Summer Internship Project

On

“Comparative Analysis on Banking Industry

with reference to HDFC & ICICI Bank”

Submitted in partial fulfillment of the requirements for the

Two Year Full Time Master of Business Administration

(Affiliated To A.P.J. Abdul Kalam Technical University, Lucknow)

(SESSION -2020- 2022)

By: Under the Guidance of

Aditi Sinha Prof. Puneet Kumar
I.T.S- Mohan Nagar
Roll No. 2000380700014
Batch: MBA 2020-2022

INSTITUTE OF TECHNOLOGY & SCIENCE, GHAZIABAD

GT Road, Mohan Nagar, Ghaziabad-201007
www.its.edu.in

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 INSTITUTE OF TECHNOLOGY & SCIENCE, GHAZIABAD

Session: 2020-22

CERTIFICATE OF ORIGINALITY

I hereby declare that this Summer Internship Report is my own work and that, to the
best of my knowledge and belief, it reproduces no material previously published or
written that has been accepted for the award of any other degree or diploma, except
where due acknowledgement has been made in the text.

(Aditi Sinha)
Roll No.2000380700014
Date:

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 INSTITUTE OF TECHNOLOGY & SCIENCE,
GHAZIABAD

Session: 2020-22

CERTIFICATE

This is to certify that Ms. Aditi Sinha MBA (2020-22 Batch) a student of Institute of
Technology and Science has undertaken the Summer Internship Project on
Comparative Analysis of Bank.

The project has been carried out by the student in partial fulfillment of the requirements
for the award of MBA, under my guidance and supervision.

I am satisfied with the work of Ms. Aditi Sinha

Date:

Academic Mentor’s Name:

Prof. Puneet Kumar

(Signature)

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 Acknowledgement
Many people have contributed to the success of this project. Although a single sentence
hardly suffices, I would like to thank Almighty God for blessing us with his Grace. I
acknowledge my deep sense of gratitude of I.T.S Ghaziabad and A.K.T.U for giving me
opportunity to make this mini project that is going to enhance my skills. I am very much
obliged and thankful to Dr. Charul Agarwal, my Coordinator for providing this
opportunity and constant encouragement given by her during the course. I extend my
sincere and heartfelt thanks to Prof. Puneet Kumar, my Mentor for providing us the
right ambience for carrying out this work and for innumerable acts of timely advice,
encouragement. I express my immense pleasure and thankfulness to all the teachers and
staffs for their cooperation and support. Last but not the least, I want to thank all others,
especially my family, friends and classmates who in one way or another helped me in
the successful completion of this work.

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 Executive Summary
Banks assume a functioning job in the financial advancement of a nation. Their capacity
to make a positive commitment in touching off the procedure of development relies
upon the compelling financial framework. The financial division changes were gone for
making banks increasingly effective and suitable. As one who had a job in starting these
changes, we can say that the time of progress was not so natural. Be that as it may, as an
outcome of these changes the financial framework has developed increasingly stable
and safe. The capital ampleness of the Indian banks is currently comparable to
worldwide benchmarks. The dimension of net NPAs has boiled down to truly
reasonable dimensions. An issue that is in the front line of banking changes as of now is
that of bank solidification. The present investigation is dedicated to break down the
monetary exhibition of HDFC Bank and ICICI Bank.

Bank is a foundation that arrangements in money and its substitutes and gives pivotal
monetary administrations. The important kind of preparing in the cutting edge modern
world is business banking and focal banking. Banking Means "Tolerating Deposits to
loan or Investment of stores of money from the general population, repayable on interest
or generally and pull back with a money order, draft or something else." The compact
oxford word reference has characterized a bank as "Foundation for authority of money
which it pays out on clients request." Infact this is the capacity which the bank
performed when banking started. "Banking in the most broad sense, is implied the
matter of getting, monitoring and using the assets of network

The nationalization period of the mid 1970s brought a portion of the world class banks
under the administration's control. The following decade proclaimed the second period
of nationalization with the converging of old private part banks. The 1990s saw
incomplete progression of the financial business and the rise of new private area banks
just as universal banks. During the following couple of years, fears of advancement
were put to rest and in the previous decade the financial framework has increased much
from it. Progression drew out the best in the business inciting aggressive soul among
different banks.

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This report shows the comparison between ICICI and HDFC with the help of analyses
of ratio with its charts and deals with the findings, suggestions & conclusion which is
very much important after analysis is made.

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 Table of contents

Page No.

 Introduction 8
 Literature Review 18-21
 Analysis of 3Cs 22-27
 SWOT Analysis 28-32
 Porter’s 5 force model 33-36
 Comparative analysis 37-38
 Company profile 39-55
 Comparative analysis 56-81

of HDFC and ICICI Bank

 Methodology 81
 Finding 82
 Conclusion 83-84
 References 85

Introduction

Introduction to the Banking Industry:

The rapid transformation in the banking industry over the last decade has made the
industry stronger, cleaner, transparent, efficient, faster, disciplined, and a lot more
competitive. The banking industry in India has a huge canvass of history, which covers
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the traditional banking practices from the time of Britishers to the reforms period,
nationalization to privatization of banks, and now increasing numbers of foreign banks
in India. Therefore, banking in India has been through a long journey. Rural banking
and microfinancing are the two gateways for Indian banks to grow and compete with
international banks.

The use of technology has brought a revolution in the working style of the banks and it
has pervaded each and every aspect of human life in a drastic manner. Advent of
anytime, anywhere banking has become possible due to technology adoption. Life has
changed enormously due to gadgets and appliances becoming easy to use and that too,
in affordable prices.

Mobile phones, Digital cameras, I- phones, Dish TV are now common household goods
and no more come in category of luxury items. Together with that, the entry of plastic
money has opened new avenues for cashless transactions considered safer and more
convenient than watching every time whether the wallets are still struck in our hip
pockets, vanity bags or not when we move out for shopping or on journeys.

As we know finance is considered as the life blood of all economic activities and has
become integral part of modern business. A country’s financial system works in a set of
financial markets, financial services and financial institutions.

Broadly, the financial market is categorized into two groups :

(a)Money market which deals only with short term finance, and

(b)Capital market which deals with long- term funds.

Banking industry is the back bone for the growth of any economy. In the recent time,
we are witnessed that the World Economy is passing through some small details or parts
circumstances as bankruptcy of banking and financial institutions, debt crisis in major
economies of the world and euro zone crisis. The banking scenario has become very
uncertain causing recession in major economies like US and Europe.

Generally banking in India was fairly mature in terms of supply, product range and
reach- even though reach in rural India and to the poor remains a challenge. The
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government has developed initiatives to address this through the State Bank of India
expanding its branch network and through the National Bank for Agriculture and Rural
Development with things like microfinance. This also included the 2014 plan by the
then prime minister to bring bank accounts to the estimated 40% of the population that
was still unbanked. Banks are a subset of the financial services industry.

A banking system also referred as a system provided by the bank which offers cash
management services for customers, reporting the transactions of their accounts and
portfolios, throughout day. The banking system India should not only be hassle free but
it should be able to meet the new challenges posed by the technology and any other
external and internal factors.

For past three decades, India’s banking system has several outstanding achievements to
its credit. The banks are the main participants of the financial system in India. The
Banking sector offers several facilities and opportunities to their customers. All the
banks safeguard the money and valuables and provide loans, credit, and payment
services, such as checking accounts, money order, and cashier’s cheques.

Need of the Banks:

Before the establishment of banks, the financial activities were handled by money
lenders and individuals. At that time the interest rates were very high. Again there were
no security of public savings and no uniformity regarding loans. So, as to overcome
such problems the organized banking sector was established, which was fully regulated
by the government. The organized baking sector works within the financial system to
provide loans, accept deposits and provide other services to their customers.

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The following functions of the bank explain the need of the bank and its importance:

i. To provide the security to the savings of customers.

ii. To control the supply of money and credit.

iii. To encourage public confidence in the working of the financial system, increase
savings speedily and efficiently.

iv. To avoid focus of financial powers in the hands of a few individuals and institutions.

v. To set equal norms and conditions (i.e. rate of interest, period of lending etc.) to all
types of customers.

Structure of Indian Banking Industry

All banks which are included in the Second Schedule to the Reserve Bank of India Act,
1934 are Scheduled Banks. These banks comprise Scheduled Commercial Banks and
Scheduled Cooperative Banks. Scheduled Commercial Banks in India are categorized
into five different groups according to their ownership and/or nature of operation.

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These bank groups are:

i.) State Bank of India and its Associates

ii. )Nationalized Banks Private Sector Banks Foreign Banks

iii.) Regional Rural Banks.

In the bank group-wise classification, IDBI Bank Ltd. is included in Nationalized

Banks.

Scheduled Co-operative Banks consist of Scheduled State Co-operative Banks and

Scheduled Urban Cooperative Banks.

By 2013 the Indian Banking Industry employed 1,175,149 employees and had a total of
109,811 branches in India and 171 branches abroad and manages an aggregate deposit
of Rs. 67504.54 billion (US$1.1 trillion or 840 billion) and bank credit of 52604.59
billion (US$870 billion or 650 billion).

The net profit of the banks operating in India was 1027.51 billion (US$17 billion or 13
billion) against a turnover of 9148.59 billion (US$150 billion or 110 billion) for the
financial year 2012-13.

Industry Profile
Banking Industry Profile:

Banks play a key role in the entire financial system by mobilizing deposits from
households spread across the nation and making these funds available for investment,
either by lending or buying securities. Today the banking industry has become an

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integral part of any nation’s economic progress and is critical for the financial wellbeing
of individuals, businesses, nations, and the entire globe.
The key operational activities are listed below:
 Acceptance of Deposits
 Lending of Funds
 Clearing of Cheques
 Remittance of Funds
 Lockers & Safe Deposits
 Bill Payment Services
 Online Banking
 Credit & Debit Cards
 Overseas Banking Services
 Wealth Management
 Investment Banking
 Social Objectives

The Global Banking Industry

The market size of The Global Banking Services Industry is expected to grow over
USD 1 trillion at a Compound Annual Growth Rate (CAGR) of 6.0% during the
forecast period of 2019-2024.
This Banking Services Industry procurement intelligence report has enlisted the top
suppliers and their cost structures, SLA terms, best selection criteria, and negotiation
strategies.

 JP Morgan Chase & Co.

 Bank of America Corp.
 Wells Fargo & Co.
 HSBC Holdings Plc
Citigroup Inc.
 Goldman Sachs Group Inc.

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Before COVID-19, Global GDP growth was waning, but the pandemic exacerbated the
slowdown.
However, the leading banking service providers are leveraging digital technologies such
as web- and mobile-based channels to boost their engagement with customers.
Despite a possible rebound in 2021, global GDP could still be US$9.3 trillion lower
than what was expected a year ago. This drastic contraction in the global economy has
already meaningfully diminished loan growth and payment transaction volumes. These
declines have been largely offset by near-record levels of trading revenues and wealth
management fees. But as the pandemic continues, banks will likely be confronted with a
greater share of distressed assets on their books.

Shape Of Recovery:
Slow, Uncertain, And Uneven
– Recovery of banking systems to pre-COVID-19 levels will be slow, uncertain, and
uneven.
– China, Canada, Singapore, Hong Kong, South Korea, and Saudi Arabia are among the
banking systems likely to recover first, by the end of 2022.
– Some banking systems may not recover until 2023 including the U.S., U.K., France,
Germany, Spain,Italy, Japan, Australia, Brazil, Indonesia, and Russia.
– India, Mexico, and South Africa are among the banking systems that will be slower to
recover.

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Indian Banking Industry Profile:

As per the Reserve Bank of India (RBI), India’s banking sector is sufficiently
capitalised and well-regulated. The financial and economic conditions in the country are
far superior to any other country in the world.
Indian banking industry has recently witnessed the roll out of innovative banking
models like payments and small finance banks. RBI’s new measures may go a long way
in helping the restructuring of the domestic banking industry.
The digital payments system in India has evolved the most among 25 countries with
India’s Immediate Payment Service (IMPS) being the only system at level five in the
Faster Payments Innovation Index (FPII). *

Market Size

The Indian banking system consists of 12 public sector banks, 22 private sector banks,
46 foreign banks, 56 regional rural banks, 1485 urban cooperative banks and 96,000
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rural cooperative banks in addition to cooperative credit institutions As of November
2020, the total number of ATMs in India increased to 209,282.

Asset of public sector banks stood at Rs. 107.83 lakh crore (US$ 1.52 trillion) in FY20.
During FY16-FY20, bank credit grew at a CAGR of 3.57%. As of FY20, total credit
extended surged to US$ 1,698.97 billion. During FY16-FY20, deposits grew at a CAGR
of 13.93% and reached US$ 1.93 trillion by FY20.

According to the RBI, bank credit and deposits stood at Rs. 108 trillion (US$ 1.5
trillion) and Rs. 149.6 trillion (US$ 2.1 trillion), respectively, as of March 12, 2021.
Credit to non-food industries stood at Rs. 107.3 trillion (US$ 1.5 trillion), as of March
12, 2021. Non-food industries grew at 5.7% in January 2021 as against an increase of
8.5% in January 2020

Investments/Developments

Key investments and developments in India’s banking industry include:

 As of February 27, 2021, the number of bank accounts opened under the
government’s flagship financial inclusion drive ‘Pradhan Mantri Jan Dhan
Yojana (PMJDY)’ reached 41.93 crore and deposits in Jan Dhan bank accounts
stood at more than Rs. 1.70 lakh crore (US$ 23.07 billion).
 On November 6, 2020, WhatsApp started UPI payments service in India on
receiving the National Payments Corporation of India (NPCI) approval to ‘Go
Live’ on UPI in a graded manner.
 In October 2020, HDFC Bank and Apollo Hospitals partnered to launch the
‘HealthyLifeProgramme’, a holistic healthcare solution that makes healthy
living accessible and affordable on Apollo’s digital platform. 

Government Initiatives

 The RBI introduced new auto debit rules with a mandatory additional factor of
authentication (AFA), effective from October 01, 2021, to improve the safety
and security of card transactions, as part of its risk mitigation measures.
 In September 2021, Central Banks of India and Singapore announced to link
their digital payment systems by July 2022 to initiate instant and low-cost fund
transfers.
 In August 2021, Prime Minister Mr. Narendra Modi launched e-RUPI, a person
and purpose-specific digital payment solution. e-RUPI is a QR code or SMS
string-based e-voucher that is sent to the beneficiary’s cell phone. Users of this
one-time payment mechanism will be able to redeem the voucher at the service

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 provider without the usage of a card, digital payments app, or internet banking
access.
 As per Union Budget 2021-22, the government will disinvest IDBI Bank and
privatise two public sector banks.

 As per Union Budget 2019-20, the Government proposed fully automated GST
refund module and an electronic invoice system that will eliminate the need for a
separate e-way bill.

 Government smoothly carried out consolidation, reducing the number of Public

Sector Banks by eight.

Achievements

Following are the achievements of the Government:

 In September 2021, Unified Payments Interface (UPI) recorded 3.65 billion

transactions worth Rs. 6.54 trillion (US$ 87.11 billion).
 As of October 08, 2021, according to the RBI, India’s foreign exchange reserves
reached US$ 639.51 billion.
 To improve infrastructure in villages, 204,000 point of sale (PoS) terminals have
been sanctioned from the Financial Inclusion Fund by National Bank for
Agriculture & Rural Development (NABARD).
 In March 2021, Unified Payments Interface (UPI) recorded 2.73 billion
transactions worth Rs. 5 lakh crore (US$ 68.88 billion).
 According to the RBI, India’s foreign exchange reserve reached US$ 574.82
billion as of November 27, 2020.
 The number of transactions through immediate payment service (IMPS)
increased to 346.55 million in volume and amounted to Rs. 2.88 trillion (US$
39.57 billion) in value in January 2021.

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17
 Literature review:
Sumit K. Majumdar et al (1999) analyzed the connection between the dimensions of
obligation in the capital structure and execution for an example of Indian firms. Existing
hypothesis places a positive relationship; be that as it may, investigation of the
information uncovers the relationship for Indian firms to be essentially negative.
The structure of capital markets in India, where both present moment and long haul
loaning foundations are government-claimed, was estimated to represent the finding of
this relationship, and it declared that corporate administration components which work
in the West won't work in the Indian setting except if the supply of advance capital was
privatized.
Avinandan Mukherjee et al (2002) investigated the linkage between execution
benchmarking and vital homogeneity of Indian business banks. Devises a strategy for
benchmarking execution of Indian business banks utilizing their distributed monetary
data, Defines execution by how a bank can use its assets to produce business exchanges
and is estimated by their proportion, which is then called the effectiveness.
The idea of effectiveness is basic from an advertising point of view. Methodologically,
so as to conquer a portion of the weaknesses of basic efficiencies got through
self ‐ appraisal of individual banks, an increasingly "law based" idea of cross
proficiency assessed with the procedure of peer ‐ appraisal has been gotten to
benchmark the banks. Bunches banks dependent on closeness in business strategy which
offers a system for aggressive situating in the objective market and fills in as a reason
for long ‐ term vital core interest.
It found that the open segment banks by and large outflank the private and outside
banks in this quickly developing and changing division.
Rasoul Rezvanian et al (2002) utilized a parametric methodology in the system of a
trans log cost work and a non - parametric methodology in the system of straight
programming to inspect generation execution and cost structure of an example of
Singaporean business banks. The aftereffects of the parametric approach recommended
that the normal cost bend of these banks is U molded and there were economies of scale
for little and medium-estimate banks. It gave proof of economies of extension for all
banks paying little heed to their size. The non - parametric outcomes demonstrated that
the Singaporean banks could have diminished expense by 43% had they all been
generally speaking productive. The wellsprings of this cost wastefulness appear to be
caused similarly by allocative and specialized wasteful aspects.
Richard S. Barr et al (2002) assessed the comparative beneficial proficiency and
execution of US business banks 1984 ‐  1998.

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It portrayed the CAMELS rating framework utilized by bank analysts and controllers;
and finds that manages an account with high proficiency scores additionally have solid
CAMELS appraisals.
It found that the other relationship recognized and prescribes the utilization of DEA to
support investigators and strategy creators comprehend organizations in more
noteworthy profundity, controllers and analysts to create observing devices and banks to
benchmark their procedures.
Ihsan Isik et al (2003) dissected the Financial deregulation and complete
factorefficiency change of Turkish business banks. It found that all types of Turkish
banks,
despite the fact that in various extents, have recorded huge profitability additions driven
for the most part by productivity increments as opposed to specialized advancement.
Effectiveness increments, be that as it may, were generally inferable from improved
asset the board rehearses instead of improved scales. It likewise shown that private
banks started to close their presentation hole with open banks in the new condition.
Milind Sathye (2003) estimated the beneficial proficiency of banks in a creating nation,
that is, India. The estimation of proficiency was finished utilizing information
envelopment examination. Two models have been developed to s how effectiveness
scores fluctuate with change in information sources and yields.
The proficiency scores, for three gatherings of banks, that is, freely claimed, exclusive
and outside possessed, are estimated. It demonstrated that the mean effectiveness score
of Indian banks contrasts well and the world mean proficiency score and the
productivity of private part business banks as a gathering may be, incomprehensibly
lower than that of open division banks and outside banks in India, the current strategy of
diminishing non - performing resources and legitimization of staff and branches might
be kept on getting effectiveness gains and make the Indian banks globally aggressive
which is a pronounced goal of the Government of India.
Prashanta Kumar Banerjee (2003) assessed the operational and money related execution
of Indian Factoring Companies. Considering is a worldwide industry with a tremendous
turnover. It offers different points of interest like predictable income, lower organization
costs, decreased credit dangers and more opportunity for center exercises. Both the
residential and worldwide figuring are getting prominence at a noteworthy rate in all
pieces of the world. The considering administrations made a section in India in the year
1991. From that point forward, a great number of figuring organizations specifically
SBI Factors and Commercial Services Ltd., Canbank Factors Ltd, Wipro Finance Ltd.,
Integrated Finance Company Ltd, and Foremost Factors Ltd. have been putting forth
considering administrations in India.

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 It affirmed that operational and money related execution of the variables in India has
been improving through time.AliAtaullah et al (2004) gave a comparative investigation
of the development of the specialized proficiency of business banks in India and
Pakistan during 1988–1998, a period portrayed by a wide margin achieving changes in
the financial business realized by monetary advancement. Information Envelopment
Analysis was connected to elective info – yield details to gauge specialized proficiency,
and to decay specialized productivity into its two segments, unadulterated specialized
effectiveness and scale productivity.
The consistency of the evaluated effectiveness scores were checked by looking at their
organization with three conventional non-wilderness proportions of bank execution.
Furthermore, the connection between bank size and specialized productivity was
inspected.
It was discovered that the general specialized effectiveness of the financial business of
the two nations improved steadily throughout the years, particularly after 1995.
Dissimilar to open area banks in India, open part banks in Pakistan saw improvement in
scale effectiveness as it were.
It was likewise discovered that banks are moderately more effective in producing
gaining resources than in creating pay. This was ascribed to the nearness of high non -
performing credits. What's more, it is discovered that the hole between the
unadulterated specialized proficiency of various size gatherings has declined throughout
the years.
Chiang Kao et al (2004) anticipated the exhibitions of 24 business banks in Taiwan
dependent on their budgetary estimates. The gauges dependent on unsure money related
information are spoken to in extents, rather than as single qualities. A DEA model for
interim information is detailed to anticipate the productivity. The forecasts of the
proficiency scores are likewise exhibited as extents. It found that all the effectiveness
scores determined from the information contained in the fiscal reports distributed
subsequently fall inside the comparing anticipated scopes of the proficiency scores
which we had determined from the money related gauges. It appeared even the awful
exhibitions of the two banks taken over by the Financial Re organizing Fund of Taiwan
could really be anticipated ahead of time utilizing this examination.
Chien Ta Ho et al (2004) investigated the Performance estimation of Taiwan's business
banks. It has utilized an imaginative two phase information envelopment examination
model that separates proficiency and adequacy to assess the exhibition of 41 recorded
organizations of the financial business in Taiwan. It found that an organization with
better proficiency does not constantly imply that it has better viability. There was no
obvious relationship between's these two markers.

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Shanmugam, K. R. et al (2004) added to the financial proficiency writing by estimating
specialized effectiveness of banks in four distinctive proprietorship bunches in India
during the change time frame, 1992–1999. It utilized the stochastic wilderness work
procedure for board information. The outcomes show that the productivity of raising
premium edge is time invariant while the efficiencies of raising different yields non-
premium pay, speculations and credits were time fluctuating. The state bank gathering
and outside banks were more productive than their partners. The change time frame saw
a generally high effectiveness for expanding speculations, which was steady with
financial development goal of the change measures. In any case, there were as yet
bigger holes between the genuine and potential exhibitions of banks.

Barathi Kamath (2007) evaluated and broke down the Value Added Intellectual
Coefficient (VAIC) for estimating the value ‐  based execution of the Indian financial
division for a time of five years from 2000 to 2004. It affirmed the presence of
tremendous contrasts in the exhibition of Indian banks in various fragments, and there is
additionally an improvement in the general execution over the examination time frame.
There was an apparent predisposition for the exhibition of remote banks contrasted and
residential banks

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Analysis of 3Cs of HDFC And ICICI

COMPANY ANALYSIS

Bank accounts opened under GoI PradhanMantri Jan DhanYojana ~420

Mn and deposits in Jan DhanYojana accounts were around $18.4 Bn. 
Bank Credit from FY16-20 has registered a CAGR of 3.6% and as of FY20 and total
credit extended stand at ~$1.7 Tn 
Investments stood as the 2nd largest component in the assets side of the total banks’
balance sheets after loans and advances, driven primarily by Government securities. 
As of 2020, the capital adequacy amongst Indian banks remained above regulatory
requirements with RBI also further relaxing the leverage ratio for banks to boost
lending. 
Deposits has registered a ~14% CAGR from $1.15 Tn (2016) to ~$2 Tn (2021). 
RBI has taken steps to enable mobile payments key enablers to growth, by removing
transaction limit of $745 and allowing banks to set their own limits.  
Recovery of stressed assets improved during 2019-20 through the IBC, 2016 and
Securitisation and Reconstruction of Financial Assets and Enforcement of Security
Interests (SARFAESI) Act, 2002. 

The common four Ps of marketing mix is as follows:

(i) Product:
To be more specific the peripheral services need frequent innovations, since this would
be helpful in excelling competition. The product portfolio designing is found significant
to maintain the commercial viability of the public sector banks. The banks professionals
need to assign due weight age to their physical properties. They are supposed to look
smart active and attractive.

(ii) Price:
Price is a critical and important factor of bank marketing mix due numerous players in
the industry. Most consumers will only be prepared to invest their money in search of
extraordinary or higher returns.

They are ready to pay additional value if there is a perception of extra product value.
This value maybe improved performance, function, services, reliability, and promptness
for problem solving and of course, higher rate of return.

22
(iii) Promotion:
Bank Marketing is actually is the marketing of reliability and faith of the people. .It is
the responsibility of the banking industry to take people in favorthrough Word of mouth
publicity, reliability showing through long years of establishment and other services.

(iv) Place:
This is choice of where and when to make a product available will have significant
impact on the customers. Customers often need to avail banking services fast for this
they require the bank branches near and convenient to their official area or the place of
easy access.

23
COMPETITORS OF HDFC AND ICICI

AXIS Bank

Axis Bank Limited, formerly known as UTI Bank (1993–2007), is an

Indian banking and financial services company headquartered in
Mumbai, Maharashtra. It sells financial services to large and mid-size companies, SMEs
and retail businesses.
As of 30 June 2016, 30.81% shares are owned by the promoters and the promoter group
(United India Insurance Company Limited, Oriental Insurance Company
Limited, National Insurance Company Limited, New India Assurance Company
Ltd, GIC, LIC and UTI).The remaining 69.19% shares are owned by mutual funds, FIIs,
banks, insurance companies, corporate bodies and individual investors.
As of 12 August 2016, the bank had a network of 4,096 branches and extension
counters and 12,922 ATMs.
Axis Bank has the largest ATM network among private banks in India. It even operates
an ATM at one of the world's highest sites at Thegu, Sikkim at a height of 4,023 meters
(13,200 ft) above sea level.

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State bank of India

State Bank of India (SBI) is an Indian multinational public sector bank and financial

services statutory body headquartered in Mumbai, Maharashtra. SBI is the 43rd largest
bank in the world and ranked 221st in the Fortune Global 500 list of the world’s biggest
corporations of 2020, being the only Indian bank on the list. It is a public sector
bank and the largest bank in India with a 23% market share by assets and a 25% share
of the total loan and deposits market.
It is also the fifth largest employer in India with nearly 250,000 employees.
The bank descends from the Bank of Calcutta, founded in 1806 via the Imperial Bank of
India, making it the oldest commercial bank in the Indian Subcontinent. The Bank of
Madras merged into the other two presidency banks in British India, the Bank of
Calcutta and the Bank of Bombay, to form the Imperial Bank of India, which in turn
became the State Bank of India in 1955. 
The Government of India took control of the Imperial Bank of India in 1955,
with Reserve Bank of India (India’s central bank) taking a 60% stake, renaming it State
Bank of India.

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Punjab National Bank

Punjab National Bank, abbreviated as PNB, is an Indian nationalised bank.

Headquartered at New Delhi, India, it is under the ownership of the Ministry of
Finance, government of India. The bank was founded in May 1894 and is the second
largest government-owned bank in India, both in terms of its business volumes and its
network. The bank has over 180 million customers, 12,248 branches, and
13,000+ ATMs.
PNB has a banking subsidiary in the UK (PNB International Bank, with seven branches
in the UK), as well as branches in Hong Kong, Kowloon, Dubai, and Kabul. It has
representative offices in Almaty (Kazakhstan), Dubai (United Arab
Emirates), Shanghai (China), Oslo (Norway), and Sydney (Australia).
In Bhutan, it owns 51% of Druk PNB Bank, which has five branches. In Nepal, PNB
owns 20% of Everest Bank, which has 50 branches. PNB also owns 41.64% of JSC
(SB) PNB Bank in Kazakhstan, which has four branches.
As on 31 March 2019, the bank had 70,810 employees. As of 31 March 2019, it also
had 1722 employees with disabilities on the same date (2.43%). The average age of
bank employees on the same date was 39 years. The bank reported the business
of ₹ 11.65 crores per employee and net profit of ₹ 8.06 lakhs per employee during the
FY 2012–13. The company incurred ₹ 5,751 crores towards employee benefit expenses
during the same financial year.

26
CUSTOMERS

Customer needs are rapidly changing. To meet those needs, banks need to make the
customer experience the starting point for process design.
To do so, they need to understand what customers want, and how and when they want
it. Instead of a major cost center, operations of the future will be a driver of innovation
and customer experience.
Today, banks offer standardized products hard coded with specific benefits, parameters,
and rules–30-year mortgages, travel rewards credit cards, savings accounts with
minimum balances.
A variety of operational roles are charged with supporting these products and managing
the rules governing for the customers. In the future, these activities will be automated,
and employee roles will shift toward product development. Instead of evaluating credit
risks and deciding on mortgage approvals, operations staff will work with automated
systems to enable a bank to offer its customers flexible and customized mortgages.
Automation and artificial intelligence, already an important part of consumer banking,
and will penetrate operations far more deeply in the coming years, delivering benefits
not only for a bank’s cost structure, but for its customers. Digitizing the loan-closing
and fulfillment experience, for instance, will speed the process and give customers the
flexibility and freedom to view and sign documents online or with their mobile app.
Private sector banks HDFC and ICICI have asked customers to use digital means for
transactions and said they have reduced their staff in office as a precautionary measure
against the spread of coronavirus and that too for customers. Even particularly,
HDFC Bank had changed its working hours and its function from 10 am to 2 pm till
March 31, except on Saturday. The private sector lender had also temporarily suspended
passbook update and foreign currency purchase services.

ICICI Bank informed its customers through SMS that "our branches shall remain open
with required hygiene steps and reduced staff" and that too for the safety and
convenience for its customers.

27
 SWOT ANALYSIS OF BANKING INDUSTRY

SWOT Analysis of Banking industry focuses on strength, weakness, opportunities and

threats. Strength and weakness are the internal factors opportunities and threats are
external factors.

SWOT Analysis is a validated framework that helps to evaluate business performance

of Banking Industry.

the SWOT Analysis of banking industry as follows:

28
Strength in the SWOT Analysis

 Banking Industry is the Oldest Industry :

Due to Technological advancement Industries are changing their structure. Banking

has also changed its structure and system. Banking Industry has proved to be one of
the wide spread and widely acknowledged industry. It has also supported the human
race. Banking has adapted and updated itself to suit the new needs. Banks today play
a critical and indispensable role in society, from inculcating the habit of savings to
helping people with financial instruments.

 Financial Stability of Nation:

In ensuring a nation’s economic growth and financial stability, the banking industry
plays a vital role. By fostering prosperity, banks contribute to the economy. They
assist the masses to maintain their resources and become important contributors to
both the national and international economy.

 Supplier of Financial Instruments:

Banks have a wide range of financial instruments for their customers. Fixed
Deposits, Stocks, bonds, insurance and savings accounts are some of the varied
products sold by banks. Furthermore, to provide online banking solutions, banks
have also embraced and incorporated digital technologies.

 Good Employment Source and Helps in GDP growth:

There is a widespread consensus that perhaps the improvement of the financial

system leads to economic growth. Financial development establishes encouraging
conditions for growth by either supply-led (financial development stimulates growth)
or demand-driven growth. It is this industry that works constantly to ensure financial
stability, encourage foreign trade , promote jobs and reduce poverty around the
world.

 Financial Assistance:

Whether natural calamity or man-made calamity banks alleviate the after-effects of

disaster by offering financial assistance to victims to rise up and lead a peaceful life
again.

29
 Diversified services:

the banking sector provides insurance, loan and investment services from Current
and Saving Accounts.

 Connecting People:

With the advent of a modern century, technological innovation Banks have made life
simpler for a common man. People can transact in many places on a real-time basis.

 Changing from the position of simple savings & credit facilitator:

Today’s top bank priorities include regulatory enforcement, improving asset quality,
enhancing customer focus, concentrating on digital convergence, and addressing
competition from non-banks. Banks are now investing in business and technology to
improve their business models.

Weakness in the SWOT Analysis

 Global Economics Susceptibility:

Due to Exchange Rate changes and changes in world economy banking Industry is
effected.
It is also seen that slight shifts in the exchange rates of currencies or the spending
and saving patterns of the citizens of one major nation can directly impact the entire
banking industry.

 Non Performing Assets:

The major weakness of the banking sector is NPAs (Non-Performing Assets).

Typically, NPAs denote loans that are not recoverable. This leads to financial losses
for the bank, inevitably. For the banking sector and the economy as a whole, NPAs
can have a debilitating impact. Developing countries like India face instances of high
NPAs that have dealt a significant blow to the nation’s banking industry.

 Lack of coverage in rural areas:

It has been observed that the banking industry focuses more on urban areas in most
countries, while rural regions are ignored. In the banking sector, this is a
considerable weakness.

30
 Villages are now home to a significant majority of the world’s population. In
developed countries, this is more. Banks are working in main stream don’t want to
concentrate on mainstreams. Banks must try to capture Rural Markets.

Opportunities in the SWOT Analysis

 Advancements in Technology:

The banking industry has always based on technology. This is evident that digital
services provided by banks today are totally based on technology. However, banks
should continue to adopt the latest technological advances. To draw future
generations, they should focus on putting out newer goods and services.

 Opportunities for rural growth:

One of the banking industry’s weak points is its limited presence in rural areas. But
this vulnerability can actually be turned into an opportunity. Banks will increase their
customer base considerably by expanding into villages and providing their services
to the rural population.

 Societal Evolution:

Both economically and culturally, human society is changing. The needs and
demands of customers with increasing income levels are bound to change in this
complex landscape. It is necessary for banks to adapt to this changing society. The
sector will solidify its position in the future by offering better services.

 Rising in the private banking sector:

The banking industry around the world is highly regulated by Public sector banks
and their respective central banks. With the emergence of private sector banks, this
sector is experiencing structural and functional shifts, primarily due to the adaptation
of new technology and intensified competition, thereby benefiting end-customers.

31
Threats in the SWOT Analysis

 Lack of Cyber Defence Proper:

The current banking industry relies entirely on the cyber-world. Whether it is data
storage, monetary transactions or personal information, everything is stored digitally.
This makes the banking sector a primary target for hackers who are seeking to
benefit financially by leveraging flaws in the banks digital infrastructure. Unless
banks take effective cybersecurity steps to safeguard their records, they will face a
significant cyberspace threat.

 Competition Stiff:

Worldwide, banks face stiff competition. Not only from other banks, but also from
institutions like Non-Banking Financial Companies that sell a range of financial
products that are not available to all banks. This has contributed to a change of the
consumer base from banks to NBFCs, which are more embraced by the new skilled
breed.

 Global Uncertainty in Economics:

The world is going through difficult economic times at present. The international
banking sector has all been affected by trade wars, protectionist policies, and
economic downturns. If the world’s economic conditions do not change, banks will
face a bleak future.

 Recession:

This is one of the biggest challenges to the nation’s financial system. The traumatic
shock of economic crises and the collapse of a number of companies will impact the
banks and vice versa.

 System stability:

The failure of certain poor banks has also undermined the stability of the system.

 Government Regulations can directly effect the Banking Sector of a country.

32
 PORTERS 5 FORCE MODEL OF BANKING SECTOR

The finance and banking industry has immensely changed its elements for the last one
decade. Many banks have joined the business both neighborhood and outside.
Eminently, the no banks monetary foundations have been mushrooming by a disturbing
rate. For this very reason the players in the keeping money industry need to consider
their aggressive situating and re-situating deliberately. In mid 1960s the business had
just two bank, Standard Bank and Blacklegs Bank, Now Rokel Commercial Bank. It
can in this way be said that in ,1960s the business had a monopolistic structure.

In any industry, including the banking industry , the nature of rivalry is dependably a
component of the market structure. The pattern today is an impeccable rivalry and the
national bank has pulled back from dealing with the market services. Banks are
currently taking a shot at their own about what are applicable items and rates to be
offered to the market. In such manner the requirement for the evaluation of the allure of
the business turns into a need. Porter’s Five Forces Framework has been generally
utilized as a part of investigating the attraction of an industry. (Koroma, 2017).

Porter’s Five Forces framework is as follow:

 Threat of New Entrants

In spite of the administrative and capital necessities of beginning another bank, in 1977
and 2002 a number of 215 new banks opened every year as indicated by the FDIC. With
such a large number of new banks entering the market every year the danger of new
contestants ought to be to a great degree high.
Yet it may, because of mergers and bank errors the number of banks reduces by about
253 a year. A center explanation behind this is, what the greatest obstacle of entry for
the managing is seemingly, and Finance industry is trust.

Since the business manages other individuals’ cash and monetary data new banks think
that it’s hard to fire up. Because of the way of the business individuals are all the more
ready to put their trust in huge name, understood, main banks who they consider to be
dependable.
The bank industry has experienced a combination in which significant banks try to serve
the greater part of a client’s budgetary needs under their rooftop.

33
This solidification promotes the part of trust as an obstruction to entrance for new banks
hoping to contend with big banks, as purchaser will probably enable one bank to hold
every one of their records and administration their monetary needs. At last the
hindrances to passage are moderately low for the managing industry. While it is about
unthinkable for new banks to enter the business offering the trust and full scope of
administrations as a noteworthy bank, it is genuinely simple to open up a small bank
working on the local level. (David, 2016)

 Power of Suppliers

Capital is the essential asset on any bank and there are four main providers of capital in
the business.
1. Customer deposit
2. Advance and loan.
3. Mortgage-backed securities.
4. Advances from other monetary organizations.
By using these four main providers, the bank can make sure that they have the
fundamental assets required to benefit their clients’ getting needs while keeping up
enough money to meet withdrawal desires. The energy of the providers is to a great
extent in view of the market, their energy is regularly considered to vacillate between
medium to high. (Kumbhar, 2013)

 Power of Buyer
The individual doesn’t posture a lot of a danger to the finance and banking industry,
however one central point influencing the influence of purchasers is generally high
exchanging costs. On the off chance that a man has one bank that handle their account
needs, debt, reserve investments, checking, and so forth, it can be a tremendous bother
for that individual to change to another bank. To attempt and persuade clients to change
to their bank they will customarily bring down the cost of exchanging, however the vast
majority still like to stay with their present bank.
The web has enormously expanded the influence of the purchaser in the banking
industry. The web has enormously expanded the simplicity and decreased the cost for
shoppers to look at the costs of opening/holding accounts and in addition the rates
offered at different banks.

34
ING Direct acquainted high return investment accounts with catch the purchasers’
consideration, then they went above and beyond and made it simple for clients to
exchange their cash from their present bank to ING. ING was fruitful in their endeavor
since they figured out how to make exchanging costs low in terms of time and capital.

 Availability of Substitutes
Several banking industry’s biggest dangers of substitution are not from opponent banks
but rather from non-monetary challengers. The business does not endure any genuine
danger of substitutes similar to credits or withdrawals, however insurances, joined
finances, and salary securities are facilities of the many banks that are additionally
offered by non-banking organizations.
There is likewise the danger of installment strategy substitutes and advances are
moderately high for the business. For instance, gem dealers, automobile companies, and
more tend to offer favored financing on “first-class” things. As a rule these non-banking
organizations offer a lower financing costs on installments then the shopper would
somehow or another get from a conventional bank credit.

 Competitive Rivalry
The banking industry is considered exceptionally viable. The finance related industry
has been around for a long time, and pretty much everybody who needs bank account
benefits as of now has them. Along these lines, banks must endeavor to draw customers
far from contender banks. They do this by offering lower financing, higher rates,
venture services, and more higher services than their opponents.
The bank rivalry is frequently a race to figure out which bank can offer both the best
and speediest facilities, yet has made banks encounter a lower ROA (Return on Assets).
Given the way of the business it will probably observe advance solidification in the
banking industry. Big banks have a tendency to like to procure or converge with
different banks than to burn through cash showcasing and publicizing. (Anon., 2009)
Hence the forthcoming of banking industry is extremely hard to state. One might say
that both the venture and retail banking is confronting transformational challenges. The
administrative change proposed by government is broad and its effect is additionally
unverifiable.
After the money related emergency, banks are stressing on repairing its equilibrium
reports, attempting to reinforce their capital, improving the liquidity position or more all
recapturing trust and certainty. The recuperation of bank divisions is broadly reliant
upon the approach and change moves made by the government.

35
Achievement of banking division relies on upon appropriate risk taking. Banks need to
evaluate their monetary development alongside their capability of taking danger. It has
been noticed that the world economy is growing progressively. Subsequently, a
compelling administrative system, improve exploit will help the bank industry to
accomplish reasonable development in future.

36
 COMPARATIVE ANALYSIS:

What is a comparative analysis?

Comparative analysis is the process of comparing items to one another and

distinguishing their similarities and differences. When a business wants to analyze an
idea, problem, theory or question, conducting a comparative analysis allows it to better
understand the issue and form strategies in response.

A business might conduct this type of analysis to analyze things with obvious
differences or items with both differences and commonalities. Healthcare businesses,
for example, may conduct this analysis to compare and contrast two different types
of medications. Other businesses might conduct a comparative analysis to examine two
different production processes to determine which is more effective.

Typically, a business conducts a comparative analysis to determine:

 The strategies of indirect and direct competitors

 The financial health of a business, including its investments and profit margins
 Accounting strategies, such as budgets
 How trends affect a target audience
 Emerging opportunities in technology, marketing or related functions
 Why is a comparative analysis important?

It's important to conduct comparative analyses to gain a better understanding of a

problem or answer relevant questions.

Here are the primary goals companies aim to achieve through the comparison of data
sets, documents or processes:

Providing a frame of reference for data

A comparative analysis details how data or processes compare to one another and
explains how they relate. This provides context for the analysis so the differences and
similarities in the relationships between data sets are clear.

For example, an auto manufacturer may compare the safety features of two or more
models to determine how they affect sales or which features require improvement. This
type of analysis might provide in-depth data on each feature and provide historical data
to make comparisons about how each feature performs.

Narrowing focus
An effective comparative analysis also helps a company develop substantial and
meaningful reasons for conducting the comparison. The data a company gathers for a
comparative analysis that supports claims or arguments is not random but thoroughly
researched evidence.

37
The reason for conducting an analysis might be to present conflicting arguments and
examine both sides or to prove or disprove an argument.

For example, an auto manufacturer's analysis might prove that certain safety features
prompt an increase in auto sales. The analysis provides and confirms data that highlights
how side airbags are a more popular feature than traction control. This allows a
manufacturer to focus on improving and promoting the features customers want when
buying a new car.

38
 COMPANY PROFILE:

HDFC BANK Limited

39
HDFC Bank Limited is an Indian banking and financial services company,
headquartered in Mumbai, Maharashtra. HDFC Bank is India's largest private sector
bank by assets and by market capitalisation as of April 2021. It is the third largest
company by market capitalisation of $112.76 billion on the Indian stock exchanges. It is
also the fifteenth largest employer in India with nearly 120,000 employees.

1994
- The Bank was Incorporated on 30th August. A new private sector
Bank promoted by housing Development Corporation Ltd. (HDFC), a
premier housing finance company. The bank is the first of its kind
to receive an in-principle approval from the RBI for establishment of
a bank in the private sector. Certificate of Commencement of Business wasreceived on
10th October 1994 from RBI.
- The Bank transacts both traditional commercial banking as well as
investment banking.
- The Bank opened its first branch in Ramon House at Churchgate,
Mumbai on January 16th.

2014
-HDFC Bank reaches 50th branch milestone in Himachal Pradesh
-HDFC Bank Launches Rural Financial Literacy Initiative in Kanpur
-HDFC Bank sets GUINNESS WORLD RECORD
-HDFC Bank achieves 200th branch milestone in Tamil Nadu
-HDFC Bank launches 'Secure Banking' programme in Kerala
-HDFC Bank opens branch at Dubai
-HDFC Bank launches e-payment gateway for Ghaziabad Nagar Nigam

2015
-HDFC Bank launches sonic branding
-HDFC Bank signed MoU with Himachal Pradesh government

-HDFC Bank launches 'Har Zaroorat Poori Ho Chutki Mein, Bank Aapki
Mutthi Mein'
40
-HDFC Bank wins Best Private Banking Services for Super affluent
clients for 5 years in a row at Euromoney Awards
-HDFC Bank voted India's Best Managed Company
-HDFC Bank launches Medical Benefits Prepaid Card
-HDFC Bank launches PayZapp, Indias first 1-click mobile-pay
solution
-HDFC Bank and Snapdeal in partnership with Visa launch India's first
co-branded e-commerce credit card

2017
-HDFC Bank allots 1793900 equity shares
-HDFC Bank launches student card
-HDFC Bank launches SmartUp zone to cater startups.
-HDFC Bank allots 3909200 equity shares.
-Sa-Dhan, HSBC Bank ink pact to create digital eco for MFIs.
-HDFC Bank surpasses TCS to become 2nd most valued company
-HDFC Bank launches SmartUp Zone in Hyderabad.
As of 30 June 2019, the Bank's distribution network was at 5,500 branches across 2,764
cities. The bank also installed 430,000 POS terminals and issued 23,570,000 debit cards
and 12 million credit cards in FY 2017 It has a base of 1,16,971 permanent employees
as of 21 March 2020.

Listings and shareholding

The equity shares of HDFC Bank are listed on the Bombay Stock Exchange and
the National Stock Exchange of India. Its American depositary receipts are listed on
the NYSE issued through JP Morgan Chase Bank.
Its global depository receipts (GDRs) was listed on the Luxembourg Stock
Exchange but was terminated by board of directors following its low trading volume.

41
 Shareholders (as of 30 September 2021) Shareholding

Promoter group (HDFC) 25.88%

Foreign institutional investor(FII) 38.30%

Individual shareholders 13.25%

Qualified institutional buyer 4.74%

Insurance companies 2.94%

Unit Trust of India/mutual funds 14.57%

Financial institutions/banks 0.4%

Products and services

HDFC Bank provides a number of products and services including wholesale
banking, retail banking, treasury, auto loans, two-wheeler loans, personal loans, loans
against property, consumer durable loan, lifestyle loan and credit cards. Along with this
various digital products are Payzapp and SmartBUY.

Mergers and acquisitions

HDFC Bank merged with Times Bank in February 2000. This was the first merger of
two private banks in the New Generation private sector banks category. 

Times Bank was established by Bennett, Coleman and Co. Ltd., commonly known
as The Times Group, India's largest media conglomerate

42
In 2008, Centurion Bank of Punjab (CBoP) was acquired by HDFC Bank. HDFC
Bank's board approved the acquisition of CBoP for ₹95.1 billion in one of the largest
mergers in the financial sector in India.
In 2021, the bank acquired a 9.99% stake in FERBINE, an entity promoted by Tata
Group, to operate a Pan-India umbrella entity for retail payment systems, similar
to National Payments Corporation of India.
In September 2021, the bank partnered with Paytm to launch a range of credit cards
powered by the global card network Visa.

Corporate social responsibility

Parivartan is the umbrella term for all of the corporate social

responsibility initiatives by HDFC Bank

HDFC Bank's Parivartan initiative spent ₹535 crore in FY 2019–20.

HDFC Bank spent Rs 634.91 crore towards Parivartan,in FY 2020-21. Out of Rs 634.9
crore, over Rs 110 crore was allocated and utilised towards initiatives focused
on Covid-19 relief.
HDFC Bank pledges to become carbon neutral by 2032.

Awards and recognition

2021

 Best bank in India:  Finance Asia Country Awards

 Best bank for SMEs:  Asiamoney best bank awards
 Best bank in India: The Euromoney Awards for Excellence
 Ranks No. 1 in Mass Affluent category: Euromoney Private Banking and
Wealth Management Survey
2020

 Best Bank in India: Euro money Awards

 Best bank in India: Finance Asia Country Awards

2019
43
 Best Bank: New Private Sector – FE Best Bank awards
 Winner in Innovation and Inclusiveness in Priority Sector Lending – 11th
Inclusive Finance India Awards (IFI) 2019
 Ranked 1st in 2019 Brand Z Top 75 Most Valuable Indian Brands HDFC Bank
was featured for the 6th consecutive year
 Among The Most Honored Company List, Institutional Investor All-Asia (ex-
Japan) Executive Team 2019 survey
 India’s Best Bank, Euromoney Awards for Excellence 2019
 Bank of the Year and Best Large Bank, Business Today – Money Today
Financial Awards 2019
 Best Bank in India 2019, by Global magazine FinanceAsia.
 Ranked 60th in 2019 Brand Z Top 100 Most Valuable Global Brands HDFC
Bank was featured BrandZ Top 100 Most Valuable Global Brands 2019 for the 5th
consecutive year. The Bank's brand value has gone up from $20.87 billion in 2018
to $22.70 billion in 2019.
 Best Large Bank & Fastest Growing Large Bank in 2019, by Business World
Magna Awards
 India's leading private sector bank: Dun & Bradstreet BFSI Awards

2018

 Company of the year: The Economic Times Corporate Excellence Awards

 Best Performing Private Bank in Total Aadhaar Generation & Update: Aadhaar
Excellence Awards
 NCPI - National Payments Excellence Awards

2016

 Best Banking Performer, India in 2016 by Global Brands Magazine Award.

 Best Performing Branch in Microfinance among private sector banks by
NABARD, 2016, Award for Best Performance in Microfinance
 KPMG study of India's Best Banks, Bank of the year & best digital banking
initiative award 2016

44
 BrandZ Rankings, Most Valued brand in India for third successive year
 FinanceAsia poll on Asia's Best Companies 2015, Best managed public
company – India
 J. P. Morgan Quality Recognition Award, Best in class straight through
processing rates

45
 ICICI Bank Limited

ICICI Bank Limited is an Indian multinational bank and financial services company

with its corporate office in Mumbai, Maharashtra. The Bank was Incorporated on 5th
January at Baroda. ICICI Bank waspromoted by ICICI and erstwhile SCICI Ltd. and
received theCertificate for Commencement of Business on 24th February.

It offers a wide range of banking products and financial services for corporate and retail
customers through a variety of delivery channels and specialized subsidiaries in the
areas of investment banking, life, non-life insurance, venture capital and asset
management. The bank has a network of 5,275 branches and 15,589 ATMs across India
and has a presence in 17 countries.

It doesbanking business of all kinds. It was founded as an institution to

46
provide quality banking services using state-of-the-art technology.

- The Bank has established a well diversified branch network with 24

branches in 15 centres covering 12 states. The bank set up a fully

computerised environment with the State-of-the-art technology at all

offices continuously upgrading its strong systems and procedures

withspecial emphasis on risk management.

The bank has subsidiaries in the United Kingdom and Canada; branches in United
States, Singapore, Bahrain, Hong Kong, Qatar, Oman, Dubai International Finance
Centre, China and South Africa; as well as representative offices in United Arab
Emirates, Bangladesh, Malaysia and Indonesia. The company's UK subsidiary has also
established branches in Belgium and Germany

1996

- The deposit products and other services of the bank were branded with names such as
`Maxicash' for services accounts, `Money Plus' for Current Account, `Quantum' for
fixed deposit account, `Power Pay' for payroll accounts treasure chest for locker
facilities and `Trice' forautomated teller machine facility.

- The Bank had, in compliance with a directive issued by RBI, deposited in aggregate
Rs 88.16 crores with small Industrial Development Bank of India and National Bank
for Agricultural & Rural Development.

- The `B' category branches were authorised to handle full range of

foreign exchange transaction of customers and five other branches

were placed in `C' category to handle limited foreign exchange

transactions.

- Seven branches of the bank with substantial foreign exchange

business were linked to the society for worldwide Interbank

Telecommunication (SWIFT) network which enables them to transmit

47
Letter of Credit and fund transfer messages promptly world wide.

- 700 No. of equity shares subscribed for by signatories to the

Memorandum of Association. 1500,00,000 No. of equity shares allotted

to ICICI Ltd.

1997

- The bank introduced electronic funds transfer facility. The bank

hasafull fledged vigilance and inspection department.

- The bank opened 11 branches and 2 extension counters thereby

increasing the total network of branches to 33 and extension counters

to 4.

- The Bank offered 150,00,000 No. of equity shares of Rs 10 each at a

prem., of Rs 25 per share to ICICI.

- The Bank offered for sale 412,50,200 No. of equity shares of Rs 10

each at a price of Rs 35 per share.

- Sicom Ltd. has entered into an agreement with ICICI Bank and

Dresdner Bank for providing a counter guarantee against letters of

credits (LCs) opened by its clients.

- The merger of SCICI with ICICI effective from April 1, the bank has

become a wholly-owned subsidiary of ICICI.

- ICICI Banking Corporation, a fully-owned subsidiary of Industrial

Credit & Investment Corp of India Ltd, has finalised an offer for

sale of 4 crore equity shares of Rs.10 each at a premium of Rs.30 per

share, according to merchant banking sources.

48
1998

- ICICI Bank, which introduced Internet banking in India, is set to

launch various technology-based new services in the near future.

Some of the new services include setting up of call centres and the

introduction of fund transfers between own accounts in its branches.

- ICICI Banking Corporation Ltd, the first bank in the country to go

in for Internet banking, is now all set to provide its

account-holders with the facility of transferring funds across their

accounts on the Net.

2013

-ICICI Bank and Aircel launch 'Mobile Money'

-ICICI Bank inaugurates 12 new branches in Jammu & Kashmir

-ICICI Bank inaugurates three new branches at Imphal

-ICICI Bank inaugurates a new branch in Ashok Rajpath, Patna

2014

for Janani Suraksha Yojna in Ranchi

-ICICI Bank launches redesigned website to enhance customer

experience

-ICICI Bank launches iMobile application for Windows

-ICICI Bank launches ICICI Bank Unifare Card in partnership with

DMRC

-ICICI Bank launches 'ICICI Bank Global Banking-Hello Canada'

-ICICI Bank launches 'ProCircle' on Money2India platform

49
-ICICI Bank launches Student Travel Card

-ICICI Bank launches EMI on debit cards

-ICICI Bank launches two apps to enhance customer service

2015

-ICICI Bank launched a mobile phone-based product that offers a slew

of new-age services

-ICICI ties up with Emirates NBD for instant money transfers

-ICICI Bank launched fully automated digital locker facility

-ICICI Bank launches online rail ticket booking on its website

-ICICI Bank Canada launches Student GIC Program

-ICICI Bank launches Money2World, Indias first fully online

service for outward remittances

-ICICI Bank launches in-store mobile-based payments with Visa

-ICICI Bank launches contactless credit and debit cards

-ICICI Bank launches 'Pockets', India's first digital bank on a

mobile phone

2016

-ICICI Bank crosses Rs 1 lakh-cr mortgage lending milestone

-ICICI Bank enters South Africa, opens branch in Johannesburg

-ICICI Bank launches iWork@home for women employees

-ICICI Bank launches contactless mobile pay solution

50
 ICICI Bank UK PLC

An ICICI Bank branch in London, United Kingdom

Type Subsidiary

Industry Financial services

Founded 2003

Headquarters India 

Parent ICICI Bank Limited

Website www.icicibank.co.uk

Products

ICICI Bank offers products and services such as online money transfers, tracking
services, current accounts, savings accounts, time deposits, recurring deposits,

51
mortgages, loans, automated lockers, credit cards, prepaid cards, debit cards and digital
wallets called ICICI pocket.

ICICI bank launched 'ICICI Stack' which provides online services such as payment
options, digital accounts, instant car loans, insurance, investments, loans etc.

ICICI Bank UK PLC offers products and services such as a current account, savings
account, remittance to India, safe deposit box, NRI Services, business banking, foreign
exchange services, commercial real estate and corporate banking.In 2019, ICICI Bank
UK PLC launched an instant account opening facility through its iMobile app.

Awards and recognition

- ICICI Bank was recognised by the Ministry of Rural Development,

Government of India, for the funding provided to Self Help Groups

across rural India. This funding supported the growth of the National

Rural Livelihood Mission programme initiated by the Government.

- ICICI Bank won the award in the End Users of IT category for

Chatbot on iMobile and Software Robotics at the IMC Digital

Technology Awards 2016.

- ICICI Bank won the Gold Award in the Banks and Credit Cards

category, as per the Readers Digest Trusted Brand Survey 2017.

- ICICI Bank won the Best Retail Bank in India award for the fourth

consecutive year at the Asian Banker Excellence in Retail Financial

Services International Awards 2017.

- ICICI Bank was awarded the Gold category recognition at the

Energy And Environment Foundation Global Safety Award 2017. This is

the highest award received by a bank in the Financial Sector

52
Banking/Non-Banking Finance Companies, for its constant effort

towards encouraging safe work practices across operations.

-ICICI Foundation won the 'Best CSR & Sustainability Practices Award

for 2016' at the 4th Asia Business Responsibility Summit.

-ICICI Bank won two awards at the Asset Triple A Country Awards 2016.

The Bank won the Best Bond House-Domestic Award in the 'Best House'

category and the Best Syndicated Loan Award in the 'Best Deal'

category respectively.

During the financial crisis of 2007–2008, customers rushed to ICICI ATMs and

branches in some locations due to rumors of bank failure. The Reserve Bank of India
issued a clarification on the financial strength of ICICI Bank to dispel the rumours.

In March 2020, the board of ICICI Bank Ltd. approved an investment of Rs 1,000 crore
in Yes Bank, resulting in a 5% ownership interest in Yes.

History and Major Events

We were incorporated in 1994 as a part of the ICICI group. Our

initial equity capital was contributed 75.0% by ICICI and 25.0% by SCICI Limited, a
diversified finance and shipping finance lender of which ICICI owned 19.9%
atDecember 1996. Pursuant to the merger of SCICI into ICICI, we becamea wholly
owned subsidiary of ICICI.

The chronology of events since we were incorporated in 1994 is as

follows:

Change of name

Our name was changed from ICICI Banking Corporation Limited to ICICI

Bank Limited on September 10, 1999. The change of name was effected on account of
our being widely known by the name ICICI Bank.

53
Merger of Bank of Madura

Bank of Madura was merged with us effective March 10, 2001. The share

exchange ratio fixed for the transaction was two of our equity shares

of Rs. 10 each for every equity share of Bank ofMadura of Rs. 10 each.

Amalgamation of ICICI
ICICI, ICICI Capital Services and ICICI Personal Financial Services

amalgamated with us with effect from May 3, 2002.

The Appointed Datefor the merger specified in the Scheme of Amalgamation, which
was thedate of the amalgamation for accounting purposes under Indian GAAP,was
March 30, 2002. The amalgamation was approved by the High Courtof Judicature at
Bombay vide its order dated April 11, 2002 and by the High Court of Gujarat at
Ahmedabad vide its order dated March 7,2002. The share exchange ratio was one of our
equity shares of Rs. 10 each for every two equity shares of ICICI of Rs. 10 each.

Amalgamation of The Sangli Bank Limited

The Board of Directors of ICICI Bank Limited and the Board of

Directors of The Sangli BankLimited (Sangli Bank) at their respective Meetings held
on December9, 2006, approved an allstock amalgamation of Sangli Bank with
ICICIBank. The amalgamation was subsequently

approved by the Members of both banks. RBI (RBI) approved the scheme

of amalgamation effective April 19, 2007.

Customer
Customer needs are rapidly changing. To meet those needs, banks need to make the
customer experience the starting point for process design.

54
To do so, they need to understand what customers want, and how and when they want
it. Instead of a major cost center, operations of the future will be a driver of innovation
and customer experience.

Today, banks offer standardized products hard coded with specific benefits, parameters,
and rules–30-year mortgages, travel rewards credit cards, savings accounts with
minimum balances. A variety of operational roles are charged with supporting these
products and managing the rules governing for the customers. In the future, these
activities will be automated, and employee roles will shift toward product development.
Instead of evaluating credit risks and deciding on mortgage approvals, operations staff
will work with automated systems to enable a bank to offer its customers flexible and
customized mortgages.

Automation and artificial intelligence, already an important part of consumer banking,

and will penetrate operations far more deeply in the coming years, delivering benefits
not only for a bank’s cost structure, but for its customers. Digitizing the loan-closing
and fulfillment experience, for instance, will speed the process and give customers the
flexibility and freedom to view and sign documents online or with their mobile app.

Private sector banks HDFC and ICICI have asked customers to use digital means for
transactions and said they have reduced their staff in office as a precautionary measure
against the spread of coronavirus and that too for customers. Even particularly,

HDFC Bank had changed its working hours and its function from 10 am to 2 pm till
March 31, except on Saturday. The private sector lender had also temporarily suspended
passbook update and foreign currency purchase services.

ICICI Bank informed its customers through SMS that "our branches shall remain open
with required hygiene steps and reduced staff" and that too for the safety and
convenience for its customers.

COMPARATIVE ANALYSIS OF HDFC AND ICICI BANK

55
  Current Ratio
Current ratio show an asset and liabilities of banking system. We can know that
condition of current asset and current liabilities of banking system. The current ratio
indicates the extent to which the claims of short-term creditors are covered by assets
56
that are expected to be converted to cash in a period roughly corresponding to the
maturity of the liabilities.

Interpretation :-
The current ratio of the selected bank as a whole registered a fluctuating trend during
the entire the study period The average of current ratio is 0.088 times for ICICI bank
and The HDFC bank average ratio is 0.062 times. It means that current ratio of ICICI
bank is more than HDFC bank. Individually see this table we can see that in ICICI bank
the current ratio is very high in year 2018 10.13 times) compare to other years ratio and
average ratio. Same in HDFC bank the current ratio is very high in year 2014 (0.08
times) compare to other years ratio and average ratio. Both these banks ratio, we see
that current ratio is less than 1.

Net Working Capital is negative for ICICI bank between the 2014 to
2017 and in HDFC bank Net Working Capital is negative to all years
but average ratio of ICICI bank is more than HDFC bank it means
that condition of Net Working capital is better than HDFC bank.

 Quick Ratio
Quick ratio measures a company ability to pay the debt. Some conservative minded
investors don't like to use the current ratio as an indicator of whether or not a company
has the ability to pay 'Its short term obligations (debt). Instead, the quick ratio is used.

57
The quick ratio is similar to the Current ratios with one exception; that is, the quick ratio
measures a company's ability to pay its Short-term debt, without relying on the sale of
its inventory.

Therefore, in calculating a quick ratio, - business owners must subtract the inventory
from the current assets.

 Quick Ratio (In Times)

Interpretation
The Quick ratio of the selected bank as a whole registered a fluctuating trend during the
entire the study period. The average of quick ratio is 13.466 times for ICICI bank and
9.958 times for HDFC bank. It means that the quick ratio of ICICI bank is more than
HDFC bank. First we see that In ICICI bank quick ratio is very high in year 2014 (16.71
times) and very law in year 2015 (10.53 times), same in HDFC bank quick ratio is very
high in year 2018 (14.51 times) and very law in year 2014 (6.20 times). Finally then we
compare the average quick ratio of ICICI bank and HDFC bank we see that quick ratio
of ICICI bank is more than HDFC bank. It means that liquidity of ICICI bank is more
than HDFC bank.

 Credit Deposit Ratio

A commonly used statistic for assessing a bank's liquidity by dividing the banks total
loans by its total deposits. This number, also known as the LTD ratio, is expressed as a
percentage.

Credit Deposit Ratio (In Percentage)

58
Interpretation
The Credit Deposit Ratio of the selected bank as a whole registered a fluctuating trend
during the entire the study period. Here, Credit Deposit Ratio of ICICI bank is more
than HDFC bank. First we talk about ICICI bank Credit Deposit Ratio is very high in
2018 (105.08 %) and very law in 2014 (97.71 %). Second we talk about HDFC bank
Credit Deposit Ratio is very high in year 2018 (83.24 %) and very law in year 2014
(78.06 %). Average ratio of credit deposit is ICICI bank more than HDFC bank. If the
ratio is too high, it means that the bank may not have enough liquidity to cover any
unforeseen fund requirements, and conversely, lithe ratio is too low, the bank may not
be earning as much as it could be.

 Total Assets Turnover Ratio

Asset turnover is a Financial Ratio that measures the efficiency of a company's use of its
assets in generating sales revenue or sales income to the company. Companies with low
profit margins tend to have high asset turnover, while those with high profit margins
have low asset turnover. Companies in the retail industry tend to have a very high
turnover ratio due mainly to cutthroat and competitive pricing.

1. "Sales" is the value of "Net Sales" or "Sales" from the company's Income statement.

2. "Average Total Assets" is the average of the values of "Total assets" from the
company's balance sheet in the beginning and the end of the fiscal period. It is
calculated by adding up the assets at the beginning of the period and the assets at the
end of the period, then dividing that number by two.

3. Alternatively, "Average Total Assets" can be ending total assets.

Total Assets Turnover Ratio (in percentage)

59
Interpretation
Here, the total assets turnover ratio of HDFC bank is more than ICICI bank. First we
talk about ICICI bank; every year Total Asset Turnover Ratio is similar in every year
and in HDFC bank Total Assets Turnover Ratio is similar in every year but in 2016
Total turnover ratio is more than the other years.

 Gross Profit Margin Ratio :

The gross profit margin is calculated as follows:

Gross Profit Ratio =Sales −Cost of Goods Sold ×100

The ratio measures the gross profit margin on the total net sales made by the company.
The gross profit represent the excess of sales proceeds during the period under
observation over their cost, before taking into account administration, selling and
distribution and financing charges.

60
Significance

• This ratio shows the relationship between gross profit and net sales.

• Higher ratio means lower cost of goods sold.

61
The table above, the Gross Profit Ratio of the HDFC and ICICI Banks are presented
during the period of the study from 2015-16 to 2019-20. In HDFC Bank the Ratio shoes
continuously increasing trend. The average Profit Ratio of the HDFC Bank was
19.678% during the study period. The ratio was the highest of 22.23% during 2019-20,
where as it was the lowest of 17.35% during 2015-16. In case of ICICI Bank the Ratio
shows fluctuated trend during the study period. It was 15.37% in 2015-16 which
increase to 16.19% in 2016-17 it was highest.

62
In HDFC Bank the Ratio was higher during the study period.
Hence the performance of HDFC bank is good than ICICI
Bank.

Net Profit Margin Ratio

It’s computed as,

Net profit margin = Net Profit Business Income Where, Net

profit = Net operating Profit + Non-operating Incomes- Non-
operating Expenses Business Income = Interest earned

This is the ratio of net profit to net sales. The concept of net profit is different from net
operating profit. In calculating the net profit, all Non-operating expenses and losses are
also deducted and all non-operating income is added.

The net profit ratio is the overall measure of a firm’s ability to turn each rupee of
business income into profit. It indicates the efficiency with which a business is
managed. A firm with a high net profit ratio is in an advantageous position to survive in
the face of cost of firm.where the net profit is low, the firm will find it difficult to
withstand these types of adverse conditions.

63
64
The above table, indicates the Net Profit Ratio of the HDFC and ICICI Banks during the
period of the study from 2015-16 to 2019-20. In HDFC Bank the Ratio shows fluctuated
trend.

The average Profit Ratio of the HDFC Bank was 21.11% during the study period. The
ratio was the highest of 21.79% during 2018-19, where as it was the lowest of 20.41%
during 2016-17. In case of ICICI Bank the Ratio shows decreasing trend during the
study period. It was 22.76% in 2015-16 which decrease to 5.304% in 2019-20 it was
lowest.

In HDFC Bank the Ratio was higher during the study period,
Hence the performance of HDFC bank is good than ICICI
Bank except in one year.

Return on Total Assets

As a formula, it would be expressed as:

Return on Assets Ratio = Net Income TotalAssets

Ratio Return on assets (ROA) is an indicator of how profitable a company is relative to
its total assets. ROA gives a manager, investor, or analyst an idea as to how efficient a
company's management is at using its assets to generate earnings.

Return on assets is displayed as a percentage. Businesses (at least the ones that survive)
are ultimately about efficiency: squeezing the most out of limited resources. Comparing
profits to revenue is a useful operational metric, but comparing them to the resources a
company used to earn them cuts to the very feasibility of that company's’ existence.
Return on assets (ROA) is the simplest of such corporate bang-for-thebuck measures.
ROA is calculated by dividing a company’s net income by total assets.

65
The above table, indicates the Return on Assets Ratio of the HDFC and ICICI Banks
during the period of the study from 2015-16 to 2019-20. In HDFC Bank the Ratio
shows fluctuated trend. The average Profit Ratio of the HDFC Bank was 1.69 during the
study period. The ratio was the higher of 1.73 during 2016-17, where as it was the lower
of 1.643 during 2018-19. In case of ICICI Bank the Ratio shows decreasing trend

66
during the study period. It was 1.735 in 2015-16 which decrease to 0.272 in 2019-20 it
was lowest.

In HDFC Bank the Ratio was higher during the study period,
Hence the performance of HDFC bank is good than ICICI
Bank in the year.

Return on Capital Employed

Formulae,

Return on Capital Employed = Net Profit Before Interest and Tax

Capital Employed
The term investment may refer to total assets or net assets. The funds employed in net
assets are known as capital employed. Net assets equal net fixed assets plus current
assets minus current liabilities excluding bank loan. Alternatively, capital employed is
equal to net worth plus total debt .

Significance:
• The success of enterprise is judge with the help of this ratio.
• It is perhaps the most important ratio from the viewpoint of management.

67
68
The above table, indicates the Capital Employed Ratio of the HDFC and ICICI Banks
during the period of the study from 2015-16 to 2019-20. In HDFC Bank the Ratio
shows fluctuated trend.

The average Profit Ratio of the HDFC Bank was 1.788 during the study

period. The ratio was the higher of 1.83 during 2015-16, where as it was the lower of
1.72 during 2018- 19. In case of ICICI Bank the Ratio shows fluctuated trend during the
study period. It was 0.171 in 2015-16 which decrease to 0.289 in 2019-20 it was lowest.

In HDFC Bank the Ratio was higher during the study period, Hence
the performance of HDFC bank is good than ICICI Bank in the year.

69
The Return analysis of Pre and Post covid period of ICICI
Bank and HDFC Bank

NET PROFIT ANALYSIS

Net income can be distributed among holders of common stock as a dividend or held by
the firm as an addition to retained earnings. As profit and earnings are used
synonymously for income (also depending on UK and US usage), net earnings and net
profit are commonly found as synonyms for net income. Often, the term income is
substituted for net income, yet this is not preferred due to the possible ambiguity. Net
income is informally called the bottom line because it is typically found on the last line
of a company's income statement (a related term is top line, meaning revenue, which
forms the first line of the account statement).

In simplistic terms, net profit is the money left over after paying all the expenses of an
endeavor. In practice this can get very complex in large organizations.
The bookkeeper or accountant must itemise and allocate revenues and expenses
properly to the specific working scope and context in which the term is applied.

Net income is usually calculated per annum, for each fiscal year. The items deducted
will typically include tax expense, financing expense (interest expense), and minority
interest. Likewise, preferred stock dividends will be subtracted too, though they are not
an expense. For a merchandising company, subtracted costs may be the cost of goods
sold, sales discounts, and sales returns and allowances. For a product
company, advertising, manufacturing, & design and development costs are included.
Net income can also be calculated by adding a company's operating income to non-
operating income and then subtracting off taxes.[4]

The net profit margin percentage is a related ratio. This figure is calculated by dividing

net profit by revenue or turnover, and it represents profitability, as a percentage.

70
Net profit of ICICI Bank in pre covid period (1 April 2019 to 31March 2020) was
7930.81 crore and post covid period (1 April 2020 to 31 March 2021) it was 16192.68
crore. It is almost double in post covid period and growth rate is 104% Net profit of
HDFC Bank in pre covid period was 26257 crore and post covid period is 31116.53
crore and growth rate during the period is 18.50%.

ICICI bank’s net profit increased by 8261.87 crore and HDFC bank’s
net profit increased by 4859.53 crore during post covid period Net
profit of both ICICI bank and HDFC bank during covid period or post
covid (April 20 to March 21) increased but performance of ICICI bank
are exceptional during this period compare to HDFC bank .

RETURN ANALYSIS:

OPERATING PROFIT MARGIN:

The operating margin ratio, also known as the operating profit margin, is a profitability
ratio that measures what percentage of total revenues is made up by operating income.
In other words, the operating margin ratio demonstrates how much revenues are left
over after all the variable or operating costs have been paid. Conversely, this ratio
shows what proportion of revenues is available to cover non-operating costs like interest
expense.

71
This ratio is important to both creditors and investors because it helps show how strong
and profitable a company’s operations are. For instance, a company that receives 30
percent of its revenue from its operations means that it is running its operations
smoothly and this income supports the company.

It also means this company depends on the income from operations. If operations start
to decline, the company will have to find a new way to generate income.

Conversely, a company that only converts 3 percent of its revenue to operating income
can be questionable to investors and creditors.

The auto industry made a switch like this in the 1990’s. GM was making more money
on financing cars than actually building and selling the cars themselves. Obviously, this
did not turn out very well for them. GM is a prime example of why this ratio is
important.

Operating profit margin also known as EBIT and Return on sales is the ratio of
Operating income to net Revenue. Operating Profit Margin = Operating Income/
Revenue.

ICICI bank’s operating profit margin is -11.38 in pre covid period and post covid it is
-3.5 In both situation operating profit margin are in loss but in post covid period losses
are decline so I can say that operating profit of ICICI bank perform well in post covid
period.

HDFC operating profit was 2.6 in pre covid period and post covid
period it is 4.89 so HDFC bank shows highly positive growth in post
covid period.
72
NET PROFIT MARGIN

Net profit margin is the percentage of revenue left after all expenses have been
deducted from sales.  The measurement reveals the amount of profit that a business
can extract from its total sales. The net profit margin is intended to be a measure of
the overall success of a business.

A high net profit margin indicates that a business is pricing its products correctly
and is exercising good cost control. It is useful for comparing the results of
businesses within the same industry, since they are all subject to the same business
environment and customer base, and may have approximately the same cost
structures.

Generally, a net profit margin in excess of 10% is considered excellent, though it

depends on the industry and the structure of the business. When used in concert
with the gross profit margin, you can analyze the amount of total expenses
associated with selling, general, and administrative expenses (which are located on
the income statement between the gross margin and the net profit line items).

This measurement is typically made for a standard reporting period, such as a

month, quarter, or year, and is included in the income statement of the reporting
entity.

Formulae,

Net profit margin % = Net Profit/ Revenue.

Example of Net Profit Margin

ABC International has a net profit of $20,000 in its most recent month of
operations. During that time, it had sales of $160,000. Thus, its net profit margin is:

($20,000 net profit ÷ $160,000 net sales) x 100 = 12.5% net profit margin

73
Net profit Margin of ICICI bank during pre covid period is 10.60 which is increased
post covid period up to 20.46.

So, in this post covid period makes the highly positive effect on the
profitability of ICICI bank through net profit margin.

Net profit margin of HDFC bank during pre covid is 22.86 and during post covid it is
25.75.

So, in the post covid period make the slightly positive effect on the
profitability on HDFC bank through net profit margin.

RETURN ON ASSETS

Return on assets (ROA), also known as return on total assets, is a measure of how much
profit a business is generating from its capital. This profitability ratio demonstrates the
percentage growth rate in profits that are generated by the assets owned by a company.

Return on Assets (ROA) is a ratio computed by dividing the net income over total
assets. ROA measure the profit earned per rupee of assets and reflects how well bank
management uses the bank’s real investmentresources to generate profit.

Return on Assets % = Net Profit /Total Assets

74
Return on Assets of ICICI bank during pre post covid time is .72% which is increased
during post covid time up to 1.31%.

So, Return on Assets makes the highly positive effect on the

profitability of ICICI bank during post covid time.

Return on Assets of HDFC bank pre post covid time is 1.71% which is increased during
post covid time up to 1.78 %.

So, Return on Assets makes the slightly positive effect on the

profitability of HDFC bank during post covid time.

Return on Equity Funds:

Return on shareholders’ investment, popularly known as return on investment or return

on equity funds is the relationship between net profits and the proprietors’ funds. Net
profit after interest and tax is divided by the shareholders’ funds. This ratio is one of the
most important ratios used for measuring the overall efficiency of a bank. The primary
objective of business is to maximize its earnings and this ratio indicates the extent to
which this primary objective of business is being achieved. This ratio is of a great
importance to the present and prospective shareholders as well as the management of
the bank.

Formulae,

Return on Net worth % = Profit after tax/ Equity share holder fund

75
Return on equity of ICICI bank during pre covid time is 6.99 which is increased post
covid time up to 10.97.

So, because of increase in Return on equity makes the positive effect on

ICICI bank in post covid period. Return on equity of HDFC bank
during pre covid period it is 15.35 which is slightly negative effect
during post covid period up to 15.27.

76
COMPARATIVE FINANCIAL PERFORMANCE OF HDFC BANK
AND ICICI BANK:

The nationalization period of the mid 1970s brought a portion of the

tip top banks under the administration's control

77
The following decade proclaimed the second period of nationalization with the
converging of old private part banks.

The 1990s saw halfway advancement of the financial business and the rise of new
private part banks just as worldwide banks. During the following couple of years, fears
of progression were put to rest and in the previous decade the financial framework has
increased much from it. Progression drew out the best in the business initiating.

78
SIMILAR STATEMENT ABOUT THE FINANCIAL
PERFORMANCE OF ICICI AND HDFC BANK

Investigation of the Comparative execution of ICICI Bank and

HDFC Bank is done through the fiscal reports for multi-year

79
The above Table uncovers that the Deposit of HDFC Bank was 36.37 percent more than
that of ICICI Bank during 2008. In any case, it expanded to 110.59 percent in 2014. It
demonstrates a higher development rate of HDFC Bank to the degree of surpassing the
stores of ICICI Bank in 2014.
The file estimation of Deposits of ICICI Bank was just 119.83 in 2014 when contrasted
with 2008. In any case, it is 364.77 for HDFC Bank which shows 3.04 occasions higher
for the HDFC Bank than for ICICI Bank. Acquiring of HDFC Bank was 5.29 percent
more than that of ICICI Bank during 2008.
In any case, it expanded to 32.04 percent in 2014. It demonstrates a striking
development rate of HDFC Bank. The list estimation of Borrowings of ICICI Bank was
just 183 of every 2014 when contrasted with 2008. Yet, it was 1107.07 for HDFC Bank
which shows 6.05 occasions higher for the HDFC Bank than for ICICI Bank.

80
 RESEARCH METHODOLOGY

TO PROCEED WITH THE RESEARCH WORK IN A STRUCTURED WAY

CERTAIN METHODOLOGYIS USED SOAS TO YIELD EXACT AND
CORRECT RESULT FROM THE STUDY. THE METHODOLOGY IS
ADOPTED BYME IS AS FOLLOWS:

TYPE OF RESEARCH – DESCRIPTIVE RESEARCH DATA

SOURCE –SECONDARY DATA

DATA COLLECTION METHOD – PUBLISHED ON INTERNET,

MAGAZINES, PAPERS, AND JOURNALS.

81
 FINDINGS

The findings of the study reveal that the gross profit ratio is found to be higher in HDFC
Bank. This indicates that HDFC Bank has better profit earning capacity. Nonetheless,
the net profit ratio in both the bank is found to be similar. This denotes both the banks
have the same profit margin. Moreover, the results of the study demonstrate that the
return on assets ratio is higher in HDFC bank. This indicates the return on assets earned
by the bank is higher. Notably, the Net profit ratio is similar in both the banks. This
indicates the banks have same earning capacity. In terms of the return on capital
employed, the study reveals that it is higher in HDFC bank. This indicates that the bank
has better earning capacity of return on capital employed than ICICI bank. Overall, the
profitability performance of HDFC bank is higher in terms of profit ration, and the bank
possesses better earning capacity than ICICI bank. When compared to ICICI bank,
HDFC bank stands better in almost all aspects of profitability performance.

Nevertheless, ICICI bank can multiply return on assets by increasing assets or by

increasing profitability of the bank. Profitability may be increased by granting more
loans, earning higher interest on loans and passing the same to depositors.

82
 CONCLUSION
 Structure the investigation it is discovered that the Advance of HDFC Bank was
26.33 percent more than that of ICICI Bank during 2008. In any case, it
expanded to 93.12 percent in 2014. It demonstrates a high development rate of
HDFC Bank with respect to as advances are concerned.
 The record estimation of advances of ICICI Bank was just 140.06 in 2014 when
contrasted with that of 2008. Be that as it may, it was 497.29 for HDFC Bank
which shows 3.55 occasions higher for the HDFC Bank than for ICICI Bank.
Venture of HDFC Bank was 30.79 percent more than that of ICICI Bank during
2008. Yet, it expanded to 67.54 percent in 2014. It demonstrates a high
development rate of HDFC Bank with respect to as speculations are concerned.
 The record estimation of ventures of ICICI Bank was just 110.6 in 2014 when
contrasted with 2008. Be that as it may, it was 242.59 for HDFC Bank which
shows 2.19 occasions higher for the HDFC Bank than for ICICI Bank. Value for
HDFC Bank was 25.59 percent higher than that of ICICI Bank during 2008. Be
that as it may, it expanded to 60.32 percent in 2014. The file estimation of value
of ICICI Bank was 162.43 in 2014 when contrasted with 2008. In any case, it
was 382.88 for HDFC Bank which shows 2.35 occasions higher for the HDFC
Bank than for ICICI Bank.
 The results of the study reveal that HDFC bank profitability performance is
better and higher than ICICI bank. Overall, the HDFC Bank is generating more
profitability in this comparison. The similar steps can be adopted by ICICI Bank
in order to earn profit capacity. In ICICI Bank, average gross profit ratio is
lower than HDFC Bank.
 To increase the gross profit, the bank should control the costs and expenses
associated with bank operations. In comparison to ICICI bank, performance of
the HDFC bank during the study period can be described as dynamic and
flexible in attracting profit; ICICI bank can take suggestion from HDFC bank
also.

 Average Net Profit Margin ratio is lowest in ICICI Bank. The net profit ratio
indicates the efficiency and advantageous position to cover the cost. So it is
suggested that ICICI Bank should increase its income and reduce its expenses to

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 maximize the profit. Net profit ratio of the HDFC bank is continuous in
increasing trends and ICICI bank should examine the strategies employed by
HDFC bank.
 ICICI bank should reduce variable cost and improve the customer loyalty and
improve services offered to customers. According to return on total assets, total
assets of both banks are nearby the same but earning capacity of the ICICI bank
is lower. Therefore, ICICI bank has to invest its cash in order to give maximum
benefits to ICICI bank and charge more interest from the beneficiary companies.
 Net profit analysis shows rapid growth in net profit of both bank which is 104%
growth rate in ICICI bank and 18% in HDFC bank in post covid period. ICICI
Bank reported 8261.87 crore increase in its net profit for the financial year ended
March 31, 2021, at Rs 16,192.68 crore.
 The private lender had posted a net profit of Rs 7,930.81 crore in the financial
year ended March 31, 2020 HDFC Bank reported 4859.87 crore increase in net
profit. In financial year ended march 31, 2021, it was 26257 crore and in
financial year march 312021 net profit is 31116.53. Study shows that the HDFC
bank and ICICI bank’s ROA also increase during post covid period. ROE of
ICICI bank increase in post covid period but HDFC bank‘s ROE slightly decline
during post covid period.
 Private banking sector shows positive growth in operating profit, net profit,
return on asset (ROA) and return on Equity (ROE). As result shown by this
study that global COVID-19 crisis does not have the negative impact on ICICI
Bank and HDFC Bank. Both bank shows positive return during post covid
period. Study result also shows that ICICI bank growth rates of different return
are comparatively higher than HDFC bank’s.

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 REFERENCES

Media Reports, Press releases, Reserve Bank of India, Press Information

Bureau, www.pmjdy.gov.in

https://www.ibef.org/industry/banking-india.aspx

Barathi Kamath. G (2007). The intellectual capital performance of the Indian banking
sector.Journal of Intellectual Capit al. 8 (1), pp. 96-123.

http://ignited.in/I/a/109751

https://www.projects4mba.com/swot-analysis-of-banking-industry/4756/

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