A

SYNOPSIS REPORT
ON
RETAIL BANKING TRANSFORMATION IN INDIA
AT
ICICI BANK LTD

Submitted
By
C. BHANUCHANDHAR
H.T.NO: 1325-20-672-248
PROJECT SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF DEGREE
OF

MASTER OF BUSINESS ADMINISTRATION

Department of Business Administration

AURORA’S PG COLLEGE
RAMANTHAPUR
(Affiliated to Osmania University)
2020-2022

1
 Aurora’s PG College (MBA), Ramanthapur
Department of Management

SYNOPSIS

Title of the Project : RETAIL BANKING

TRANSFORMATION IN INDIA

Student Name : C. BHANUCHANDHAR

Hall Ticket Number : 1325-20-672-248

Signature of the Student :

Signature of the Guide :

2
 INDEX
. No. CONTENTS Page No

1 INTRODUCTION

2 NEED FOR THE STUDY

3 OBJECTIVES OF THE STUDY

4 SCOPE OF THE STUDY

5 RESEARCH METHODOLOGY

6 REVIEW OF LITERATURE

7 INDUSTRY PROFILE

8 COMPANY PROFILE

9 PROPOSED OUTCOMES

10 LIMITATIONS OF THE STUDY

11 CHAPTERISATION

12 BIBLIOGRAPHY

3
INTRODUCTION
Banking in India has come a full circle from the time when you had to wait in a queue to
collect cash to getting it delivered at your doorstep at no extra cost. Add to that services
like phone banking, Internet banking, 24 hour ATM, draft delivery at home, etc. and you
have service spelt with a capital. Though the contemporary banks' services have changed a
lot over the last few years, the core function has remained the same. Banks handle deposits
and withdrawal of money, provide loans, pay a part of the surplus as interest and the rest is
kept back for the smooth functioning of the bank and profit making. A banks' functions
can be divided into various divisions like:
Retail/Personal Banking: This division provides a range of financial services
toindividual customers and small companies. It operates mainly through branch networks.
Retail banking includes routine transactions like deposits and withdrawals of money;
money transfer; foreign currency exchange and travellers cheque encashment. They also
deal with personal and small loans, credit and mortgages; insurance policies; investment
schemes; pension funds; and advice to customers on various financial matters. Apart from
offering home loans, car loans, educational loans, consumer loans, etc. they also develop
various deposit schemes and help people fill their coffers.
Corporate Banking: They deal with medium to large-scale companies andgovernment
agencies. It could start at the local branch manager level, though more complex dealings
are routed through corporate divisions of clearing banks and their merchant banking
subsidiaries.
Corporate banking deals with credit and advances, trade finance, foreign exchange
management, asset management, lease financing of heavy equipment, infrastructure,
machinery, credit risk assessment, etc. They also advise clients on matters such as
corporate mergers and acquisition, raising capital and business strategy regarding
competitors and outside factors.
Merchant Banking: Investment management is the primary activity of this group.It could
be on behalf of corporate clients, or institutional investors-like pension funds, investment
trusts, or those in the securities business. This groups also handles public issue and
marketing of shares, debentures and other such papers. It may also include other stock
market functions like dematerialization services, investment advisory services, etc.
Merchant banking executives research into capital market, advise and manage funds of
various corporate and individual customers.

4
Treasury group:
This group takes care of the total funds of a bank includingforeign exchange reserves.
Responsibilities include bank portfolio management, dealing in foreign currency, etc.
There are Forex (foreign exchange) dealers in this group who exclusively deal with the
foreign market. They buy and sell foreign exchange at the minimum exchange cost
thereby earning maximum profit from the transactions.

Rural Banking:
This group deals with the banking and credit needs of people inthe rural sector. Not all
banks have this group and some banks have separate subsidiary companies for rural
banking.

Product Management:
This group conceptualizes various banking services andthen develops, implements and
manages them. They have the responsibility for a banking product (meaning services like
personal loans, home loans, credit cards, loans against shares, educational loans, etc.)
Apart from these main functional groups, there is an appraisal group to analyse economic
feasibility of industrial projects, the bank's exposure to financial risk and long term
returns. There are internal auditors who audit the bank's internal books of accounts. There
are various groups of professionals like lawyers, engineers, agricultural scientists and
economists who work in various departments in advisory capacities. They help make
decisions on issues that are legal, technical or economic in nature. For example, the
economist advises various functional groups on the implications of the Union budget on
the business of the banks, consumer buying pattern, etc.

OPPORTUNITIES AND CHALLENGES

Retail banking has immense opportunities in a growing economy like India. As the growth
story gets unfolded in India, retail banking is going to emerge a major driver. How does
the world view us? The BRIC report is viewing India as an economic superpower. A.T.
Kearney, a global management-consulting firm, recently identified India as the ―second
most attractive retail destination‖ of 30 emergent markets.

5
The rise of Indian middle class is an important contributory factor in this regard. The
percentage of middle to high-income Indian households is expected to continue rising. The
younger population not only wields increasing purchasing power, but as far as acquiring
personal debt is concerned, they are perhaps more comfortable than previous generations.
Improving consumer purchasing power, coupled with more liberal attitudes towards
personal debt, is contributing to India‘s retail banking segment.

The combination of above factors promises substantial growth in retail sector, which at
present is in the nascent stage. Due to bundling of services and delivery channels, the areas
of potential conflicts of interest tend to increase in universal banks and financial
conglomerates. Some of the key policy issues relevant to the retail-banking sector are:
financial inclusion, responsible lending, and access to finance, long-term savings, financial
capability, consumer protection, regulation and financial crime prevention.

6
NEED OF THE STUDY
Designing own and new financial products is very costly and time consuming for the
bank. Customers now-a-days prefer net banking to branch banking. The banks that are
slow in introducing technology-based products, are finding it difficult to retain the
customers who wish to opt for net banking. A major disadvantage is monitoring and
follows up of huge volume of loan accounts inducing banks to spend heavily in human
resource department. The volume of amount borrowed by a compared to wholesale
banking. This does advantage of earning huge profits from wholesale banking.
Single customer is very low as not allow banks to to exploit the single customer as in case
of Wholesale banking

7
 OBJECTIVES OF STUDY
1. To study the issues and challenges in retail banking
2. To study the recent trends in retail banking
3. To ensure high satisfaction level and reduce percentage of complaints of
customer in retail banking.
4. To estimate the future growth of Indian retail banking.
5. To understand Optimization of retail banking channels.
To suggest strategies for improvement in Customer Service.

8
SCOPE OF THE STUDY

 Increase in the purchasing power. The rural areas have the large purchasing power at their
disposal and this is an opportunity to market Retail Banking.
 Tax benefits are available for example in case of housing loans the borrower can avail tax
benefits for the loan repayment and the interest charged for the loan
 India has 200 million households 400 middleclass population more than 90% of the
savings come from the household sector . Falling interest rates have resulted in a shift.
“Now people want to save less and spend more”.
 Nuclear family concept is gaining much importance which may lead to large savings,
Large number of banking services to be provided are day-by-day increasing
 All round increase in economic activity.

9
RESEARCH METHODOLOGY
Data was collected from two sources-primary and secondary sources.
1. Primary data collection- The primary data was collected by means of survey. It
was collected from different customers through questionnaire.
2. Secondary data collection-This data was collected from Internet,
Company‘s websites & Magazines.
SAMPLE SIZE
Sample size was restricted to 50 respondents, since it was not possible to cover the whole
universe in the available time period.
SAMPLING METHOD
For this research Non- Probability Convenience Sampling has been used because time
limit for the completion of the work is limited and also managers and employees were not
available all the time.
Area of Study- Hyderabad
Duration-3 months

10
REVIEW OF LITERATURE

POTENTIAL FOR RETAIL IN INDIA: IS SKY THE LIMIT

The Indian players are bullish on the Retail business and this is not totally unfounded.
There are two main reasons behind this. Firstly, it is now undeniable that the face of the
Indian consumer is changing. This is reflected in a change in the urban household income
pattern. The direct fallout of such a change will be the consumption patterns and hence the
banking habits of Indians, which will now be skewed towards Retail products. At the same
time, India compares pretty poorly with the other economies of the world that are now
becoming comparable in terms of spending patterns with the opening up of our economy.
For instance, while the total outstanding Retail loans in Taiwan is around 41% of GDP, the
figure in India stands at less than 5%. The comparison with the West is even more
staggering. Another comparison that is natural when comparing Retail sectors is the use of
credit cards. Here also, the potential lies in the fact that of all the consumer expenditure in
India in 2001, less than 1% was through plastic, the corresponding US figure standing at
18%.
SKILLS
Highly skilled candidates are recruited at various levels across the organization. Skills can
be classified broadly into highly skilled and semi skilled routine work. Various training
program are organized regularly to impart training needs of the employees.
STYLE /CULTURE
The culture of the organisation, consisting of two components: Organisational culture:
the dominant values and beliefs, and norms,which develop over time and become
relatively enduring features of organisation life.
Management Style: More matter of what managers do than what theysay how do a
company‘s managers spend their time? What are they focusing attention on?Symbolism –
the creation and maintenance (or sometimes deconstruction) of meaning is a fundamental
responsibility of managers.,Building a high performance culture is another key prerogative
of the HR function. ICICI BANK LTD envisage a credible and transparent performance
management process that helps in aligning individual goals with corporate objectives, both
quantitative and qualitative, and encourages cross sell and team spirit. ICICI BANK LTD
performance management process will be supported by a robust rewards and recognition
strategy for each business and a market based compensation structure that is flexible,

11
responsive and helps retention through asset building and wealth creation for top
performers.
STRATEGY
Being one of the leading banking institutions with rich culture of professionalism the bank
has various strategies to tackle with competitors in the market. The bank has the strategy
to make use of the growing potential of the rural sector as well as the global academy, the
business landscape will be changing magically and so will the financial service need.The
bank has the strategy to enhance the reach of anytime and anywhere banking. It has the
ATM’s almost in all the cities and in good numbers. With the growing of the net banking
the bank have several new products and facilities with state-of-the-art facilities, enabling
you to conduct all your banking activities using your personal computer, from the comfort
of your home or office. Thus providing you with secure, 24 hour access to all your
accounts from anywhere in the world.
Unique Advantages:
Single Access Key: Our revolutionary technology allows you to accessyour account with
your debit card PIN. Just log on to our website, select Internet Banking services and key in
your Customer ID and debit card PIN. On successful validation you will be allowed to
select an Internet password. It's that easy.
Secure Technology: For the first time in India, our Two FactorAuthorization allows for
"One Time Passwords" for Internet Banking transaction authentication to be delivered via
SMS to your Mobile Phone. This password enhances your Internet Banking security and
allows you the freedom of banking without remembering multiple passwords.
Instant Payment Solutions: Our Real Time Gross Settlement (RTGS)Payment and
Electronic Funds Transfer (EFT) facilities allow you to transfer funds to own or third
party accounts instantly. You can also request for multiple Demand Drafts at various
locations and set up standing instructions for your account to execute routine payments

SYSTEM
Formal and informal procedures that support the strategy and structure (systems are more
powerful than they are given credit).The bank follows a systematic procedure at all the
levels. The bank has very good performance appraisal system, training and development
system, resource allocation system, distribution and recovery system. The instructions
flow from top management to lower levels of management.The training needs are

12
developed after TNI (Training Needs Identification) and all the programs are put on the
monthly/annual training calendar to be implemented.
Trends in Retail Banking
Growing a retail banking business is becoming increasingly challenging. The yield curve
is flattening, reducing banks‘net interest margin. Competition is intensifying, as new, non-
traditional players enter the retail banking space. And consumer preferences for financial
products, payment methods and distribution channels continue to evolve, providing
revenue opportunities, but also introducing new operational challenges.
The changing dynamics of the retail banking business have significant implications for
financial institutions. In order to successfully compete in this environment, banks must
provide a distinctive customer experience and offer innovative product solutions in order
to differentiate their value proposition in the marketplace.
Key trends in retail Banking are:
1. Bifurcation of the retail banking business
National- Consolidate- Credit Cards, Home Equity Loans Mortgages Local-
Fragmented- Deposits, Installment Loans, Small Business Loans.

13
2.2ARTICLES
ARTICLE: 1
TITLE: Banking changing the gear.
AUTHOR: Sharad Kumar
YEAR: (February 2010)
ABSTRACT:
Indian banking is transforming itself into a customer centric, commercial position by
providing the better and qualitative services in addition to primary services with the help of
superior technology and effective innovation which is producing customer delight. India has
always been a high potential of savings and deposits and its customers were by and large
conservative in nature. He also explained that today's customer is wise one. They are clear in
their mind about their needs, desire, wants and the capabilities that they posses in converting
their desire into demand. The relationship between the desire and demand is one which
generates all the activities of the economy.

ARTICLE: 2
TITLE: "Customer satisfaction with service quality- An empirical study of public and
private sector banks",.
AUTHOR: Pooja Mengi
YEAR: (September 2009)
ABSTRACT:
considered that customer services is an integral part of any facet of banking and it defines the
future of any banking organization. For a service sector like banking industry the whole range
of activities and generation of income swivels around the customers. According to her
servequal performance will ensure maximum customer satisfaction and also help in attending
customer loyalty.

14
ARTICLE: 3
TITLE: "Impact of service quality on customer satisfaction, loyalty and commitment in
the Indian Banking sector",.
AUTHOR: Sandip Ghosh Hajra, Dr. Kailash. B.L. Srivastava.
YEAR: (May 2010)
ABSTRACT:
quality plays vital role towards the determinant of competitiveness for establishing and
sustaining & satisfying the relationship with the bank customers. A customer minded
corporate culture, an excellent service system design, the effective utilization of information
and technology are crucial superior service quality. In this regard, by identifying the future
needs, challenges the Indian Banking sector has responded to these needs by paying more
attention to enhancement of service quality so as to retain its market position. In the present
in Indian banking scenario satisfactorily service quality is an indispensable competitive
strategy. It is very much important to explore the perception of services quality and its
relationship with the customer satisfaction, loyalty and commitment in banks. He also given
an importance for service quality dimensions which are; assurance, empathy, security and
reliability. All these dimension of service quality tends to have strong impact on customer
satisfaction depending upon the quality performance.

15
ARTICLE: 4
TITLE: Customer Services Of Commercial Banks In India.
AUTHOR: Dr. A. Subhaiah. S. Jaykumar,
YEAR: (Aug 2009),
ABSTRACT:
E - Banking - A new dimensions of customer services of commercial banks in India' has
reviewed that banking services are delivered by suing technology. Banking done
electronically is electronic banking. Customer need not necessarily visit bank to carry out
their banking transaction and can meet their requirements through the deliveries of E -
Banking facilities. Due to adoption the E - Banking cost of reduction in the transaction,
improvements in efficiency as well as it can win the trust of customers.

16
ARTICLE: 5
TITLE: "Financial inclusions : Banking scenario",.
AUTHOR: J. Vimal Priyan , B. Suriya Prabha,
YEAR: (March 2010)
ABSTRACT:
The meaning, nature of financial inclusions in banking sector. They also said the banking
industry has shown tremendous growth in volume and profit in last few decades. Despite in
making notable improvement in financial viability, profitability, competitiveness these are
concerns that yet banks has not able include vast segments of population. The reason may be
change from country to country and so. The strategy could also may but all of our efforts are
being made financial inclusion can truly shift the financial conditions and standard of life of
poor and disadvantaged.

17
INDUSTRY PROFILE
A bank is a financial institution that accepts deposits and channels those deposits into lending
activities. Banks primarily provide financial services to customers while enriching investors.
Government restrictions on financial activities by banks vary over time and location. Banks
are important players in financial markets and offer services such as investment funds and
loans. In some countries such as Germany, banks have historically owned major stakes in
industrial corporations while in other countries such as the United States banks are prohibited
from owning non-financial companies. In Japan, banks are usually the nexus of a cross-share
holding entity known as the keiretsu. In France, bancassurance is prevalent, as most banks
offer insurance services (and now real estate services) to their clients.

Introduction
India’s banking sector is constantly growing. Since the turn of the century, there has been a
noticeable upsurge in transactions through ATMs, and also internet and mobile banking.
Following the passing of the Banking Laws (Amendment) Bill by the Indian Parliament in
2014, the landscape of the banking industry began to change. The bill allows the Reserve
Bank of India (RBI) to make final guidelines on issuing new licenses, which could lead to a
bigger number of banks in the country. Some banks have already received licences from the
government, and the RBI's new norms will provide incentives to banks to spot bad loans and
take requisite action to keep rogue borrowers in check.
Over the next decade, the banking sector is projected to create up to two million new jobs,
driven by the efforts of the RBI and the Government of India to integrate financial services
into rural areas. Also, the traditional way of operations will slowly give way to modern
technology.
Market size
Total banking assets in India touched US$ 1.8 trillion in FY15 and are anticipated to cross
US$ 28.5 trillion in FY25.
Bank deposits have grown at a compound annual growth rate (CAGR) of 21.2 per cent over
FY08–15. Total deposits in FY15 were US$ 1,274.3 billion.
Total banking sector credit is anticipated to grow at a CAGR of 18.1 per cent (in terms of
INR) to reach US$ 2.4 trillion by 2019.
In FY18, private sector lenders witnessed discernable growth in credit cards and personal
loan businesses. ICICI Bank witnessed 181.6 per cent growth in personal loan disbursement

18
in FY18, as per a report by Emkay Global Financial Services. ICICI BANK's personal loan
business also rose 49.8 per cent and its credit card business expanded by 31.1 per cent.
Investments
Bengaluru-based software services exporter Mphasis Ltd has bagged a five-year contract
from Punjab National Bank (PNB) to set up the bank’s contact centres in Mangalore and
Noida (UP). Mphasis will provide support for all banking products and services, including
deposits operations, lending services, banking processes, internet banking, and account and
card-related services. The company will also offer services in multiple languages.
Microfinance companies have committed to setting up at least 30 million bank accounts
within a year through tie-ups with banks, as part of the Indian government’s financial
inclusion plan. The commitment was made at a meeting of representatives of 25 large
microfinance companies and banks and government representatives, which included financial
services secretary Mr GS Sandhu.
Export-Import Bank of India (Exim Bank) will increase its focus on supporting project
exports from India to South Asia, Africa and Latin America, as per Mr. Yaduvendra Mathur,
Chairman and MD, Exim Bank. The bank has moved up the value chain by supporting
project exports so that India earns foreign exchange. In 2014–15, Exim Bank lent support to
85 project export contracts worth Rs 24,255 crore (US$ 3.96 billion) secured by 47
companies in 23 countries.

19
COMPANY PROFILE
ICICI Bank is India's largest private sector bank with total assets of Rs. 5,946.42 billion (US$
99 billion) at March 31, 2019 and profit after tax Rs. 98.12 billion (US$ 1,637 million) for
the year ended March 31, 2019.ICICI Bank currently has a network of 3,839 Branches and
13,943 ATM's across India.

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

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial
institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank was
reduced to 46% through a public offering of shares in India in fiscal 1998, an equity offering
in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of
Madura Limited in an all-stock amalgamation in fiscal 2001, and secondary market sales by
ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at
the initiative of the World Bank, the Government of India and representatives of Indian
industry. The principal objective was to create a development financial institution for
providing medium-term and long-term project financing to Indian businesses.
 In the 1990s, ICICI transformed its business from a development financial institution
offering only project finance to a diversified financial services group offering a wide variety
of products and services, both directly and through a number of subsidiaries and affiliates like
ICICI Bank. In 1999, ICICI become the first Indian company and the first bank or financial
institution from non-Japan Asia to be listed on the NYSE.
 

20
After consideration of various corporate structuring alternatives in the context of the
emerging competitive scenario in the Indian banking industry, and the move towards
universal banking, the managements of ICICI and ICICI Bank formed the view that the
merger of ICICI with ICICI Bank would be the optimal strategic alternative for both entities,
and would create the optimal legal structure for the ICICI group's universal banking strategy.
The merger would enhance value for ICICI shareholders through the merged entity's access
to low-cost deposits, greater opportunities for earning fee-based income and the ability to
participate in the payments system and provide transaction-banking services. The merger
would enhance value for ICICI Bank shareholders through a large capital base and scale of
operations, seamless access to ICICI's strong corporate relationships built up over five
decades, entry into new business segments, higher market share in various business segments,
particularly fee-based services, and access to the vast talent pool of ICICI and its subsidiaries.
 In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger of
ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal Financial
Services Limited and ICICI Capital Services Limited, with ICICI Bank. The merger was
approved by shareholders of ICICI and ICICI Bank in January 2002, by the High Court of
Gujarat at Ahmedabad in March 2002, and by the High Court of Judicature at Mumbai and
the Reserve Bank of India in April 2002. Consequent to the merger, the ICICI group's
financing and banking operations, both wholesale and retail, have been integrated in a single
entity.

21
PROPOSED OUTCOMES
Any serious discussion of the future of the retail banking industry eventually raises a basic
question: will future customers still need retail banks? The answer, it turns out, depends on
banks themselves. With technology and nonblank businesses providing new options for
safeguarding and managing their finances, customers will continue to depend on banks
only as long as banks can provide service and value that cannot be found anywhere else.

The need to become highly customer focused has forced the slow-moving public sector
banks to adopt a fast track approach. The unleashing of products and services through the
net has galvanized players at all levels of the banking and financial institutions market grid
to look a new at their existing portfolio offering. Conservative banking practices allowed.

22
LIMITATION
1. Designing own and new financial products is very costly and time consuming
for the bank.
2. Customers now-a-days prefer net banking to branch banking. The banks that
are slow in introducing technology-based products, are finding it difficult to
retain the customers who wish to opt for net banking.
3. Customers are attracted towards other financial products like mutual funds
etc.
4. Though banks are investing heavily in technology, they are not able to
exploit the same to the full extent.
5. A major disadvantage is monitoring and follow up of huge volume of loan
accounts inducing banks to spend heavily in human resource department
6. Long term loans like housing loan due to its long repayment term in the
absence of proper follow-up, can become NPAs.
7. The volume of amount borrowed by a single customer is very low as
compared to wholesale banking. This does not allow banks to to exploit the
advantage of earning huge profits from single customer as in case of
wholesale banking.

23
 CHAPTERISATION

CHAPTER -1 - INTRODUCTION

This chapter includes the introduction of the topic, need, scope, objectives of the study,
Project limitations and methodology of the study.

CHAPTER - 2 REVIEW OF LITERATURE

This chapter includes the theoretical background and articles written by different authors and
brief explanation of the topic.

CHAPTER - 3 - INDUSTRY PROFILE & COMPANY PROFILE

CHAPTER - 4 - DATA ANALYSIS AND INTERPRETATION

This chapter includes the comparative analysis of the financial statements of the five years
data and it also includes the interpretation based on the study.

CHAPTER - 5 – SUMMARY AND CONCLUSION

This chapter includes the overall summary of the project and the conclusion based on the
study during the period.

24
BIBLIOGRAPHY
Reports
 Ahmad, K., “Bankers’ perception of electronic banking in Pakistan”, Journal of internet
banking and commerce, April 2008
 Aladwani, A.M., “Online banking:A field study of drivers, development challenges And
expectations”, International Journal of information Management .
 Agboola A. A ., “Electronic payment systems and Tele banking Services in Nigeria”,
Journal of Internet Banking and commerce
 Eyadat, M. and Kozak, S., “The role of Information Technology in the profit and cost
efficiency improvements of the banking sector”, Journal of Academy of Business and
Economics,

WEBSITES

 www.banknetindia.com
 www.bharatbook.com
 http://www.banknetindia.com/
 https://www.bankingfinance.in

25