Shivanshu Report | Reserve Bank Of India | Transaction Account

A Project Study Report On Training Undertaken at ICICI Bank & SBI Bank “Comparison of Microfinance products of ICICI & SBI bank

and Customer Perception towards these products” Submitted in partial fulfillment for the Award of degree Master of Business Administration

Submitted By: Shivanshu Vinay Krishna MBA Part 2nd year

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Preface

Decision making is a fundamental part of the research process. Decisions regarding that what you want to do, how you want to do, what tools and techniques must be used for the successful completion of the project. In fact it is the researcher’s efficiency as a decision maker that makes project fruitful for those who concern to the area of study. This project report has been prepared as per the requirement of the syllabus of MBA course structure under which the students are required to undertake project. My job during the making of project was to get an overview of availability of microfinance products provided by Banking sector. And how’s the lower availability of credits in market affect the Economy. The project title is-“Comparison of microfinance products of ICICI & SBI Bank and customer perception about these products.” Different types of micro products are provided by the banks. These micro finance products help to raise the level of economy and standard of poor people. Basically when we are playing with computer in every part of life, I used it in my project not for the ease of mine but for the ease of result explanation to those who will read this project. The project presents the role of microfinance products in life of persons. Now I take this opportunity to present the project report and sincerely hope that it will be as much knowledge enhancing to the readers as it was to use during the fieldwork and the completion of the report.

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ACKNOWLEDGEMENTS

To acknowledge all the persons who had helped for the fulfillment of the project is not possible for any researcher but in spite of all that it becomes the foremost responsibility of the researcher and also the part of research ethics to acknowledge those who had played a great role for the completion of the project. I express my sincere thanks to my project guide Mrs.Prachi Mam & Ms. Ity patni Mam and all my faculty members, Department of management studies, Poornima Group Of Colleges for guiding me right from the inception till the successful completion of the project. I sincerely acknowledge him for extending their valuable guidance, support of literature, critical review of project and the report and above all the moral support they had provided to me with all stages of this project. I would also like to acknowledge Mr. Amish Duggar for expending his valuable guidance. I would also like to thanks the supportive staff, Department of management studies, Poornima Group Of Colleges, for their help & cooperation throughout the project.

Shivanshu Vinay Krishna

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the productivity of any business concern depends upon the behavioural aspect of consumers. etc. The report begins with the introduction to industry and after that introdustion of company. The third chapter. its area of operation. The second chapter is the introduction to the Micro finance Products which gives a brief idea regarding Micro Finance Products . computation and graphical representation of data collected from survey. This project report contains 5 different chapters. -4- . The fourth chapter comprehensive coverage of forecasting concepts and techniques which shows the analysis of data through tabulation. This topic deals with the customer’s perception towards other Micro finance Products from SBI and ICICI investment. suggestion & conclusion part which is very much important after analysis is made. types of data used and the data collection method. It covers the sample procedure. its organization structure. It also contains the objectives and limitations of the project.Executive Summary In the growing global competition. The fifth chapter deals with the findings. methodology adopted in preparing this report is mentioned. its achievements.

so in the sixth chapter the recommendation part is covered which are made after a depth study of the analysis part of thesis. Constructive and healthy suggestions for improvements of the report will be great fully appreciated. I hope this report will be extremely useful for those it is meant. INDUSTRY PROFILE -5- . In each of the five chapters as described above. every chapter has been scheduled in a manner so as to enable the reader to appreciate the contents easily. The report is supported by figures and data wherever necessary with a view to assist the reader in developing a clear cut understanding of the topic.As we know that only analysis and conclusion is not the end of a research.

The earliest known state deposit bank. only smaller to save costs on the paper. was founded in 1407 at Genoa.History Banking in the modern sense of the word can be traced to medieval and early Renaissance Italy. Banks can be traced back to ancient times even before money when temples were used to store commodities. They contain a sum to be paid and then the order "May so and so pay the bearer such and such an amount". In the 9th century. establishing branches in many other parts of Europe. During the 3rd century AD. Muslim traders are known to have used the cheque or ṣakk system since the time of Harun al-Rashid (9th century) of the Abbasid Caliphate. The Bardi and Peruzzi families dominated banking in 14th century Florence. Perhaps the most famous Italian bank was the Medici bank. during the Mongol Empire. set up by Giovanni Medici in 1397. a Muslim businessman could cash an early form of the cheque in China drawn on sources in Baghdad. banks in Persia and other territories in the Persian Sassanid Empire issued letters of credit known as Ṣakks. Venice and Genoa. George). Fragments found in the Cairo Geniza indicate that in the 12th century cheques remarkably similar to our own were in use. Banco di San Giorgio (Bank of St. The date and name of the issuer are also apparent. to the rich cities in the north like Florence. Italy. -6- . a tradition that was significantly strengthened in the 13th and 14th centuries.

-7- . which is specified as:    conducting current accounts for his customers paying cheques drawn on him. from Old High German banc. who used to make their transactions atop desks covered by green tablecloths. In fact. bank "bench. The earliest evidence of money-changing activity is depicted on a silver Greek drachm coin from ancient Hellenic colony Trapezus on the Black Sea.Origin of the word The word bank was borrowed in Middle English from Middle French banque. from Old Italian banca. counter". Definition The definition of a bank varies from country to country. even today in Modern Greek the word Trapeza (Τράπεζα) means both a table and a bank. and collecting cheques for his customers. modern Trabzon. Under English common law. a pun on the name of the city. a banker is defined as a person who carries on the business of banking. presented in the British Museum in London. Benches were used as desks or exchange counters during the Renaissance by Florentine bankers. c. The coin shows a banker's table (trapeza) laden with coins. 350– 325 BC.

it is actually functional. who carry on the business of banking' (Section 2. the making of advances to customers. Although this definition seems circular. In particular. the definition above. including cheques. The business of banking is in many English common law countries not defined by statute but by common law. and not necessarily in general. and this Act contains a statutory definition of the termbanker: banker includes a body of persons. When looking at these definitions it is important to keep in mind that they are defining the business of banking for the purposes of the legislation. most of the definitions are from legislation that has the purposes of entry regulating and supervising banks rather than regulating the actual business of banking. paying and collecting cheques drawn by or paid in by customers. In other English common law jurisdictions there are statutory definitions of the business of banking orbanking business. In most common law jurisdictions there is a Bills of Exchange Act that codifies the law in relation to negotiable instruments. and includes such other business as the Authority -8- . because it ensures that the legal basis for bank transactions such as cheques does not depend on how the bank is organised or regulated.Banco de Venezuela. whether incorporated or not. Interpretation). However. Examples of statutory definitions:  "Banking business" means the business of receiving money on current or deposit account. in many cases the statutory definition closely mirrors the common law one.

may prescribe for the purposes of this Act. or with a period of call or notice of less than that period. the cheque has lost its primacy in most banking systems as a payment instrument.  "Banking business" means the business of either or both of the following: 1. (Banking Act (Singapore). savings or other similar account repayable on demand or within less than [3 months] .. direct credit. 2. Section 2. Interpretation). Receiving from the general public money on current. direct debit and internet banking. Banking Standard activities Large door to an old bank vault.. paying or collecting cheques drawn by or paid in by customers Since the advent of EFTPOS (Electronic Funds Transfer at Point Of Sale). even if they do not pay and collect cheques. deposit. This has led legal theorists to suggest that the cheque based definition should be broadened to include financial institutions that conduct current accounts for customers and enable customers to pay and be paid by third parties. -9- .

and lend most funds to households and non-financial businesses. Banks lend money by making advances to customers on current accounts. Channels Banks offer many different channels to access their banking and other services:  ATM is a machine that dispenses cash and sometimes takes deposits without the need for a human bank teller. cash management trusts and other non-bank financial institutions in many cases provide an adequate substitute to banks for lending savings too. by accepting term deposits. paying cheques drawn by customers on the bank. and by issuing debt securities such as banknotes and bonds.Banks act as payment agents by conducting checking or current accounts for customers. Banks provide almost all payment services. EFTPOS. Some ATMs provide additional services. Non-banks that provide payment services such as remittance companies are not normally considered an adequate substitute for having a bank account. and ATM. individuals and governments. and money market funds. and by investing in marketable debt securities and other forms of money lending. A branch is a retail location Call center   . Banks borrow most funds from households and non-financial businesses. Banks also enable customer payments via other payment methods such as telegraphic transfer. Banks borrow money by accepting funds deposited on current accounts.10 - . and a bank account is considered indispensable by most businesses. by makinginstallment loans. and collecting cheques deposited to customers' current accounts. but non-bank lenders provide a significant and in many cases adequate substitute for bank loans.

This difference is referred to as the spread between the cost of funds and the loan interest rate. profitability from lending activities has been cyclical and dependent on the needs and strengths of loan customers and the stage of the economic cycle. e. by sending out statements Mobile banking is a method of using one's mobile phone to conduct banking transactions Online banking is a term used for performing transactions. Fees and financial advice constitute a more stable revenue stream and banks .11 - . Mail: most banks accept check deposits via mail and use mail to communicate to their customers. mostly for private banking or business banking. Video banking can be performed via purpose built banking transaction machines (similar to an Automated teller machine). often visiting customers at their homes or businesses Telephone banking is a service which allows its customers to perform transactions over the telephone without speaking to a human Video banking is a term used for performing banking transactions or professional banking consultations via a remote video and audio connection.      Business model A bank can generate revenue in a variety of different ways including interest. The bank profits from the differential between the level of interest it pays for deposits and other sources of funds. Historically. transaction fees and financial advice. over the Internet Relationship Managers. or via a videoconference enabled bank branch. The main method is via charging interest on the capital it lends out to customer. and the level of interest it charges in its lending activities. payments etc.g.

will also increase profitability). and insurance functions allows traditional banks to respond to increasing consumer demands for "onestop shopping" by enabling cross-selling of products (which. with convenience of easy credit. This helps in making profit and facilitates economic development as a whole. First. Banks make money from card products through interest payments and fees charged to consumers andtransaction fees to companies that accept the cards. this includes the Gramm-Leach-Bliley Act. . including carrying suitcases filled with cash to purchase a home). it is still common to deal strictly in cash. which means charging higher interest rates to those customers that are considered to be a higher credit risk and thus increased chance of default on loans. lowers the price of loans to those who have better credit histories. They make it easier for consumers to conveniently make transactions and smooth their consumption over time (in some countries with underdeveloped financial systems. smart cards. These products include debit cards. Third. Merging banking. prepaid cards. the banks hope. which allows banks again to merge with investment and insurance houses. and credit cards.have therefore placed more emphasis on these revenue lines to smooth their financial performance.12 - . Second. In the past 20 years American banks have taken many measures to ensure that they remain profitable while responding to increasingly changing market conditions. they have expanded the use of risk-based pricing from business lending to consumer lending. there is also increased risk that consumers will mismanage their financial resources and accumulate excessive debt. However. investment. they have sought to increase the methods of payment processing available to the general public and business clients. This helps to offset the losses from bad loans. and offers credit products to high risk customers who would otherwise be denied credit.

West Yorkshire. An interior of a branch of National Westminster Bank on Castle Street.Products A former building society. now a modern retail bank in Leeds.13 - .Liverpool .

Some of the main risks faced by banks include:  Credit risk: risk of loss arising from a borrower who does not make payments as promised. derivatives) Term loan Risk and capital Banks face a number of risks in order to conduct their business. commodities. and how well these risks are managed and understood is a key driver behind profitability. . interest rates. and how much capital a bank is required to hold.  Liquidity risk: risk that a given security or asset cannot be traded quickly enough in the market to prevent a loss (or make the required profit).14 - .Retail         Business loan Cheque account Credit card Home loan Insurance advisor Mutual fund Personal loan Savings account Wholesale       Capital raising (Equity / Debt / Hybrids) Mezzanine finance Project finance Revolving credit Risk management (FX.

 Operational risk: risk arising from execution of a company's business functions. 2. . participating in interbank clearing and settlement systems to collect. will decrease due to the change in value of the market risk factors. in the form of banknotes and current accounts subject to cheque or payment at the customer's order.15 - .  The capital requirement is a bank regulation. Market risk: risk that the value of a portfolio. since inward and outward payments offset each other. They are effectively transferable by mere delivery. or by drawing a cheque that the payee may bank or cash. Credit intermediation – banks borrow and lend back-to-back on their own account as middle men. reducing the cost of settlement between them. Netting and settlement of payments – banks act as both collection and paying agents for customers. 3. which sets a framework on how banks and depository institutions must handle their capital. in the case of banknotes. The categorization of assets and capital is highly standardized so that it can be risk weighted (see riskweighted asset). and hence valued at par. Issue of money. It also enables the offsetting of payment flows between geographical areas. Banks in the economy Economic functions The economic functions of banks include: 1. These claims on banks can act as money because they are negotiable or repayable on demand. This enables banks to economise on reserves held for settlement of payments. present. and pay payment instruments. be presented with. either an investment portfolio or a trading portfolio.

to raise the funding it needs to continue to operate.g. banks can do this by aggregating issues (e. Banking crises have developed many times throughout history.4. Maturity transformation – banks borrow more on demand debt and short term debt. With a stronger credit quality than most other borrowers. the U. if rising interest rates force it to pay relatively more on its deposits than it receives on its loans). In other words. credit risk (the chance that those who owe money to the bank will not repay it).S. and interest rate risk (the possibility that the bank will become unprofitable. banknotes and deposits are generally unsecured. when one or more risks have materialized for a banking sector as a whole. Savings and Loan crisis in the 1980s and early 1990s.g. These include liquidity risk (where many depositors may request withdrawals in excess of available funds). Bank crisis Banks are susceptible to many forms of risk which have triggered occasional systemic crises. However. withdrawals and redemptions of banknotes). accepting deposits and issuing banknotes) and redemptions (e. wholesale cash markets and securities markets).g. and the subprime mortgage crisis in the 2000s. but provide more long term loans. this puts the note holders and depositors in an economically subordinated position. the Japanese banking crisis during the 1990s. The improvement comes from diversification of the bank's assets and capital which provides a buffer to absorb losses without defaulting on its obligations. investing in marketable securities that can be readily converted to cash if needed. and raising replacement funding as needed from various sources (e. . Prominent examples include the bank run that occurred during the Great Depression. if the bank gets into difficulty and pledges assets as security.16 - . they borrow short and lend long. maintaining reserves of cash. 5. Credit quality improvement – banks lend money to ordinary commercial and personal borrowers (ordinary credit quality). but are high quality borrowers.

Growth in assets in adverse market conditions was largely a result of recapitalisation.4 trillion while profits declined by 85% to $115bn.17 - . and Italy each had more than 30.000 banks in the world grew by 6. .000 branches in the UK. even if they are not repayable to the customer's order—although money lending. China's top 4 banks have in excess of 67. Asian banks' share increased from 12% to 14% during the year. up 12% on the previous year. ABC:24000+) with an additional 140 smaller banks with an undetermined number of branches. by itself.Size of global banking industry Assets of the largest 1.000 branches.000 branches (ICBC:18000+. Fee revenue generated by global investment banking totalled $66. CCB:13000+.000). while the share of US banks increased from 11% to 13%. BOC:12000+. resulting in a large number of small to medium-sized institutions in its banking system. Regulation Currently in most jurisdictions commercial banks are regulated by government entities and require a special bank licence to operate.000 branches—more than double the 15.8% in the 2008/2009 financial year to a record $96. As of Nov 2009. This is an indicator of the geography and regulatory structure of the USA. is generally not included in the definition. In 2004. Japan had 129 banks and 12. Usually the definition of the business of banking for the purposes of regulation is extended to include acceptance of deposits. Germany. EU banks held the largest share of the total. 56% in 2008/2009. The United States has the most banks in the world in terms of institutions (7. France. down from 61% in the previous year.3bn in 2009.085 at the end of 2008) and possibly branches (82.

e. since each The bank has a lien on cheques deposited to the customer's account.Unlike most other regulated industries.g. The bank has a right to combine the customer's accounts. to The bank must not disclose details of transactions through the customer's account is just an aspect of the same credit relationship. and some commercial banks (such as theBank of Scotland) issue their own banknotes in addition to those issued by the Bank of England. a cheque drawn by the customer. the extent that the customer is indebted to the bank. 2. there is a public duty to disclose. . being either a publicly or privately governed central bank. account—unless the customer consents. 7. for example. plus any agreed overdraft limit. 3. the Financial Services Authority licences banks. 4. and to credit the proceeds to the customer's account. in some countries this is not the case. the customer owes the balance to the bank. when the account is overdrawn. customer's account as the customer's agent. Banking law is based on a contractual analysis of the relationship between the bank (defined above) and the customer—defined as any entity for which the bank agrees to conduct an account. The bank agrees to pay the customer's cheques up to the amount The bank may not pay from the customer's account without a mandate The bank agrees to promptly collect the cheques deposited to the standing to the credit of the customer's account. 5. the UK government's central bank. The law implies rights and obligations into this relationship as follows: 1.18 - . or the law demands it. the regulator is typically also a participant in the market. Central banks also typically have a monopoly on the business of issuing banknotes. The bank account balance is the financial position between the bank and the customer: when the account is in credit. However. the bank owes the balance to the customer. the bank's interests require it. from the customer. 6. In the UK.

Minimum capital Minimum capital ratio 'Fit and Proper' requirements for the bank's controllers. may be partly or wholly exempt from bank licence requirements. The statutes and regulations in force within a particular jurisdiction may also modify the above terms and/or create new rights. 4. Types of banks Banks' activities can be divided into retail banking. The requirements for the issue of a bank licence vary between jurisdictions but typically include: 1. 3. business banking. owners. directors. providing services to mid-market . and therefore regulated under separate rules. 2. obligations or limitations relevant to the bank-customer relationship. such as building societies and credit unions. Approval of the bank's business plan as being sufficiently prudent and or senior officers plausible.8. days. since cheques are outstanding in the ordinary course of business for several These implied contractual terms may be modified by express agreement between the customer and the bank. The bank must not close a customer's account without reasonable notice.19 - . dealing directly with individuals and small businesses. Some types of financial institution.

or are non-profit organizations. Salt Lake City 1908 . directed at large business entities.20 - . relating to activities on the financial markets. corporate banking.business. and investment banking. some are owned by government. private banking. providing wealth management services to high net worth individuals and families. However. Most banks are profit-making. private enterprises. Types of retail banks National Bank of the Republic.

Since the two no longer have to be under separate ownership. the U. Salt Lake City 1911  Commercial bank: the term used for a normal bank to distinguish it from an investment bank. . some use the term "commercial bank" to refer to a bank or a division of a bank that mostly deals with deposits and loans from corporations or large businesses.21 - . After the Great Depression.S. whereas investment banks were limited to capital market activities. Congress required that banks only engage in banking activities.ATM Al-Rajhi Bank National Copper Bank.

Ethical banks: banks that prioritize the transparency of all operations and make only what they consider to be socially-responsible investments. providing local and regional outreach—and by their socially responsible approach to business and society. savings banks were created on public initiative. Their original objective was to provide easily accessible savings products to all strata of the population. In some countries.22 - . Historically a minimum of USD 1 million was required to open an account. Nowadays. European savings banks have kept their focus on retail banking: payments. Postal savings banks: savings banks associated with national postal systems.000 for private investors. Credit unions: not-for-profit cooperatives owned by the depositors and often offering rates more favorable than for-profit banks.         . credits and insurances for individuals or small and medium-sized enterprises. in others. Building societies and Landesbanks: institutions that conduct retail banking. residents of a defined neighborhood. Offshore banks: banks located in jurisdictions with low taxation and regulation. they also differ from commercial banks by their broadly decentralised distribution network. savings banks took their roots in the 19th or sometimes even in the 18th century. Community banks: locally operated financial institutions that empower employees to make local decisions to serve their customers and the partners. over the last years many private banks have lowered their entry hurdles to USD 250. Private banks: banks that manage the assets of high net worth individuals. members of a certain labor union or religious organizations. Many offshore banks are essentially private banks. Typically. Community development banks: regulated banks that provide financial services and credit to under-served markets or populations. membership is restricted to employees of a particular company. however. socially committed individuals created foundations to put in place the necessary infrastructure. Savings bank: in Europe. and their immediate families. Apart from this retail focus. savings products.

Merchant banks were traditionally banks which engaged in trade finance. and advise corporations on capital market activities such as mergers and acquisitions. a portmanteau wordcombining "banque or bank" and "assurance". also distribute insurance— hence the term bancassurance. . refers to banks which provide capital to firms in the form of shares rather than loans. among other services. engage in several of these activities.23 - . The modern definition. conceived and implemented wholly with networked computers. they tend not to invest in new companies. Types of investment banks  Investment banks "underwrite" (guarantee the sale of) stock and bond issues. signifying that both banking and insurance are provided by the same corporate entity. more commonly known as financial services companies. such as supervising commercial banks. Other types of banks  Central banks are normally government-owned and charged with quasi- regulatory responsibilities. They generally provide liquidity to the banking system and act as the lender of last resortin event of a crisis. Unlike venture capital firms.  Both combined  Universal banks. make markets. however. These big banks are very diversified groups that. trade for their own accounts. or controlling the cash interest rate. A Direct or Internet-Only bank is a banking operation without any physical bank branches.

a concept that is forbidden in Islam. All banking activities must avoid interest. Instead. Islamic banks adhere to the concepts of Islamic law. . the bank earns profit (markup) and fees on the financing facilities that it extends to customers.24 - . This form of banking revolves around several well-established principles based on Islamic canons.

which no other financial institution can offer.25 - . Debit Cards  Collection of cheques. middle class. and technological innovations are all contributing to this growth. . bill of exchange. and the processes followed are in compliance with the local regulations and the Bank’s corporate policy.Banking Products The business of banking is highly regulated since banks deal with money offered to them by the public and ensuring the safety of this public money is one of the prime responsibilities of any bank.  Other Pra. These deposits can have a distinct feature can be withdrawn by cheques. Every bank has a compliance department.  Credit Cards. The Indian banking market is growing at an astonishing rate.Banking Sector Banking in a traditional sense is the business of accepting deposits of money from public for the purpose of lending and investment. That is why banks are expected to be prudent in their leading and investment activities. which include:  Issuing demand draft & traveler’s cheque. An expanding economy. banks also offer financial services.  Investment and Insurance Services. with Assets expected to reach US$1 trillion by 2010. which is responsible to ensure that all the services offered by the bank. In addition.  Safe deposit lockers  Custodian services.

The Indian banking Industry is in the middle of an IT revolution. which has resulted in innovative methods of offering new banking products and services. 1949  Foreign Exchange Management Act. Lending is risk taking. cars and other consumer durables and for investment purposes to individuals and the others. The depositor of banks is also assured of safety of their money by deploying some percentage of deposit in statutory reserves like SLR & CLR. However. increased standard of living. Players are becoming increasingly customer centric in their approach. banks do mot finance any speculative activity. It represent an important channel of collecting small saving from the households and ending it to the corporate sector.1999  Indian Contract Act  Negotiable Instruments Act.The country’s middle class accounts for over 320 million people. 1881 Bank lend money either for productive purposes to individual. . In correlation with the growth of the economy. firms. rising income levels.26 - . Banking System Banking system is an integral sub-system of the financial system. regulation. Corporate etc. and affordability of banking products are promising factors for continued expansion. of for buying house property. Banks are now realizing the importance of being a big player and are beginning to focus their attention on mergers and acquisitions to take advantage of economies of scale and/or comply with Basel II The major regulations and act govern the banking business are: Banking Regulation Act. focusing on the expansion of retail and rural banking.

00. 1965. It means they do mot satisfy the conditions laid down by that schedule. which are mot included in the second schedule of the Banking Regulations Act. Classification of Banks 1. The must satisfy the RBI than its affairs are mot conducted in a manner detrimental to the interests of its depositors. Non-Schedule Banks These are banks. 50.000. These are further classified as follow:  State co-operative Banks  Commercial Banks Banks are further sub-divided as:- . They are further classified as back:  Central co-operative banks and primary credit societies  Commercial Banks 2.27 - . Schedule Banks Must have paid-up capital and reserve of mot less than Rs.The Indian Banking system has the Reserve Bank of India (RBI) as the apex body for all matters relating to the banking system.

The Government of India Nationalized 14 private banks in 1969 and another 6 in the year 1980. artisans and small entrepreneurs. C. Indian Banks: These banks are companies registered in India under companies act. It was Established to operate exclusively in rural areas to provide credit and other facilities to small and marginal armers. 1956. Regional Rural Banks: The RBI established these in the year 1975 of Banking Commission. Old private Sector Banks: . B. agricultural alboras.. Other Nationalized Banks: This group consists of private sector bank that were national. D. State Bank of Hyderabad. State Bank of India and its Subsidiaries: This group comprises of the State Bank of India (SBI) and its seven subsidiaries viz. State Bank of Patiala.28 - . State Bank of Travancore. their place of origin is in India. These are further classified into.1. A. State Bank of Bikaner & jaipur State Bank of Indore.

Initially their branches slowly speard throughout the national as they grew.This group consists of Banks that were established by the privy states.29 - . 3. New Private Sector Banks: These banks were started as profit oriented companies after the RBI opened the banking sector to the private sector. . falling revenues from traditional sources. which are the mainstay of the Indian Banking System. PSBs. E. are in the process of shedding their flab in terms of excessive manpower. excessive non Performing Assets (NPAs) and excessive governmental equity. lack of modern technology and a massive workforce while the new private sector banks are forging ahead and rewriting the traditional banking business model by way of their sheer innovation and service. Foreign Banks: There are banks that were registered outside India and had origiented in a foreign country. these banks are monthly technology driven and betterment in their branches slowly spread throughout the nation as they grew. while on the other hand the private sector banks are consolidating themselves through mergers and acquisitions. the PSBs. On the one hand. Current Scenario: The industry is currently in a transition phase. community organization or by a group of professionals for the cause of economic betterment in their area of operations. which currently account for more than 78 percent of total banking industry assets are saddled with NPAs (a mind-boggling Rs 830 billion in 2000).

30 - . ICICI Bank’s acquisition of ITC Classic. phone banking. HDFC Bank’s merger with Times Bank. the industry has witnessed several such instances. The private players however cannot match the PSB’s great reach.The PSBs are of course currently working out challenging strategies even as 20 percent of their massive employee strength has dwindled in the wake of the successful Voluntary Retirement Schemes (VRS) schemes. Over the last two years. Automatic Teller Machines (ATMs) and combined various other services and integrated them into the mainstream banking arena. . Therefore one of the means for them to combat the PSBs has been through the merger and acquisition (M& A) route. anywhere banking. Anagram Finance and Bank of Madurai. and mobile banking. debit cards. For instance. while the PSBs are still grappling with disgruntled employees in the aftermath of successful VRS schemes. great size and access to low cost deposits. Private sector Banks have pioneered internet banking.

ABN AMRO. has been well defined under three separate heads with one page dedicated to each bank.31 - . The banker of all banks. ICICI. in the introduction part of the entire banking cosmos.INDIAN BANKING INDUSTRY The banking section will navigate through all the aspects of the Banking System in India. The last but not the least explains about the scheduled and unscheduled banks in India. etc. It will discuss upon the matters with the birth of the banking concept in the country to new players adding their names in the industry in coming few years. The description along with a list of scheduled commercial banks is given on this page. HSBC. However. Reserve Bank of India (RBI). the Indian Banks Association (IBA) and top 20 banks like IDBI. This has been elaborated in Nationalization Banks in India. Government took major step in the 1969 to put the banking sector into systems and it nationalized 14 private banks in the mentioned year. . Section 42 (6) (a) of RBI Act 1934 lays down the condition of scheduled commercial banks. the past has been well explained under three different heads namely: • • • History of Banking in India Nationalization of Banks in India Scheduled Commercial Banks in India The first deals with the history part since the dawn of banking system in India.

and four nominated Directors by the Central Government to represent the four local Boards with the headquarters at Mumbai. 1935. 1934 (II of 1934) provides the statutory basis of the functioning of the Bank. 100 each fully paid which was entirely owned by private shareholders in the begining. The Reserve Bank of India Act. The share capital was divided into shares of Rs. The Act. 5 crores on the basis of the recommendations of the Hilton Young Commission. one Government official from the Ministry of Finance.000.20. ten nominated Directors by the Government to give representation to important elements in the economic life of the country. The Government held shares of nominal value of Rs. . It was established in April 1935 with a share capital of Rs. 1934 was commenced on April 1. the Governor and four Deputy Governors.CENTRAL BANK OF INDIA RESERVE BANK OF INDIA (RBI): The central bank of the country is the Reserve Bank of India (RBI). Reserve Bank of India was nationalised in the year 1949.32 - . Local Boards consist of five members each Central Government appointed for a term of four years to represent territorial and economic interests and the interests of co-operative and indigenous banks. The Bank was constituted for the need of following: • • • To regulate the issue of banknotes To maintain reserves with a view to securing monetary stability and To operate the credit and currency system of the country to its advantage. Chennai and New Delhi. 2. Kolkata. The general superintendence and direction of the Bank is entrusted to Central Board of Directors of 20 members.

Government of India rupee securities. via. The Reserve . the assets of the Issue Department were to consist of not less than two-fifths of gold coin. the Reserve Bank of India is required to maintain gold and foreign exchange reserves of Ra. to keep the cash balances as deposits free of interest. of which at least Rs. The assets and liabilities of the Issue Department are kept separate from those of the Banking Department.Functions of Reserve Bank of India The Reserve Bank of India Act of 1934 entrust all the important functions of a central bank the Reserve Bank of India. 40 crores in value. Since 1957. The Reserve Bank is agent of Central Government and of all State Governments in India excepting that of Jammu and Kashmir. The distribution of one rupee notes and coins and small coins all over the country is undertaken by the Reserve Bank as agent of the Government. Banker to Government The second important function of the Reserve Bank of India is to act as Government banker. eligible bills of exchange and promissory notes payable in India. to receive and to make payments on behalf of the Government and to carry out their exchange remittances and other banking operations. agent and adviser. The remaining three-fifths of the assets might be held in rupee coins. The Reserve Bank has a separate Issue Department which is entrusted with the issue of currency notes. Originally. the Bank has the sole right to issue bank notes of all denominations. Bank of Issue Under Section 22 of the Reserve Bank of India Act. The Reserve Bank has the obligation to transact Government business. these provisions were considerably modified.33 - . gold bullion or sterling securities provided the amount of gold was not less than Rs. 200 crores. The system as it exists today is known as the minimum reserve system. 115 crores should be in gold. Due to the exigencies of the Second World War and the post-was period.

34 - .e. By an amendment of 1962. It acts as adviser to the Government on all monetary and banking matters. the distinction between demand and time liabilities was abolished and banks have been asked to keep cash reserves equal to 3 per cent of their aggregate deposit liabilities. Every bank has to get a licence from the Reserve Bank of India to do banking business within India. Since 1956.Bank of India helps the Government . selective controls of credit are increasingly being used by the Reserve Bank. Controller of Credit The Reserve Bank of India is the controller of credit i. the Reserve Bank of India can ask any particular bank or the whole banking system not to lend to particular groups or persons on the basis of certain types of securities. The Bank makes ways and means advances to the Governments for 90 days. Since commercial banks can always expect the Reserve Bank of India to come to their help in times of banking crisis the Reserve Bank becomes not only the banker's bank but also the lender of the last resort. According to the provisions of the Banking Companies Act of 1949. it has the power to influence the volume of credit created by banks in India. According to the Banking Regulation Act of 1949. the licence can be cancelled by the Reserve Bank of . It makes loans and advances to the States and local authorities. The scheduled banks can borrow from the Reserve Bank of India on the basis of eligible securities or get financial accommodation in times of need or stringency by rediscounting bills of exchange. every scheduled bank was required to maintain with the Reserve Bank a cash balance equivalent to 5% of its demand liabilites and 2 per cent of its time liabilities in India. Bankers' Bank and Lender of the Last Resort The Reserve Bank of India acts as the bankers' bank. It can do so through changing the Bank rate or through open market operations. The Reserve Bank of India is armed with many more powers to control the Indian money market. The minimum cash requirements can be changed by the Reserve Bank of India.both the Union and the States to float new loans and to manage public debt.

Custodian of Foreign Reserves The Reserve Bank of India has the responsibility to maintain the official rate of exchange. 10. (c) It controls the banking system through the system of licensing. The Reserve Bank has also the power to inspect the accounts of any commercial bank.6d. This power of the Bank to call for information is also intended to give it effective control of the credit system. the Reserve Bank of India. (b) It controls the credit operations of banks through quantitative and qualitative controls. has the following powers: (a) It holds the cash reserves of all the scheduled banks. According to the Reserve Bank of India Act of 1934. 6d. therefore. The rate of exchange fixed was Re. though there were periods of extreme pressure in favour of or against . Since 1935 the Bank was able to maintain the exchange rate fixed at lsh.certain stipulated conditions are not fulfilled. Each scheduled bank must send a weekly return to the Reserve Bank showing.35 - . in detail. 1 = sh. inspection and calling for information. the Bank was required to buy and sell at fixed rates any amount of sterling in lots of not less than Rs. (d) It acts as the lender of the last resort by providing rediscount facilities to scheduled banks. Every bank will have to get the permission of the Reserve Bank before it can open a new branch. As supereme banking authority in the country. its assets and liabilities.000.

F. After India became a member of the International Monetary Fund in 1946.M. the range of the Reserve Bank's functions has steadily widened. 1934. The Reserve Bank was asked to promote banking . management and methods of working. which. and liquidation. branch expansion. Besides maintaining the rate of exchange of the rupee.36 - . The supervisory functions of the RBI have helped a great deal in improving the standard of banking in India to develop on sound lines and to improve the methods of their operation. The Bank now performs a varietyof developmental and promotional functions. 1949 have given the RBI wide powers of supervision and control over commercial and co-operative banks. The nationalisation of 14 major Indian scheduled banks in July 1969 has imposed new responsibilities on the RBI for directing the growth of banking and credit policies towards more rapid development of the economy and realisation of certain desired social objectives. liquidity of their assets. the Reserve bank has certain non-monetary functions of the nature of supervision of banks and promotion of sound banking in India. at one time. The vast sterling balances were acquired and managed by the Bank. were regarded as outside the normal scope of central banking. The RBI is authorised to carry out periodical inspections of the banks and to call for returns and necessary information from them. the Reserve Bank has to act as the custodian of India's reserve of international currencies. the Reserve Bank has the responsibility of maintaining fixed exchange rates with all other member countries of the I. Further. The Reserve Bank Act. relating to licensing and establishments. amalgamation.the rupee. Promotional functions With economic growth assuming a new urgency since Independence. Supervisory functions In addition to its traditional central banking functions. the RBI has the responsibility of administering the exchange controls of the country. and the Banking Regulation Act. reconstruction.

amalgamation. the Reserve Bank of India set up the Agricultural Credit Department to provide agricultural credit. i. and establish and promote new specialised financing agencies. management and methods of working.. the Unit Trust of India in 1964. Monetary functions of the RBI are significant as they control and regulate the volume of money and credit in the country. however. the Industrial Development Bank of India also in 1964. Accordingly. But only since 1951 the Bank's role in this field has become extremely important. The supervisory function of the RBI may be regarded as a non-monetary function (though many consider this a monetary function). to eliminate moneylenders from the villages and to route its short term credit to agriculture. and to provide industrial finance as well as agricultural finance. inspection.37 - . Classification of RBIs functions The monetary functions also known as the central banking functions of the RBI are related to control and regulation of money and credit.these powers relate to licencing of banks. it set up the Deposit Insurance Corporation in 1962. extend banking facilities to rural and semi-urban areas. liquidity of their assets. reconstruction and . issue of currency. the Reserve Bank has helped in the setting up of the IFCI and the SFC. control of bank credit. banker to the Government and to the money market. The Bank has developed the co-operative credit movement to encourage saving. are the non-monetary functions of the RBI in the context of India's economic backwardness. the RBI has been given wide and drastic powers. the Agricultural Refinance Corporation of India in 1963 and the Industrial Reconstruction Corporation of India in 1972. control of foreign exchange operations.e. Equally important. The RBI has set up the Agricultural Refinance and Development Corporation to provide long-term finance to farmers. The promotion of sound banking in India is an important goal of the RBI.habit. branch expansion. As far back as 1935. These institutions were set up directly or indirectly by the Reserve Bank to promote saving habit and to mobilise savings. under the Banking Regulation Act of 1949 .

38 - .liquidation. the working of banks has greatly improved. . Under the RBI's supervision and inspection. The RBI's powers of supervision have now been extended to non-banking financial intermediaries. particularly after its nationalisation 1949. Since independence. the RBI has followed the promotional functions vigorously and has been responsible for strong financial support to industrial and agricultural development in the country. Commercial banks have developed into financially and operationally sound and viable units.

Financial Markets In the last decade. they started making debt in the market. With the openings in the insurance sector for these institutions. Private Sector Institutions played an important role. Competition among financial intermediaries gradually helped the interest rates to decline. The real interest rate was maintained. Since 1991. The borrowers did not pay high price while depositors had incentives to save. The important achievements in the following fields is discussed under serparate heads:           Financial markets Regulators The banking system Non-banking finance companies The capital market Mutual funds Overall approach to reforms Deregulation of banking system Capital market developments Consolidation imperative Now let us discuss each segment seperately. They grew rapidly in commercial banking and asset management business.39 - . every governments of India took major steps in reforming the financial sector of the country. It was something between the nominal rate of interest and the expected rate of inflation. Deregulation added to it.Financial and Banking Sector Reforms: The last decade witnessed the maturity of India's financial markets. .

small business and agricultural finance. Development finance institutions . the onus is on the Government to encourage the PSBs to be run on professional lines. The RBI has also been granting licences to industrial houses. in order to achieve an efficient banking system. The PSBs will play an important role in the industry due to its number of branches and foreign banks facing the constrait of limited number of branches. retail trade. Securities and Exchange Board of India (SEBI) and the Insurance Regulatory and Development Authority (IRDA) became important institutions. The Government accepted the important role of regulators. The RBI has given licences to new private sector banks as part of the liberalisation process. Many banks are successfully running in the retail and consumer segments but are yet to deliver services to industrial finance. Shares of the leading PSBs are already listed on the stock exchanges. PSBs are still dominating the commercial banking system. Hence. The banking system Almost 80% of the business are still controlled by Public Sector Banks (PSBs).Regulators The Finance Ministry continuously formulated major policies in the field of financial sector of the country.40 - . Opinions are also there that there should be a superregulator for the financial services sector instead of multiplicity of regulators. The Reserve Bank of India (RBI) has become more independant.

edged market occupies . The RBI has introduced a liquidity adjustment facility (LAF) in which liquidity is injected through reverse repo auctions and liquidity is sucked out through repo auctions.FIs's access to SLR funds reduced.41 - . The secondary market was underdeveloped and lacked liquidity. Convertibility clause no longer obligatory for assistance to corporates sanctioned by term-lending institutions. Now they have to approach the capital market for debt and equity funds.2 crores. The move to universal banking has started. has been raised to Rs. Primary dealers bid for these securities and also trade in them. The DFHI is the principal agency for developing a secondary market for money market instruments and Government of India treasury bills. The RBI conducts its sales of dated securities and treasury bills through its open market operations (OMO) window. asset management and insurance through separate ventures. Non-banking finance companies In the case of new NBFCs seeking registration with the RBI. the money market in India was narrow and circumscribed by tight regulations over interest rates and participants. the gilt. DFIs such as IDBI and ICICI have entered other segments of financial services such as commercial banking. Several measures have been initiated and include new money market instruments. Capital adequacy norms extended to financial institutions. On account of the substantial issue of government debt. strengthening of existing instruments and setting up of the Discount and Finance House of India (DFHI). the requirement of minimum net owned funds. Until recently.

The Securities Trading Corporation of India (STCI). the SEBI has now decided to concentrate on the development of the debt market.70. With the growth in the securities markets and tax . the industry had a framework for the establishment of many more players. which has led to retail investors deserting the stock markets.up. After bringing some order to the equity market. However. The capital market The number of shareholders in India is estimated at 25 million. only an estimated two lakh persons actively trade in stocks. Mutual funds The mutual funds industry is now regulated under the SEBI (Mutual Funds) Regulations. which started operations in June 1994 has a mandate to develop the secondary market in government securities. The Unit Trust of India remains easily the biggest mutual fund controlling a corpus of nearly Rs.an important position in the financial set. during recent times the stock markets have been constrained by some unsavoury developments.000 crores. The biggest shock to the mutual fund industry during recent times was the insecurity generated in the minds of investors regarding the US 64 scheme. Expectations are that India will be an attractive emerging market with tremendous potential. but its share is going down. There has been a dramatic improvement in the country's stock market trading infrastructure during the last few years.42 - . Unfortunately. both Indian and foreign players. 1996 and amendments thereto. With the issuance of SEBI guidelines. Long-term debt market: The development of a long-term debt market is crucial to the financing of infrastructure. Stamp duty is being withdrawn at the time of dematerialisation of debt instruments in order to encourage paperless trading.

mutual funds started becoming popular. but it can be expected that the customer will gain from improved service. of course.advantages granted for investment in mutual fund units. It is too early to conclude whether the erstwhile public sector monopolies will successfully be able to face up to the competition posed by the new players. They are introducing new products. an active corporate debt market and a developed derivatives market). Foreign companies can only enter joint ventures with Indian companies. On the whole. Overall approach to reforms The last ten years have seen major improvements in the working of various financial market participants. Some gaps however remain (for example: lack of an interbank interest rate benchmark. An indication of the strength of the reformed Indian financial system can be seen from the way India was not affected by the Southeast Asian crisis. with participation restricted to 26 per cent of equity. Technology developments have improved customer service. The insurance industry is the latest to be thrown open to competition from the private sector including foreign players. in order to improve the low per capita insurance coverage. The new players will need to bring in innovative products as well as fresh ideas on marketing and distribution. The entry of foreign players has assisted in the introduction of international practices and systems. The government and the regulatory authorities have followed a step-by-step approach. the cumulative effect of the developments since 1991 has been quite encouraging.43 - . not a big bang one. . Good regulation will. setting new standards of customer service. improving disclosure standards and experimenting with new types of distribution. The foreign owned AMCs are the ones which are now setting the pace for the industry. be essential.

The fate of the Fiscal Responsibility Bill remains unknown and high fiscal deficits continue. substantial capital were provided by the Government to PSBs. Government pre-emption of banks' resources through statutory liquidity ratio (SLR) and cash reserve ratio (CRR) brought down in steps. Without fiscal control. the political and legal structures hve to ensure that borrowers repay on time the loans they have taken. Bank lending norms liberalised and a loan system to ensure better control over credit introduced. even with the best of regulation. provisioning for delinquent loans and for capital adequacy. asset classification. financial stability cannot be ensured. The phenomenon of rich industrialists and bankrupt companies continues. PSBs were encouraged to approach the public for raising resources. punishment has to follow crime. Deregulation of banking system Prudential norms were introduced for income recognition. Banks asked to set up asset liability management (ALM) systems. Recovery of debts due to banks and the Financial Institutions Act. financial liberalisation alone will not ensure stable economic growth.However. which is often not the case in India. frauds cannot be totally prevented. Derivative products . In the case of financial institutions. Some tough decisions still need to be taken. In order to reach the stipulated capital adequacy norms. However. RBI guidelines issued for risk management systems in banks encompassing credit. and special recovery tribunals set up to facilitate quicker recovery of loan arrears.44 - . 1993 was passed. Further. New private sector banks allowed to promote and encourage competition. market and operational risks. Interest rates on the deposits and lending sides almost entirely were deregulated. A credit information bureau being established to identify bad risks.

1947. Capital market developments The Capital Issues (Control) Act. To reduce the cost of issue. The National Stock Exchange (NSE). the capital market regulator was established in 1992. Several local stock exchanges changed over from floor based trading to screen based trading. introduced capital adequacy norms for brokers. SEBI reconstituted governing boards of the stock exchanges. Indian companies were permitted to access international capital markets through euro issues.such as forward rate agreements (FRAs) and interest rate swaps (IRSs) introduced. office of the Controller of Capital Issues were abolished and the initial share pricing were decontrolled. clearing and settlement facilities was established. with nationwide stock trading and electronic display. The practice of making preferential allotment of shares at prices unrelated to the prevailing market prices stopped and fresh guidelines were issued by SEBI. Private mutual funds permitted The Depositories Act had given a legal framework for the establishment of depositories to record ownership deals in book entry form. Companies were required to disclose all material facts and specific risk factors associated with their projects while making public issues. and made rules for making client or broker relationship more transparent which included separation of client and broker accounts. Foreign institutional investors (FIIs) were allowed to invest in Indian capital markets after registration with the SEBI. underwriting by the issuer were made optional.45 - . repealed. subject to conditions. Dematerialisation of stocks encouraged paperless trading. . SEBI.

First. In the case of insurance. SEBI issued detailed employee stock option scheme and employee stock purchase scheme for listed companies. Companies given the freedom to issue dematerialised shares in any denomination. The SEBI (Credit Rating Agencies) Regulations. but the situation is different now. 1999 issued for regulating new credit rating agencies as well as introducing a code of conduct for all credit rating agencies operating in India. the Life Insurance Corporation of India is a behemoth. A system of rolling settlements introduced. SEBI empowered to register and regulate venture capital funds. and anyway play only a niche role. which at one time were much sought after jobs. 100 were abolished. Standard denomination for equity shares of Rs. A number of them can be merged. Steps were taken to improve corporate governance based on the report of a committee. while the four public sector general insurance companies will probably move towards .Buy back of shares allowed The SEBI started insisting on greater corporate disclosures.46 - . Consolidation imperative Another aspect of the financial sector reforms in India is the consolidation of existing institutions which is especially applicable to the commercial banks. Derivatives trading starts with index options and futures. Private sector banks will be self consolidated while co-operative and rural banks will be encouraged for consolidation. In India the banks are in huge quantity. there is no need for 27 PSBs with branches all over India. No one expected so many employees to take voluntary retirement from PSBs. 10 and Rs. The merger of Punjab National Bank and New Bank of India was a difficult one.

It is not possible to play the role of the Oracle of Delphi when a vast nation like India is involved. even though facing difficult times. Hi-tech and the need to meet increasing consumer needs is encouraging convergence. but the business being comparatively new for the private players. There are a number of small mutual fund players in the private sector. and the coming decade should be as interesting as the last one. In India organisations such as IDBI. and most other public sector players are already exiting the mutual fund business. the new buzzword internationally. . as there is a great deal of synergy among these businesses. The UTI is yet again a big institution. Both banks and insurance companies have started entering the asset management business. it will take some time.47 - . ICICI. Where mergers may not be possible. However. a few trends are evident. This phenomenon is expected to grow rapidly in the coming years.consolidation with a bit of nudging. alliances between organisations may be effective. HDFC and SBI are already trying to offer various services to the customer under one umbrella. Various forms of bancassurance are being introduced. with the RBI having already come out with detailed guidelines for entry of banks into insurance. We finally come to convergence in the financial sector. The LIC has bought into Corporation Bank in order to spread its insurance distribution network. The pensions market is expected to open up fresh opportunities for insurance companies and mutual funds. even though it has not always been a success till date.

Major Banks in India                                ABN-AMRO Bank Abu Dhabi Commercial Bank American Express Bank Andhra Bank Allahabad Bank Axis Bank (Earlier UTI Bank) Bank of Baroda Bank of India Bank of Maharastra Bank of Punjab Bank of Rajasthan Bank of Ceylon BNP Paribas Bank Canara Bank Catholic Syrian Bank Central Bank of India Centurion Bank China Trust Commercial Bank Citi Bank City Union Bank Corporation Bank Dena Bank Deutsche Bank Development Credit Bank Dhanalakshmi Bank Federal Bank HDFC Bank HSBC ICICI Bank IDBI Bank Indian Bank                              Indian Overseas Bank IndusInd Bank ING Vysya Bank Jammu & Kashmir Bank JPMorgan Chase Bank Karnataka Bank Karur Vysya Bank Laxmi Vilas Bank Oriental Bank of Commerce Punjab National Bank Punjab & Sind Bank Scotia Bank South Indian Bank Standard Chartered Bank State Bank of India (SBI) State Bank of Bikaner & Jaipur State Bank of Hyderabad State Bank of Indore State Bank of Mysore State Bank of Saurastra State Bank of Travancore Syndicate Bank Taib Bank UCO Bank Union Bank of India United Bank of India United Western Bank Vijaya Bank Kotak Mahindra Bank  Yes Bank .48 - .

These three banks remained at the apex of modern banking in India till their amalgamation as the Imperial Bank of India on 27 January 1921. Custodial Services. Private Equity. General Insurance. Point of Sale Merchant Acquisition. The Bank of Bombay (15 April 1840) and the Bank of Madras (1 July 1843) followed the Bank of Bengal. The bank is entering into many new businesses with strategic tie ups – Pension Funds. number of branches. Advisory Services. A unique institution. market capitalization and profits is today going through a momentous phase of Change and Transformation – the two hundred year old Public sector behemoth is today stirring out of its Public Sector legacy and moving with an agility to give the Private and Foreign Banks a run for their money. structured products etc – each one of these initiatives having a huge potential for growth. Three years later the bank received its charter and was re-designed as the Bank of Bengal (2 January 1809). Primarily Anglo-Indian creations. The State Bank of India. and was influenced by changes occurring in the structure of both the local trading environment and those in the relations of the Indian economy to the economy of Europe and the global economic framework. it was the first joint-stock bank of British India sponsored by the Government of Bengal. the three presidency banks came into existence either as a result of the compulsions of imperial finance or by the felt needs of local European commerce and were not imposed from outside in an arbitrary manner to modernise India's economy. . Their evolution was.49 - . shaped by ideas culled from similar developments in Europe and England. the country’s oldest Bank and a premier in terms of balance sheet size.Introduction of SBI The origin of the State Bank of India goes back to the first decade of the nineteenth century with the establishment of the Bank of Calcutta in Calcutta on 2 June 1806. however. Mobile Banking.

the Bank is also attempting to change old mindsets. on whole sale banking capabilities to provide India’s growing mid / large Corporate with a complete array of products and services.forming a formidable group in the Indian Banking scenario. SBI DFHI. The Bank is changing outdated front and back end processes to modern customer friendly processes to help improve the total customer experience. SBICAP Securities. SBI Life and SBI Cards . SBI Factors. With four national level Apex Training Colleges and 54 learning Centres spread all over the country the Bank is continuously engaged in skill enhancement of its employees. debit cards. looking at the vast untapped potential in the hinterland and proposes to cover 100. It is consolidating its global treasury operations and entering into structured products and derivative instruments. today it offers the largest banking network to the Indian customer. The bank is also looking at opportunities to grow in size in India as well as Internationally. and other electronic channels such as Internet banking. Today.50 - . It has also 7 Subsidiaries in India – SBI Capital Markets. Some of the training programes are attended by bankers from banks in other countries. It is the only Indian bank to feature in the Fortune 500 list. It presently has 82 foreign offices in 32 countries across the globe. It is also focusing at the top end of the market. the Bank is the largest provider of infrastructure debt and the largest arranger of external commercial borrowings in the country.The Bank is forging ahead with cutting edge technology and innovative new banking models. attitudes and take all employees together on this exciting road to Transformation. to expand its Rural Banking base.000 villages in the next two years. It is in the process of raising capital for its growth and also consolidating its various holdings. The Bank is also in the process of providing complete payment solution to its clientele with its over 8500 ATMs. With about 8500 of its own 10000 branches and another 5100 branches of its Associate Banks already networked. mobile banking. etc. In a recently concluded mass internal communication programme termed ‘Parivartan’ the . Throughout all this change.

The State Bank of India emerged as a pacesetter. the State Bank of India catered to the needs of the customers.51 - . The Plan aimed at serving the Indian economy in general and the rural sector of the country. the former state-owned or state-associate banks. Later on. . to drive home the message of Change and inclusiveness. inherited from the Imperial Bank. in order to serve the economy as a whole and rural sector in particular. Moreover. sub offices and three Local Head Offices. including the Imperial Bank of India. in 1951. Instead of serving as mere repositories of the community's savings and lending to creditworthy parties. The workshops fired the imagination of the employees with some other banks in India as well as other Public Sector Organizations seeking to emulate the Program.000 employees in a period of 100 days using about 400 Trainers. The Act enabled the State Bank of India to make the eight former State-associated banks as its subsidiaries. the State Bank of India (Subsidiary Banks) Act was passed in 1959. As a result. the State Bank of India (SBI) was established on 1 July 1955. The bank served the heterogeneous financial needs of the planned economic development. with its operations carried out by the 480 offices comprising branches. an Act was passed in the Parliament of India in May 1955. Subsequently. confined their services to the urban sector. by banking purposefully. because as much as a quarter of the resources of the Indian banking system were controlled directly by the State.Bank rolled out over 3300 two day workshops across the country and covered over 130. The All India Rural Credit Survey Committee proposed the take over of the Imperial Bank of India. Therefore. This resulted in making the State Bank of India more powerful. and integrating with it. the All India Rural Credit Survey Committee recommended the formation of a state-partnered and statesponsored bank. Until the Plan. An important turning point in the history of State Bank of India is the launch of the first Five Year Plan of independent India. in particular. the commercial banks of the country. they were not equipped to respond to the growing needs of the economic revival taking shape in the rural areas of the country.

52 - .Branches The corporate center of SBI is located in Mumbai. etc. located at major cities throughout India. there are several other establishments in and outside Mumbai. apart from the corporate center. it offers various services including merchant banking services. State Bank of Indore. The bank boasts of having as many as 14 local head offices and 57 Zonal Offices. fund management. credit cards and insurance. primary dealership in government securities. factoring services. The Bank also facilitates the free transaction of money at the ATMs of State Bank Group.Well networked to cater to its customers throughout India. which includes the ATMs of State Bank of India as well as the Associate Banks – State Bank of Bikaner & Jaipur. ATM Services SBI provides easy access to money to its customers through more than 8500 ATMs in India. Subsidiaries The State Bank Group includes a network of eight banking subsidiaries and several non-banking subsidiaries. State Bank of Hyderabad. In order to cater to different functions. It is recorded that SBI has about 10000 branches. Through the establishments. You may also transact money through SBI Commercial and International Bank Ltd by using the State Bank ATM-cum-Debit (Cash Plus) card. The eight banking subsidiaries are: • • • State Bank of Bikaner and Jaipur (SBBJ) State Bank of Hyderabad (SBH) State Bank of India (SBI) .

where it has 84 offices serving the international needs of the bank's foreign customers.53 - . Foreign Branches: SBI has branches in these countries:            Australia Bahrain Bangladesh Belgium Canada Dubai France Germany Hong Kong Israel Japan .• • • • • State Bank of Indore (SBIR) State Bank of Mysore (SBM) State Bank of Patiala (SBP) State Bank of Saurashtra (SBS) State Bank of Travancore (SBT) Foreign Offices: State Bank of India is present in 32 countries. The focus of these offices is India-related business. and in some cases conducts retail operations.

U. with over 4500 branches being incorporated so far.S. the SBI has extensive coverage. The bank .A Subsidiaries and Joint Ventures: In addition to the foreign branches above.         • People's Republic of China Republic of Maldives Singapore South Africa Sri Lanka Sultanate of Oman The Bahamas U. Following its arch-rival ICICI Bank.K. most notably during Chandra Shekhar's tenure as Prime Minister of India. State Bank of India has electronically networked most of its metropolitan.54 - . SBI has these wholly owned subsidiaries and joint ventures:      • Nepal State Bank Limited SBI Mauritius Indian Ocean International Bank (Mauritius) SBI Canada SBI California Growth: State Bank of India has often acted as guarantor to the Indian Government. With more than 9400 branches and a further 4000+ associate bank branches. urban and semi-urban branches under its Core Banking System (CBS).

The State Bank of India has had steady growth over its history.1. Fortune Global 500 Ranking – 2007: SBI debuted in the Fortune Global 500[2] at 498 in 2006.786. Revenues 15. According to the Forbes 2000 listing it tops all Indian companies.has the largest ATM network in the country having more than 5600 ATMs [1]. It is the only Indian bank to feature in the top 100 world banks in the Fortune Global 500 rating and various other rankings. In recent years.3.119. Assets 187.2 Group companies:         SBI Capital Markets Ltd SBI Mutual Fund (A Trust) SBI Factors and Commercial Services Ltd SBI DFHI Ltd SBI Cards and Payment Services Pvt Ltd SBI Life Insurance Co.55 - .Banc assurance (Life Insurance) SBI Funds Management Pvt Ltd SBI Canada IT Initiatives: .4.547.407. the bank has sought to expand its overseas operations by buying foreign banks. As per fortune 500-2007 following are the data for SBI in $ million. Ltd . though the Harshad Mehta scam in 1992 marred its image. Stockholders' Equity 9. Profits 1. In 2007 it moved up to 495.

carrying all applications. No. The new infrastructure serves as the bank's backbone.000 branches have been covered. As of December 2006. State Bank of India is India's largest bank amongst all public and private sector banks operating in India.000 by the end of 2007 raising the total number to 8. Corporate Details: State Bank of India is actively involved since 1973 in non-profit activity called Community Services Banking. such as the IP telephone network. 2007 SBI has 7236 ATMs. Internet banking and internal e-mail. 20. . over 10. As of September 20. State Bank of India owns and operates the following subsidiaries and Joint Ventures –  State Bank Of India Credit Card  State Bank Of India Online  State Bank Of India USA  State Bank Of India Services  State Bank Of India Mutual Funds  State Bank Of India Branch  State Bank Of India NRI Account Foreign Subsidiaries:  State bank of India International (Mauritius) Ltd. The first and the second phases of the project have already been completed and the third phase is still in progress.According to PM Network (December 2006. ATM network.56 - . Vol. The new infrastructure has enabled the bank to further grow its ATM network with plans to add another 3.600.000 domestic and 70 foreign offices and branches. State Bank of India launched a project in 2002 to network more than 14. 12).

INMB Bank Ltd. State Bank of India (Canada). The main activities of are into - . Ltd. State Bank of India has 52 foreign offices in 34 countries across the globe. Non.57 - .   State Bank of India (California). (SBICPSL) Joint ventures:  SBI Life Insurance Company Ltd (SBI LIFE). Lagos. The Corporate Accounts Group is a Strategic Business Unit of the Bank set up exclusively to fulfill the specialized banking needs of top corporate in the country.banking Subsidiaries      SBI Capital Markets Ltd (SBICAP) SBI Funds Management Pvt Ltd (SBI FUNDS) SBI DFHI Ltd (SBI DFHI) SBI Factors and Commercial Services Pvt Ltd (SBI FACTORS) SBI Cards & Payments Services Pvt. The State Bank of India 14 Local Head Offices and 57 Zonal Offices are located at important cities spread throughout the country. Activities: State Bank of India administrative structure is well equipped to oversee the large network of branches in India and abroad.

NRI Services. SBI Vishwa Yatra Foreign Travel Card.       Personal Banking. Moreover.58 - . Safe Deposit Lockers. E-Pay. Internet Banking. Foreign Inward Remittances. SME. Corporate. Domestic Treasury. State Bank of India offers the following services to its customers              Domestic Treasury. ATM Services. Performance: . Broking Services Revised Service Charge. RBIEFT. International. Agriculture. MICR Codes. State Bank of India has Colleges/Institutes/Training Centers that are the seats of learning and research and development. It caters not only to the employees of State Bank of India but also other banks/establishments in India and abroad. Gift Cheques. E-Rail.

State Bank of India has posted Net Income to the tune of Rs 6364.59 - .SBI Bank India had Total Income of Rs 68376. Products And Services Personal Banking • • • • • SBI Term Deposits SBI Loan For Pensioners SBI Recurring Deposits Loan Against Mortgage Of Property SBI Housing Loan Loan Against Shares & Debentures SBI Car Loan Rent Plus Scheme SBI Educational Loan Medi-Plus Scheme Other Services • • • • • • • • • • • • • • • Agriculture/Rural Banking NRI Services ATM Services Demat Services Corporate Banking Internet Banking Mobile Banking International Banking Safe Deposit Locker RBIEFT E-Pay E-Rail SBI Vishwa Yatra Foreign Travel Card Broking Services Gift Cheques .38 crore or the financial year 2006 -07.83 crore for the financial year 2006 -07.

P. patronised by over 80% of the top corporate houses of the country. Network 18 recognized this momentous transformation journey.Grameen EQUITY Shakti. SBI Mutual Fund is a joint venture between the State Bank of India and Société Générale Asset Management. Mr.SARAL ULIP Protection Plans: Specialized Term Insurance:Retirement Solutions: SBI Life . 2008 – SBI Life Insurance has achieved a unique distinction of ranking third globally in terms of number of Million Dollar Round Table (MDRT) . The fund traces its lineage to SBI . the State Bank of India is undertaking. and has awarded the prestigious Indian of the Year – Business.The CNN IBN. Mumbai. O.Swadhan (Group): SBI Life Dhanaraksha Plus: SBI Life . The institution has grown immensely since its inception and today it is India's largest bank. one of the world’s leading fund management companies that manages over US$ 500 Billion worldwide. August 26.India’s largest banking enterprise. Health Products: ALL TYPES SBI Mutual Fund is India’s largest bank sponsored mutual fund and has an enviable track record in judicious investments and consistent wealth creation. Bhatt in January 2008 INVESTMENT MUTUAL FUND EQUITY SCHEMES DABT SCHEMES BALANCED SCHEMES LIFE INSURENCE EXCHANGE TREADED SCHEMES Unit Linked Products: Pension Products:Pure Protection Products:Protection cum Savings Products:Money Back Scheme Products:SBI Life . to its Chairman.60 - .

Mr.662 SBI Life Insurance India Northwestern 4 5 11 14 22 68 69 Mutual AIA-Hong Kong LIC of India USA Hong Kong India 1. O.662 have qualified for the prestigious MDRT membership. 1.167 1. . P.486 2. Among these.000 SBI Life Insurance Advisors.411 1. The board in addition to monitoring corporate performance also carries out functions such as approving the business plan. 124 qualified for Court of Table (COTs) and 20 for Top of Table (TOTs). 2008 RANK COMPANY NAME COUNTRY 1 2 3 Samsung Life Ins New York Life Korea USA MEMBERS 2. Of the 40.159 595 536 343 125 124 HDFC Standard Life India Max New York Life India ICICI Pru Birla Sunlife India India Management The bank has 14 directors on the Board and is responsible for the management of the Bank’s business. reviewing and approving the annual budgets and borrowing limits and fixing exposure limits.members. Bhatt is the Chairman of the bank.61 - .

62 - .The five-year term of Mr. Bhatt would be a key to SBI’s future growth momentum. Bhatt was Managing Director at State Bank of Travancore. The positions of CFO and the head of treasury have been segregated. The management’s thrust on growth of the bank in terms of network and size would also ensure encouraging prospects in time to come. Mr. . Bhatt has more than 30 years of experience in the Indian banking industry and is seen as futuristic leader in his approach towards technology and customer service. were depending on informal sources and moneylenders. the senior management of the bank has been broadened considerably. Bhatt will expire in March 2011. Prior to this appointment. therefore.A noble mission to reach those families who were hitherto having no access to the credit by any formal financial institution and. Mr. and new heads for rural banking and for corporate development and new business banking have been appointed. Micro Credit / Micro Finance : State Bank of India SHG Movement . Bhatt has had the best of foreign exposure in SBI.Deep Roots in SBI: Micro finance is not new to State Bank of India.A Mission: SBI has taken up SHG movement as a mission. Mr. We believe that the appointment of Mr.Bank's association with non-government organizations (NGOs) or voluntary agencies in extending financial help can be traced as far back as 1976 well before NABARD introduced SHG-Bank Credit Linkage Programme as a pilot project in 1992. T S Bhattacharya is the Managing Director of the bank and known for his vast experience in the banking industry. Recently. Micro Finance . Mr.

30.691 5.74.08.396 6.Bank Credit Linkage SBI is maintaining its position as a leader among Commercial Banks in credit linking of SHGs and is a prime driver for the movement.07.33.08 cr. SBI's branches spread throughout the length and breadth of the country have opened 6.660 21.84 cr.481 12. The yearwise cumulative position of SHGs-Bank Linkage programme for the last 4 years is as under: Year SHGs linked (financed) No. in Rs. SBI with a share of approximately 47% of total SHGs financed by Commercial Banks is far ahead of others.666 3.Since then the Bank has made a steady progress in financing SHGs. 434.752 48. 2.36 cr. (Amt.05 March .41 lac SHGs have been provided with credit facilities thus benefiting more than 75 lac poor people.11.69.As on March 2006. Innovations & Initiatives Bank has successfully initiated various measures toward widening its SHG network.Leader in SHG .466 3. 269.87 cr. of SHGs maintaining Savings a/c in the Bank Amount in Savings a/c 261.Bank Credit Linkage Programme: SBI has actively participated in SHG-Bank Credit Linkage programme since its inception in 1992 as a pilot project of NABARD.79.568 5.Majority of these SHGs are women SHGs.Steady Growth in SHG .07 cr. March .40.06 1. 1459.36.067 Savings Bank account of SHGs out of which more than 5.067 SBI .63 - .04 March .553 1. 872.50. 2262.) 348.31 cr.03 March .43.842 324.674 75.To list a few examples: .89 cr. 1311.68. 411.45 cr.As at the end of March 2006. of beneficiaries Amount disbursed Amount outstanding No.77 cr. 462. 614.43 cr.95 cr.82 cr.

. (iii) Close liaison with NGOs Operating functionaries at branch level and region level are in close contact with NGOs in their area to take the movement ahead.Under the scheme formulated keeping the socio economic conditions of villages insight. Hyderabad.(i) Sensitisation of staff Bank's aim is to sensitise the entire staff from Manager to Messenger working in rural and semi-urban branches towards the programme. . (viii) Rural training institutes: To help the rural youth to stand on their feet. (vii) SBI Life . 10 years.64 - . is the first to introduce a life insurance scheme. two RUDSETI type training institutes have been established at Gulbarga and Gadag in Karnataka State. especially designed for SHG members.Response to this product is very encouraging.e. i.For the purpose. (vi) Sahayog Niwas: SBI has launched its Housing Loan product ‘SAHAYOG NIWAS meant for SHG members.Special feature of the scheme is that entire premium amount paid by the member is refunded after maturity. our insurance subsidiary. regular meetings are arranged with the NGOs and their support is solicited.Shakti: SBI Life. (ii) Special training programmes in SHGs are being conducted at 54 training centres of the Bank in the country apart from State Bank Institute of Rural Development. (v) Lending to NGOs / Federations of SHGs: Lending to credible NGOs / Federations of SHGs on selective basis for on lending to SHGs is being encouraged. to impart training in self employment to youth free of cost. housing loans are given to the SHG members without any mortgage of house / land. (iv) SHG cells: Special SHG cells have been opened at major branches.

(ix) SBI staff as SHPI: The main role of formation and nurturing of SHGs have been played by NGOs who, apart from their fundamental role of social service, also aim to make the poor economically self sufficient.But in SBI, our committed work force is not lagging behind and a number of committed staff members have worked hard to form and nurture SHGs on their own. (x) Appreciation by Government: A number of our branches / Circles have also received commendation and appreciation from various State Governments for doing excellent job in SHG-Bank Credit Linkage programme. NABARD felicitated 15 SHGs at a function organized in New Delhi on 13th September 2005.The function was presided over by the Hon’ble Union Finance Minister.Out of total 15 SHGs felicitated, 4 were financed by our branches, one each from Orissa, Jharkhand, Madhya Pradesh and Uttaranchal. (xi) Samanwita: Bank has sponsored and financially supported NGO SAMANWITA in collaboration with Government of Orissa for supplementing the process of socio economic upliftment of the tribals and the downtrodden in the poorest and most backward Kandhamal district of Orissa State where 52% of the population is that of tribals.Core activities performed by Samanwita is empowerment of people through promotion of SHGs, especially women SHGs and development of human resources. (xii) SHPI status: State Bank of India is the first Commercial Bank to which NABARD has recently given SHPI status. Future Plans SBI has set for itself an ambitious target of credit linking 1 million SHGs up to March 2008.The Bank has started to leverage our vast SHG network for various services beyond credit delivery.

INTRODUCTION OF ICICI BANK

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ICICI Group offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised group companies, subsidiaries and affiliates in the areas of personal banking, investment banking, life and general insurance, venture capital and asset management. With a strong customer focus, the ICICI Group Companies have maintained and enhanced their leadership position in their respective sectors. ICICI Bank is India's second-largest bank with total assets of Rs. 3,793.01 billion (US$ 75 billion) at March 31, 2009 and profit after tax Rs. 37.58 billion for the year ended March 31, 2009. The Bank has a network of 1,451 branches and about 4,721 ATMs in India and presence in 18 countries.

HITORY
1955: The Industrial Credit and Investment Corporation of India Limited (ICICI) incorporated at the initiative of the 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%

1961:

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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 1972: The second entity in India to set up merchant banking services 1977: ICICI sponsored the formation of Housing Development Finance Corporation. Managed its first equity public issue. 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 1993: Promoted TDICI - India's first venture capital company

1994:

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ICICI Securities and Finance Company Limited in joint venture with J. ICICI Bank set up.68 - . P. Morgan set up 1996: ICICI Asset Management Company set up. ICICI assigned higher than sovereign rating by Moody's. ICICI Ltd became the first company in the Indian financial sector to raise GDR 2000: ICICI launched retail finance . house loans and loans for consumer durables. 2002: ICICI Ltd merged with ICICI Bank Ltd to create India's second largest bank in terms of assets. . : ICICI Bank launched India's first CDO (Collateralised Debt Obligation) Fund named Indian Corporate Collateralised Debt Obligation Fund (ICCDO Fund). ICICI becomes the first Indian Company to list on the NYSE through an issue of American Depositary Shares 2001: ICICI Bank became the first commercial bank from India to list its stock on NYSE.car loans. The Boards of ICICI Ltd and ICICI Bank approved the merger of ICICI with ICICI Bank. ICICI Bank announces merger with Bank of Madura.

a self-service banking centre inaugurated in Pune. India's first ever "Visa Mini Credit Card". ICICI Bank's representative office inaugurated in Dubai. Mumbai. launched. ATM-on-Wheels.69 - . Representative office set up in China. the first-ever permanent aggregation and display of housing projects in the county. launched in Pune. launched in Mumbai. ICICI Bank launched Private Banking. ICICI Bank announced the setting up of its first ever offshore branch in Singapore. a 43% smaller credit card in dimensions launched. 2003: The first Integrated Currency Management Centre launched in Pune. It was the first of its kind in India. ICICI Bank's UK subsidiary launched."E Lobby". 1100-seat Call Centre set up in Hyderabad ICICI Bank Home Shoppe. The first offshore banking unit (OBU) at Seepz Special Economic Zone. India's first mobile ATM. .

a pioneering initiative to encourage the contribution of Small and Medium Enterprises to the growth of Indian economy.m. ICICI Bank and Visa jointly launched mChq – a revolutionary credit card on the mobile phone. to 8 p.m. 2005: ICICI Bank and CNBC TV 18 announced India's first ever awards recognising the achievements of SMEs. Temasek Holdings acquired 5.ICICI Bank subsidiary set up in Canada.70 - . from Monday to Saturday. ICICI Bank introduced the concept of floating rate for home loans in India. First rural branch and ATM launched in Uttar Pradesh at Delpandarwa. The MFI would undertake the promotional role of identifying. ICICI Bank became the market leader in retail credit in India.2% stake in ICICI Bank. "Free for Life" credit cards launched wherein annual fees of all ICICI Bank Credit Cards were waived off. ICICI Bank introduced 8-8 Banking wherein all the branches of the Bank would remain open from 8a. Hardoi. training and promoting the micro-finance clients and ICICI Bank would finance the clients directly on the recommendation of the MFI. 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).

71 - . ICICI Bank's USD 2 billion 3-tranche international bond offering was the largest bond offering by an Indian bank. First Indian company to make a simultaneous equity offering of $1. Andhra Pradesh. Representative offices opened in Thailand. 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.8 billion in India. Acquired Ivestitsionno Kreditny Bank of Russia. A lowcost solution. . a nationwide Golf tournament for high networth clients of the private banking division launched.'NRI smart save Deposits' – a unique fixed deposit scheme for nonresident Indians. Indonesia and Malaysia. Bhoomi puja conducted for a regional hub in Hyderabad.Private Banking Masters 2005. financial planning and debt management services. ICICI Bank became the largest bank in India in terms of its market capitalisation 2007: Introduced a new product . Disha provides free credit counseling. this became an effective delivery option for ICICI Bank's micro finance institution partners. the United States and Japan. Financial counseling centre Disha launched. This event is the largest domestic invitation amateur golf event conducted in India.

ICICI Bank became the first bank in India to launch a premium credit card -.The Visa Signature Credit Card. ICICI Bank became the first private bank in India to offer both floating and fixed rate on car loans. ICICI Bank launched the "Probationary Officer Programme". ICICI Bank raised Rs 20. an online resource centre. finance and grow their business.72 - . nation wide initiative to attract bright graduate students to pursue a career in banking. Foundation stone laid for a regional hub in Gandhinagar. Launched India's first ever jewellery card in association with jewelry major Gitanjali Group. In a first of its kind. 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. Introduced SME Toolkit. construction equipment loans and professional equipment loans.000 crore (approx $5 billion) from both domestic and international markets through a follow-on public offer. Gujarat.Sangli Bank amalgamated with ICICI Bank.5 billion syndication loan agreement in Singapore. to help small and medium enterprises start. commercial vehicles loans. ICICI Bank signed a multi-tranche dual currency US$ 1. .

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. 2008: ICICI Bank enters US. ICICI Bank concluded India's largest ever securitisation transaction of a pool of retail loan assets aggregating to Rs. BANK SEVIES .96 billion (equivalent of USD 1. 48. Russia. ICICI Bank launched iMobile. opens its first branch in Frankfurt.21 billion) in a multitranche issue backed by four different asset categories.73 - . a breakthrough innovation in banking where practically all internet banking transactions can now be simply done on mobile phones. ICICI Bank enters Germany. launches its first branch in New York. 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.

74 - .• Personal Banking o o o o Savings & Deposits Loans Cards Wealth management • • Global Private Clients Corporate Banking o o o o o o o o Transaction Banking Treasury Banking Investment Banking Capital Markets Custodial Services Rural & Agri Banking Structured Finance • Business Banking Technology Finance o Current Account o Business o Forex o Trade o Cash Loans Management • NRI Banking o o o o o o Services Money Transfer Bank Accounts Investment Property Solutions Insurance Loans INSURENCE & INVESTMENT • Life Insurance o o Life Insurance Retirement Solutions .

75 - .o o Health Solutions o o General Insurance Education Solutions Health Insurance Overseas Travel Student Medical Motor Insurance Insurance o Insurance o o • Securities o o o o Home Insurance Corporate Finance Primary Dealership Institutional Equities Retail Equities Our Funds Performance Analyser Systematic Investing Compare Schemes • Mutual Fund o o o o • Private Equity Practice INVESTOR RELATIONS .

ICICI Bank provides a range of commercial banking and project finance products and services. including loan products.It is ICICI Group's belief that all stakeholders should have access to complete information regarding its position to enable them to accurately assess its future potential. Its commercial banking operations for retail customers consist of retail lending and deposits.        Annual Reports Investor Presentations Quarterly Financial Results Share price and ownership SEC Filings Credit Ratings Investor FAQs NATURE OF BUSINESS: ICICI is a financial intermediary which brings together the savers and borrowers in the economic system. as well as issuance of unsecured redeemable bonds. In the pursuit of these objectives the ICICI Bank Limited (ICICI Bank) offers products and services in the areas of commercial banking to retail and corporate customers (both domestic and international). deposits and . treasury and investment banking and other products. It collects funds from surplus units and lends the same to those units whose income exceeds its expenditure. distribution of third-party investment products and other fee-based products and services. such as insurance and asset management. fee and commission-based products and services. ICICI Group regularly publishes information on its operations and various initiatives for its investors.76 - .

growth-oriented middle market companies and small and medium enterprises. This we hope to achieve by:  Understanding the needs of customers and offering them superior products and service Leveraging technology to service customers quickly. 1956 and licensed as a bank under the Banking Regulation Act. Health and Pensions player built on trust by world-class people and service.77 - . is the joint stock company which is incorporated under the Companies Act. efficiently and conveniently  . VISION To be the leading provider of financial services in India and a major global bank.foreign exchange and derivatives products to corporations. To be the preferred brand for total financial and banking solutions for both corporates and individuals To be the dominant Life. ONWNERSHIP TYPE JOINT STOCK COMPANY: ICICI BANK LIMITED. 1949 ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE).

there are no limits to our growth. maintain a healthy financial profile and diversify our earnings across businesses and geographies. contribute positively to the various countries and markets in which we operate. where we can play a significant role in redefining and reshaping the sector. MISSION We will leverage our people. Ownership and Passion. We do believe that we are on the threshold of an exciting new opportunity. expand the frontiers of our business globally. create value for our stakeholders Provide the social facilities to the society        . Given the quality of our parentage and the commitment of our team. speed and financial capital to:  Be the banker of first choice for our customers by delivering high quality. play a proactive role in the full realisation of India’s potential. Developing and implementing superior risk management and investment strategies to offer sustainable and stable returns to our policyholders Providing an enabling environment to foster growth and learning for our employees And above all. Boundaryless. the qualities of our people and the way we work.Integrity.78 - . Each of the values describe what the company stands for. technology. Customer First. building transparency in all our dealings   The success of the company will be founded in its unflinching commitment to 5 core values -. maintain high standards of governance and ethics. worldclass products and services.

IN order to build some brand equity by doing social service, ICICI Bank has decided to undertake a MISSION for reducing low birth weight incidence at the village level. Undertaken by ICICI Bank's Social Initiatives Group, the bank has decided to identify effective and scalable strategies for delivering the services required to impact female nutritional status to tackle the incidence of low birth babies. Appointing several partners to work on this project an ICICI Bank official says, ``This is going to be a significant MISSION supported by the bank and the aim to understand whether a suitably trained health worker working with the public health system and the integrated child development scheme can provide quality services to impact low birth incidence at the village level.'' The MISSION is based in Ranchi district in Jharkhand and is being implemented through a partnership between the Department of Health, Government of Jharkhand, Krishi Gram Vokas Kendra(KGVK) and Care, both of whom are NGOs based in Jharkhand and the Child in Need Institute (CINI), an NGO based in West Bengal. Adds the ICICI Bank official, ``ICICI Bank needs to participate in the all round development of the country by focusing on some of its fundamental problems. It seeks to perform this role primarily as a funding agency, through its Social Initiatives Group.'' ICICI Bank's Social Initiative Group's (SIG) mission is ``to identify and support initiatives designed to improve the capacities of the poorest of the poor to participate in the larger economy.'' The group seeks to achieve its mission by supporting initiatives that are costeffective, capable of large-scale replication and have the potential for near and longterm impact. ``ICICI Bank believes in strengthening or supplementing existing systems rather than investing in parallel structures.
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The purpose is also to build long-term relationships with sustainable partners,'', adds the bank official. In the past, ICICI Bank has undertaken projects in the area of elementary education and micro financial services.

REGISTERED OFFICE
ICICI Bank Limited Registered Office: Landmark, Race Course Circle, Vadodara 390 007. Corporate Office: ICICI Bank Towers, Bandra Kurla Complex, Mumbai 400 051.

SUBSIDIARIES

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ORGANITION STRUCTURE
An organization structure as an integral part of a system or a group. It has to accept the discipline and regulatory ethics of the system/group. It has also to compete within the group and strive to excel in its performance. An organization structure also operates with in a social, economic and political environment We believe that the structure of an organization needs to be dynamic, constantly evolving and responsive to changes both in the external and internal environments. Our organizational structure is designed to support our business goals, and is flexible while at the same time ensuring effective control and supervision and consistency in standards across business groups.

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82 - ..

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says Reddy. and that microfinance provides a new. these clients had never been served by a formal lending institution. But why would ICICI. ICICI Bank is now lending to 1.20 billion (US$4. 9. ICICI Bank sees an opportunity to make profits in untouched markets.84 - . be interested in serving low-income segments? Simply because it recognizes that poor people are bankable. profitable opportunity. "There is no dearth of funds today. while improving the lives of poor people. says Padmaja Reddy. "We need to stop sending government and funding agencies the signal that microfinance is not a commercially viable system". interest rates have also dropped. From 10. the largest private bank in India.000 microfinance clients in 2001. says Nachiket Mor. 0. Spandana.ICICI Banks the Poor in India: Demonstrates That Serving Low-Income Segments Is Profitable The traditional image of microfinance is one of a charitable activity conducted mostly by non-profit organizations and separate from the mainstream financial system. as banks are looking into MFIs favorably.2 million clients through its partner microfinance institutions. and its outstanding portfolio has increased from Rs. unlike a few years ago". And with banks entering the sector. A few years ago. and ICICI believes grant money should be limited to the creation of facilitative infrastructure.98 billion (US$227 million). led by ICICI Bank. "Interest rates have come down from 14% to 10%". . the sector has changed rapidly. However. As a result of banks entering the game. Who would not appreciate the winwin of this situation? Rapid Growth ICICI's microfinance portfolio has been increasing at an impressive speed. this image has been changing in India in the last few years as commercial banks have been widely entering the sector.5 million) to Rs. There is an increasing shift in the microfinance sector from grant-giving to investment in the form of debt or equity. the CEO of one of ICICI Bank's major MFI partners. Executive Director of ICICI Bank.

Partnership Models
But how has ICICI Bank been able to achieve such rapid growth in such a short time? This success is due to a series of innovative models and initiatives. While a model of microfinance has emerged in recent years in which a microfinance institution (MFI) borrows from banks and on-lends to clients, few MFIs have been able to grow beyond a certain point. Under this model, MFIs are unable to provide risk capital in large quantities, which limits the advances from banks. In addition, the risk is being entirely borne by the MFI, which limits its risk-taking.

The MFI as Collection Agent
To address these constraints, ICICI Bank initiated a partnership model in 2002 in which the MFI acts as a collection agent instead of a financial intermediary. This model is unique in that it combines debt as mezzanine finance to the MFI.[1] The loans are contracted directly between the bank and the borrower, so that the risk for the MFI is separated from the risk inherent in the portfolio. This model is therefore likely to have very high leveraging capacity, as the MFI has an assured source of funds for expanding and deepening credit. ICICI chose this model because it expands the retail operations of the bank by leveraging comparative advantages of MFIs, while avoiding costs associated with entering the market directly.

Securitisation
Another way to enter into partnership with MFIs is to securitize microfinance portfolios. In 2004, the largest ever securitisation deal in microfinance was signed between ICICI Bank and SHARE Microfin Ltd, a large MFI operating in rural areas of the state of Andra Pradesh. Technical assistance and the collateral deposit of US$325,000 (93% of the guarantee required by ICICI) were supplied by Grameen Foundation USA. Under this agreement, ICICI purchased a part of SHARE's microfinance portfolio against a consideration calculated by computing the Net Present Value of receivables amounting to Rs. 215 million (US$4.9 million) at an agreed discount rate. The interest paid by SHARE is almost 4% less than the rate paid in commercial loans. Partial credit provision was provided by SHARE in the form of a guarantee amounting to 8% of the
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receivables under the portfolio, by way of a lien on fixed deposit. This deal frees up equity capital, allowing SHARE to scale up its lending. On the other hand, it allows ICICI Bank to reach new markets. And by trading this high quality asset in capital markets, the bank can hedge its own risks. Janet MacKinley, chairman of the Income Fund of America and Vice Chair of Grameen Foundation USA's Program Committee welcomes this deal; she says: "I believe it will encourage more of these types of transactions that can play a strategic role in making microfinance more widely available to the world's poorest communities". Another securitisation deal was also signed with Bhartya Samruddhi Finance Limited (BSFL), in which ICICI Bank securitised the receivables of a selected portfolio of microfinance loans by BSFL amounting to Rs 42.1 million (US$ 957,000). Both under the partnership model and under the securitisation deal, the bank provides organizations with financial support at a mezzanine level which enables them to offer credit protection in the microfinance portfolios to a reasonable extent.

Training New Partners
Despite rapid growth, the lack of NGOs and MFIs operating in India remains a constraint. According to ICICI Bank, there is a need for approximately 200 MFIs to cover the country, however there are only 15 large players capable of scale. New players are therefore needed: ICICI believes that new NGOs, entrepreneurs, and corporations who conduct development activities in rural areas can and should become MFIs. ICICI Bank has put in place its Micro Finance Development Team with the objective of identifying and training new partners. The Social Initiative Group of ICICI Bank (SIG) aims to partner with organizations to identify and support entrepreneurs in microfinance.

Working with Venture Capitalists

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Another challenge in scaling-up the microfinance sector is the lack of equity capital. In order to solve this shortage, ICICI Bank is encouraging venture capitalists to start entering the sector. Several venture capital funds in the country have the capability of identifying and mentoring entrepreneurs, including Lok Capital, Aavishkar and Bell Weather. Bell Weather has made three equity commitments for start up, and its committee has decided to increase the size of the fund from US$10 million, to US$25 million. Lok capital mobilizes and directs private capital to fund microfinance activities and to fund long term management and technical support for development of commercially sustainable MFIs. Aavishkar provides micro-equity funding (Rs. 10 lacs to Rs. 50 lacs, approximately US$20,000 to US$100,000) and operational and strategic support to commercially viable companies increasing income in or providing goods and services to rural or semi-urban India. ICICI Bank has come to an agreement with these three venture capitalists under which it will provide take-out financing to the MFI to buy out the venture after a period of three to five years, provided the MFI attains an operational sustainability rating from Micro-Credit Ratings International Ltd (M-CRIL) and Credit Rating Information Services of India Limited (CRISIL).

Beyond Microcredit
Microfinance does not only mean microcredit, and ICICI does not limit itself to lending. ICICI's Social Initiative Group, along with the World Bank and ICICI Lombard, the insurance company set up by ICICI and Canada Lombard, have developed India's first index-based insurance product. This insurance policy compensates the insured against the likelihood of diminished agricultural output/yield resulting from a shortfall in the anticipated normal rainfall within the district, subject to a maximum of the sum insured. The insurance policy is linked to a rainfall index.

Technology

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One of the main challenges to the growth of the microfinance sector is accessibility. The Indian context, in which 70% of the population lives in rural areas, requires new, inventive channels of delivery. The use of technologies such as kiosks and smart cards will considerably reduce transaction costs while improving access. The ICICI Bank technology team is developing a series of innovative products that can help reduce transaction costs considerably. For example, it is piloting the usage of smart cards with Sewa Bank in Ahmedabad. To maximize the benefits of these innovations, the development of a high quality shared banking technology platform which can be used by MFIs as well as by cooperatives banks and regional rural banks is needed. ICICI is strongly encouraging such an effort to take place. Wipro and Infosys, I-Flex, 3iInfotech, some of the best Indian information technology companies specialized in financial services, and others, are in the process of developing exactly such a platform. At a recent technology workshop at the Institute for Financial Management Research in Chennai, the ICICI Bank Alternate Channels Team presented the benefits of investing in a common technology platform similar to those used in mainstream banking to some of the most promising MFIs. It is hoped that this workshop will unite five to ten MFIs in creating an independent association that will lead these efforts.

The Centre for Microfinance Research
While the sector has been growing rapidly, and while the focus has been largely on growing outreach, there is an urgent need to fill gaps both in practice and understanding in order to maximize the impact of this growth. To fill these gaps, ICICI bank has created the Centre for Microfinance Research (CMFR) at the Institute for Financial Management Research (IFMR) in Chennai. Through research, research-based advocacy, high level training and strategy building, it aims to systematically establish the links between increased access to financial services and the participation of poor people in the larger economy. The CMFR Research Unit supports initiatives aimed at understanding and analyzing the following issues: impact of access to financial services; contract and product designs; constraints to household productivity; combination of microfinance and other

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and gaps in knowledge. In addition to undertaking research. the CMFR Microfinance Strategy Unit will offer advanced financial management training for microfinance practitioners. In order to bring together academics and practitioners. impact of MFI policies and strategies. and an analysis of Sewa Bank's loans and accounts panel data base in Ahmedabad.development interventions. A training series on Building Blocks of Banking and Finance will also be conducted. people's behavior and psychology with respect to financial services. etc). Harvard. In partnership with MicroSave. there are other missing markets and constraints facing households. water.89 - . and the effect of regulations. Other on-going projects include the impact evaluation of smokeless chulhas on health and productivity in Orissa. the CMFR recognizes that while MFIs aim to meet the credit needs of poor households. which in turn impacts household well-being. The CMFR is involved in several studies with researchers from leading universities. roads. including MIT. costs and profitability of microfinance organizations. a study on the break-up of transaction costs of MFIs and SHGs. The CMFR Microfinance Strategy Unit will address these issues through a series of workshops which will bring together MFI practitioners and sectoral experts (in energy. and Yale. evidence of credit constraints. the CMFR also organizes regular seminars and conducts courses for managers and researchers from NGOs. international organizations. and academics. it will allow estimating the effects of the MFI's programme in an unbiased manner. the CMFR directly helps MFIs in terms of strategy building. government. . it is implementing an impact evaluation of Spandana's microcredit programme in Hyderabad. such as healthcare. infrastructure. health. Finally. aimed at financial institutions both large and small that wish to acquire a comprehensive and detailed set of skills to effect their transformation. as the first randomized evaluation of microcredit. economics of micro-enterprises. For example. These have implications in terms of the scale and profitability of client enterprises and efficiency of household budget allocation.

Is microfinance the solution? ICICI Bank believes it is. 2009. up from Rs 1. if growth is properly managed and questions are correctly answered. more customized and more comprehensive. CURRENT SCENARIO SBI profit rises 46% in Q4 on higher other income Kolkata. Bhatt.The latter will bring to the table knowledge of best practices in their specific areas. In order for microfinance to be a useful mechanism for poverty alleviation. and each consultation workshop will result in long-term collaboration between with MFIs for implementing specific pilots.90 - . 2009. . according to its Chairman. While the microfinance sector is growing fast in India.P.508 crore on account of sale of investments in the quarter ended March 31.883 crore during the corresponding quarter of last year. challenges must be addressed in order to make this growth both effective and sustainable. Other income for the quarter under consideration grew by 67 per cent at Rs 4.742 crore for the fourth quarter ended March 31. Mr O. May 9 Riding on higher other income including profits from treasury operations. State Bank of India posted a 46 per cent rise in net profit at Rs 2. Microfinance needs to become more accessible.817 crore). several questions need to be answered. The bank made a profit of Rs 1.718 crore (Rs 2.

2009 increased by 35.5 per cent at Rs 9.91 - .The net profit for the year ended March 31.566 crore on account of profit on sale of investments. The bank’s treasury income in 2008-09 increased by 171 per cent to Rs 2. against Rs 6.121 crore. .729 crore during the corresponding period last year. Mr Bhatt said. The board of directors at a meeting here on Saturday recommended a dividend of 290 per cent or Rs 29 per share (215 per cent) for the year under review.

695 crore). Domestic deposits grew by 33 per cent at Rs 6. he said. also grew by 30 per cent in 2008-09. Current Account and Savings Bank Account (CASA) deposits increased by 22 per cent to Rs 2. exchange.” he pointed out. he said.96. he maintained.340 crore (Rs 5.73.617 crore contributed by commission. loan processing fee and account maintenance charges.” A 30 per cent growth in advances also contributed to the growth of net profit.396 crore (Rs 2.627 crore) and term deposits grew by 41.92 - . which was earlier growing in single digits.5 per cent to Rs . Performance The bank’s core fee-based income for the year ended March 2009 grew by 29 per cent to Rs 7. Our fee-based income. “Historically.22.23.Pillar of growth Treasury would continue to be an important pillar of growth for the bank. “There has been a robust growth in our advances not only in terms of volumes but also in terms of income. Other income increased by 46 per cent at Rs 12. Referring to the lower growth in net profit in 2008-09 vis-À-vis 2007-08 when the growth was 48 per cent. liquidity overhang and the cost of carrying it and also on account of higher provisioning for salary revisions and for pensions. treasury was our residual business but this year treasury has registered outstanding growth.” Mr Bhatt said explaining the reason for the growth in the bank’s net profit.691 crore (Rs 8. “It was due to the rise in overhead costs due to branch expansion.589). We are now trying to offer products at par with other multinational banks.

lesser growth and lower yield on advances has put a pressure on our margins. Domestic NPAs increased by Rs 1. The bank witnessed a two basis point dip in NIM in April 2009.22. on the other hand there has been a decline in credit offtake.” Mr Bhatt said. “There has been an unprecedented flow of deposits since November 2008 to the tune of Rs 1. .944 crore (Rs 2.59 per cent). However.651 crore.” Mr Bhatt observed.48. “International NPAs increased by 955 crore as a result of economic slowdown.63 per cent (72.962 crore).76 per cent (1.98.4.78 per cent). This has led to a decline in CD ratio.93 - .13 per cent). The net interest margin (NIM) declined to 2.22. The share of bulk deposits to total deposits declined to 10.81 per cent (14.” Mr Bhatt said and added that the bank would be able to manage NPAs at the current level. “The huge growth in deposits. he said. NPAs flat The net non-performing assets remained almost flat at 1.07 per cent). the bank was hopeful of either maintaining or registering a slight improvement in its NIM. with the cost of deposits coming down.540 crore (Rs 4. The creditdeposit ratio declined to 66.000 crore a day. particularly in the US and Singapore.774 crore of which Ratnagiri Power alone contributed to Rs 1.331 crore).93 per cent (3. Advances went up 30 per cent at Rs 5.

venture capital and asset management. without the . SAVING ACCOUNT A Savings Account for everyone with a host of convenient features and banking channels to transact through. So now you can bank at your convenience.) ICICI Bank is also the largest issuer of credit cards in India. life and non-life insurance. corporate and retail customers through a variety of delivery channels and specialised subsidiaries and affiliates in the areas of investment banking.94 - . TYPES OF ACCOUNTS 1.PRODUCTS OF ICICI BANK ICICI Bank offers a wide range of banking products and financial services to dynamic.

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affordability and higher earnings 4. An ICICI Bank Recurring Deposit lets you invest small amounts of money every month that ends up with a large saving on maturity. 4.FIXED DEPOSIT ACCOUNT . you may not have adequate funds to make big investments.96 - . Children learn how to manage their personal finances.It's really important to help children learn the value of finances and money management at an early age. So you enjoy twin advantages. RECURRING DEPOSIT ACCOUNT When expenses are high. but we make banking a pleasure and at the same time fun. Banking is a serious business.

It's really easy ! 2.Doorstep Service. PERSONAL LOAN . HOME LOANS The No. 1 Home Loans Provider in the country.97 - . ICICI Bank Home Loans offers some unbeatable benefits to its customers . Liquidity and Returns!!!! A combination of unbeatable features of the Fixed Deposit from ICICI Bank. Simplified Documentation and Guidance throughout the Process. Flexibility.Safety. LOANS 1.

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top up on existing loans. refinance on used vehicles.99 - . Xtend product. balance transfer on high cost loans. .Range of services on existing loans & extended products like funding of new vehicles. Flexible repayment options in tandem with the farmer's seasonal liquidity. FARM EQUIPMENT LOAN Preferred financier for almost all leading tractor manufacturers in the country. 5. Monthly. Comfortable repayment tenures from 1 year to 9 years. working capital loans & other banking products. Quarterly and Half-yearly repayment patterns to choose from.

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India instituted a rural bank expansion program in 1977. and the impact of microsavings (surprisingly. In order to help get some kind of bearing on the impact of microfinance. there seems to have been more work done on savings than credit). other studies have also emerged on the broader topic of microfinance. certainly the literature of microfinance cannot be so new? After all. Simultaneously.” And it certainly was – providing two separate randomized studies on the impact of microcredit.103 - . the impact of microcredit. Yet. 2010 ⋅ David Roodman called 2009 a “milestone year for microfinance. Mexico did something similar in 1992. . The selected papers are organized into three categories: the broader context. we present here a short literature review on how microfinance affects the lives of the poor. governments have long known that increasing access to rural and low-income finance was important.Literature Review Dweep Chanana ⋅ January 18.

MIT Jameel PovertyActionLab. Esther Duflo. Results do not rule out the possibility that a considerable fraction of the increase in households’ savings could have come from new savings.Spandana October2009 Hyderabad.104 - . who come and go and might take Spandana’s money with them. The paper uses an exogenous expansion of a Mexican savings institute. had no effect on high income households. India’s fifth-largest city. Effects on households’ saving rates and on different informal savings instruments are considered. evidence of crowding out of these instruments caused by the expansion is limited. the expansion. rejecting some districts as having too many construction workers. In the case of informal savings instruments.IndianCentreforMicroFinance.FernandoAportelo. . India The researchers from the Abdul Latif Jameel Poverty Action Lab (J-PAL) at MIT and the Indian Centre for Micro Finance worked with Spandana to randomize the rollout of its microcredit operations in Hyderabad. as a natural experiment and the 1992 and 1994 National Surveys of Income and Expenditures. Results show that the expansion increased the average saving rate of affected households by more than 3 to almost 5 percentage points.BankofMexico December 1999 This paper assesses the impact of increasing financial access on low-income people savings. Abhijit Banerjee. The effect was even higher for the poorest households in the sample: their saving rate increased by more than 7 percentage points in some cases. Rachel Glennerster. Spandana chose 104 areas of the city to expand into eventually. In 2006–-07. Cynthia Kinnan. in general. targeted to low-income people. Furthermore.

and microfinance/microenterprise. 2004. Journal of Entrepreneurial Finance and Business Ventures. Journal of Entrepreneurial Finance and Business Ventures. pp. 1-26 . He has published in the Journal of Financial Economics. Journal of Financial Research. Issue 1. 9. Researchers followed up by surveying more than 6.000 households between August 2007 and April 2008. 2004. Journal of Business. restricting their visits to families that seemed more likely to borrow: ones that had lived in the area at least three years and had at least one working-age woman. Journal of Small Business Management. Issue 1. Brigham Young University. 1-26 James C. Managerial Finance. 9. pp. Vol. The surveyors made sure not to visit an area until Spandana had been there at least a year. initial public offerings. Brau* Department of Finance Jim Brau is Assistant Professor of Finance and Goldman Sachs Faculty Fellow at the Marriott School. Journal of Entrepreneurial Finance. They surveyed in “treatment” areas (ones where Spandana worked) and control ones (where it did not yet).105 - .Spandana started lending in a randomly chosen 52 of the 104. His research includes entrepreneurial finance. and Journal of Business Education among others. Vol.

Gary M. and the International Review of Economics and Finance. World Development. As the sector expands. Brigham Young University. His articles on microfinance and international development have appeared in a number of peer-reviewed academic journals. Experiences with CIS for microfinance reveal trends and lessons about successful models. Journal of Developmental Entrepreneurship. so do the challenges faced by practitioners. December 2005 Valerie Rozycki Advisor: Dr. Gary is co-founder and co-editor of the Journal of Microfinance. NonProfit and Voluntary Sector Quarterly. Theoretical and empirical studies show that one important solution to some of these challenges is a system for sharing credit information between lending institutions.106 - . but it is critical to explore countries with underdeveloped CIS and consider nontraditional. innovative solutions. Policy Studies Journal. Woller Department of Public Management Gary Woller is Associate Professor of Public Management at the Marriott School. Contemporary Economic Policy. David Brady Department of Public Policy Microfinance as a tool for economic development has been growing in importance in the past three decades. including Journal of International Development. .

107 - . Several countries have solved this problem with formal systems for sharing credit information. Marié Source: Small Enterprise Development. Stanford. pp. Volume 17. 30-39(10) Publisher: Practical Action Publishing Linking the formal financial sector with poor microfinance clients seemed impossible even a decade ago. without proper information sharing systems in place. March 2006 . Current research focuses on country cases . Kirsten. and it is crucial that we share the knowledge gained from these efforts. to illustrate this linkage methodology. but the credit (and most of the risk) is directly between ICICI Bank and the SHG or individual clients. according to which the latter takes the responsibility of monitoring and recovering loans from individuals and self-help groups. This article explains the model and provides two case study examples. maturing microfinance sectors often operate sub-optimally. Number 1. Malcolm. either spontaneously or enforced. This approach is based on a partnership between ICICI Bank and selected NGOs/MFIs. USA 94309 Microfinance services (predominantly the disbursement of very small loans to the poorest sectors of society) have expanded rapidly over the past three decades and have much potential to affect grass-roots economic development. When lending institutions lack complete information about the creditworthiness of borrowers. However. One of India's most innovative linkage models is ICICI Bank's recent 'facilitation linkage' with several NGO/MFIs. Valerie Rozycki Stanford University. Increasingly such linkages are emerging. lending decisions are not optimized and the performance of microfinance institutions suffers.Authors: Harper. PSS and BISWA. CA.

funds disbursed. This paper examines the current .108 - . July 2006 Madhurima Bhattacharyay An outstanding economic growth and a bright future prospect notwithstanding. particularly microfinance. is essential for attaining income poverty as prescribed in the Millennium Development Goals (MDGs). This paper which examines rural finance for the poor and its impact on income poverty also analyzes the . Strengthening access to financial services for the rural sector. Microfinance has achieved prominence among development strategies because of its scale and continued success.where such systems have been successful as well as on general analyses of barriers to creating such systems. by the number and the stage of development of the Microfinance Institutions and the clients they serve.the field has grown in both size and sophistication as measured.and potential .role of the financial sector. in developing a more inclusive and robust economy. India needs to develop a more inclusive financial market by enhancing direct access to finance for poor communities and small rural businesses. poverty reduction is still the most daunting challenge for India. Kofi Annan United Nations secretary-General Micro finance is the provision of financial services to the economically active poor. MFIs continue to expand their reach (in terms of clients served. saving mobilized etc. their socio-economic impact did not match expectations as planned.In the last two decades . Despite various initiatives taken for the expansion of the commercial bank branch network into the rural and semi-urban areas of the country to promote lending to key disadvantaged and underprivileged economic sectors. resiliency to shocks and continued innovation.) and in many developing countries.in terms of sustainability. particularly the rural poor. they are among the most profitable financial institutions operating.

All MFIs. The present study takes a sneak preview of various financial services developed after economic liberalization in India. privatization and globalization have transformed the face of service sector in India. NY. non-bank finance companies will not come under NABARD. Financial services are no exception to his. which will be promoted by NABARD. it analyzes the performance of microfinance institutions (MFIs) in the rural area.109 - . 2010 The waves of liberalization. Ambuj Gupta University of Petroleum and Energy Studies Dehradun (U. Amlan Ghosh August 9.K. societies and co-operatives will now be regulated by NABARD. with particular emphasis on commercial bank-linked. and Haley.performance of the rural financial services system in India and outlines trends and patterns in farmers’ access to financial services over the course of the past half-acentury. MFIs operating as co-operatives. expansion of services and wider outreach. Under the provision of the bill. Working Ppaer No. largely successful Self-Help Group (SHG) programs. 2002. In particular.28 The Indian government has taken a bold step in introducing a new microfinance law to bring microfinance institutions under prudential supervision. 2007 . the National Bank for Rural and Agricultural Development (NABARD) will regulate the microfinance sector in India. operating in the form of trusts.) India August 24. trusts and societies have to register under the Microfinance Development Council. New York University. 34 Morduch. service sector has witnessed massive growth in the form of innovative products. B. The bill will be submitted in Parliament soon for approval. 1014. The Union Cabinet has cleared the bill on 6th February 2007. J. However. On account of this.

still dominate the landscape and investor protection. the Indian financial system has been witnessing an exciting era of transformation. Franklin Allen University of Pennsylvania .Finance Department. At the same time. In the last few years. there is some evidence of credit constraints for India's SME firms that rely heavily on trade credit. European Corporate Governance Institute (ECGI) With recent growth rates among large countries second only to China's. however. while excellent on paper. Family businesses. At the same time. The banking sector has seen major changes with deregulation of interest rates and the emergence of strong domestic private players as well as foreign banks. significant foreign portfolio inflows including the largest private equity inflows in Asia. .Since the opening up of the economy and reforms in the banking sector in India. Corporate governance norms in India have strengthened rapidly in the past few years. India has experienced nothing short of an economic transformation since the liberalization process began in the early 1990's. there is some evidence of credit constraints for India's SME firms that rely heavily on trade credit. appears to be less effective owing to an overburdened legal system and corruption. Rajesh Chakrabarti Indian School of Business The banking sector has seen major changes with deregulation of interest rates and the emergence of strong domestic private players as well as foreign banks. and a rapidly developing derivatives market.110 - . This article examines the problems of formal banking in providing credit (micro) to the poor of rural and urban areas in the present era and suggests that the POSB can be used to cater the financial need of rural India where MFIs have very little presence in total demand of finance. rural finance is in back foot. To keep the momentum of the growth at present level India needs to serve the financial need of the excluded masses to bring them into the main stream of developmental process.both domestic and foreign. In the last few years microfinance has contributed in a big way to financial inclusion and is now attracting venture capital and for-profit companies . with a soaring stock market.

sampling procedure & fieldwork done & finally the analysis procedure. Definition of Research . The questionnaire has been drafted & presented by the researcher himself. The methodology used in the study consistent of sample survey using both primary & secondary data.111 - .journals have been referred for secondary data. magazine.Research methodology Research methodology is a methodology for collecting all sorts of information & data pertaining to the subject in question. The primary data has been collected with the help of questionnaire as well as personal observation book. The methodology includes the overall research design. The objective is to examine all the issues involved & conduct situational analysis.

so procedures can be duplicated or understood by others. It disseminates the findings to contribute to generalizeable knowledge.112 - . so others may test the findings by repeating it. OBJECTIVE OF RESEARCH Research design phase :This phase mainly involve stating the conceptual structure within which research would be conducted. so decisions are based on data collected.  Logical.  Replicable. within specified boundaries.   Empirical. It employs well designed method to collect the data and analyses the results. The main steps involved in this phase are as: Sampling Plan: .The word research is derived from the Latin word meaning to know. Reductive. so it investigates a small sample which can be generalized to a larger population. The five characteristics of research presented below will be examined in greater detail later are:  Systematic problem solving which identifies variables and tests relationships between them. It is a systematic and a replicable process which identifies and defines problems.

The sample was selected for the study by convenient method. This type of sampling where each & every item in the population has an equal chance of inclusion in the sample. Primary data was collected through Questionnaire. Data Collection: Collection of data is done by  Secondary Data & through  Questionnaire i. Sample Size:  Sample of 50 people was taken into study. and their data was collected. Sample unit: Under the study the customers are considered the sample unit in Jaipur District. Data Analysis: .113 - . Sampling Technique:  To study the Project.e.. a Simple Random Sampling technique is used.

etc. I’m able to analyze customer’s views. ideas and opinions related to Advance Product & investment and about SBI & ICICI . After data collection. and also using quantitative techniques (by using these techniques) accurate information is obtained. two dimensional. According to their responses I analyze the findings and draw certain remarks. Classification & tabulation of data:  The data thus collected were classified according to the categories.  Bar graphs. Statistical tools used for analysis:  Out of the total respondents. Data Interpretation:  Interpretation of data is done by using statistical tools like Pie diagrams. As per questionnaire and market surveys I have find out different responses from different people. ranking. The tools that have been used for analyzing data & inference drawing are mainly statistical tools like percentage. . The resultant tables were one dimensional. counting sheets & the summary tables were prepared.114 - . the respondents who responded logically were taken into account while going into statistical details & analysis of data. averages.

10 billion. the two are taking divergent paths.744. which had over 1 lacks employees.FACTS. has reduced headcount through a voluntary retirement scheme and is cautious about adding headcount. SBI. is setting up regional hubs where its workforce would . In the area of human relations. 3. on the other hand.115 - . FINDINGS & ANALYSIS Facts & Analysis: ADVANTAGES OF ICICI OVER SBI: ICICI is growing at a very fast rate with a total asset of Rs. ICICI Bank.

ICICI Bank is also set to outdo SBI is in its international book .be concentrated and plans to add 20.  SBI have four national level Apex Training Colleges and 54  Learning Centers spread all over the country the Bank is  Continuously engaged in skill enhancement of its employees.  State bank of India has vast experience in the field of SME  (Small and Medium Enterprises) Financing. is planning to add another 3.000 employees in the next few years.116 - . which has over 10.  It is also set to become the largest issuer of debit cards and is the second largest credit card issuer.An area where it has been very aggressive. ADVANTAGES OF SBI OVER ICICI:  SBI is the largest and oldest bank of India.  SBI offers flexible tenures of loan repayment. Its major stocks are held by government of India. So this bank enjoys the trust of its Customers a lot.000 branches.  SBI group. .  Some of the training programs are attended by bankers from  banks in other countries.000 to its headcount every year. 00.  As it is the oldest name so it enjoys public trust a lot.000 and 1.000 branches. The group plans to add between 75.

we believe SBI’s liability franchise will strengthen further with the opening of ~2.  Though CASA for ICICI will also improve from the current 27%. .000 branches in FY09.Six reasons why we currently prefer SBI over ICICI Reason #1 .Stronger CASA base  CASA franchise of 42% provides comfort on margin sustainability for SBI.117 - .

 ICICI has 43% of its liabilities with more than 1-year maturity. with 60% of liabilities of more than 1-year maturity.Reason #2 – Asset-liability match of SBI is better  SBI has a better asset-liability match. while ~71% of assets have more than 1-year maturity.118 - . . while ~61% of assets have more than 1-year maturity.

 Reason #3 . .119 - .Proxy insurance plays on both  Any upside on insurance reforms can be played through SBI as well.  Cost ratios of SBI Life are better than ICICI Prudential Life due to its strong bancassurance model and better agency productivity.

SBI’s loan book is well diversified across a variety of segments. . ICICI’s loan book is still skewed towards retail.Reason #4 .120 - .SBI has more diversified loan book  While asset quality risks persist for both banks.

Reason #5 .Market share gain in favor of SBI . According to our analysis. over the next 18 months the retail segment is likely to be more vulnerable than the corporate segment.121 - .

 SBI will continue to gain market share in both advances and deposits at ICICI’s expense due to the latter’s strategy of going slow. while for ICICI it was 2% as at Q1FY09.122 - . Reason #6 .  Deposit growth for SBI was at 25%.Return ratios for SBI are better .  Advances growth for SBI as at Q1FY09 was 28% versus 13% for ICICI.

0x FY10E adjusted book (assuming value of subsidiaries for SBI at INR 301 and for ICICI at INR 283 on FY10E basis).123 - .  ROE for ICICI is expected to be in the range of 8-10% in FY09-10E. Key risks . while that of SBI will be in the range of 14-16%.94x FY10E adjusted book. SBI is trading at 0. while ICICI is trading at 1.

124 - . the bulk of SBI’s loan origination happens through branches where underwriting standards are stricter. revised loan waiver guidelines could keep SBI’s Q2FY09 profits muted due to higher provision requirement. considering the aggressive balance sheet growth. Graphical Representation of data .  For ICICI. we do not expect SBI to go through a similar experience as ICICI. the expectation of bad asset quality is priced in and further negative surprises look unlikely. unlike the DSA model that ICICI follows. SBI’s low provisioning coverage (44%) will lead to higher provisioning cost in FY10E. while we expect NPAs to increase for SBI in FY10E and FY11E. Hence.  Also. Like any other PSU bank.

125 - .Q.1 On which bank you depend for your regular transaction? Table-1 SBI ICICI HDFC OTHER TOTAL NO. OF PEOPLE 62% 36% 2% 0 31 18 1 0 50 Chart-1 .

126 - . around 36% of people are using ICICI Bank for their transaction and only 2% of people are using HDFC .70% 60% 50% 40% 30% 20% 10% 0% SI B IC I IC H F DC OTH ER It has been observed that approximately 62% correspondents are using the service of SBI for their daily transaction. It also shows that SBI have the highest market position .2 Are you aware of products & services provided by SBI and ICICI? . Q.

127 - . of People 90% 10% 45 5 50 Chart-2 .Table-2 YES NO Total No.

Q. the rest 10% have no idea about the product they are using.3 Are you aware of the micro finance products of SBI and ICICI? .90 % 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0 % YS E NO From the above data it is clear that most of the customers (around 90%) of Jaipur have the idea about the product & services of SBI. In this 10% most of the people are from typical rural area (Farmers).128 - .

Table-3 YES NO Total No. of People 80% 20% 40 10 50 Chart-3 .129 - .

4 which product of SBI or ICICI you have used? . Q.80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0% Y ES NO It is clear that most of the people have the idea about the advance product of SBI. Almost all the 80% people who have the idea about the advance product are the user of SBI product & service.130 - .

131 - .Table-4 Fix Deposit INSURANCE MF EQUITY OTHER 30% 20% 30% 16% 4% 15 10 15 8 2 Chart-4 .

30 % 25 % 20 % 15 % 10 % 5 % 0 % F Deposit ix INS ANCE UR MF EQUITY OTHER 30% of People in Jaipur use Fix deposits and others 30% use Mutual funds and about 20% use Insuranse and rest use other products of SBI & ICICI Bank. Q.132 - . 5 what do you feel about the services providing by SBI or ICICI in micro finance products? .

133 - .Table-5 Good Average Best 40% 24% 36% SBI & ICICI 20 12 18 Chart-5 .

40% of people said that the service provide by SBI & ICICI is good & 36% said it is best & 24% of people said that it is average.40% 35% 30% 25% 20% 15% 10% 5% 0% Good Averag e Bes t From this it is clear that the service provide by SBI in its advance product is good in between the customer.6 according to you which factors are most crucial for rapid growth of MFIs? . Q. All of them satisfy with the product provide by SBI.134 - .

135 - . of people 32% 24% 20% 24% 16 12 10 12 50 Chart-6 .Table-6 Low interset rate Availability Instalment factor Processing & sanctioning of loan Total no.

136 - . Q.7 Do you think Microfinance has helped in Rural India? .35% 30% 25% 20% 15% 10% 5% 0% Instalm fa ent ctor L interset rate ow Ava bility ila P rocessing& sa nctioningof loa n From this it is clear that the low interest rate is major factor for the success of Banks and after that availability and processing time comes.

of people 78% 22% 39 11 50 Chart-7 .137 - .Table-7 Yes NO Toal no.

Q.8 Microfinance concept makes relevance in rural India as well as urban area. Do you agree? .138 - .80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0% Y es NO It is clear that most of the people said that Micro finance helped in Rural areas and rest of the people says no about this.

of people 70% 30% 35 15 50 Chart-8 .139 - .Table-8 Yes No Total no.

140 - .70% 60% 50% 40% 30% 20% 10% 0% Y es No It is clear that most of the people said that Micro finance concept has relevance in rural areas and rest of the people says no. Q. 9 Which features you like most in SBI and ICICI bank? .

141 - .Table-9 Various products Attractive ROI Transparency Simple & fast processing Strong Capital Any other feature Total no. of people 20% 24% 22% 20% 12% 2% 10 12 11 10 6 1 50 Chart-9 .

2 5% V arious products 2 0% Attractive R OI Trans parency S ple & fas im t proces ing s 1 0% S trong C apital Any other feature 5 % Total no. 10 According to you which factor can enhance the popularity of SBI and ICICI micro finance products. . Q. of people 1 5% 0 % From this it is clear that attractive ROI provided by banks attracts customers different products and fast response also attracts the mind of customers.142 - .

143 - . of people 40% 32% 28% 20 16 14 50 Chart-10 .Table-10 Customer relationship Transparency Low charges Total No.

40 % 35 % 30 % 25 % 20 % 15 % 10 % 5 % 0 % C tom us er relations hip trans parency L charg ow es It is clear that most of the people said that customer relationship affects the customers and 32 % people said that it depends on transparency and rest of the people says that it depends on low charges. Project Findings : .144 - .

 Many customers have no time to call customer care so that they are not able to know about the service & features of SBI advance product.  People want securities that’s why choose SBI than ICICI bank. .  A response from customer care is so clear & good.  This live project topic gives opportunity to know about various loan schemes provided by the bank.  Government employees are more concern than private employees for advance product.  Creating an efficient and effective organization. From this project it is found that SBI advance product having the 1st place in the market at Delhi & NCR.  It has been observed that approximately 85% correspondents are using advance  product of SBI and 15% are not using any type of advance product of SBI in Delhi & NCR.145 - .  Most of the customers at Delhi & NCR prefer to take loan from SBI.  It also describes the core features of borrowers as well as bankers for financing loan which is a complex process.  More flexible requirement given by this bank. Approximately 43% of advance product users said that the service of SBI in advance product is excellent.  All of SBI customers are satisfied with the services provided by the bank.  Biggest problem people don’t invest their money in Share due to lack of knowledge. there is a great opportunity to compete with ICICI Bank & to retain its customer by fulfilling the requirement of customer in SBI and ICICI advance product.  The study shows all the important aspects of Bank loan schemes & how this affects to current financial trends.

 Transparency  Quick prosessing .146 - .REASONS FOR HIGHLY USE OF SBI ADVANCE PRODUCT :      Biggest bank of india Attractive rate of retorns Transparency Simple & fast processing Quick processing REASON S FOR HIGHLY USE OF ICICI ADVANCE PRODUCT & INVESTMENT :  Less paper work  Attractive roi but less than sbi.

147 - . Strong economic growth would generate higher demand for funds pursuant to higher corporate demand for credit on account of capacity expansion. Significant thrust on growing retail book poses higher credit risk to the bank. especially in the retail segment. Management indicated a likely pension shortfall on account of AS-15 to be close to Rs50bn. Contribution of retail credit to total bank credit stood at 26%. Delay in technology upgradation could result in loss of market shares. Insufficient capital may restrict the growth prospects of the bank going forward. could impact retail growth of SBI and hence slowdown in earnings growth.      . Growing retail & SMEs thrust would lead to higher business growth. Stiff competition.    Weakness/ Threats:   The risks that could ensue to SBI in time to come are as under: SBI is currently operating at a lowest CAR. Slow down in domestic economy would pose a concern over credit off-take thereby impacting earnings growth.SWOT ANALYSIS OF SBI Strength/ Opportunities:  The growth for SBI in the coming years is likely to be fueled by the following factors: Continued effort to increase low cost deposit would ensure improvement in NIMs and hence earnings.

All the computerized machines are located in suitable manner & are very useful to the customers & staff of the bank. Banking services: Compared to other bank ICICI bank provides long hrs.SWOT ANALYSIS OF ICICI BANK  STRENGHTS: 1) Online Services: ICICI Bank provides online services of all it’s banking facilities. at night in certain branches. They provide faster services along with bonding & personal relationship with the customers. 4) 12 hrs. [D-Mart is a dematerialized account opened by a salaried person for purchase & sale of shares of different companies. .148 - . 6) Late night ATM services: ICICI bank provides late night ATM services to the customers. The ATM centers of ICICI bank works even after 11:00pm.e. 3) Friendly Staff: The staff of ICICI Bank in all branches is very friendly & help the customers in all cases. proper sitting arrangements to the customers. 5) Other Facilities to the Customers & Employees: ICICI Bank also provides other facilities like drinking water facilities. And there are also proper Ventilation & sanitary facilities for the employees of the bank.] 2) Advanced Infrastructure: Branches of ICICI Bank are well equipped with advanced technology to provide the customers with taster banking services. It also provides D-Mart account facilities on-line. of services i. so a person can access his account from anywhere he is. 8-8 services to the customers. This service is one of it’s kind & is very helpful for the customers who are in urgent need of money.

2) Increase in percentage of Returns on increase: The bank should provide higher returns on deposits in comparison of the present situation. The bank will advertise & promote the different policies introduced by the insurance company & convince their customers to buy insurance policies. That means the bank can have a tie-up with a insurance company. 4) Associate with social cause: The bank can also associate itself with social causes like providing relief aid patients. funding towards natural calamities. . The bank can recruit these students through tie-ups with colleges. Even when the credit period is not over it sends reminder letters to the  OPPORTUNITIES: 1) Bank –Insurance services: The bank should also provide insurance services. 3) Recruit professionally guided students: Bank & Insurance is a special non-aid course where the students specialize in the functioning & services of the bank & also are knowledge about various tax policies. Weakness: 1) High Bank Service Charges: ICICI bank charges highly to customers for the services provided by them when compared to other bank & that is why it is only in the reach of higher class of society. Such students will surely prove as an asset to the bank. But this falls in the 4th quadrant so the bank should neglect it. This will also upto large extent help the bank earn profits & popularity.149 - . limited period. 2) Less Credit Period: ICICI bank provides credit facilities but only upto customers which may annoy them.

 THREATS 1) Competition: ICICI Bank is facing tight competition locally as well as internationally. But this threat falls in the 4th quadrant so its negligible. The company can avoid this threat.150 - . Bank like CITI Bank. ABM. The decisions made by different managers are diverse and any one wrong decision can laid to heavy losses to the bank. Standered Chartered. 3) Decentralized Management: Each branch manager is given the authority of taking decisions in their respective branches. HDFC also provide equivalent facilities like ICICI do and also ICICI do not have consistency in its international operation. . HSBC. 2) Net Services: ICICI Bank provides all kind of services on-line. The confidential information of the customers can be leaked easily through the e-mail ids. 4) No Proper Facilities To Uneducated customers: ICICI Bank provides all services through electronic computerized machines. This creates problems to the less educated people. There can be easy access to the e-mail ids of the customers through wrong people.

This includes assets. However. The only place that ICICI Bank has been able to upset the monolith has been in the area of market capitalization. branch network. and size of profits. Their growth means India’s growth.CONCLUSION: The gap between SBI and the rest of the bank is so wide that SBI comes out as number one on almost all counts. SBI and ICICI are both India’s largest banks.151 - . And by this competition customers will be benefited and Indian economy will get a boost. number of employees. . there are signs that this is changing and the bank is making attempts to realize the value of its investments in the life insurance and asset management business. One reason why SBI has lagged in market cap despite its size has been its inability to unlock value from its various businesses. ATM network.

 Before deducting or charging any monetary charge SBI & ICICI must consult with customer. .  Agents should be trained.  It is the duty of the bank to disclose all the material facts regarding advance product.152 - .  Both should more concern about physical verification rather than phone verification so it will avoid fraud or cheating.  SBI and ICICI should more focus on Retaining existing customers. repayment period and any types of charges.  SBI customer care should more concern about the fastest settlement of customer  problems.  For the better service new offers would be require.Suggestion & Recommendation  Customer awareness programme is required so that more people should attract towards advance product.  Advance product selling agents must not give any type of wrong information regarding advance product. etc. ICICI bank is already doing.  Both bank must focus on Segmentation based on customer knowledge Product offering based on customer demand.  Special scheme should be implemented to encourage both customer and agents.  SBI and ICICI must take feedbacks of customers regarding features & services. like ROI. well educated & proper trained to convince the people about different advance product.

well educated & proper trained to convince the people about different advance product.  SBI should take steps to solve customer problems immediately.153 - . .Suggestions given by the consumers at the time of survey:  There is more time period for repayment of education loan.  Education loan should be providing to private college also which is not under AICTE or any kind of University.  A customer awareness programme should be taking place in rural area.  Guarantee should give in investment money in share market.  Agents should be trained.  Loan sanction date should be according to customer convenient.

154 - ._____________________________________ Occupation-__________________________________ Contact Detail -_______________________________ Q.1 On which bank you depend for your regular transaction? a) SBI b) ICICI Bank c) HDFC Bank d) Other Bank. Specify (_____________) Q.2 Are you aware of products & services provided by SBI and ICICI? a) YES b) NO Q.Appendix Questionnaire Name .3 Are you aware of the micro finance products of SBI and ICICI? a) YES b) NO .

6 according to you which factors are most crucial for rapid growth of MFIs? a) Low interest rate b) Availability c) Instalment factor d) Processing & sanctioning of loan Q. Specify ( ______________ ) Q.7 Do you think Microfinance has helped in Rural India? a)Yes .4 which product of SBI or ICICI you have used? a) Fix deposit b) Insurance c) Mutual Fund d) Equity e) Other.Q. 5 what do you feel about the services providing by SBI or ICICI in micro finance products? a) Good b) Average c) Best Q.155 - .

specify ( _____________ ) Q.156 - .8 Microfinance concept makes relevance in rural India as well as urban area. 9 Which features you like most in SBI and ICICI bank? a) Various Product b) Attractive ROI c) Transparency d) Simple & fast processing e) Strong capital f) Any other feature.b) No Q. 10 According to you which factor can enhance the popularity of SBI and ICICI micro finance products. Do you agree? a) Yes b) No Q. a) Customer Relationship b) Transparency c) Low charges .

3. 1.157 - . 6 44 57 85 96 98 99 100 101 . FIGURE NO. 1 2 DETAILS Concept of Financial System Financial System PAGE NO. 41 41 LIST OF TABLES : SERIAL NO. 9. of Users and Non Users of e-Broking The age of the people using e-Broking Service The occupation of the people using e-Broking Service The yearly income of the people using e-Broking Service 10. 5. 8. 1 2 3 4 1 2 3 4 5 DETAILS Angel Group of Companies List of Stock Exchanges Comparison of charges of Broking Houses Profession Tax on Salaries Mode of Data Collection No. 1.LIST OF FIGURES : SERIAL NO. 2. 13. 12. 4. 11. 6 7 8 9 10 The Broking House from where people using e-Broking Service prefer to invest The features liked by people using e-Broking Service The age of the people not using e-Broking Service The occupation of the people not using eBroking Service The yearly income of the people not using e102 104 106 107 108 PAGE NO. 14. 7. 6. 2. TABLE NO.

98 99 100 101 102 104 106 107 108 109 . GRAPH NO. 7. 11 The Broking House from where people not using e-Broking Service prefer to invest 109 LIST OF GRAPHS: SERIAL NO.Broking Service 15. 4. 3.158 - . 9. 2. 1. 1 2 3 4 5 6 7 8 9 10 DETAILS Users and Non Users of e-Broking The age of the people using e-Broking Service The occupation of the people using e-Broking Service The yearly income of the people using eBroking Service The Broking House from where people using e-Broking Service prefer to invest The features liked by people using e-Broking Service The age of the people not using e-Broking Service The occupation of the people not using eBroking Service The yearly income of the people not using eBroking Service The Broking House from where people not using e-Broking Service prefer to invest PAGE NO. 10. 6. 8. 5.

159 - ..

160 - .Questionare master sheet .

161 - .icmr.icfai.org/microfinance/successstories www.org www.com www.geocities.microfinancegateway.org .com www.nabard.empowerpoor.Bibliography: www.

A. Central Intelligence Agency. Banerjee. E... ADB. 2003.html . 2005. A.gov/library/publications/the-world-factbook/geos/in. Asian Development Bank.C.162 - . R.. “Community development in sustainable livelihoods approaches An introduction”. 2006. The Banker. The World Factbook 2009-India. E. Banker.. 36448...cia.. Massachusetts Institute of Technology. Boston. Duflo. Mimeo. February. M. Community Development Journal. Glennerster. “Asian Development Outlook: 2010”. World Bank.ADB. “A Snapshot of Micro enterprises in Hyderabad”.” a Research Paper submitted to GRIPS (primarily based on the data and information provided by an unpublished report on “Poverty and SHG Movement in Uttarakhand: Role of Institutions and Policies for Performance Assessment of Self Help Groups in Poverty Reduction in the state of Uttarakhand in India). Carney.. Direction in Development. “Improving Access to Finance to for India’s Rural Poor”. “Microfinance Gains Momentum”. Asian Development Bank. 2010. “Key Indicators 2006: Measuring Policy Effectiveness in Health and Education”. Sustainable Rural Livelihoods: What Contribution can we make? Department for International Development (DFID).30 Brocklesby. 1998 CIA. “Performance Assessment of Self Help Groups in Poverty Reduction in the state of Uttarakhand in India. Bhattacharyay. Washington D. 2005 Basu P. Manila. 38(3). M. https://www. Manila. D ed. and Fisher. 2006.

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