. From paying your bills to
transferring funds, booking your rail/air tickets, shopping, sending a money order and doing lots more.

Research methodology
Research methodology means the method that is used for research on a specific topic. In this
research methodology, the basic trends will be taken into account. The basic purpose of
including this chapter is to assess the methodology that is used for research and the reason for
choosing that specific methodology in respect to how it helps and leads to a conclusion

3.1 Research Philosophy

The methods used for a research include pondering over the in a theoretical way so that the
research approach can be applied, Mason stated (2002). The main purpose of explaining
research philosophy here is to get to know of as many research methods and information as
possible so that research can be made by gathering data about the Corporate Social
Responsibility of the organizations and how they actually practice it.
There are also techniques defined used for data acquisition for the purpose of research in case
the data could not be obtained. Saunders et al., (2007) mentions that research philosophy can
be categorized as is shown in the diagram below:

The major approaches are as follows:

. Realist Approach: The realistic approach states that all the data and information
collected are purely related to true beliefs
. Positivist Approach: This approach includes the hard facts and figures about the
research
. Interpretive: It includes getting information about the real time experiences of the
people included in the research

In this research paper, realist approach has been used. Information and data were collected
based on true beliefs.

3.2 Research Design

Research design gives the direction or framework how to carry out or conducting the research
project so that the desired result can be obtained. It is also called the overall research plan.
The basic purpose of this study is to know how do firms use Internet Banking to build brand
equity .

3.3 Units of analysis

Unit of analysis in this research is the case studies of four multinational companies SBI

3.4 Sample

In this study, sample consists of 4 multinational companies who are performing in different
parts of the world. This sample is based on non probability sample technique because the
sample is selected on the basis of convenience and by keeping in the mind the main issue,
variables on which this study is focusing environment, labor and local community and the
research questions. A sample of this study is representative because all the 4 companies deal
in different part of their world. It is not possible that all of them perform the same for us.
Some of them will be good, others will be moderate and few of them will be weak in this
scenario.
3.6 Research Approach

Inductive research approach will be carried out in this research and a result of provisional and
belief is a theory created by this research. The important inspection and assessment of the
specific process is done. In order to reach and find out to the areas of that general and basic
process and practice is called inductive thought. In this research, qualitative inductive
approach is being used.

This study focus on Internet Banking partlarly MNCs and its effect on brand equity for this
research
case study is the most appropriate research strategy because the case study look a research
question in its real-life context and it include in-depth examination of few insistence. In this
study multi case study approach will be used.

Internet Banking is an important issue these days. This study will check that how a firm use
Internet Banking and how
it affect company.s brand equity. Does it effect in a positive manner or negative manner. In
order to check all these issues case study strategy are the most appropriate choice.

3.8 Data Collection

3.8.1 Secondary Data

Secondary data collection method is the one in which the data is already available and is not
the firsthand information. For this particular research, secondary data were used. This data
can both be used in small or large scaled surveys. The reliability of the data can be questioned
in the fact that the figures and facts were not collected by the researcher directly through
Primary Research, which is the mail disadvantage of conducting research on secondary data
available already. The data includes in this research was collected from different company
reports, websites, articles, company blogs, pressure groups. reports and the like.
 Data Analysis And Interpretation

Employees: 41,871
Employee growth: 37.2%

You see, ICICI Bank is India's #2 bank (after State Bank of India), with more than 600
branches and 2,200 ATMs nationwide. ICICI's retail banking group offers lending and
deposit services to small businesses and individuals. Larger businesses are served by the
corporate banking group, which offers finance services and treasury products. ICICI's rural and
government banking unit offers micro-loans and agricultural banking. Foreign
operations, as well as services related to international trade finance and expatriate
Indians, fall under the international banking group. Other ICICI offerings include online
banking, asset management, and insurance.

ICICI Security is a SEBI Registered CAT-1 Merchant banker.

Key numbers for fiscal year ending March, 2009:

Sale: $5,796.3M
One year growth: 99.1%
Net income: $524.1M
Income growth: 167.4%

ICICI Advice on Wide Varity of Product:

1: Private Equity Financing

2: Secondary sale transactions

3: pre IPO deals

Consideration on policies of ICICI bank regarding merchant banking by
customers.

a) YES 72

b) N0 28

Chart Title
28%

72%

Interpretation:-
 
As per the my study when any customers planning for merchant banking
services they consider the policies of bank regarding the charges charged
by the bank .
Factors consider by customers while taking personal loan. 

a) Interest rate 70

b) Scheme 20

c) Duration 8

d) others 2
 2%
8%

20%

70%

Interpretation:- 

When any customers planning for merchant banking from any bank they mainly
consider the charges of the particular bank and they give second preference
to branches available and also the ATM facility.
2.

OCCUPATION NO OF RESPONDENTS
Student 33
Employee 40
Business 22
Housewife 5

45
40
no. of respondent

35
30
25
20
15
10
5
0
Student Employee Business Housewife
occupation

NO OF RESPONDENTS
3. ) Monthly income

MONTHLY INCOME NO. OF RESPONDENT

Less than 10,000 11
10,000-20,000 53
20,000-30,000 27
30,000-40,000 9

9% 11%

27%

53%

Less than 10,000 10,000-20,000 20,000-30,000 30,000-40,000

4. . Qualification

QUALIFICATION NO. OF RESPONDENTS

Under-graduate 42
Graduate 37
Post-graduate 14
Professional 7

7%

14%

42%

37%

Under-graduate Graduate Post-graduate Professional

 
5. Types of account maintained in icici bank

Accounts SBI ICICI

Saving 54 31
Current 6 8
Fixed deposit 9 6
Any other 2 2
Net banking 70 30

Types of account maintained

60
50
40
respond

30
no. of

20
ent

10
0
Saving Current Fixed Any other
deposit
Types of account

SBI ICICI
6. Frequency of your visit to bank

SBI ICICI
Daily 4 3
Weekly 8 9
Monthly 40 21
Yearly 8 7

Frequency of your visit ot bank

n o . o f re s p o n d e n ts

50
40

30
20

10
0
Daily Weekly Monthly Yearly
time

SBI ICICI
7). Presence of enquiry counter

SBI MERCHANT BANKING

YES 50 39
NO 10 1

Presence of enquiry counter

60
50
no. of respondent

50
39
40
30
20
10
10 1
0
SBI ICICI
name of the bank
ICICI
YES NO

good relationship with the customers.

 FINDINGS
ICICI Bank, India's largest private sector bank, and First Data, a global leader in
electronic commerce and payment services, have formed a merchant acquiring
alliance named ICICI Merchant Services which has acquired ICICI Bank's
merchant acquiring portfolio. The venture brings together one of India's largest
merchant portfolios, representing approximately 30% of the current Indian
acquiring market, and a leading acquirer and payment services provider with
global expertise. Over time, ICICI Merchant Services expects to deliver an
enhanced suite of card acquiring services to existing and to new merchants.
 
ICICI Bank is India's second largest bank with over 2,000 branches across the
country. First Data, a KKR company, provides payment processing services for 5.3
million merchant locations globally and serves customers in 36 countries around
the world. First Data's services include offering merchants the ability to view and
interrogate their payment transactions securely via the Internet while benefiting
from loyalty, prepaid and market-leading e-commerce solutions based upon
advanced processing technologies

.
1. mainly investors prefer the merchant banking

2. Family members are creating more effect on decisions regarding

merchant banking

3. market reputation is main factor consider by customers

4. Most of the customers consider the policies of bank regarding the

merchant banking .

5. 50 % customer’s give the higher rating to brokers and jobbers of the

bank .

6. not only governments employees but also the business classes prefer
the merchant banking
 8.Similarly self employed prefer merchant Banking in some cases when the
brokers and jobbers charges are low

9.Low income class mainly did not prefer the merchant banking.

Contact details
 Email id

merchantcare@icicims.com

 CallCenterNumbers:
If you are an existing customer of ICICI Merchant Services, please call our number
on 1800 102 1671 to enquire regarding
o Your account/agreement
o Additional services
o Any issues you may be encountering with your service

If you would like to enquire regarding Global Gateway, please call our number
on 18001021673

If you do not currently have a processing agreement with ICICI Merchant Services
and are interested in hearing how we can help grow your business through card
acceptance please call our number on 1800 102 1671. We look forward to your
call.
A merchant account is a type of bank account that allows businesses to accept payments in multiple ways,
typically debit or credit cards. A merchant account is established under an agreement between an acceptor and
a merchant acquiring bank for the settlement of payment card transactions. In some cases a payment processor,
independent sales organization (ISO), or member service provider (MSP) is also a party to the merchant
agreement. Whether a merchant enters into a merchant agreement directly with an acquiring bank or through
an aggregator, the agreement contractually binds the merchant to obey the operating regulations established by
the card associations.
Contents

Methods of processing credit cards

Today a majority of credit card transactions are sent electronically to merchant processing banks for
authorization, capture and deposit. Various methods exist for presenting a credit card sale to "the system." In
all circumstances either the entire magnetic strip is read by a swipe through a credit card terminal/reader, a
computer chip is read (an "EMV"), or the credit card information is manually entered into a credit card
terminal, a computer or website. The earliest methods, submitting credit card slips to a merchant processing
bank by mail, or by accessing an Automated Response Unit (ARU) by telephone, are still in use today but have
long been overshadowed by electronic devices. These early methods used two-part forms and a manual device
for mechanically imprinting the embossed card number information onto the forms.

Credit card terminaal

Main article: payment terminal

A credit card terminal is a stand-alone piece of electronic equipment that allows a merchant to swipe or key-
enter a credit card's information as well as additional information required to process a credit card transaction.
They may be connected to Point of Sale systems and typically have a keypad and network connection and may
have a built-in printer.
Automated response unit (ARU)
An ARU (also known as a voice authorization, capture and deposit) allows the manual keyed entry and
subsequent authorization of a credit card over a cellular or land-line telephone. With this method, a merchant
typically imprints their customer's card with an imprinter to create a customer receipt and merchant copy, then
process the transaction instantaneously over the phone.

Payment gateway
Main article: payment gateway
Learn more
This section does
not cite any sources.

A payment gateway is an e-commerce service that authorizes payments for e-businesses and online retailers. It
is the equivalent of a physical POS (point-of-sale) terminal located in most retail outlets. A  merchant account
provider is typically a separate company from the payment gateway. Some merchant account providers have
their own payment gateways but the majority of companies use 3rd party payment gateways. The gateway
usually has 2 components: a) the virtual terminal that can allow for a merchant to securely login and key in
credit card numbers or b) have the website's shopping-cart connect to the gateway via an API to allow for real
time processing from the merchant's website.
Merchant account marketingEdit
Merchant accounts are marketed to merchants by two basic methods: either directly by the processor or
sponsoring bank, or by an authorized agent for the bank and additionally directly registered with both Visa and
MasterCard as an ISO/MSP (independent selling organization / member service provider).

Marketing details are by card issuers like Visa and MasterCard, and are enforced by various rules and fines. A
few of the largest processors also partner with warehouse clubs to promote merchant accounts to their business
members.

Marketing by banksEdit
A bank that has a merchant processing relationship with Visa and MasterCard, also known as a member bank,
can issue merchant accounts directly to merchants.

To reduce risk, some banks limit approval to merchants in its geographical area, those with a physical retail
storefront, or those that have been in business for two years or more.

Marketing by independent sales organizations (ISO)/MSPs Edit

To market merchant accounts, an ISO/MSP must be sponsored by a member bank. This sponsorship requires
that the bank verify the financial stability and suitability of the company that will be marketing on its behalf.
The ISO/MSP must also pay a fee to be registered with Visa and MasterCard and must comply with
regulations in how they may market merchant accounts and the use of trademarks of Visa and MasterCard.
One way to verify if an ISO/MSP is in compliance is to check a website or any other marketing material for a
disclosure "company is a registered ISO/MSP of bank, town, state. FDIC insured".

This disclosure is required by both Visa and MasterCard and will cause a penalty of up to $25,000 if it is not
clearly visible. In almost all cases, if there is no disclosure, the company is likely to be an uninformed fourth
party or worse.[1][better  source  needed]
Rates and feesEdit
A merchant account has a variety of fees, some periodic, others charged on a per-item or percentage basis.
Some fees are set by the merchant account provider, but the majority of the per-item and percentage fees are
passed through the merchant account provider to the credit card issuing bank according to a schedule of rates
called interchange fees, which are set by Visa, Discover, and MasterCard. Interchange fees vary depending on
card type and the circumstances of the transaction. For example, if a transaction is made by swiping a card
through a credit card terminal it will be in a different category than if it were keyed in manually.
Discount ratesEdit
The discount rate comprises a number of dues, fees, assessments, network charges and mark-ups merchants are
required to pay for accepting credit and debit cards, the largest of which by far is the interchange fee. Each
bank or ISO/MSP has real costs in addition to the wholesale interchange fees, and creates profit by adding a
mark-up to all the fees mentioned above. There are a number of price models banks and ISOs/MSPs used to
bill merchants for the services rendered. Here are the more popular price models:
Three-tier pricingEdit

The three-tier pricing is the most popular pricing method and the simplest system for most merchants to
understand, if not the most transparent. The newer six-tier pricing, including additional tiers covering debit,
business, or international cards is gaining in popularity. In three-tier pricing, the merchant account provider
groups the transactions into three groups (tiers) and assigns a rate to each tier based on a criterion established
for each tier. A possible drawback from the merchant's perspective is that these "tiers" or "buckets" are
variable from one processor to the next prohibiting any direct comparison from a tier one provided by one
provider to a tier one provided by another provider.

First tier – qualified rateEdit

A qualified rate is the percentage rate a merchant will be charged whenever they accept a regular consumer
credit card and process it in a manner defined as "standard" by their merchant account provider using an
approved credit card processing solution. This is usually the lowest rate a merchant will incur when accepting
a credit card. The qualified rate is also the rate commonly quoted to a merchant when they inquire about
pricing.

The qualified rate is created based on the way a merchant will be accepting a majority of their credit cards. For
example, for an Internet merchant, the Internet interchange categories will be defined as qualified, while for a
 physical retailer only transactions swiped through or read by their terminal in an ordinary manner will be
defined as qualified.

Second tier – mid-qualified rateEdit

Also known as a partially qualified rate, the mid-qualified rate is the percentage rate a merchant will be
charged whenever they accept a credit card that does not qualify for the lowest rate (the qualified rate). This
may happen for several reasons such as:

 A consumer credit card is keyed into a credit card terminal instead of being swiped

 A special kind of credit card is used like a rewards card or a business card

A mid-qualified rate is higher than a qualified rate. Some of the transactions that are usually grouped into the
mid-qualified tier can cost the provider more in interchange costs, so the merchant account providers do make
a markup on these rates.

The use of "rewards cards" can be as high as 40% of transactions. So it is important that the financial impact of
this fee be understood.

Third tier – non-qualified rateEdit

The non-qualified rate is usually the highest percentage rate a merchant will be charged whenever they accept
a credit card. In most cases all transactions that are not qualified or mid-qualified will fall to this rate. This may
happen for several reasons such as:

 A consumer credit card is keyed into a credit card terminal instead of being swiped and address
verification is not performed

 A special kind of credit card is used like a business card and all required fields are not entered

 A merchant does not settle their daily batch within the allotted time frame, usually past 48 hours from
time of authorization.

A non-qualified rate can be significantly higher than a qualified rate and can cost the provider much more in
interchange costs, so the merchant account providers do make a markup on these rates.

Six-tier pricingEdit
As a result of the Walmart Settlement [2] and to compete against PIN-based debit cards (which are processed
outside of the Visa and MasterCard networks), Visa and MasterCard lowered the interchange rates for debit
cards well below those for credit cards. Some providers can pass on the lower cost of these cards directly to
merchants. Consequently, the three tiers programs have added two classifications for debit cards that are
processed without a PIN or with a PIN for a total of six rate classifications.
Interchange-plus pricingEdit
Some providers offer merchant account services priced on an "interchange plus" basis. These accounts are
based on the "interchange" tables published by both Visa [3] and MasterCard[4] MasterCard. This type of
pricing creates a discount rate by adding interchange rates plus a percentage and authorization fees. This is a
common pricing model for very low and very high average tickets.
Authorization feeEdit
The authorization fee (actually an authorization request fee) is charged each time a transaction is sent to the
card-issuing bank to be authorized. The fee applies whether or not the request is approved. Note this is not the
same as a transaction fee.
Transaction feeEdit
The transaction fee is charged when you accept your authorization. This fee only applies to an authorization
that is accepted without error.

Statement feeEdit
The statement fee is a monthly fee associated with the monthly statement that is sent to the merchant at the end
of each monthly processing cycle. This statement shows how much processing was done by the merchant
during the month and what fees were incurred as a result.

Many times, the statement fee is not directly linked to "paper" statements but rather general overhead. This
means that a provider would not waive this fee if a merchant chose to have a "paperless" statement.

Monthly minimum feeEdit

The monthly minimum fee is a way to ensure that merchants pay a minimum amount in fees each month to
cover costs from the provider to maintain the account. If a merchant's fees do not equal or exceed the monthly
minimum they will be charged the difference up to the monthly minimum.

Example: A merchant has signed a contract with a $25.00 monthly minimum fee. If all the fees
(clarity: this is only for processing costs, so it does not include monthly fees, chargeback fees, etc.) for
the most recent month of processing total only $15.00, this merchant will be charged an additional
$10.00 to meet their monthly minimum requirements. Sometimes there are fees that are charged that
are not a part of the monthly minimum, such as statement fees. It is industry standard to charge a
monthly minimum, though not all acquirers charge this, nor do all that do charge it for every
agreement.
Batch feeEdit
A batch fee (also known as a batch-header fee) can be charged to a merchant whenever the merchant "settles"
their terminal. Settling a terminal, also known as "batching", is when a merchant sends their completed
transactions for the day to their acquiring bank for payment. Some providers perform this automatically. It is
important to close a batch every 24 hours or a higher rate will be assessed by Visa, Discover or MasterCard.
The term "batch header" originally came from processing pre-electronic terminal era, when each batch of
credit card receipts was turned into the merchant's local bank for deposit. The batch header was a mini report
summarizing those receipts bundled within.

Customer service feeEdit

The customer service fee (also known as a maintenance fee) can be charged by some providers to pay for the
cost of customer service. Also referred to as a "merchant support fee", "customer support fee", or simply,
"service fee" by some merchant providers.

Annual feeEdit
The annual fee can be charged by some providers to pay for costs of maintaining the merchant's account.
Sometimes these fees can be quarterly. The fee can be from $79–$399. These fees in cases include a Payment
Card Industry (PCI) compliance fee, which may include a cyber/breach insurance policy.

Early termination feeEdit

The early termination fee can be charged by some providers if the merchant ends the contract before the end of
the contract term. While contract terms of one-to-three years are typical, some providers have terms of up to
five years with a one-year prior notice to cancel or the fee will be assessed. Some providers also assess all
statement fees and monthly minimums remaining when the contract is terminated. Some providers may also
assess a "lost profit" fee based on an assumption of profits they concluded they would have earned during the
full term of the contract.

Chargeback feeEdit
Chargebacks are the largest risk that is presented to banks and providers. This is not to be confused with
refunds, which are simply a merchant refunding a transaction. In the Visa, Discover, and MasterCard rules, the
merchant's processing bank is 100% responsible for all the transactions that the merchant performs. This can
leave the provider open to millions of dollars of potential losses if the merchant operates in an illegal or risky
manner and generates many chargebacks. The providers pass this cost on to the merchant, but if the merchant
is fraudulent or simply does not have the money, the provider must pay all the costs to make the cardholder
'whole'. The chargeback risk is the largest part taken into consideration during the contract application and
underwriting process. Some banks are much more stringent than others when assessing a merchant's
chargeback risk.

If a merchant encounters a chargeback they may be assessed a fee by their acquiring bank. A potential
chargeback is presented on behalf of the card holder's bank to the merchant's credit card processing bank.

Currently, both Visa and MasterCard require all merchants to maintain no more than 1% of dollar volume
processed to be chargebacks. If the percentage goes above, there are penalties starting at $5,000 – $25,000
charged to the merchant's processing bank and ultimately passed on to the merchant.
In all cases, a chargeback will cost the merchant the chargeback fee, typically $15–$30, plus the cost of the
transaction and the amount processed.

Conclusion

The merchant banking business has increased over a short period

of time and with continued economic reforms. However, a stiff competition
exists in this line and survival will depend upon the financial skills and
spectrum of financial services and instruments offered by the Merchant Banker.
Hence, Merchant Banking Service is taking shape for turbulent times.

Merchant banking is an activity initially undertaken by a few

large commercial banks in India, and it is now being adopted or undertaken by a
few large commercial banks in India, and it is now being adopted or undertaken
by practically every commercial bank through its Merchant Banking
Department. The range of activities covered under merchant banking very wide
indeed. The merchant banks offer a package of financial services. Unlike in the
 past, their activities are now primarily non-fund based. Therefore, they do not
require much capital. One of the basic requirements of merchant banking is a
highly professional staff and worldwide contacts. Merchant banking is usually
international in character.

Bibliography

Books Reffered:

 Accountancy. R.K. Mittal,A.K.Jain.

 Financial Management- Theory and Practice. Shashi.K.Gupta , R.K. Sharma.

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Internet websites:

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 Www.Moneycontrol.Com

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 Www.Wikipedia.Org

 Www.Google.Com

 Www.Scribd.Com

 Www.Managementparadise.Com