PROJECT REPORT ON

“A STUDY ON FINANCIAL STATEMENT ANALYSIS OF ICICI

BANK

A PROJECT REPORT
Submitted for the Partial Fulfilment of the Degree of
Master in Business Administration

SUBMITTED BY-
NISHANT SHARMA
UNIVERSITY ROLL NO- 21014326024
4th SEMESTER, MBA
ACADEMIC SESSION, 2021-2023
SUBMITTED TO-
MRS. DIKSHA THAKUR

HIMACHAL PRADESH TECGNICAL UNIVERSITY OFF

CAMPUS BUSINESS SCHOOL AT RAJIV GANDHI
GOVERNMENT ENGINEERING COLLEGE CAMPUS AT
NAGROTA BAGWAN DISTRICT- KANGRA HIMACHAL
PRADESH- 176047
 DECLARATION

I, Nishant Sharma hereby declare that this project report in prepared by me on “FINANCIAL
PERFORMANCE ANALYSIS OF ICICI BANK” submitted in partial fulfillment of
requirement for the degree of the MASTER IN BUSINESS ADMINISTARATION
(FINANCE) To HPTUBS OFF CAMPUS AT RGGEC.

This is my original work & not submitted for the award of any other degree.

I further declare that the results of my findings & research in the subject is original & has not
been previously submitted either in part or whole to any other institute & university for any
degree.

PLACE: NISHANT SHARMA

DATE:
 CERTIFICATE

Dated: April 20, 2018

Himachal Pradesh Technical University Business School [HI)TUBS]

Rajiv Gandhi Government Engineering College [RGGECI

Kangra at NagrotaBagwan (Massal) Himachal Pradesh [India] — 176047

lhis to certiö' that I Nishant sharma have carried out the research proposal embodied in the
present field report for the partial fulfillment of the degree ofMaster in Business Administration
as per the ordinances of Himachal Pradesh Technical University. I declare to the best of my
knowledge that no part of this project report was earlier subniitted for the award of Master in
Business Administation and other research dégree of any University.

Name: Nishant sharma URN: 21014326040

Supervisor
 ACKNOWLEDGEMENT

No task is single man’s effort. Any job in this world cannot be accomplished without the
assistance of others. An assignment puts the knowledge and experience of an individual o test.
There is always a sense of gratitude that one likes to express towards the persons who helped to
change an effort in a success. The opportunity to express my indebt Ness to people who have
helped me to accomplish this task.

I would like to express my gratitude to the mentor Mrs. Diksha Thakur My special thanks to him
for his kind co-operation and constant encouragement.

Last but not the least, it would be unfair if I don’t express my indebt Ness to my parents and all
my friends for their active cooperation which was of great help during the course of my project
report.
 PREFACE

The present era is undoubtedly a management era. Management is an important function in any
organization. A management is one of the most important fields which are widely used in every
stage of life. The effective management can be achieved only by effective management training
and developing skill to understand the organizational level, this project work is a part of the
course of MBA and was done on the topic “A Study on Risk Management in Banking Sector”.
This project is prepared on the basis of responses of the farmers (Bank’s customers) in market
and understanding the requirement of proper guidance to customers.

The advantages of this sort of integration, which promotes guided to corporate culture, functional,
social and norms along with formal teaching are numerous.
1) To bridge the gap between theory and practical.
2) To install the feeling of belongingness and acceptance.
The present report gives a detailed view of the “A Study on Risk Management in Banking
Sector”. The research is definitely going to play an important role in developing an aptitude for
hard self-confidence.
 INDEX
CHAPTERS CONTENTS PAGE NO.

DECLARATION
CERTIFICATE
ACKNOWLEDGEMENT
PREFACE
CHAPTER-1 INTRODUCTION 1-24

CHAPTER-2 REVIEW OF LITERATURE 25-29

CHAPTER-3 RESEARCH METHODOLOGY 30-32

CHAPTER-4 DATA ANAYLYSIS & INTERPRETATION 33-45

CHAPTER-5 FINDING & CONCLUSION 46-48

BIBLIOGRAPGHY 49
 Chapter 1

INTRODUCTION
TO THE
TOPIC
 INTRODUCTION TO ICICI BANK
ICICI Bank is India's second-largest bank with total assets of about Rs.1,67,659 croreat March 31, 2005 and
profit after tax of Rs. 2,005 crore for the year ended March 31, 2022 (Rs. 1,637 crore in fiscal 2019). ICICI
Bank has a network of about 560 branches and extension counters and over 1,900 ATMs. ICICI Bank offers a
wide range of banking products and financial services to corporate and retail customers through a variety of
delivery channels and through its specialized subsidiaries and affiliates in the areas of investment banking, life
and non-life insurance, venture capital and asset management.

ICICI Bank set up its international banking group in fiscal 2020 to cater to the cross border needs of clients and
leverage on its domestic banking strengths to offer products internationally. ICICI Bank currently has
subsidiaries in the United Kingdom and Canada, branches in Singapore and Bahrain and representative offices
in the United States, China, United Arab Emirates, Bangladesh and South Africa.

ICICI Bank's equity shares are listed in India on the Stock Exchange, Mumbai and the National Stock Exchange
of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange
(NYSE).

As required by the stock exchanges, ICICI Bank has formulated a Code of Business Conduct and Ethics for its
directors and employees.

At April 4, 2020, ICICI Bank, with free float market capitalization of about Rs. 308.00 billion (US$ 7.00 billion)
ranked third amongst all the companies listed on the Indian stock exchanges.

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.

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.
1
1.1 BOARD MEMBERS as on January 2023
Board Governance, Remuneration
Audit Committee
& Nomination Committee
Mr. Uday Chitale, Chairman
Ms. Neelam Dhawan, Chairperson
Mr. S. Madhavan
Mr. Girish Chandra Chaturvedi
Mr. Radhakrishnan Nair
Mr. B. Sriram
Corporate Social Responsibility Committee
Customer Service Committee
Mr. Girish Chandra Chaturvedi, Chairman
Ms. Vibha Paul Rishi, Chairperson
Mr. Radhakrishnan Nair
Mr. Hari L. Mundra
Ms. Vibha Paul Rishi
Mr. Sandeep Bakhshi
Mr. Uday Chitale
Mr. Rakesh Jha
Mr. Rakesh Jha
Fraud Monitoring Committee
Credit Committee
Mr. Radhakrishnan Nair, Chairman
Mr. Sandeep Bakhshi, Chairman
Mr. S. Madhavan
Mr. B. Sriram
Ms. Neelam Dhawan
Mr. Hari L. Mundra
Mr. Sandeep Bakhshi
Mr. Rakesh Jha
Mr. Rakesh Jha

Risk Committee
Information Technology (IT) Strategy Committee
Mr. B. Sriram, Chairman Mr. S. Madhavan, Chairman
Ms. Neelam Dhawan Mr. Girish Chandra Chaturvedi
Mr. Sandeep Batra Ms. Vibha Paul Rishi
Mr. Rakesh Jha Mr. Sandeep Batra
Share Transfer & Shareholders'/ Investors' Grievance
Committee of Executive Directors
Committee
Mr. Hari L. Mundra, Chairman Managing Director & CEO,
Mr. Uday Chitale Chairperson
Mr. Sandeep Batra Any Two Independent Directors

2
1.2 SOCIAL INITIATIVES GROUP (SIG):
ICICI Bank's social sector initiatives aim to resolve some of the most fundamental developmental problems
facing India today. Its involvement is primarily in terms of non-commercial support to fill knowledge and
practice gaps in specific thematic areas— Early Child Health, Elementary Education and Micro Financial
Services.

SIG interactive platform that seeks to:

 Bring together participants in the development process to widen and deepen the discourse informing
development practice. Interactive features include discussion board sand facilities to post papers, articles
or other resources.
 Publish research related to innovations and significant problems within the identified thematic areas.

 Enable online application for funding.

MISSION STATEMENT OF SIG

The mission statement of the SIG is "to identify and support initiatives designed to improve the capacities of the
poorest of the poor to participate in the larger economy". The SIG believes that the three fundamental capacities
any individual should possess to be able to participate in the larger economy are in the areas of health, education
and access to basic financial services. Within these broad areas, infant health at birth, elementary education and
micro financial services define the areas in which the SIG’s work focuses

At a very basic level, the programmes and projects supported by the SIG are required to cater to the poorest.
They should enable them to become active and informed participants in socio-economic processes as opposed
to passive observers. These initiatives must be output oriented, with a focus on producing measurable outcomes
that meet a minimum quality requirement. The initiatives also need to be cost-effective. This is in recognition of
the fact that resources are limited and their efficient use is imperative if the maximum number is to benefit.
Cost-effectiveness also facilitates the adoption of the initiative in other contexts.

The initiative must be scalable. Scalability implies the ability to draw upon important elements of a programme
and adapt them to suit the needs of a specific situation. It should be possible to do so at a national level. Even if
the programme itself is not directly scalable, it should be possible to take away significant lessons from it in
order to enrich work in other settings.

All supported initiatives should have the potential for both near and long-term impact. Consequentially, it is
important that the impact of these programmes, in the near and long term, be carefully understood and analyzed
in a rigorous manner and not through anecdotes. It is critical to clearly understand how an initiative is
performing in terms of its predetermined goals and in comparison to alternatives. There is little doubt that a
complex of factors, very often beyond the control of the program/ organization, will influence the outcome. Yet,
serious and regular impact analysis can only make the program richer and is essential. The SIG assigns greater
value to programmes/ organizations that carefully examine the short-term and long-term implications of their
actions.

3
In pursuit of its goals in the three focus areas, the SIG tends to support reasonably large-sized initiatives so that
issues such as cost-effectiveness, scalability and impact assessment can be dealt with more directly. These
initiatives not only have the potential to provide key research inputs to other programmes, but also tend to have
a large impact that benefits the communities they work with. The approach of the SIG may thus be
characterized more broadly as ‘action research’, to distinguish it from pure academic research. However, in its
research work and impact assessment, the SIG seeks to adhere to the highest standards of academic rigour. It
often works in partnership with academic institutions such as Institute of Rural Management Anand, KEM,
Massachusetts Institute of Technology, Tata Institute of Social Sciences, University of California, Berkeley and
the University of Southampton.

It is crucial that the programmes supported by SIG be time-bound. This lends clarity to the aim of the
programme and prevents its intent from getting diluted over time.

The SIG works by identifying gaps in knowledge and practice in its focus areas and locating initiatives that
address these gaps in a manner consistent with the SIG’s mission. The identification of research needs is
followed by an in-depth analysis of the short-term and long-term implications of various forms of action.
Among other things, this requires taking a comprehensive overview of work already done in the country and
outside. The SIG, thus, seeks to answer certain fundamental questions in its focus areas through the projects it
supports and, thereby, contribute to findings that help the sector. It should be pointed out that the SIG does not
function as a rollout agency.

An important feature of the SIG’s strategy is the belief in strengthening or supplementing existing systems,
rather than investing in parallel structures. Another key element of its strategy is the building of long-term
relationships with suitable partners. As part of this effort, the SIG works actively to improve the efficacy of
these partners and ensure sustained impact.

In pursuit of its goals, the SIG seeks to work actively with research agencies, Non-Governmental Organizations
(NGOs), Corporates, Government departments, local stakeholders and international organizations. It should also
be noted that the group believes modern technologies, particularly Information and Communication
Technologies (ICT) can prove to be important facilitators if used appropriately.

FOCUS AREAS OF SIG

The SIG has three focus areas:

 Early Child Health

 Elementary Education
 Micro Financial Services

Health: Early Child Health

4
 This focus seems to have the potential for maximum long and short-term impact and appears achievable in the
most cost-effective and therefore scaleable manner.ICICI Bank aims to improve individual capacity by
impacting two important indicators of chronic under nutrition in the first three years at the national level:

 Proportion of babies born with a birth weight of less than 2.5 kg at or beyond 37 weeks of gestation
(Intra-Uterine Growth retardation, IUGR)
 Proportion of children under three years who are stunted.

Education: Elementary Education

Education (and not just literacy) up to the elementary level seems to be almost a necessary condition for any
individual (rich or poor) to be able to participate in any manner in the larger economy Here the goal is to work
towards the universalisation of elementary education all across India, rural and urban, with a substantial
difference being made by 2010. The goal focuses on retention in school and learning achieved.

Money: Micro Financial Services

These services would include basic banking (savings and cash management), finance (debt and equity),
insurance (life and health) and derivatives. The goal here is to facilitate universal access to these four services
by the year 2010.

In addition to its core areas of focus, the SIG, in a limited manner, supports some other initiatives:

1. Non-governmental Organization (NGO) Capacity Building

This is supported through the GIVE (Giving Impetus to Voluntary Effort) Foundation. It seeks to provide a
variety of services to NGOs listed including facilitating the receipt of donations online (Give Online), sale of
NGO products (Shop Online), volunteering of time and skills (Volunteer Online) and news (News Online).

2. Modernization of the Indian Financial System

This involves encouraging appropriate research and institution building efforts on a national basis. It is a virtual
non-profit research centre that acts as a platform to address and encourage debate, and develop a non-partisan
opinion on various issues of concern and interest in financial economics relating to emerging markets. ICICI
Bank has supported the development of various financial institutions such as the National Stock Exchange and
the Bombay Stock Exchange. It has also supported the Institute for Financial Management and Research,
Chennai.

The changed economic climate in India, with a growing emphasis on the market, has hastened the need for an
informed and participatory socio-economic order. As one of the largest players in the economic landscape of the
country, ICICI Bank believes that its involvement in the commercial sector must be backed by a simultaneous
commitment in the social sector. This is particularly so if any of the larger goals of economic liberalisation in
India, and of its players, is to be brought to fruition. ICICI Bank seeks to perform its role in the social sector
through a dedicated not-for-profit group, the Social Initiatives Group (SIG).

5
1.3 Go Green Initiative
The Go Green Initiative is an organisation wide initiative that moves beyond moving people, processes and
customers to cost effective automated channels to build awareness and consciousness of our environment,our
nation and our society.
Objective
ICICI Bank’s Green initiative is to make healthy environment in the organisation i.e; to create intrapersonal
skills amongs the customer and understanding between employees of the organisation.
Broad objectives of the ICICI are:
(a) to assist in the creation, expansion and modernisation of private concerns;
(b) to encourage the participation of internal and external capital in the private concerns;
(c) to encourage private ownership of industrial investment.
Green products and services
Instabanking
It is the platform that brings together all alternate channels under one umbrella and gives customers the option
of banking through Internet banking, i-Mobile banking, IVR Banking. This reduces the carbon footprint of the
customers by ensuring they do not have to resort to physical statements or travel to their branches.
Vehicle Finance
As an initiative towards more environment friendly way of life, Auto loans offer 50% waiver on processing fee
on car models which uses alternate mode of energy. The models identified for the purpose are, Maruti's LPG
version of Maruti 800, Omni and Versa, Hyundai's Santro Eco, Civic Hybrid of Honda, Reva electric cars, Tata
Indica CNG and Mahindra Logan CNG versions.

6
1.4 Branches and ATM’s
ICICI Bank Ltd., a subsidiary of ICICI Limited, was constituted in 1994 headquartered in Mumbai. In the year
2002, ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal Financial Services Limited
and ICICI Capital Services Limited, merged with ICICI Bank. The Bank provides a broad spectrum of services
to its wholesale and retail customers through its well manned outlets and subsidiaries. Today ICICI Bank Ltd. is
the second-largest bank in India by its assets. The Bank has a network of 2,758 branches and 9,363 ATMs
across the country and has a presence in 19 countries, including India.

Products and services

Personal banking

 Deposits
 Loans
 Cards
 Investments
 Insurance
 Demat services
 Wealth services

NRI Banking

 Money transfer
 Bank Accounts
 Investments
 Insurance
 Loans

Business Banking

 Corporate Net Banking

 Cash Management
 Trade Services
 Online Taxes

7
1.5 Corporate Social Responsibility programmes for Elementary Education
Read to Lead Phase I
Read to Lead is an initiative of ICICI Bank to facilitate access to elementary education for underprivileged
children in the age group of 3–14 years including girls and tribal children from the remote rural areas. The Read
to Lead initiative supports partner NGOs to design and implement programs that mobilise parent and
community involvement in education, strengthen schools and enable children to enter and complete formal
elementary education. Read to Lead has reached out to 100,000 children across 14 states of Andhra Pradesh,
Bihar, Delhi, Gujarat, Haryana, Jharkhand, Karnataka, Maharashtra, Orissa, Rajasthan, Tamil Nadu, Tripura,
Uttar Pradesh and West Bengal.
Read to Lead Phase I is focused on

 Bridge courses to support dropout children to re-enrol in formal education

 Remedial coaching to potential dropout children to ensure their continuation in formal schooling
 Educational kits that include uniforms, books, stationery, woollen clothes etc.
 Inclusive and special education for children with special needs, such as mentally challenged and physically
disabled children
 Health and nutritional support for children
 Community initiatives for sensitisation on importance of education, including parent groups, school
enrolment drives, workshops and seminars, and publications
 Holistic development of children through instruction in arts and crafts, street plays, and life skills education
Read to Lead Phase II
In Phase II of the Read to Lead programme, ICICI Bank has supported the establishment of 63 libraries that will
reach out to approximately 7,200 children in the rural areas of Jagdalpur block of Bastar district in Chhattisgarh.
The programme includes building libraries, sourcing books and conducting various interactive activities to
make the library a dynamic centre for learning.

8
1.6 Subsidiaries
Domestic

 ICICI Prudential Life Insurance Company Limited

 ICICI Lombard General Insurance Company Limited
 ICICI Prudential Asset Management Company Limited
 ICICI Prudential Trust Limited
 ICICI Securities Limited
 ICICI Securities Primary Dealership Limited
 ICICI Venture Funds Management Company Limited
 ICICI Home Finance Company Limited
 ICICI Investment Management Company Limited
 ICICI Trusteeship Services Limited
 ICICI Prudential Pension Funds Management Company Limited
International

 ICICI Bank UK PLC

 ICICI Bank Canada
 ICICI Bank Eurasia Limited Liability Company
 ICICI Securities Holdings Inc.
 ICICI Securities Inc.
 ICICI International Limited

1.7 Acquisitions

 1996: SCICI Ltd. A diversified financial institution with headquarters in Mumbai

 1997: ITC Classic Finance. Incorporated in 1986, ITC Classic was a non-bank financial firm that engaged
in hire ,purchase, and leasing operations. At the time of being acquired, ITC Classic had eight offices, 26
outlets, and 700 brokers.
 1998: Anagram Finance. Anagram had built up a network of some 50 branches in Gujarat, Rajasthan, and
Maharashtra that were primarily engaged in retail financing of cars and trucks. It also had some 250,000
depositors.
 2001: Bank of Madura
 2002: The Darjeeling and Shimla branches of Grindlays Bank
 2005: Investitsionno-Kreditny Bank (IKB), a Russian bank
 2007: Sangli Bank. Sangli Bank was a private sector unlisted bank, founded in 1916, and 30% owned by the
Bahte family. Its headquarter were in Sangli in Maharashtra, and it had 198 branches. It had 158 in
Maharashtra and 31 in Karnataka, and others in Gujarat, Andhra Pradesh, Tamil Nadu, Goa, and Delhi. Its
branches were relatively evenly split between metropolitan areas and rural or semi-urban areas.
 2010: Bank of Rajasthan.

9
1.8 Awards
2004

 Best Bank in India Award presented by Euromoney Magazine

2007

 ICICI Bank has been conferred the Euromoney Award 2007 for the Best Bank in the Asia-Pacific Region
 ICICI Bank wins the Excellence in Remittance Business award by The Asian Banker
2009

 ICICI Bank bags the "Best bank in SME financing (Private Sector)" at the Dun & Bradstreet Banking
awards
2011

 ICICI Bank is the only Indian brand to figure in the BrandZ Top 100 Most Valuable Global Brands Report,
second year in a row
 ICICI Bank ranked 5th in the list of "57 Indian Companies", and 288 th in World Rankings in Forbes
Global 2000 list.
 ICICI Bank has won the "Banking Technology Awards 2010" at The Indian Banks Association in the
following categories
 ICICI Bank was recognized for its Special Citation of the Fully Electronic Branch Service Channel, first set
up at Hiranandani Estate, Thane, at the Financial Insights Innovation Awards held in conjunction with
Asian Financial Services Congress
 For the second year in a row, ICICI Bank was ranked 70th in the Brandirectory league tables of the worlds
most valuable brands by, The BrandFinance® Banking 500
 ICICI Bank was ranked 1st in the Banking and Finance category and 9th in the "2010 Best Companies To
Work For" by Business Today
 ICICI Bank UK, HiSAVE product range has been awarded the Consumer Moneyfacts Awards 2011 for the
'Best Online Savings Provider'
 For the second consecutive year, ICICI Bank was ranked second in the "India's 50 Biggest Financial
Companies", in The BW REAL 500 by Business World
 ICICI Bank was one of the winners in the Global Awards for Enterprise & IT Architecture Excellence.
ICICI Bank bagged the award in the ‘Business Intelligence and Analytics' category.
 The Brand Trust Report ranks ICICI among the top 4 most trusted financial institutions.
 ICICI Bank awarded "House Of The Year (India)", by Asia Risk magazine, for eighth time in a row since
2004
 ICICI Bank awarded the most Tech-friendly Bank award by Business World
 ICICI Bank received the Best Trade Finance Bank in India by The Asset Triple A Award, Hong Kong
 ICICI Bank is the first and the only Indian brand to be ranked as the 45th most valuable global brand by
Brand Top 100 Global Brands Report

10
2012

 Airtel, ICICI among 'top 100 global brands'

 ICICI Bank won the "Best Bond House (India) 2011", by IFR Asia
 ICICI Bank awarded the Best Bank (India) by Global Finance
 ICICI Bank won the "Century International Quality Era Award" at Geneva
 ICICI Bank was awarded the "Best Foreign Exchange Bank (India)" by Finance Asia Country Awards.
 ICICI Bank received the "Dataquest Technology Innovation Awards 2012" for Data center migration by
Dataquest.
 ICICI Bank was conferred the Best Performance Award for Self Help Group (SHG) Bank Linkage
Programme in NABARD's State Level Awards announced by their Maharashtra Regional Office. The Bank
received the first prize for the year 2010-11 in the Private Sector Bank category and 2nd runner up for the
year 2011-12 in the Commercial Bank category.
 For the second consecutive year, ICICI Bank won the NPCI's NFS Operational Excellence Awards in the
MNC and Private Sector Banks Category for its ATM network.
 Mr.K.V.Kamath was awarded the "Hall Of Fame" by Outlook Money for his long standing contribution in
the financial services sector.
 ICICI Bank won the Best Bank - India Award by The Banker.
 Ms. Chanda Kochhar ranked 18th in the Fortune's list of '2012 Businesspersons of the Year'. The 50 global
leaders is Fortune's annual ranking of leaders who are "the best in business".
 Ms. Chanda Kochhar tops the list of "50 Most Powerful Women in Business" by Fortune India.
 ICICI Bank tops the list of "Private sector and Foreign Banks" by Brand Equity, Most Trusted Brands 2012.
It ranks 15th in the "Top Service 50 Brands".
 For the third consecutive year, ICICI Bank ranked second in "India's 50 Biggest Financial Companies" in
The BW Real 500 by Businessworld.
 For the second year in a row, Ms. Chanda Kochhar, Managing Director & CEO was ranked 5th in the
International list of 50 Most Powerful Women In Business by Fortune.
 ICICI Bank tops the list of most fans in India and globally ranks fifth amongst financial institutions on
Facebook in the social media engagement study conducted by Ketchum Sampark.
 ICICI Bank in the Private Sector Bank category won the Best Technology Bank Of The Year ,Best
Financial Inclusion Initiative and Best Use Of Technology In Training and e-Learning by Indian Bank's
Association (IBA) Technology Awards. The Bank also received the first runner up for Best Online Bank,
Best Customer Relationship Initiative and Best Use Of Mobility Technology in Banking by IBA
Technology Awards .
 ICICI Bank awarded the Best SME Bank for Treasury and Working Capital (India) by The Asset Triple A.
 ICICI Bank received the Best Trade Finance House and Best Cash Management House by The Corporate
Treasurer Alliance Country Awards.
 ICICI Bank awarded the Best Private Sector Bank in Global Business Development, Rural Reach and SME
financing categories by Dun & Bradstreet - Polaris Financial Technology Banking Awards.

11
1.9 SWOT ANALYSIS OF ICICI BANK
Strength:
 ICICI Bank has emerged as the second largest bank in India and is among the top 250 banks in the world
within the decades of its operation.
 Currently it has an assests of worth around US$ 81billion with a profit after tax of US$ 896million.
 ICICI Bank is now a global player in the arena of international banking through its operation in 18
countries all over the world.
 ICICI bank has explained its market capitalization through enlistment not only in National Stock
Exchange and Bombay Stock Exchange, but also in becoming the first Non-Asian Japanese bank to get
enlisted in NYSE.
 ICICI bank has successfully diversified its operation to a number of financial spheres, starting from
general banking activities to general insurance, credit card services, mutual funds, stock trading , loans,
etc.
 It has a massive customer pool of around 14 million.
 It has been considered as the pioneer in usage of internet services for online banking from the comforts
of home and offices.
 Much of its success is attributed to aggressive and innovative marketing strategies for its diversified
range of product and services

Weakness
 Its primarily targets Upper middle class and Upper class of the society, thereby losing the business
opportunities concentrated at middle and bottom sections of the economical pyramid.
 ICICI bank levies higher service charges for various transaction making it expensive to afford by the
major sections of the society.

Opportunities
 Expanding business to the middle and lower income groups of the society by introducing economical
version of its services and hence making it affordable.

Threat
 More and more banks are coming up, both in private and public sector with online banking system
(which no longer is the exclusive domain of ICICI Bank), competitive service charges and interest rates,
lucrative loans schemes and insurance policies etc.

In view of the above, ICICI has to re-model its business strategies to cope up with the stiff competition from
the fast growing pool of players in the Indian banking Sector.

12
1.10 Risk and Capital
Banks face a number of risks inorder to conduct their business and how well these risk are managed and
understood is a key driver behind profitability, and how much capital a bank is required to hold . Some of the
main risks faced by banks include:

 Credit risks: risk of loss arising from a borrower who does not make payments as promised
 Liquidity risks: risk that a given security or assets can be traded quickly enough in the market to prevent
a loss (or make the required profit).
 Market risks: risk that the value of portfolio, either an investment portfolio or trading portfolio, will
decrease due to the change in the value of the market risks factors.
 Operational risks: risk arising from execution of a company’s business functions .
 Reputational risk:a type of risk related to the trustworthiness of business.

The capital requirement is a bank regulation which sets a framework on how banks and depository institutions
must handle their capital. The categorization of assets and capital is highly standardized so that it can be risk
weighted .

13
1.11 ROLE OF BANKS IN ECONOMY

Money lending in one form or the other has evolved along with the history of the mankind. Even in the ancient
times there are references to the moneylenders. Shakespeare also referred to ‘Shylocks’ who made unreasonable
demands in case the loans were not repaid in time along with interest. Indian history is also replete with the
instances referring to indigenous money lenders, Sahukars and Zamindars involved in the business of money
lending by mortgaging the landed property of the borrowers.

Towards the beginning of the twentieth century, with the onset of modern industry in the country, the need for
government regulated banking system was felt. The British government began to pay attention towards the
need for an organised banking sector in the country and Reserve Bank of India was set up to regulate the formal
banking sector in the country. But the growth of modern banking remained slow mainly due to lack of surplus
capital in the Indian economic system at that point of time. Modern banking institutions came up only in big
cities and industrial centres. The rural areas, representing vast majority of Indian society, remained dependent
on the indigenous money lenders for their credit needs.

Independence of the country heralded a new era in the growth of modern banking. Many new commercial banks
came up in various parts of the country. As the modern banking network grew, the government began to realise
that the banking sector was catering only to the needs of the well-to-do and the capitalists. The interests of the
poorer sections as well as those of the common man were being ignored.

In 1969, Indian government took a historic decision to nationalise 14 biggest private commercial banks. A few
more were nationalised after a couple of years. This resulted in transferring the ownership of these banks to the
State and the Reserve Bank of India could then issue directions to these banks to fund the national programmes,
the rural sector, the plan priorities and the priority sector at differential rate of interest. This resulted in
providing fillip the banking facilities to the rural areas, to the under-privileged and the downtrodden. It also
resulted in financial inclusion of all categories of people in almost all the regions of the country.

However, after almost two decades of bank nationalisation some new issues became contextual. The service
standards of the public sector banks began to decline. Their profitability came down and the efficiency of the
staff became suspect. Non-performing assets of these banks began to rise. The wheel of time had turned a full
circle by early nineties and the government after the introduction of structural and economic reforms in the
financial sector, allowed the setting up of new banks in the private sector.

The new generation private banks have now established themselves in the system and have set new standards of
service and efficiency. These banks have also given tough but healthy competition to the public sector banks.

Modern Day Role

Banking system and the Financial Institutions play very significant role in the economy. First and foremost is in
the form of catering to the need of credit for all the sections of society. The modern economies in the world
have developed primarily by making best use of the credit availability in their systems. An efficient banking
system must cater to the needs of high end investors by making available high amounts of capital for big
projects in the industrial, infrastructure and service sectors. At the same time, the medium and small ventures
must also have credit available to them for new investment and expansion of the existing units. Rural sector in a
country like India can grow only if cheaper credit is available to the farmers for their short and medium term
needs.

14
Credit availability for infrastructure sector is also extremely important. The success of any financial system can
be fathomed by finding out the availability of reliable and adequate credit for infrastructure projects.
Fortunately, during the past about one decade there has been increased participation of the private sector in
infrastructure projects.

The banks and the financial institutions also cater to another important need of the society i.e. mopping up small
savings at reasonable rates with several options. The common man has the option to park his savings under a
few alternatives, including the small savings schemes introduced by the government from time to time and in
bank deposits in the form of savings accounts, recurring deposits and time deposits. Another option is to invest
in the stocks or mutual funds.

In addition to the above traditional role, the banks and the financial institutions also perform certain new-age
functions which could not be thought of a couple of decades ago. The facility of internet banking enables a
consumer to access and operate his bank account without actually visiting the bank premises. The facility of
ATMs and the credit/debit cards has revolutionised the choices available with the customers. The banks also
serve as alternative gateways for making payments on account of income tax and online payment of various
bills like the telephone, electricity and tax. The bank customers can also invest their funds in various stocks or
mutual funds straight from their bank accounts. In the modern day economy, where people have no time to
make these payments by standing in queue, the service provided by the banks is commendable.

While the commercial banks cater to the banking needs of the people in the cities and towns, there is another
category of banks that looks after the credit and banking needs of the people living in the rural areas,
particularly the farmers. Regional Rural Banks (RRBs) have been sponsored by many commercial banks in
several States. These banks, along with the cooperative banks, take care of the farmer-specific needs of credit
and other banking facilities.

Future

Till a few years ago, the government largely patronized the small savings schemes in which not only the interest
rates were higher, but the income tax rebates and incentives were also in plenty. The bank deposits, on the other
hand, did not entail such benefits. As a result, the small savings were the first choice of the investors. But for
the last few years the trend has been reversed. The small savings, the bank deposits and the mutual funds have
been brought at par for the purpose of incentives under the income tax. Moreover, the interest rates in the small
savings schemes are no longer higher than those offered by the banks.

Banks today are free to determine their interest rates within the given limits prescribed by the RBI. It is now
easier for the banks to open new branches. But the banking sector reforms are still not complete. A lot more is
required to be done to revamp the public sector banks. Mergers and amalgamation is the next measure on the
agenda of the government. The government is also preparing to disinvest some of its equity from the PSU banks.
The option of allowing foreign direct investment beyond 50 per cent in the Indian banking sector has also been
under consideration.

Banks and financial intuitions have played major role in the economic development of the country and most of
the credit- related schemes of the government to uplift the poorer and the under-privileged sections have been
implemented through the banking sector. The role of the banks has been important, but it is going to be even
more important in the future.

15
Size of global banking industry
Assets of the largest 1,000 banks in the world grew by 6.8% in the 2008/2009 financial year to a record
US$96.4 trillion while profits declined by 85% to US$115 billion. Growth in assets in adverse market
conditions was largely a result of recapitalization. EU banks held the largest share of the total, 56% in
2008/2009, down from 61% in the previous year. Asian banks' share increased from 12% to 14% during the
year, while the share of US banks increased from 11% to 13%. Fee revenue generated by global investment
banking totaled US$66.3 billion in 2009, up 12% on the previous year.
The United States has the most banks in the world in terms of institutions (7,085 at the end of 2008) and
possibly branches (82,000). This is an indicator of the geography and regulatory structure of the USA, resulting
in a large number of small to medium-sized institutions in its banking system. As of Nov 2009, China's top 4
banks have in excess of 67,000 branches with an additional 140 smaller banks with an undetermined number of
branches. Japan had 129 banks and 12,000 branches. In 2004, Germany, France, and Italy each had more than
30,000 branches—more than double the 15,000 branches in the UK.

Banking Regulation
Currently commercial banks are regulated in most jurisdictions by government entities and require a special
bank license to operate.
Usually the definition of the business of banking for the purposes of regulation is extended to include
acceptance of deposits, even if they are not repayable to the customer's order—although money lending, by
itself, is generally not included in the definition.
Unlike most other regulated industries, the regulator is typically also a participant in the market, being either a
publicly or privately governed central bank. Central banks also typically have a monopoly on the business of
issuing banknotes. However, in some countries this is not the case. In the UK, for example, the Financial
Services Authority licenses banks, and some commercial banks (such as the Bank of Scotland) issue their own
banknotes in addition to those issued by the Bank of England, the UK government's central bank.
Banking law is based on a contractual analysis of the relationship between the bank (defined above) and
the customer—defined as any entity for which the bank agrees to conduct an account.
The law implies rights and obligations into this relationship as follows:

1. The bank account balance is the financial position between the bank and the customer: when the account
is in credit, the bank owes the balance to the customer; when the account is overdrawn, the customer
owes the balance to the bank.
2. The bank agrees to pay the customer's checks up to the amount standing to the credit of the customer's
account, plus any agreed overdraft limit.
3. The bank may not pay from the customer's account without a mandate from the customer, e.g. a check
drawn by the customer.
4. The bank agrees to promptly collect the checks deposited to the customer's account as the customer's
agent, and to credit the proceeds to the customer's account.
5. The bank has a right to combine the customer's accounts, since each account is just an aspect of the same
credit relationship.
6. The bank has a lien on checks deposited to the customer's account, to the extent that the customer is
indebted to the bank.
7. The bank must not disclose details of transactions through the customer's account—unless the customer
consents, there is a public duty to disclose, the bank's interests require it, or the law demands it.
16
 8. The bank must not close a customer's account without reasonable notice, since checks are outstanding in
the ordinary course of business for several days.
These implied contractual terms may be modified by express agreement between the customer and the bank.
The statutes and regulations in force within a particular jurisdiction may also modify the above terms and/or
create new rights, obligations or limitations relevant to the bank-customer relationship.
Some types of financial institution, such as building societies and credit unions, may be partly or wholly exempt
from bank license requirements, and therefore regulated under separate rules.
The requirements for the issue of a bank license vary between jurisdictions but typically include:

1. Minimum capital
2. Minimum capital ratio
3. 'Fit and Proper' requirements for the bank's controllers, owners, directors, or senior officers
4. Approval of the bank's business plan as being sufficiently prudent and plausible.

Types of banks
Banks' activities can be divided into retail banking, dealing directly with individuals and small
businesses; business banking, providing services to mid-market business; corporate banking, directed at large
business entities; private banking, providing wealth management services to high net worth individuals and
families; and investment banking, relating to activities on the financial markets. Most banks are profit-making,
private enterprises. However, some are owned by government, or are non-profit organizations.

Types of retail banks

 Commercial bank: the term used for a normal bank to distinguish it from an investment bank. After
the Great Depression, the U.S. Congress required that banks only engage in banking activities, whereas
investment banks were limited to capital market activities. Since the two no longer have to be under
separate ownership, some use the term "commercial bank" to refer to a bank or a division of a bank that
mostly deals with deposits and loans from corporations or large businesses.
 Community banks: locally operated financial institutions that empower employees to make local decisions
to serve their customers and the partners.
 Community development banks: regulated banks that provide financial services and credit to under-
served markets or populations.
 Credit unions: not-for-profit cooperatives owned by the depositors and often offering rates more favorable
than for-profit banks. Typically, membership is restricted to employees of a particular company, residents
of a defined neighborhood, members of a certain labor union or religious organizations, and their immediate
families.
 Postal savings banks: savings banks associated with national postal systems.
 Private banks: banks that manage the assets of high net worth individuals. Historically a minimum of USD
1 million was required to open an account, however, over the last years many private banks have lowered
their entry hurdles to USD 250,000 for private investors.[citation needed]
 Offshore banks: banks located in jurisdictions with low taxation and regulation. Many offshore banks are
essentially private banks.
17
 Savings bank: in Europe, savings banks took their roots in the 19th or sometimes even in the 18th century.
Their original objective was to provide easily accessible savings products to all strata of the population. In
some countries, savings banks were created on public initiative; in others, socially committed individuals
created foundations to put in place the necessary infrastructure. Nowadays, European savings banks have
kept their focus on retail banking: payments, savings products, credits and insurances for individuals or
small and medium-sized enterprises. Apart from this retail focus, they also differ from commercial banks by
their broadly decentralized distribution network, providing local and regional outreach—and by their
socially responsible approach to business and society.

Types of investment banks

 Investment banks "underwrite" (guarantee the sale of) stock and bond issues, trade for their own accounts,
make markets, provide investment management, and advise corporations on capital market activities such as
mergers and acquisitions.
 Merchant banks were traditionally banks which engaged in trade finance. The modern definition, however,
refers to banks which provide capital to firms in the form of shares rather than loans. Unlike venture capital
firms, they tend not to invest in new companies.

 Universal banks, more commonly known as financial services companies, engage in several of these
activities. These big banks are very diversified groups that, among other services, also distribute
insurance— hence the term banc assurance, a portmanteau word combining " banque or bank" and
"assurance", signifying that both banking and insurance are provided by the same corporate entity.

Other types of banks

 Central banks are normally government-owned and charged with quasi-regulatory responsibilities, such as
supervising commercial banks, or controlling the cash interest rate. They generally provide liquidity to the
banking system and act as the lender of last resort in event of a crisis.
 Islamic banks adhere to the concepts of Islamic law. This form of banking revolves around several well-
established principles based on Islamic canons. All banking activities must avoid interest, a concept that is
forbidden in Islam. Instead, the bank earns profit (markup) and fees on the financing facilities that it extends
to customers.

18
1.12 Porter’s Five Force Model
Porter’s Five Forces Model is a reality check to se if a industry is attractive enough to enter. The Five Forces are:

1: Threats from new or potential competitors.

2: The intensity of competition among existing firm.

3: The power of the suppliers .

4: The power of customers.

5: The easiness of changing to substitute products. If all of those forces are high then the industry is less
favourable to enter.

Before entering a industry , one firm should check whether those forces is low, so its favourable for the firm to
enter .

19
 1.13 BANKING INDUSTRY

The Banking Industry was once a simple and reliable business that took deposits from investors at a lower
interest rate and loaned it out to borrowers at a higher rate.

However deregulation and technology led to a revolution in the Banking Industry that saw it transformed.
Banks have become global industrial powerhouses that have created ever more complex products that use risk
and securitisation in models that only PhD students can understand. Through technology development, banking
services have become available 24 hours a day, 365 days a week, through ATMs, at online bankings, and in
electronically enabled exchanges where everything from stocks to currency futures contracts can be traded .

The Banking Industry at its core provides access to credit. In the lenders case, this includes access to their own
savings and investments, and interest payments on those amounts. In the case of borrowers, it includes access to
loans for the creditworthy, at a competitive interest rate.

Banking services include transactional services, such as verification of account details, account balance details
and the transfer of funds, as well as advisory services, that help individuals and institutions to properly plan and
manage their finances. Online banking channels have become key in the last 10 years.

The collapse of the Banking Industry in the Financial Crisis, however, means that some of the more extreme
risk-taking and complex securitisation activities that banks increasingly engaged in since 2000 will be limited
and carefully watched, to ensure that there is not another banking system meltdown in the future.

Mortgage banking has been encompassing for the publicity or promotion of the various mortgage loans to
investors as well as individuals in the mortgage business.

Online banking services has developed the banking practices easier worldwide.

Banking in the small business sector plays an important role. Find various banking services available for small
businesses.

The growth in the Indian Banking Industry has been more qualitative than quantitative and it is expected to
remain the same in the coming years. Based on the projections made in the "India Vision 2020" prepared by
the Planning Commission and the Draft 10th Plan, the report forecasts that the pace of expansion in the balance-
sheets of banks is likely to decelerate.

The total assets of all scheduled commercial banks by end-March 2010 is estimated at ` 40,90,000crores. That
will comprise about 65 per cent of GDP at current market prices as compared to 67 per cent in 2002-03. Bank
20
assets are expected to grow at an annual composite rate of 13.4 per cent during the rest of the decade as against
the growth rate of 16.7 per cent that existed between 1994-95 and 2002-03. It is expected that there will be large
additions to the capital base and reserves on the liability side.

The Indian Banking Industry can be categorized into non-scheduled banks and scheduled banks. Scheduled
banks constitute of commercial banks and co-operative banks. There are about 67,000 branches of Scheduled
banks spread across India. As far as the present scenario is concerned the Banking Industry in India is going
through a transitional phase.

The Public Sector Banks(PSBs), which are the base of the Banking sector in India account for more than 78 per
cent of the total banking industry assets. Unfortunately they are burdened with excessive Non Performing assets
(NPAs), massive manpower and lack of modern technology. On the other hand the Private Sector Banks are
making tremendous progress. They are leaders in Internet banking, mobile banking, phone banking, ATMs. As
far as foreign banks are concerned they are likely to succeed in the Indian Banking Industry.

In the Indian Banking Industry some of the Private Sector Banks operating are ICICI Bank , HDFC
Bank, IDBI Bank, ING VyasaBank , SBI Commercial and International Bank Ltd, Bank of Rajasthan Ltd. and
banks from the Public Sector include Punjab National bank, Vijaya Bank, UCO Bank, Oriental Bank, Allahabad
Bank among others. ANZ Grindlays Bank, ABN-AMRO Bank, American Express Bank Ltd, Citibank are some
of the foreign banks operating in the Indian Banking Industry.

If there is one industry that has the stigma of being old and boring, it would have to be banking; however, a
global trend of deregulation has opened up many new businesses to the banks. Coupling that with technological
developments like internet banking and ATMs, the banking industry is obviously trying its hardest to shed its
lackluster image.

There is no question that bank stocks are among the hardest to analyze. Many banks hold billions of dollars in
assets and have several subsidiaries in different industries. A perfect example of what makes analyzing a bank
stock so difficult is the length of their financials - they are typically well over 100 pages. While it would take an
entire textbook to explain all the ins and outs of the banking industry, here we'll shed some light on the more
important areas to look at when analyzing a bank as an investment.

There are two major types of banks in North America:

 Regional (and Thrift) Banks - These are the smaller financial institutions, which primarily focus on
one geographical area within a country. In the U.S., there are six regions: Southeast, Northeast, Central,
etc. Providing depository and lending services is the primary line of business for regional banks.

 Major (Mega) Banks - While these banks might maintain local branches, their main scope is in
financial centers like New York, where they get involved with international transactions
and underwriting.

21
Banks also may offer investment and insurance products, which they were once prohibited from selling. As a
variety of models for cooperation and integration among finance industries have emerged, some of the
traditional distinctions between banks, insurance companies, and securities firms have diminished. In spite of
these changes, banks continue to maintain and perform their primary role—accepting deposits and lending
funds from these deposits.

Banking is comprised of two parts: Monetary Authorities—Central Bank, and Credit Intermediation and
Related Activities. The former includes the bank establishments of the U.S. Federal Reserve System that
manage the Nation’s money supply and international reserves, hold reserve deposits of other domestic banks
and the central banks of other countries, and issue the currency we use. The establishments in the credit
intermediation and related services industry provide banking services to the general public. They securely save
the money of depositors, provide checking services, and lend the funds raised from depositors to consumers and
businesses for mortgages, investment loans, and lines of credit.

There are several types of banks, which differ in the number of services they provide and the clientele they
serve. Although some of the differences between these types of banks have lessened as they have begun to
expand the range of products and services they offer, there are still key distinguishing traits. Commercial banks,
which dominate this industry, offer a full range of services for individuals, businesses, and governments. These
banks come in a wide range of sizes, from large global banks to regional and community banks. Global banks
are involved in international lending and foreign currency trading, in addition to the more typical banking
services. Regional banks have numerous branches and automated teller machine (ATM) locations throughout a
multi-state area that provide banking services to individuals. Banks have become more oriented toward
marketing and sales. As a result, employees need to know about all types of products and services offered by
banks. Community banks are based locally and offer more personal attention, which many individuals and small
businesses prefer. In recent years, online banks—which provide all services entirely over the Internet—have
entered the market, with some success. However, many traditional banks have also expanded to offer online
banking, and some formerly Internet-only banks are opting to open branches.

Savings banks and savings and loan associations, sometimes called thrift institutions, are the second largest
group of depository institutions. They were first established as community-based institutions to finance
mortgages for people to buy homes and still cater mostly to the savings and lending needs of individuals.

Credit unions are another kind of depository institution. Most credit unions are formed by people with a
common bond, such as those who work for the same company or belong to the same labor union or church.
Members pool their savings and, when they need money, they may borrow from the credit union, often at a
lower interest rate than that demanded by other financial institutions.

CHANNELS

Banks offer many different channels to access their banking and ither services.

 Automated Teller Machines

 A branch is a retail location
 Call center
22
  Mail: most banks accept cheque deposits via mail and use mail to communicate to their customers
e.g by sending out statement.
 Mobile banking is a method of using one’s mobile phone to conduct banking transactions.

PRODUCTS
Retail Banking

 Saving account
 Money market account
 Certificate of deposit
 Individual retirement account
 Credit card
 Debit card
 Mortgage
 Home equity loan
 Mutual Fund
 Personal Loan

Business (or commercial/investment) banking

 Business loan
 Capital raising (equity/debt/hybrid)
 Mezzanine finance
 Project Finance
 Revolving credit
 Risk management (FX,interest rates,commodities,derivatives)
 Term loan
 Cash management (Lock Box,Remote deposit capture, Merchant Processing)

23
Chapter :2
REVIEW
OF
LITERATURE

24
REVIEW OF LITERATURE
Ali Ataullah (2004) Concluded that there is still room for improvement in the efficiency of banks in both the
countries. A step forward for the liberalization programmer , therefore, is not only to deregulate interest rates
and enhance the level of competition but also to strengthen the instutional structure to support good practices in
the banking industry .

Gupta Sumeet&VermaRenu (2008) concluded that management of non-performing assets and risk emanating
from adverse event is the key to higher profitability of the Indian banking. Transparency and good governance
would work as principal guiding force in present scenario.

GhoshSaibal (2009) concluded that with international standards, Indian banks would need to improve their
technological orientation and expand the possibilities for augmenting their financial activities in order to
improve their profit efficiency in the near future.

Dr. Ibrahim Syed M (2011) concluded that this is diagnostic and exploratory in nature and makes use secondary
data. The study finds and concludes that the scheduled commercial banks in India have significantly improved
their operational performance.

Dr. Pardhan Kumar Tanmaya (2012) Concluded that-The study is based on primary data. The data has been
analyzed by Percentage method. The tool used to collect data from the bank officials was a structured
questionnaire. Responses obtained from the 50 Bank managers / senior officers.

Dr. Dhanabhakyam M &Kavitha M. (2012) studied that banks have to re-orient their strategies in the light of
their own strength and the kind of market in which their likely to operate on. In the perspective of this domestic
and international development, the banking sector has to chart perfect for development.

Gupta Shipra (2012) concluded that- Public and Private sector banks both are giving good service in
India .Financial condition of any bank is measured by the help of financial ratio. A leverage ratio cannot do the
job alone it needs to be complemented by other prudential tools or measures to ensure a comprehensive picture
of the buildup of leverage in individual banks or banking groups as well as in the financial system.

Sharma Esha (2012) concluded that- The liberalized policy of the govt. of India permitted entry to the ICICI in
the banking; the industry has witnessed a generation of private players. That’s why the present paper special
emphasis has been laid down on the financial analysis of the bank by using different research ant statistical tools.

GejalakshamiSandanam& et.al (2012) , Cocluded that the public sector banks performed remarkably well
during the period than that of the private sector banks the overall regression analysis show that the financial
performance of the banking industries strongly .

GoelCheenu&RekhiBhutaniChitwan (2013) concluded that the analysis supports that new banks are more
efficient than old ones. The public sector banks are as not profitable as other sectors are. It means that efficiency
and profitability are inter related.

Davda V. Nishit (2012) Concluded that a review of fundamental analysis research in accounting the paper has
outlined the development of different accounting valuation model and reviewed related emperical work .

25
 Dr. KoundalVirender (2012) concluded that although various Reforms have produced favorable effects on
commercial banks in India and because of this transformation is taking place almost in all categories of the
banks.

Sai Naga Radha V & et.al. (2013) concluded that net profit margin, operating profit margin, return on capital
employed, return on equity and debt equity ratio there is no significant difference in these ratios before after
merger. Significant difference with respect to gross profit margin.

Mishra Kumar Aswini& et.al. (2013) Concluded that DEA provide significant insights on efficiency of different
banks and places private sector ones at an advantage situation and there by hints out the possibility of further
improvisation of most of the public sector banks.

Kamraj K. &Somu A. (2013) Conclude that Indian overseas bank is one of the oldest nationalized commercial
banks in India. Banking industry is an indicator of for many development activities in the nation. Indian
overseas bank has higher potential to provide better and quality services to the billions of people in India.

Samir &KamraDeepa (2013) Concluded that this analysis the position of NPAs in selected banks SBI, PNB &
Central bank of India. It also highlights the policies pursued by the banks to tackle the NPAs and suggest a
multi-pronged strategy for speedy recovery of NPAs in banking sector.

SelvamPaneer& et.al. (2013) Concluded that-The Present study was aimed to analyze the financial assistance
of nationalized bank in India .To identify the relative performance of the operational variables the linear and
compound growth rates have been calculated . The performance of nationalized banks followed by private
sector banks is found to be higher when compared to SBI and its associates and Foreign Banks.

Dr. Gupta R. & Dr. Shikarwar N.S. (2013) Concluded that the banking industry occupies a unique place in a
nation’s economy. A well-developed banking system is a necessary precondition of economic development in a
modern economy .the main parameters of growth in banks are net profit growth , net assets growth , EPS
growth and Reserve and surplus growth and the results reveal that in terms of the parameters defined key words :
net assets ,EPS , reserves ,surplus growth .

Desrani R Hiralal (2013) Concluded that scheduled bank has wide scope in India. It is providing loans to
various industries, business mans, small scale sector industries. It is very helpful to all people who want loan.

BansalRohit (2014) Concluded that Federal has best price earnings ratio among other banks. The total assets
turnover ratio of federal bank shows that it keeps significantly highly assets to meet the debt. Overall Federal
bank is the most financially stable company in comparison to others.

Dr. Tamilarasu A. (2014) concluded that mere opening of no-frill bank account is not the purpose or the end of
financial inclusion while formal financial institution must gain the trust and goodwill of the poor through
developing strong linkages with community based financial ventures and coopratives.

Dr. ShuklaSmita&MalusareRakesh Studied that this evaluates the changes in the capital structure and solvency
position of banks by using various risk indicators for highlighting risk profile of Indian Bank entities . This
evaluates risk profile of ten public and private sector banks.

26
YeboahSebe Gilbert &Mensah Charles (2014) concluded that ADB’s focus on agriculture financing is
diminishing since a sector analysis of loans and advance indicates that agriculture sector lost its first position to
service sector. The Bank’s liquidity showed a downward and slipped trend.

Ms. Gupta Shikha (2014) Concluded that it focused on operational control, profitability and solvency etc. It
aimed to analyze and compare the financial performance of ICICI banks and offer suggestion for improvement
of efficiency in the bank.

Gaur Arti&Arora Nancy (2014) Concluded that it study about the causes and consequences of the various
component of the financial statement in relation to the profitability of the bank. We analyzed the financial
stability and overall performance of SBI and study profitability of SBI.

V. Naseer Abdul (2014) Studied that – Study compares the financial performance and employee efficiency of
Indian banks during 2007-2013. Both the financial performance and employee efficiency of foreign banks
working in India are better than domestic banks and private sector banks performance are better than the public
sector banks. It is noted that the public sector bank performance are more stable when compared to the private
sector banks.

Sharma Pooja&Hemlata (2014) Concluded that - The banking mirrors the larger economy its linkages to all
sector make it proxy for what is happening in the economy as a whole. Banking plays a silent yet crucial role in
our day to day economy. The data is taken from financial reports of both the banks for last five years ranging
from 2008-09 to 2013-13. The results depicts that ICICI Bank is performing better than SBI Bank as it is Able
to generate more loans from its deposits to the customers.

Soni Kumar Anil &KapreAbhay, Regional rural bank play a vital role in the agriculture and rural development
of India. The Study Is diagnostic and exploratory in nature and makes use of secondary data. The study finds
and concludes that performance of RRBs has significantly improved. VarathanSathiya& el.at. Concluded that-
In canara bank the credit appraisal is done by the study involves the evaluation in management, technical
feasibility, financial viability, Risk analysis and credit rating. This shows canara bank has sound system for
credit appraisal. The credit appraisal Process carried out at canara bank has good parameters to appraise.

Dr. RaoMadhusudhana K. (2014) Concluded that – with respect to the banking activities the performance of
HDFC is better than the SBI and for the investor who are intended for long term investment & risk takers
HDFC is better but with respect to the growth in the market for the company price SBI is better. SBI shares
value market more than HDFC. Patel S Vijay & et.al. Concluded that information has its own value but if
someone wants to have better judgment of the concern he has to analyze them. This provides guideline about
analysis of profitability ratio of krishakbharati bank.

Gul Shah & et.al. (2014) concluded that the study has it limitation in term of selection of banks. The present
research work serve as a guideline to public sector banks to look up the financial performance and make
superior allocation for improving efficiency for the coming time.

ThakarshibhaiChiragLoryia (2014) Concluded that it attempt to analyze profitability of selected public and
private sector banks in India. This study which looks into three key factors which affect the profitability
analysis of Indian banking sector using mean, standard deviation, and ANOVA model.

27
Movalia P. Nilesh&et.al (2014) Concluded that Public sector banks is quite good compared to private sector
banks in the area of profitability debt equity , earning per share found that price earning ration of private sector
banks is high compare to public sector banks.

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 Chapter 3

RESEARCH
METHODOLOGY

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RESEARCH METHODOLOGY
Research inculcates scientific and inductive thinking and it promotes the development of logical habits of
thinking and organization. The role of research in several fields of applied economics, whether related to
business or to the economy as a whole, has greatly increased in modern times. Research in common parlance
refers to a search for knowledge.

Objective of the study

 To find long term and short term liquidity position of ICICI Bank Limited.
 To assess the profitability of ICICI Bank Limited.
 To study the financial efficiency and performance of the ICICI Bank Limited.

NATURE OF STUDY

Descriptive Study:-

Descriptive research includes survey and fact finding inquiries of different kind The major purpose of
descriptive researches is to describe the nature/ state of affairs as it exists in present. Under this method the
researcher has no control over the variables i.e. nature of customer, he can only report that what has happened
or what is happening. It describes the characteristics of certain group of customers and estimates the population
of people who behave in a certain way.
Sources of data:
For the purpose of preparing the report the necessary information collected by secondary data:

Secondary data:

 Annual reports of the company

 Induction Material Provided by the company.
 Company’s Publications
 Websites

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Analytical tools used:

 Key Financial Ratio’s

4.5 Limitation of the study:

 Some data are confidential to the bank which was not possible to be used in the project.
 Ratio’s are generally calculated on past financial statement and thus forecast for the future is based on
past data.
 As the study is dependent on the data of the last five years there is a requirement to review the findings
before using the study of for other time interval.
 Project is based on ICICI bank so it cannot be generalized to other banks.

The study conducted had time as one of the constraints because the duration of the project was short because of
which there could be possibility that some data might have got overlooked without the knowledge of the
researcher.

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 Chapter 4:
DATA ANALYSIS
AND
INTERPRETATION

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Financial Ratio Analysis
Ratio analysis is a process of determining and interpreting relationships between the items of financial
statements to provide a meaningful understanding of the performance and financial position of an enterprise.
Ratio analysis is an accounting tool to present accounting variables in a simple, concise, intelligible and
understandable form.

As per Myers “Ratio analysis is a study of relationship among various financial factors in a business”

Objectives of Financial Ratio Analysis

The objective of ratio analysis is to judge the earning capacity, financial soundness and operating efficiency of a
business organization. The use of ratio in accounting and financial management analysis helps the management
to know the profitability, financial position and operating efficiency of an enterprise.

Advantages of Ratio Analysis

The advantages derived by an enterprise by the use of accounting ratios are:

1) Useful in analysis of financial statements:

Bankers, investors, creditors, etc analysis balance sheets and profit and loss accounts by means of ratios.

2) Useful in simplifying accounting figures:

Accounting ratio simplifies summarizes and systematizes a long array of accounting figures to make them
understandable. In the words of Biramn and Dribin, “ Financial ratios are useful because they summarize
briefly the results of detailed and complicated computation”

3) Useful in judging the operating efficiency of business:

Accounting Ratio are also useful for diagnosis of the financial health of the enterprise. This is done by
evaluating liquidity, solvency, profitability etc. Such a evaluation enables management to access financial
requirements and the capabilities of various business units.

4) Useful for forecasting:

Helpful in business planning, forecasting. What should be the course of action in the immediate future is
decided on the basis of trend ratios, i.e., ratio calculated for number of years.

5) Useful in locating the weak spots:

Locating the weak spots in the business even though the overall performance may quite good. Management cab
then pay attention to the weakness and take remedial action. For example if the firm finds that the increase in
distribution expense is more than proportionate to the results achieved, these can be examined in detail and
depth to remove any wastage that may be there.

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6) Useful in Inter-firm and Intra-firm comparison:

A firm would like to compare its performance with that of other firms and of industry in general. The
comparison is called inter-firm comparison. If the performance of different units belonging to the same firm is
to be compared, it is called intra-firm comparison. Such comparison is almost impossible without accounting
ratios. Even the progress of a firm from year to year cannot be measured without the help of financial ratios.
The accounting language simplified through ratios are the best tool to compare the firms and divisions of the
firm.

Limitations of Financial Ratio Analysis:

1) False Results:

If Financial Statements are not correct Financial Ratio Analysis will also be correct.

2) Different meanings are put on different terms:

Elements and sun-elements are not uniquely defined. An enterprise may work out ratios on the basis of profit
after Tax and interest while others work on profit before interest and Tax .So, the Ratios will also be different so
cannot be compared. But before comparison is to be done the basis for calculation of ratio should be same.

3) Not comparable:

if different firms follow different accounting Policies. Two enterprises may follow different Policies like some
enterprises may charge depreciation at straight line basis while others charge at diminishing value. Such
differences may adversely affect the comparison of the financial statements.

4) Affect of Price level changes:

Normally no consideration is given to price level changes in the accounting variables from which ratios are
computed. Changes in price level affects the comparability of Ratios. This handicaps the utility of accounting
ratios.

5) Ignores qualitative factors:

Financial Ratios are on the basis of quantitative analysis only. But many times qualitative facts overrides
quantitative aspects .For Example: Loans are given on the basis of accounting Ratios but credit ultimately
depends on the character and managerial ability of the borrower. Under such circumstances, the conclusions
derived from ratio analysis would be misleading.

6) Ratios may be worked out for insignificant and unrelated figures.

Example: A ratio may be worked out for sales and investment in govt. securities. Such ratios will only be
misleading. Care should be exercised to work out ratios between only such figures which have cause and effect
relationship. One should be reasonably clear as to what is the cause and what is the effect.

7) Difficult to evolve a standard Ratio:

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It is very difficult to evolve a standard ratio acceptable at all times as financial and economic scenario are
dynamic. Again the underlying conditions for different firms and different industries are not similar, so an
acceptable standard ratio cannot be evolved.

8) Window Dressing:

Financial Ratios will be affected by window dressing. Manipulations and window dressings affect the financial
statements so they are going to affect the ratios also. Therefore a particular ratio may not be a definite indicator
of good or bad management.

9) Personal Bias:

Ratios have to be interpreted, but different people may interpret same ratios in different ways. Ratios are only
tools of financial analysis but personal judgment of the analyst is more important. If he does not posses requisite
qualifications or is biased in interpreting the ratios, the conclusion drawn prove misleading.

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Ratio Analysis

To find long term and short term liquidity position of ICICI Bank limited:-
1)Current Ratio:-

Current Ratio or Working Capital Ratio is a relationship of current assets to current liabilities. Current
Assets are the assets that are either in the firm of cash or cash equivalents or can be converted into cash or cash
equivalents in a short time (say, within a year’s time) and Current Liabilities are repayable in a short time. It is
calculated as follows:

Current Ratio = Current Assets

Current Liabilities

Significance:

The objective of calculating Current Ratio is to assess the ability of the enterprise to meet its short-term
liabilities promptly. It shows the number of times the current assets can be converted into cash to meet current
liabilities. As a normal rule current assets should be twice the current liabilities. Low ratio indicates inadequacy
of the enterprise to meet its current liabilities and inadequate working Capital. High Ratio is an indication of
inefficient utilization of funds. An enterprise should have a reasonable current ratio.

Although there is no hard and fast rule yet a current ratio of 2:1 is considered satisfactory.

Current Ratio is calculated at a particular date and not for a particular period.

The following items are included in current assets and Current Liabilities:

Current Assets Current Liabilities

1.Cash and Bank Balance 1.Creditors
2.Debtors(after deducting provision) 2.Bills Payable

3.Bills Receivable (after deducting provisions) 3.Bank Overdraft

4. Stock 4.Short-term Loans

5. Marketable Securities 5.Outstanding Expenses
6.Prepaid Expenses 6.Provision for Tax
7.Advance Payments 7.Unclaimed Dividend

8.Accued Interest 8.Cash credit

Important Points:

1. Working Capital = Current Assets - Current Liabilities.

2. Total Debt =Total Outsider Liability = Long term Liability+ short term Liability (current liability)

3. Total assets = fixed assets + investment +Current assets

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 Table 1.1 Showing Calculation of Current Ratio

Year Current Assets Current liabilities Current Ratio

(Rs in Crores) (Rs in Crores)
2018 23551.85 38228.64 0.61
2019 31129.77 42895.38 0.72
2020 34384.06 43746.43 0.78
2021 29997.23 15501.18 1.94
2022 27630.41 15986.35 1.73

Graph 1: Showing Current Ratio

Source : Balance sheet of ICICI Bank

Interpretation- According to above graph the current ratio of ICICI bank in year 2018 is 0.61 which rise in
year 2021 1.94.

37
Liquidity Ratio or Liquid Ratio or Quick Ratio or Acid Test Ratio:
Liquidity Ratio is a relationship of liquid assets with current liabilities and is computed to assess the short-
term liquidity of the enterprise in its correct form.

This is calculated as follows:

Liquidity Ratio = Liquid assets or quick assets

Current Liabilities

Quick assets= Current assets – (stock + Prepaid Expenses)

Liquid assets are the assets, which are either in the form of cash or cash equivalent or can be converted into cash
within a very short period. Liquid assets include cash, bills receivable, marketable securities and debtors
(excluding bad and Doubtful debts), etc. Stock is excluded from liquid assets as it may take some time before it
is converted into cash. Similarly prepaid expenses do not provide cash at all and are thus excluded from liquid
assets.

A quick ratio of 1:1 is usually considered favorable, since for every rupee of current liabilities, there is a rupee
of current assets.

A high liquidity ratio compared to current ratio may indicate under stocking while a low liquidity ratio while a
low liquidity ratio indicated overstocking.

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Table 1.2 Showing Calculation of Quick Ratio

Year Quick Assets Current Liabilities Quick ratio

(Rs in crores) (Rs in crores )
2018 37121.33 38338.64 0.97
2019 38041.13 42895.38 0.88
2020 29966.56 43746.43 0.68
2021 38873.29 15501.18 2.50
2022 34090.08 15986.35 2.13

Graph 2: Showing Quick Ratio

Source: Balance sheet of ICICI Bank

Interpretation :

A quick ratio of 1:1 is considered favorable because for every rupee of current liability, there is at least 1 rupee
of liquid assets. According to above graph the quick ratio in year 2018 is 0.97 which rise in year 2021.

39
3) Non Performing Assets
Non Performing Assets are popularly known as NPA. Commercial banks assets are of various types. All those
assets which generate periodical income are called as Performing Assets (PA).While all those assets which do
not generate periodical income are called as Non Performing Assets(NPA).

It is calculated in terms of %. Any failed loan amount of total assets will be counted as Non Performing Assets.
The more the Non Performing Assets the lower the performance of banks. It is computed as given below:

Net NPA to Net customers assets= Net NPA/ Net customers assets*100

Table 1.3 Showing calculations of Net NPA (%)

Year Net NPA Net Customer % of Net NPA to

(Rs in billions) Assets customers needs
(Rs in billions) (in %)
2018 20.19 2053.74 0.98
2019 35.64 2384.84 1.49
2020 46.19 2358.24 1.96
2021 39.01 2091.22 1.87
2022 24.58 2628.16 0.94

Graph 3- Showing Net NPA to customer assets .

Interpretation- The above graph shows the variations in NPA percentage. According to above graph the NPA
in the year 2018 is 0.98 and which rises in the year 2020 to maximum which is 1.96.
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To assess the profitability of ICICI Bank Limited
4) Net Profit Ratio – is the ratio of net profit (after taxes) to net sale . It is expressed as percentage.
Components of Net Profit Ratio:
The two basic components of the net profit ratio are the net profit and sales. The net profit are obtained after
deducting income tax and generally , non operating expenses and incomes are excluded from the net profits for
calculating this ratio. Thus , incomes such as interest on investments outside the business , profit on sales of
fixed assets, etc are excluded.

Net profit Ratio= Net Profit / Net sales X 100

Table 1.5 Showing Calculations of Net Profit Ratio

Year Net Profit Sales Net Profit Ratio

(Rs in crores) (Rs in crores) (in %)
2018 3110.22 22994.29 13.52
2019 4157.73 30788.39 13.50
2020 3758.13 31092.93 12.08
2021 4024.98 25706.93 15.65
2022 5151.38 25974.05 19.83

Graph 4: Showing net profit ratio

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Source : Income statement of ICICI bank

Interpretation- Although the net profit and the sales increased during the year2018,2019 and 2020 but there
is still a downfall in the net profit ratio. During these periods the bank was not doing well because the net profit
did not increase in the same proportion as that of sales. But in the year end 2021 and 2022 the net profit ratio
increased, which indicates the net profit has increased and is in same proportion as that of sales .

Operating profit ratio:

This is calculated as follows:

Operating Profit Ratio: Operating Profit/Net Sales X 100

Te difference between Net Profit and Net Operating Profit Ratio is that net profit is calculated without
considering non-operating expenses and non operating income. If we deduct this ratio from 100, the results will
be operating ratio. Higher operating ratio enables organization to recoup non-operating expenses out of
operating profits and provide reasonable return.

Table 1.6 Showing Calculations of Operating Profit Ratio

Year Operating Profits Net sales Operating Profit ratio

(Rs in Crores) (Rs in Crores) (in %)
2018 5874 22994.29 25.54
2019 7961 30788.39 25.85
2020 8925 31092.93 28.70
2021 9732 25706.93 37.85
2022 9048 25974.05 34.83

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Graph 6- Showing Operating Profit Ratio

Source- Annual report of ICICI bank.

Interpretation- From the year 2018-2021 the operating ratio has been increasing which indicates that the
operating profit is increasing and is proportional with the sales . But in the year 2021 there is a downfall in the
operating profit which indicates increase in the operating expenses. Therefore , the bank should check the
unnecessary operating expenses to correct this situation and to provide a sufficient return.

7) Return on net worth: This is the ratio of Profit after tax to Shareholders fund.

Return on net worth=Net Profit after Interest and tax / Shareholders fund X 100

The term “Net-worth” means money belonging to equity share holders and includes reserves net of fictitious
assets awaiting write off. It measures how much income a firm generates for each rupee stockholders have
invested. Higher the percentage the better it is for the company.

Table 1.7 Showing calculation of networth

Year Net Profit After Shareholder’s fund Return on Networth

Interest and Tax (Rs in crores) (in %)
(Rs in crores)
2018 3110 24663 12.6
2019 4158 46820 8.88
2020 3758 49883 7.53
2021 4025 51618 7.79
2022 5151 55091 9.34

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Graph 7: Showing Return on Net worth

Source : Annual report of ICICI Bank

Interpretation- The net profit after interested tax have increased slowly till the year 2019 and the it declined
in the year 2020 due to high interest payments, operating expenses and taxation liability. The NPAT again
increased in the year 2021 and 2022. Consequently the net worth ratio has declined considerably and only
slightly increased in the year 2022.

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 CHAPTER 5:
FINDINGS & CONCLUSION

45
 FINDINGS

1. Credit risk is generally well contained, but there are still problems associated with loan classification,
loan loss provisioning, and the absence of consolidated accounts.

2. Market risk and Operational risk are clear challenge, as they are relatively new to the areas that were not
well developed under the original Basel Capital Accord.

3. The new regulations will allow banks to introduce substantial improvements in their overall risk
management capabilities, improving risk based performance measurement, capital allocation as portfolio
management techniques.

4. Future complexity is expected because banks diversify their operations. It is expected that banks will
diversify their operations to generate additional income sources, particularly fee-based income i.e. non
interest income, to improve returns.

5. The banks that would prefer to adopt the Standard Approach should try to adopt Advanced Approach.

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 CONCLUSION
In the end I conclude my study in one paragraph on topic “FINANCIAL SATTEMENT ANALYSIS OF ICICI
BANK”. Credit risk is generally well contained, but there are still problems associated with loan classification,
loan loss provisioning, and the absence of consolidated accounts. Market risk and Operational risk are clear
challenge, as they are relatively new to the areas that were not well developed under the original Basel Capital
Accord. The new regulations will allow banks to introduce substantial improvements in their overall risk
management capabilities, improving risk based performance measurement, capital allocation as portfolio
management techniques. Future complexity is expected because banks diversify their operations. It is expected
that banks will diversify their operations to generate additional income sources, particularly fee-based income
i.e. non interest income, to improve returns. Basel II leads to increase in Data collection and maintenance of
privacy and security in various issues. The banks that would prefer to adopt the Standard Approach should try
to adopt Advanced Approach.

47
 BIBLIOGRAPHY
REFFERENCE BOOK

 Basel Norms challenges in India –Swapan Bakshi

 White Paper The Ripple Effect: How Basel II will impact institutions of all sizes
 BASEL II – Are Indian Banks Going to Gain? -- Santosh N. Gambhire Jamanalal, Bajaj Institute of
Management Studies Mumbai
 Basel II and India's banking structure C. P. Chandrasekhar and Jayati Ghosh

WEBSITE
 www.bis.org
 www.rbi.org
 www.kpmg.com
 www.cognizant.com
 www.google.com
 www.yahoo.com

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