A PROJECT REPORT ON WORKING CAPITAL MANAGEMENT

AT ICICI BANK LTD

PROJECT REPORT

Submitted to

KUMAUN UNIVERSITY, NAINITAL

Submitted in partial fulfillment of the Requirements for the Degree

of Bachelor in Business Administration

by

RISHABH THAKUR

Roll No. 210945250098

Enrollment No. KU21315120

Amrapali Group of Institutions, Haldwani

Under the supervision of

Dr. Shekar Sahu

Assistant Professor

Faculty of Commerce & Business Management Amrapali Group of

Institutions, Haldwani
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 DECLARATION

I declare that the project report entitled “WORKING CAPITAL MANAGEMENT

ICICI BANK LTD” is my own work conducted under the guidance of Mr. Yogesh Joshi,
Assistant Professor at Faculty of Commerce and Business Management, Amrapali Group of
Institutes, Haldwani.

I further declare that to the best of my knowledge the project report has not previously
formed the basis of the award of any degree, diploma, or other similar title of recognition.

Signature of Project Guide Signature of Student

Dr. Shekar Sahu Rishabh Thakur

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Forwarded

Dr. A. K. Srivastava

Head of Department

Faculty of Commerce and Business Management

Amrapali Group of Institutions

Haldwani (Nainital), Uttarakhand

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 ACKNOWLEDGEMENT

Before I start with the details of my projects, I would like to add a few heartfelt words for the
people who were a part of my projects in numerous ways, the people who gave me their
immense support.

First, I thank our Director Prof. (Dr.) Deep Chandra Oli, Dr. N. P. Singh (Dean) & Dr. A.

K. Srivastava, HOD for their timely support and knowledgeable guidance that helped me in
my project.

I would like to thank my Project Supervisor Dr. Shekar Sahu for his continuous support in
my Survey. He was involved right from the selection till the Implementation of the project. He
taught me how to ask questions and express my ideas. He showed me different ways to
approach a problem and the need to be persistent to accomplish any goal. His continuous
support has helped me in removing the operational Hurdles.

I also express my gratitude to all my faculty members who endured with extraordinary grace
and provided constant encouragement to my best efforts and made this a rewarding
experience.

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 Rishabh Thakur

BBA VI Semester

Roll No. 210945250098

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 EXECUTIVE SUMMARY

Amazon, In any organization, the two important financial statements are the Balance
sheet & Profit and loss account of

the business . Balance sheet is a statement of the financial position of an enterprise at

a particular point of time. Profit and loss account shows the net profit or net loss of a
company for a specified period of time. When these statements of the last few year of
any organization are studied and analyzed, significant conclusions may be arrived
regar ding the changes in the financial position, the important policies followed and
trends in profit and loss etc. Analysis and interpretation of the financial statement has
now become an important technique of credit appraisal. The investors, financial
experts, management executives and the bankers all analyze these statements. Though
the basic technique of appraisal remains the same in all the cases

butthe approach and the emphasis in analysis vary. A ba nker interprets the financial
statement so as to evaluate the financial soundness and stability, the liquidity position
and the profitability or the earning capacity of borrowing concern. Analysis of
financial statement is necessary be cause it help indepicting the financial position on
the basis of past and current records.Analysis of financial statemen t helps in making
the future decision andstrategies.

Therefore, it is very necessary for every organization whether it is a financial or

manufacturing etc. to make financial statement and to analyze it.

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 TABLE OF CONTENTS

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 CHAPTER 1

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 INTRODUCTION

COMPANY PROFILE

ICICI BANK LTD

ICICI Bank Limited is an Indian multinational bank and financial services company headquartered in
Mumbai with a registered office in Vadodara. It offers a wide range of banking and financial services
for corporate and retail customers through various delivery channels and specialized subsidiaries in
the areas of investment banking, life, non-life insurance, venture capital and asset management.

This development finance institution has a network of 6000 branches, and 17000 ATMs across India
and has a presence in 17 countries. The bank has subsidiaries in the United Kingdom and Canada;
branches in United States, Singapore, Bahrain, Hong Kong, Qatar, Oman, Dubai International
Finance Centre, China and South Africa; as well as representative offices in United Arab Emirates,
Bangladesh, Malaysia and Indonesia. The company's UK subsidiary has also established branches in
Belgium and Germany. The Reserve Bank of India (RBI) has identified the State Bank of India,
HDFC Bank, and ICICI Bank as Domestic Systemically Important Banks (D-SIBs), which are often
referred to as banks that are “too big to fail”.

ICICI Bank is India's second-largest bank with total assets of Rs. 4,062.34 billion (US$ 91
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billion) at March 31, 2011 and profit after tax Rs. 51.51 billion (US$ 1,155 million) for the
year ended March 31, 2011. The Bank has a network of 2,586 branches and 8,003 ATMs in
India, and has a presence in 19 countries, including india.

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 specialised
subsidiaries in the areas of investment banking life and non-life insurance, venture capital
and asset management.

The Bank currently has subsidiaries in the United Kingdom, Russia and

Canada, branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and
Dubai International Finance Centre and representative offices in United Arab Emirates,
China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary
has established branches in Belgium and Germany.

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

History
The Industrial Credit and Investment Corporation of India (ICICI) was a government institution
established on 5 January 1955 and Sir Arcot Ramasamy Mudaliar was elected as the first Chairman
of ICICI Ltd. It was structured as a joint-venture of the World Bank, India's public-sector banks and
public-sector insurance companies to provide project financing to Indian industry. ICICI Bank was
established by ICICI, as a wholly owned subsidiary in 1994 in Vadodara. The bank was founded as
the Industrial Credit and Investment Corporation of India Bank, before it changed its name to ICICI
Bank. 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 of parent ICICI Ltd. into

10
its subsidiary ICICI Bank led to privatization.

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. 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.

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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.

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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. ICICI
Bank launched Internet Banking operations in 1998.

ICICI's shareholding in ICICI Bank was reduced to 46% through a public offering of shares in India
in 1998, followed by an equity offering in the form of American depositary receipts on the NYSE in
2000. ICICI Bank acquired the Bank of Madura Limited in an all-stock deal in 2001 and sold
additional stakes to institutional investors during 2001–02. In 1999, ICICI become the first Indian
company and the first bank or a financial institution from non-Japan Asia to be listed on the NYSE.

ICICI, ICICI Bank, and ICICI subsidiaries ICICI Personal Financial Services Limited and ICICI
Capital Services Limited merged in a reverse merger in 2002. During the financial crisis of 2007–
2008, customers rushed to ICICI ATMs and branches in some locations due to rumors of bank
failure. The Reserve Bank of India issued a clarification on the financial strength of ICICI Bank to
dispel the rumors.

In 2015, ICICI unveiled an outward remittance platform called ‘Money2World’. The first of its kind,
it enabled fully online outward remittance transactions for non-ICICI and ICICI customers alike. In
March 2020, the board of ICICI Bank Ltd. approved an investment of ₹10 billion (US$130 million)
in Yes Bank, resulting in a 5% ownership interest in Yes.

ICICI Bank office in Financial District, Hyderabad.

Acquisitions
1996: ICICI 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.

1997: SCICI (Shipping Credit and Investment Corporation of India)

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1998: Anagram (ENAGRAM) Finance. Anagram had built up a network of some 50 branches in
Gujarat, Rajasthan, and Maharashtra that were primarily engaged in the 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 headquarters 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: The Bank of Rajasthan (BOR) was acquired by the ICICI Bank in 2010 for ₹30 billion
(US$380 million). Reserve Bank of India was critical of BOR's promoters not reducing their
holdings in the company. BOR has since been merged with ICICI Bank.
Role in Indian financial infrastructure
ICICI Bank has contributed to the setting up of a number of Indian institutions to establish financial
infrastructure in the country over the years:

In 1992, India's leading financial institutions, including ICICI Ltd., promoted the National Stock
Exchange of India on behalf of the Government of India to establish a nationwide trading facility for
equities, debt instruments, and hybrids, ensuring equal access to investors across the country through
an appropriate communication network.

In 1987, ICICI Ltd along with UTI set up CRISIL as India's first professional credit rating agency.
NCDEX (National Commodities and Derivatives EXchange) was set up in 2003, by ICICI Bank Ltd,
LIC, NABARD, NSE, Canara Bank, CRISIL, Goldman Sachs, Indian Farmers Fertiliser Cooperative
Limited (IFFCO) and Punjab National Bank.

ICICI Bank facilitated the setting up of "FINO Cross Link to Case Link Study" in 2006, as a
company that would provide technology solutions and services to reach the underserved and

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underbanked population of the country. Using technologies like smart cards, biometrics and a basket
of support services, FINO enables financial institutions to conceptualise, develop and operationalise
projects to support sector initiatives in microfinance and livelihoods.
Entrepreneurship Development Institute of India (EDII), was set up in 1983, by the erstwhile apex
financial institutions like IDBI, ICICI, IFCI and SBI with the support of the Government of Gujarat
as a national resource organisation committed to entrepreneurship development, education, training
and research.

Eastern Development Finance Corporation (NEDFI) was promoted by national-level financial

institutions like ICICI Ltd in 1995 at Guwahati, Assam for the development of industries,
infrastructure, animal husbandry, agri-horticulture plantation, medicinal plants, sericulture,
aquaculture, poultry and dairy in the North Eastern states of India.

Following the enactment of the Securitisation Act in 2002, ICICI Bank, together with other
institutions, set up Asset Reconstruction Company India Limited (ARCIL) in 2003. ARCIL was
established to acquire non-performing assets (NPAs) from financial institutions and banks with a
view to enhance the management of these assets and help in the maximisation of recovery.

ICICI Bank helped establish India's first national credit bureau, Credit Information Bureau of India
Limited (CIBIL), in 2000. CIBIL provides credit information reports to its members, containing the
credit history of both commercial and consumer borrowers.

Products

ICICI Bank offers products and services such as savings and current accounts, trade and forex
services, fixed and recurring deposits, business loans, home loans, personal loans, auto loans, and
gold loans, NRI Banking services, remittances, card services, lockers, agri and rural services.The
digital platforms that ICICI Bank offers include iMobile Pay, InstaBiz, Digital Rupee App, Retail
Internet Banking, Corporate Internet Banking, Money2India, Money2World, and digital wallet
named Pockets by ICICI Bank.

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In March 2020, ICICI Bank launched 'ICICI STACK,' a digital banking suite for individuals,
merchants, and corporates, providing online services such as payments, digital accounts, instant
loans, insurance, investments, and more.

In December 2020, ICICI Bank introduced 'iMobile Pay', an interoperable app offering payment and
banking services to customers across various banking institutions. The app was originally launched
as iMobile in 2008. iMobile Pay provides over 350 services. iMobile Pay registered over 10 million
sign-ups from non-ICICI Bank account holders by the end of September in 2023.

In July 2019, ICICI Bank introduced the InstaBIZ app to offer enhanced banking and value-added
services to micro, small, and medium (MSME) customers, and customers of any bank.[49]InstaBIZ
offers interoperability, enabling merchants to instantly collect payments using UPI IDs and QR
codes. The app currently has approximately 1.5 million active users, with a year-on-year throughput
growth of over 70%.[59]As of September 2022, the platform had accumulated around 195,000
registrations from non-ICICI Bank account holders.

Subsidiaries
ICICI Prudential Life Insurance
Main article: ICICI Prudential Life Insurance
ICICI Lombard
Main article: ICICI Lombard
ICICI Prudential Mutual Fund
Main article: ICICI Prudential Mutual Fund
ICICI Securities
Main article: ICICIdirect
ICICI Bank Canada
ICICI Bank Canada

Company type Subsidiary

Industry Financial services
Founded 2003
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Headquarters Toronto, Ontario, Canada
Key people Vikash Sharma (President and Chief Executive Officer)
Parent ICICI Bank Limited
Website www.icicibank.ca
ICICI Bank Canada is a wholly owned subsidiary of ICICI Bank, whose corporate office is located
in Toronto. Established in December 2003, ICICI Bank Canada is a full-service direct bank with
assets of about $6.5 billion as of 31 December 2019. It is governed by Canada's Bank Act and
operates under the supervision of the Office of the Superintendent of Financial Institutions. The bank
has seven branches in Canada.

In 2003, ICICI Bank Canada was established as a Schedule II (foreign-owned or -controlled) bank. It
was incorporated in November and opened its head office and downtown Toronto branch in
December. In 2004 it launched an online banking platform. In 2005, it launched its financial advisor
services channel. In 2008, the bank relocated its corporate office to the Don Valley Business Park in
Toronto. In 2010, it launched a mortgage broker service. In 2014, the bank launched a mobile
banking app.

ICICI Bank Canada is a member of several esteemed trade association; as well as the Canadian
Bankers Association (CBA); a registered member with the Canada Deposit Insurance Corporation
(CDIC),[64] a federal agency insuring deposits at all of Canada's chartered banks; Interac
Association; Cirrus Network; and The Exchange Network.

ICICI Bank UK PLC

ICICI Bank UK PLC

An ICICI Bank branch in London, United Kingdom

Company type Subsidiary
Industry Financial services
Founded 2003
Headquarters India
Parent ICICI Bank Limited
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Website www.icicibank.co.uk
ICICI Bank UK PLC was incorporated in England and Wales on 11 February 2003, as a private
company with the name ICICI Bank UK Ltd. It then became a public limited company on 30
October 2006. Presently the Bank has seven branches in the UK: one each in Birmingham, East
Ham, Harrow, London, Manchester, Southall and Wembley.

The bank currently has seven branches in the UK. ICICI Bank UK PLC is authorised by the
Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential
Regulation Authority. It is covered by the Financial Services Compensation Scheme (FSCS). The
bank has a long-term foreign currency credit rating of Baa1 from Moody's. On 31 March 2019, it had
a capital adequacy ratio of 16.8%.

ICICI Bank UK PLC offers products and services such as a current account, savings account,
remittance to India, safe deposit box, NRI Services, business banking, foreign exchange services,
commercial real estate and corporate banking.[69] In 2019, ICICI Bank UK PLC launched an instant
account opening facility through its iMobile app.

ICICI Bank US
ICICI Bank Regional Subsidiaries
ICICI Bank has operations in Bahrain, Germany, Europe, Hong Kong, and China in addition to the
countries mentioned above.

Controversies
Inhumane debt recovery methods
A few years after its rise to prominence in the banking sector, ICICI Bank faced allegations on the
recovery methods it used against loan payment defaulters. A number of cases were filed against the
bank and its employees for using "brutal measures" to recover the money. Most of the allegations
were that the bank was using goons to recover the credit card payments and that these "recovery
agents" exhibited inappropriately and in some cases, inhuman behaviour. Incidents were reported
wherein the defaulters were put to "public shame" by the recovery agents

The bank also faced allegations of inappropriate behaviour in recovering its loans. These allegations
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started initially when the "recovery agents" and bank employees started threatening the defaulters. In
some cases, notes were written by the bank's employees asking the defaulters to "sell everything in
the house, including family members", were found. Such charges faced by the bank rose to a peak
when suicide cases were reported, wherein the suicide notes spoke of the bank's recovery methods as
the cause of the suicide. This led to legal battles and the bank paying huge compensation.

Money laundering allegations

\

ICICI Bank was one of the leading Indian banks accused of blatant money laundering through
violation of RBI guidelines in the famous CobraPost sting operation which shook up Indian banking
industry during April–May 2013.

On 14 March 2013 the online magazine Cobrapost released video footage from Operation Red
Spider showing high-ranking officials and some employees of ICICI Bank agreeing to convert black
money into white, an act in violation of Prevention of Money Laundering Act, 2002. The
Government of India and Reserve Bank of India ordered an inquiry following the exposé. On 15
March 2013, ICICI Bank suspended 18 employees, pending inquiry. On 11 April 2013 the Deputy
Governor of RBI, Harun Rashid Khan reportedly said that the central bank was initiating action
against ICICI Bank in connection with allegations of money laundering.

Chanda Kochhar fraud case

On 4 October 2018, the then MD & CEO Chanda Kochhar stepped down from her position
following allegations of corruption. In January 2019, based on the report of an enquiry panel headed
by Justice Srikrishna, the bank board officially terminated her from service. It also become one of the
first in the country to ask for a claw back of bonuses and benefits.[82] In 2020 the Enforcement
Directorate provisionally seized assets and shares belonging to Chanda Kochhar with an estimated
value of more than ₹780 million (US$9.8 million), in relation to the ICICI bank loan case.

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 A view of the ICICI Bank building in Mumbai.

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KEY GROUP COMPANIES

1) ICICI PRUDENTIAL INSURANCE COMPANY

ICICI Life continued to maintain its market leadership among private sector life insurance

companies with a market share of 12.71% on the basis of weighted received premium. Life

insurance companies worldwide make losses in the initial years, in view of business set-up and

customer acquisition costs in the

initial years as well as reserving for actuarial liability. While

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the growing operations of ICICI Life had a negative impact of Rs. 10.31 billion on the Bank’s

consolidated profit after tax in FY 2008 on account of the above reasons, the company’s unaudited

New Business

Achieved Profit (NBAP) for FY2008 was Rs. 12.54 billion as compared to Rs.

8.81 billion in fiscal 2007.

2) ICICI LOMBARD GENERAL INSURANCE COMPANY

ICICI Lombard General Insurance Company (ICICI General) enhanc ed its leadership position with

a market share of about 29.8% among private sector general insurance companies and an overall

market share of about 11.9% during fiscal 2008. ICICI General’s gross written premium grew by

11.4% from Rs. 30.03 billion in fiscal 2007 to Rs. 33.45 billion in fiscal 2008. ICICI General is

required to expense upfront, on origination of a policy, all sticking expenses related to the policy.

While ICICI General’s profit after tax for Rs. 1.03 billion in fiscal 2008,a growth of 50.5% over

fiscal 2007.The combined ratio is the sum of net claims and expenses as a percentage of premiums

and indicates the surplus generated on an annualized basis from the business written during a period

(excluding investment income).

ICICI PRUDENTIAL AMC & TRUST

ICICI Prudential Asset Management Company (ICICI AMC) was the secondlargest asset
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management company in India with a verage assets under management of Rs. 543.55 billion for

March 2008. ICICI AMC achieved a profit after tax of Rs. 0.82 billion in fiscal 2008, a growth of

69.7% over fiscal2007.

ICICI SECURITIES LIMITED

The securities and primary dealership business of the ICICI group have been reorganized. ICICI

Securities Limited has been renamed as ICICI Securities Primary Dealership Limited. ICICI

Brokerage Services Limited has been renamed as ICICI Securities Limited and has become a direct

subsidiary of ICICI Bank. ICICI Securities achieved a profit after tax of Rs. 1.50 billion and ICICI

Securities Primary Dealership achieved a profit after tax of Rs.

1.40 billion, in fiscal 2008.

ICICI VENTURE FUNDS MANAGEMENT COMPANY LIMITED

ICICI Venture Funds Management Company Limited (ICICI Ve nture) strengthened its leadership

position in private equity in India, with funds under management of about Rs.95.50 billion at year-

end fiscal 2008. ICICI Venture achieved a profit after tax of Rs. 0.90 billion in fiscal 2008

compared to Rs. 0.70 billion in fiscal

2007.

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 MANAGEMENT BODY OF ICICI BANK LTD

Board Members

1) Mr. K. V. Kamath, Chairman

2) Mr. Sridar Iyengar

3) Dr. Swati Piramal

4) Mr. Homi R. Khusrokhan

5) Mr. Arvind Kumar

6) Mr. M.S. Ramachandran

7) Dr. Tushaar Shah

8) Mr. V. Sridar

Managing Director & CEO Executive Director & CFO

Ms. Chanda Kochhar Mr. N. S. Kannan

Executive Director

Mr. K. Ramkumar
Mr. Rajiv Sabharwal

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 NEED OF STUDY

The study of working capital management in ICICI Bank, or any other financial institution, is
crucial for several reasons:

Risk Management: Financial institutions like ICICI Bank deal with large volumes of
transactions and manage significant amounts of assets and liabilities. Effective working capital
management helps mitigate risks associated with liquidity, credit, and interest rate
fluctuations.
Regulatory Compliance: Banks are subject to stringent regulatory requirements regarding
liquidity and capital adequacy. Studying working capital management helps ensure compliance

with regulatory guidelines and enhances the bank's ability to withstand regulatory scrutiny.
Profitability Optimization: Efficient working capital management can directly impact a bank's
profitability. By optimizing the balance between assets and liabilities, ICICI Bank can
maximize returns on its investments and minimize the cost of funding, thereby enhancing
profitability.

Customer Service and Experience: Timely management of working capital enables banks to
provide better customer service. Efficient cash management, quick processing of transactions,
and effective credit management contribute to a positive customer experience.
Capital Allocation: Working capital management in banks involves allocating capital to
different types of assets, such as loans, investments, and reserves. Studying this aspect helps
ICICI Bank allocate capital effectively to achieve its strategic objectives while maintaining
adequate liquidity.

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 Competitive Advantage: Effective working capital management can provide ICICI Bank with
a competitive advantage. By efficiently managing its resources, the bank can offer competitive
interest rates, better loan terms, and superior customer service compared to its peers.
Investor Confidence: Investors closely monitor a bank's working capital management practices
as part of their investment decision-making process. Transparent and efficient management
can enhance investor confidence and attract capital investment.

Macro-economic Factors: Banks operate within the broader economic environment, which
influences factors such as interest rates, inflation, and currency fluctuations. Understanding
working capital management helps ICICI Bank adapt to changing economic conditions and
manage associated risks.

In summary, studying working capital management in ICICI Bank is essential for managing
risks, ensuring regulatory compliance, optimizing profitability, enhancing customer service,
maintaining competitiveness, attracting investors, and navigating macro-economic factors
effectively.

OBJECTIVES OF THE STUDY

1) To study about ICICI BANK and its related aspects like its products & services,
history, organizational structure, subsidiary companies etc.

2) To evaluate the financial soundness , stability and liquidity of ICICI BANK.

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3) To learn about P&L Account, Balance -sheet and different type of Assets&
Liabilities.

SCOPE OF THE STUDY

The scope of studying working capital management at ICICI Bank would likely encompass
several key areas:

1. Analyzing Current Asset & Liability Components:

Breakdown of ICICI's current assets: cash, inventory, and receivables. How efficiently are
these managed?
Analysis of current liabilities: accounts payable and other short-term debts. How does this
impact cash flow?
2. Working Capital Cycle Management:

Examining the time it takes for ICICI to convert inventory to cash through sales and collection
of receivables.
Identifying opportunities to optimize this cycle and improve cash flow.
3. Strategies for Cash Flow Management:

Investigating ICICI's methods for managing short-term cash inflows and outflows.
Assessing the effectiveness of these strategies in maintaining liquidity.
4. Working Capital Financing Techniques:

Analyzing how ICICI uses various working capital financing options, such as short-term loans
and lines of credit.

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Evaluating the cost-effectiveness of these methods.
5. Performance Measurement and Benchmarking:

Identifying key metrics used by ICICI to measure working capital efficiency (e.g., current
ratio, inventory turnover ratio).
Comparing ICICI's performance to industry benchmarks or competitor data.
6. Impact on Profitability and Risk:

Exploring how working capital management practices affect ICICI's profitability by

optimizing resource allocation.
Assessing the risk of stockouts or bad debts associated with working capital levels.

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 CHAPTER 2

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 RESEARCH METHODOLOGY

DATA COLLECTION METHODS

Data Collection Methods for Working Capital Management at ICICI Bank

This research project on Working Capital Management at ICICI Bank utilizes a
secondary data collection approach. Here's a breakdown of the methods used to gather
information:

1. Internal Documents:

ICICI Bank's annual reports: These reports provide valuable insights into the bank's
financial performance, working capital strategies, and overall risk management
practices.
Investor presentations and financial filings: These documents offer a more detailed
analysis of the bank's working capital metrics, along with future plans and outlooks.

2. External Sources:

Industry reports and publications: Research reports from reputed financial institutions
and industry associations can provide valuable benchmarks and comparisons of ICICI
Bank's working capital management practices with industry peers.
Financial databases: Online databases like Bloomberg or Mergent Intellect provide
access to historical financial data and key ratios used to evaluate working capital
30
efficiency.
Scholarly articles and journals: Research papers and articles published in academic
journals can offer theoretical frameworks and empirical studies relevant to working
capital management in the banking sector.

DATA ANALYSIS TECHNIQUES

Data Analysis Techniques:

Ratio analysis: Financial ratios such as current ratio, quick ratio, and inventory turnover
ratio will be calculated to assess ICICI Bank's liquidity, solvency, and inventory
management practices.
Trend analysis: Examining trends in working capital components (current assets and
current liabilities) over time can reveal changes in the bank's working capital needs and
management strategies.
Comparative analysis: The research will compare ICICI Bank's working capital ratios
with industry benchmarks and those of its competitors to evaluate its relative
performance.
Limitations of Secondary Data:

Timeliness: Secondary data may not reflect the most recent developments, so it's crucial
to consider the publication date of the information source.
Availability: Certain data points might not be publicly available, requiring alternative
sources or estimation techniques.
Bias: Information from industry reports or analyst opinions may contain inherent biases,
so critical evaluation is necessary.
Conclusion:

By employing a combination of these secondary data collection methods and analysis

techniques, this research project aims to provide a comprehensive understanding of
working capital management practices at ICICI Bank.

31
TIME FRAME OF ANALYSIS

Time Frame Analysis: 2009-2011

The data collected for this research project on Working Capital Management at ICICI
Bank focuses on the period between 2009 and 2011. This specific timeframe was chosen
for the following reasons:

Capturing the Post-Lehman Crisis Period: The global financial crisis of 2008 had a
significant impact on the Indian banking sector. Analysing ICICI Bank's working capital
management practices during the recovery period (2009-2011) can reveal how the bank
adapted to changing economic conditions and liquidity risks.
Focus on Growth and Consolidation: The years 2009-2011 represent a period of
significant growth for the Indian economy This timeframe allows for examining how
ICICI Bank managed its working capital needs while expanding its operations and
customer base.
Data Availability and Consistency: Selecting a consistent three-year period ensures the
availability of comparable financial data from ICICI Bank's annual reports and other
sources. This consistency facilitates a more reliable analysis of trends and changes in the
bank's working capital management strategies.
Limitations of the Time Frame:

It's important to acknowledge the limitations associated with this specific time frame. A
three-year period might not capture long-term trends or significant changes in
regulations or industry practices. Additionally, focusing solely on the post-crisis recovery
period might not provide a complete picture of ICICI Bank's overall working capital
management approach.

32
RESEARCH LIMITATIONS

To mitigate these limitations, the research can:

Briefly discuss the bank's working capital management practices prior to 2009 to provide
context.
Mention relevant industry trends and regulatory changes during the chosen period to
understand the broader economic environment.
If possible, supplement the analysis with additional data points from outside the chosen
timeframe, acknowledging the potential for inconsistencies.
By carefully considering these factors, the research can effectively utilize the data from
2009 to 2011 to analyze ICICI Bank's working capital management strategies and their
effectiveness during a critical period.

ETHICAL CONSIDERATIONS

While this research project utilizes secondary data publicly available or obtained through
legitimate sources, ethical considerations remain important:

Data Accuracy and Credibility: The research will critically evaluate the sources of
information to ensure data accuracy and credibility. Sources with a reputation for
objectivity and established methodologies will be prioritized.
Citation and Referencing: All data and information obtained from secondary sources will
be properly cited and referenced to maintain transparency and academic integrity.
Objectivity in Analysis: The research will strive to present a balanced and objective
analysis of ICICI Bank's working capital management practices, avoiding any

33
misrepresentation or manipulation of data.
These points showcase your commitment to responsible research practices even when
using secondary data.

CONCLUSION

34
CHAPTER 3

LITERATURE REVIEW

A literature review on working capital management for ICICI Bank with a focus on its impact

35
on the profit and loss statement (P&L) and balance sheet can provide valuable insights into
how the bank manages its short-term liquidity and funding needs. Here's how such a review
might be structured:

Introduction to Working Capital Management:

Define working capital and its importance for financial management.
Discuss the relevance of working capital management for banks like ICICI Bank and its
implications for profitability and financial health.
Outline the objectives and scope of the literature review, with a focus on its impact on the P&L
and balance sheet.
Theoretical Framework:
Review theoretical models and frameworks related to working capital management, such as
the cash conversion cycle, liquidity management theories, and capital structure theories.
Discuss how these theories inform the relationship between working capital management
practices, financial performance, and balance sheet structure for banks like ICICI Bank.
Empirical Studies on Working Capital Management and Profitability:
Summarize empirical research studies that investigate the relationship between working
capital management efficiency and profitability for ICICI Bank.
Highlight findings related to the impact of cash management, receivables management,
payables management, and inventory management on the bank's profitability as reflected in
the P&L statement.
Discuss methodologies used, key variables examined, and empirical results obtained in these
studies.
Empirical Studies on Working Capital Management and Balance Sheet Structure:
Summarize empirical research studies that examine the relationship between working capital
management practices and the composition of ICICI Bank's balance sheet.
Highlight findings related to the impact of working capital management on liquidity, solvency,
and asset-liability management as reflected in the bank's balance sheet.
Discuss how efficient working capital management influences the allocation of resources,
capital structure decisions, and overall financial stability.
Technology and Innovation in Working Capital Management:
Explore how ICICI Bank utilizes technology and innovation to optimize its working capital
36
management practices and enhance profitability.
Review studies that discuss the adoption of fintech solutions, automation, and digitalization in
working capital management, and their implications for the bank's financial performance and
balance sheet structure.
Regulatory Environment and Compliance:
Examine regulatory requirements and guidelines related to working capital management for
banks like ICICI Bank, including liquidity risk management regulations issued by the Reserve
Bank of India (RBI).
Discuss how ICICI Bank navigates regulatory compliance challenges in its working capital
management practices and its impact on profitability and balance sheet composition.
Conclusion:
Summarize key findings from the literature review, emphasizing the impact of working capital
management on ICICI Bank's profitability and balance sheet structure.
Highlight the contributions of existing research to understanding the relationship between
working capital management practices, financial performance, and balance sheet dynamics.
Provide recommendations for practitioners, policymakers, and researchers based on the
insights gained, including areas for further investigation and implications for practice.

Introduction:
ICICI Bank stands as a cornerstone of India's banking sector, recognized for its extensive
range of products and services, robust organizational structure, and strategic evolution over
the years. This literature review delves into various facets of ICICI Bank, including its
historical journey, organizational framework, subsidiary companies, financial soundness,
stability, liquidity, and the intricacies of its profit and loss (P&L) account, balance sheet, assets,
and liabilities.

1. ICICI Bank Overview:

Founded in 1994, ICICI Bank has emerged as a frontrunner in India's banking industry,
catering to diverse customer segments with a broad array of financial products and services.
Its evolution from a development finance institution to a full-fledged commercial bank
37
underscores its adaptability and responsiveness to changing market dynamics. The bank's
organizational structure encompasses retail banking, corporate banking, investment banking,
and international operations, with subsidiary companies playing a pivotal role in expanding its
service footprint and enhancing customer experience.

2. Historical Evolution and Milestones:

A chronological exploration of ICICI Bank's history unveils pivotal milestones and strategic
initiatives that have shaped its trajectory. From pioneering initiatives in retail banking and
technology adoption to strategic mergers and acquisitions, the bank has demonstrated a
commitment to innovation and growth. Understanding the historical context provides valuable
insights into the bank's strategic imperatives, competitive positioning, and resilience in
navigating market challenges.

3. Organizational Structure and Subsidiary Companies:

ICICI Bank's organizational framework comprises a complex ecosystem of divisions,
subsidiaries, and strategic alliances, each contributing to its overarching objectives and market
presence. Analyzing the bank's organizational structure sheds light on its operational
dynamics, decision-making processes, and synergy across different business lines.
Furthermore, a closer examination of subsidiary companies offers insights into their strategic
relevance, financial contributions, and synergistic benefits for ICICI Bank's overall business
model.

4. Financial Soundness, Stability, and Liquidity:

Assessing ICICI Bank's financial performance entails a comprehensive evaluation of its
profitability, solvency, liquidity, and risk management practices. Studies examining key
financial ratios such as return on assets (ROA), return on equity (ROE), capital adequacy ratio
(CAR), and net interest margin (NIM) provide insights into the bank's ability to generate
sustainable profits, maintain adequate capital buffers, and manage liquidity effectively. These
analyses offer valuable benchmarks for assessing the bank's financial health and stability
relative to industry peers and regulatory standards.

5. Profit and Loss Account and Balance Sheet Analysis:

38
The profit and loss (P&L) account and balance sheet serve as fundamental tools for assessing
ICICI Bank's financial performance and position. Analyzing these financial statements reveals
insights into revenue sources, cost structures, asset quality, and capital structure. Additionally,
understanding the composition of assets and liabilities provides a deeper understanding of the
bank's asset-liability management strategies, liquidity risk mitigation efforts, and credit risk
exposure. A nuanced analysis of various asset classes, liabilities, and off-balance sheet items
offers insights into ICICI Bank's risk profile, financial resilience, and strategic priorities.

Conclusion:
In conclusion, this literature review provides a comprehensive exploration of ICICI Bank,
spanning its historical evolution, organizational dynamics, subsidiary companies, financial
performance metrics, and strategic imperatives. By evaluating the bank's financial soundness,
stability, and liquidity, stakeholders can gain valuable insights into its competitive positioning,
resilience, and ability to navigate dynamic market conditions. Furthermore, a detailed analysis
of the bank's profit and loss account, balance sheet, assets, and liabilities offers a holistic view
of its financial landscape and strategic priorities. This literature review lays the groundwork
for a comprehensive project file on ICICI Bank, offering valuable insights into its role in
India's banking sector and its trajectory in the global financial landscape.

39
40
CHAPTER 4

41
42
 CHAPTER 5
DATA ANALYSIS

TOOLS FOR ANALYSING

1. PERCENTAGE CALCULATION

There are two popular methods by which we can analyze the financial statement by
calculating percentage as taking a common base.

43
 Horizontal Analysis

When an analyst compares financial information for two or more years for a single
company, the process is referred to as horizontal analysis, since the analyst is reading
across the page to compare any single line item, such as sales revenues. In addition to
comparing dollar amounts, the analyst computes percentage changes from year to
year for all financialstatement balances, such as cash and inventory. A lternatively, in
comparing financial statements for a number of years, the analyst may prefer to use a
variation of horizontal analysiscalledTrendanalysis.Trend analysis involves calculatin
g each year's financial statement balances as percentages of the first year, also known
as the base year. When expressed as percentages, the base year figures are always 100
percent, and percentage changes from the base year can be determined. If we want to
calculate % change in sales then we apply the following formula:

Percentage = change in sales /Base Year Sales*100

 Vertical Analysis

When using vertical analysis, the analyst calculates each item on a single financial
statement as a percentage of a total. The term vertical analysis applies because each
year's figures are listed vertically on a financial statement. The total used by the
analyst on the income statement is net sales revenue, while on the balance sheet it is
total

assets. This approach to financial statement analysis, also known as

component percentages, produces common-

44
 size financial statements. Common-size balance sheets and income statements can be
more easily compared, whether across the years for a single company or across
different companies. If we want to

calculate % change of current assets then we apply the following formula :

Percentage: current assets/total assets*100

RATIO ANALYSIS

Financial ratio analysis uses formulas to gain insight into the company and its
operations. For the balance sheet, using financial ratios can show you a better idea of
the company’s financial condition along with its operational efficiency. It is important
to note that some ratios will need information from more than one financial
statement, such as from the balance sheet and the income statement. Ratio analysis
facilitates interfirm and intra-firm comparison. Ratios are often classified using the
following terms :

 LIQUIDITY RATIO: Liquidity ratios are measures of the short-term ability of the
company to pay its debts when they come due and to meet unexpected needs for cash.

45
 CURRENT RATIO: The current ratio is a rough indication of a firm ability to service
its current obligations. Generally, the higher the current ratio, the greater the cushion
between current obligations and a firm ability to pay them. The stronger ratio reflects
a numerical superiority of current assets over current liabilities Current ratio is
calculated as follows:

Current ratio= Current Assets/Current Liabilities

 QUICK RATIO: It is also known as the “acid test” ratio; this is a refinement of the
current ratio and is a more conservative measure of liquidity. The quick ratio
expresses the degree to which a company’s current liabilities are recovered by the
most liquid current assets. quick ratio is calculated as follows:

Quick ratio= (cash + marketable securities +Receivables)/current liabilities

 SOLVENCY RATIO: Solvency ratios indicate the ability of the company to meet its
long-term obligations on a continuing basis and thus to survive over a long period of
time

 Debt/Worth Ratio: This ratio expresses the relationship between capital contributed by
creditors and that contributed by owners. It expresses the degree of protection
provided by the owners for the creditors.The higher the ratio, the greater the risk
being assumed by cr

46
 editors. The lower the ratio, the greater the long term financial safety. A firm with
a low debt/worth ratio usually has a greater flexibility to borrow in the future. Amore
highly leveraged company has a more limited debt capacity.

Debt/worth ratio=Total Liabilities / Tangible Net Worth

 PROFITABILITY RATIO: Profitability ratios are gauges of the company's operating

success for a given period of time.

• Return on assets: Return on assets is a measure of how effectively the firm’s assets are
being used to generate profit. It is calculated as follows:

Return On Assets= Net Income/Total Assets

• Return on equity: Return on equity is the bottom line measure for the shareholders,
measuring for the profits earned for each rupee invested in business. It is calculated
as follows:

Return on Equity= Net income/shareholder’s equity

 FIXED/WORTH RATIO: This ratio measures the extent to which owner’s equity
(capital) has been invested in plant and equipment (fixed assets). A lower ratio
indicates a proportionately smaller investment in fixed assets in relation to net worth

47
 and a better cushion for creditors in case of liquidation. Similarly, a higher ratio
would indicate the opposite situation. The presence of substantial leased fixed assets
(not shown on the balance-sheet ) may deceptively lower this ratio. Fixed Worth
Ratio=Net Fixed Assets/ Tangible Net Worth

Profit loss account

Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07
Income

Operating income 32,369.69 32,747.36 38,250.39 39,467.92 28,457.13

Expenses

Material consumed - - - - -
Manufacturing expenses - - - - -
Personnel expenses 2,816.93 1,925.79 1,971.70 2,078.90 1,616.75
Selling expenses 305.79 236.28 669.21 1,750.60 1,741.63
Administrative expenses 4,909.00 7,440.42 7,475.63 6,447.32 4,946.69
Expenses capitalized - - - - -
Cost of sales 8,031.72 9,602.49 10,116.54 10,276.82 8,305.07
Operating profit 7,380.82 5,552.30 5,407.91 5,706.85 3,793.56
Other recurring income 7.26 305.36 330.64 65.58 309.17

48
Adjusted PBDIT 7,388.08 5,857.66 5,738.55 5,772.43 4,102.73
Financial expenses 16,957.15 17,592.57 22,725.93 23,484.24 16,358.50
Depreciation 562.44 619.50 678.60 578.35 544.78
Other write offs - - - - -
Adjusted PBT -10,131.51 -12,354.42 -17,665.98 5,194.08 3,557.95
Tax charges 1,609.33 1,600.78 1,830.51 1,611.73 984.25
Adjusted PAT 5,110.21 3,890.47 3,740.62 4,092.12 2,995.00
Non recurring items 41.17 134.52 17.51 65.61 115.22
Other non cash adjustments -2.17 - -0.58 - -
Reported net profit 5,149.21 4,024.98 3,757.55 4,157.73 3,110.22
Earnings before appropriation 8,613.59 6,834.63 6,193.87 5,156.00 3,403.66
Equity dividend 1,612.58 1,337.95 1,224.58 1,227.70 901.17
Preference dividend - - - - -
Dividend tax 202.28 164.04 151.21 149.67 153.10
Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07
Retained earnings 6,798.73 5,332.63 4,818.07 3,778.63 2,349.39

49
Total Share Capital 1,151.82 1,114.89 1,463.29 1,462.68 1,249.34

Equity Share Capital 1,151.82 1,114.89 1,113.29 1,112.68 899.34

Share Application Money 0.29 0.00 0.00 0.00 0.00

Preference Share Capital 0.00 0.00 350.00 350.00 350.00

Reserves 53,938.82 50,503.48 48,419.73 45,357.53 23,413.92

Revaluation Reserves 0.00 0.00 0.00 0.00 0.00

Net Worth 55,090.93 51,618.37 49,883.02 46,820.21 24,663.26

Deposits 225,602.11 202,016.60 218,347.82 244,431.05 230,510.19

Borrowings 109,554.28 94,263.57 67,323.69 65,648.43 51,256.03

Total Debt 335,156.39 296,280.17 285,671.51 310,079.48 281,766.22

Other Liabilities & Provisions 15,986.35 15,501.18 43,746.43 42,895.39 38,228.64

Total Liabilities 406,233.67 363,399.72 379,300.96 399,795.08 344,658.12

Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

Cash & Balances with RBI 20,906.97 27,514.29 17,536.33 29,377.53

18,706.88

Balance with Banks, Money at Call 13,183.11 11,359.40 12,430.23 8,663.60

18,414.45

Advances 216,365.90 181,205.60 218,310.85 225,616.08 195,865.6

50
Investments 134,685.96 120,892.80 103,058.31 111,454.34 91,257.84

Gross Block 9,107.47 7,114.12 7,443.71 7,036.00 6,298.56

Accumulated Depreciation 4,363.21 3,901.43 3,642.09 2,927.11 2,375.14

Net Block 4,744.26 3,212.69 3,801.62 4,108.89 3,923.42

Capital Work In Progress 0.00 0.00 0.00 0.00 189.66

Other Assets 16,347.47 19,214.93 24,163.62 20,574.63 16,300.26

Total Assets 406,233.67 363,399.71 379,300.96 399,795.07 344,658.11

Contingent Liabilities 883,774.77 694,948.84 803,991.92 371,737.36 177,054.18

Bills for collection 47,864.06 38,597.36 36,678.71 29,377.55 22,717.23

Book Value (Rs) 478.31 463.01 444.94 417.64 270.37

Annual results in brief

Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07

Sales 25,974.05 25,706.93 31,092.55 30,788.34 22,994.29

Operating profit 17,069.96 15,460.24 20,239.18 19,729.57 14,077.37

Interest 16,957.15 17,592.57 22,725.93 23,484.24 16,358.50

Gross profit 9,047.55 9,732.18 8,925.23 7,960.69 5,874.40

EPS (Rs) 44.72 36.10 33.76 37.37 34.58

51
Annual results in details

Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07

Other income 6,647.90 7,477.65 7,603.72 8,810.77 5,929.17

Stock adjustment - - - - -

Raw material - - - - -

Power and fuel - - - - -

Employee expenses 2,816.94 1,925.79 1,971.70 2,078.90 1,616.75

Excise - - - - -

Admin and selling expenses - - - - -

Research and development expenses - - - - -

Expenses capitalised - - - - -

Other expenses 3,800.31 3,934.04 5,073.41 6,075.28 5,073.81

Provisions made 2,286.84 4,386.86 3,808.26 2,904.59 2,226.36

Depreciation - - - - -

Taxation 1,609.33 1,320.34 1,358.84 898.37 537.82

Net profit / loss 5,151.38 4,024.98 3,758.13 4,157.73 3,110.22

Extra ordinary item - - - - -

Prior year adjustments - - - - -

Equity capital 1,151.82 1,114.89 1,113.29 1,112.68 899.34

Equity dividend rate - - - - -

Agg. of non-prom. shares (Lacs) 11517.72 11148.45 11132.51 11126.87 8992.67

Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07

Agg. of non promote Holding (%) 100.00 100.00 100.00 100.00 100.00

OPM (%) 65.72 60.14 65.09 64.08 61.22

GPM (%) 27.73 29.33 23.06 20.10 20.31

52
NPM (%) 15.79 12.13 9.71 10.50 10.75

53
 Cash flow

Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07

Profit before tax 6,760.70 5,345.32 5,116.97 5,056.10 3,648.04

Net cash flow- - -

operating activity -6,908.92 1,869.21 14,188.49 11,631.15 23,061.95

Net cash used in investing - -

activity -2,108.82
6,150.73 3,857.88 17,561.11 18,362.67

Net cash used in fin.

activity 4,283.20 1,382.62 1,625.36 29,964.82 15,414.58

Net inc/dec in cash and

equivlnt -4,783.61 8,907.13 -8,074.57 683.55 20,081.10

Cash and equivalnt

begin of year 38,873.69 29,966.56 38,041.13 37,357.58 17,040.22

Cash and equivalnt end

of year 34,090.08 38,873.69 29,966.56 38,041.13 37,121.32

RATIO RELATED TO WORKING CAPITAL

 Current ratio

 Liquid ratio

 Current asset to fixed asset ratio

 Net working capital ratio

54
 Ave collection period

 Current asset turnover ratio

 Net current asset turnover ratio

 Current ratio

particular 2010-11 2009-10 2008-09

Current assets 1637975035 2040733210 1220975919

Current liability 1091581121 1097712024 832482514

Current ratio = Current assets

Current liability

2010-11 2009-10 2008-09

1637975035 2040733210 1220975919 1091581121

1097712024 832482514

=1.50:1 1.86:1 1.47:1

CURRENT RATIO
RATIO

21.86
1.81.5 1.47

1.6

1.4

RATIO

55
 1.2
1
0.8
0.6
0.4
0.2
0

YEAR

This ratio indicates that the current ratio decreases because the current assets exceeds than current
liability.

 Liquid ratio

Particular 2010-11 2009-10 2008-09

Liquid asset 777064680 919781305 931166865
Liquid liability 956108452 960146202 832482514

Liquid ratio = liquid assets

Liquid liability

2010-11 2009-10 2008-09

777064680 919781305 931166865 956108452 960146202 832482514

0.81: 1 0.95: 1 1.12: 1

LIQUID RATIO

1.2 1 1.12
0.8
56
 0.95

0.81

RATIO
RATIO

0.6
0.4
0.2
0

YEAR

Current assets to fixed asset ratio

Particular 2010-11 2009-10 2008-09

current asset 1637975035 2040733210 1220975919

Fixed assets 616567088 608338839 690642060

Ratio of w. c. = current asset

Fixed asset

2010-11 2009-10 2008-09

1637975035 2040733210 1220975919 616567088 608338839 690642060

= 2.66 =3.35 =1.77

CURRENT ASSETS TO FIXED ASSETS RATIO

3.5
4
3
2.5
3.35
2.66

RATIO

57
 RATIO
2 1.77
1.5
1
0.5
0

YEAR

Net working capital ratio

particular 2010-11 2009-10 2008-09

Net w.c 546393914 943021186 832482514

Net Asset 564070078 555841829 640645050

Net Working capital ratio = Net working Capital

Net Assets

2010-11 2009-10 2008-09

546393914 943021186 832482514 564070078

555841829 640645050

= 0.97:1 =1.69:1 =1.29:1

NETWORKING CAPITAL RATIO

1.69

1.8
1.6
1.29

58
 1.4

1.2 0.97

RATIO
RATIO

1
0.8
0.6
0.4
0.2
0

YEAR

Debtors Turnover ratio

Particular 2010-11 2009-10 2008-09

Sales 7681799111 5974268884 5468894893

Debtor 1832696385 140251114 119492970

Debtors Turnover Ratio = Sales

Debtors

2010-11 2009-10 2008-09

7681799111 5974268884 5468894893 1832696385 140251114

119492970

= 4.19:1 = 4.26:1 = 4.58:1

DEBTOR TURNOVER RATIO

4.7
4.6
4.5
4.4 4.58

RATIO

59
 RATIO
4.26
4.3 4.19
4.2
4.1
4
3.9

YEAR

Ave Collection Period

Ave Collection period = 365 Day

Debtor Turnover

Particular 2010-11 2009-10 2008-09

Ave collection Period =365 =365 =365

4.19 4.26 4.58

=87 Day =86Day =80 Day

AVERAGE COLLECTION PERIOD

88 87
86 86
84

RATIO

60
 DAY
82 80
80
78
76

YEAR

Current asset turnover ratio

PARTICULAR 2010-11 2009-10 2008-09

SALES 7681799111 5974268884 5468894893
CRRENT ASSET 1637975035 2040733210 1220975919

Current asset turnover ratio = sales

Current assets
2010-11 2009-10 2008-09

7681799111 597426884 5468894893 163795035

2040733210 1220975919

= 4.69 times = 2.92 times = 4.47 times

CURRENT ASSETS TURNOVER RATIO

5 4.69 4.47
4.5

3.5 2.92

61
 RATIO
RATIO

3
2.5
2
1.5
1
0.5
0

YEAR

Net current asset turnover ratio

PARTICULAR 2010-11 2009-10 2008-09

SALES 768179911 597426884 5468894893

NET C.A. 546393914 735147353 438490415

Net current asset turnover ratio = sales

Net current asset

2010-11 2009-10 2008-09

768179911 597426884 5468894893

546393914 735147353 438490415

= 14.06 = 8.12 =12.47

NET CURRENT ASSETS TURNOVER RATIO RATIO

16 14.06
14
12 12.47

8.12

RATIO

62
 RATIO 10
8
6
4
2
0

YEAR

CHAPTER 6
CONCLUSION AND SUGGESTIONS

CONCLUSION

63
The balance-sheet along with the income statement is an important tool for investors and many

other parties who are interested in it to gain insight into a company and its operation. The balance

sheet is a snapshot at a single point of time of the company’s accounts- covering its assets, liabilities

and

shareholder’s equity. The purpose of the balance-

sheet is to give users an idea of the company’s financial position along with displaying what the

company owns and owes. It is important that all investors know how to use, analyze and read

balance-sheet. P &

L account tells the net profit and net loss of a company and its appropriation. In the case of ICICI

Bank, during fiscal 2008, the bank continued to grow and diversify its assets base and revenue

streams. Bank maintained its leadership in all main areas such as retail credit, wholesale business,

international operation, insurance, mutual fund, rural banking etc. Continuous increase in the

number of branches, ATM and electronic channels shows the growth take place in bank. Trend

analysis of profit & loss account and balance sheet shows the % change in items of p & l a/c and

balance sheet i.e. % change in 2006 from 2005 and %change in 2007 from 2006. It shows that all

items are increased mostly but increase in this year is less than as compared to increase in previous

year. In p& l a/c, all items like interest income, non-interest income, interest expenses, operating

expenses, operating profit, profit before tax and after tax is increased but in mostly cases it is less

than from previous year but in some items like interest income, interest expenses, provision %

increase is more. Some items like tax, depreciation, lease income is decreased. Similarly in balance

sheet all items like advances, cash, liabilities, deposits is increased except borrowings which is

decreased. % increase in some item is more than previous year and in some items it is less.

Ratio analysis of financial statement shows that bank’s current ratio is better than the quick ratio

and fixed/worth ratio. It means bank has invested more in current assets than the fixed assets and

liquid assets. Bank have given more advances to its customer and they have less cash in their hand.

64
 Profitability ratio of bank is lower than as compared to previous year. Return on equity is better

than the return on assets.The cash flow statement shows that net increase in cas h generated

fromoperating and financing activities is much more than the previous year but cash generated from

investing activities is negative in both year. There is increase of 159,708,479 thousand RS. in

Increase in cash & cash equivalents from previous year. Therefore analysis of cash flow statement

shows that cash inflow is more than the cash outflow in ICICI Bank. Thus, the ratio analysis and

trend analysis and analysis of cash flow statementshows that ICICI Bank’s financial position is

good. Ban k’s profitability is increasing but not at high rate. Bank’s liquidity position is fair but not

good because bank invests more in current assets than the liquid assets. As we all know that ICICI

Bank is on the first position among all the private sector bank of India in all areas but it should pay

attention on its profitability and liquidity. Bank’s position is stable.

SUGGESTIONS

Some of the recommendation and suggestion are as follows:

1) The attention is required on the areas of growth, profitability service level and building talent.
2) To increase the profit of bank, bank should decrease their o perating expenses and increase their
income.
3) To increase its liquidity, bank should keep some more cash in its hand instead of giving more and
more advances.
4) Introduce quality consciousness and standardization of the work system and procedures.
5) Make manager competitive and introduce spirit of market-orientation and culture of working for
customer satisfaction.
6) There is need to build the knowledge and skill base among the employees in the context of
technology.

65
7) Performance measure should not only cover financial a spects i.e.quantitatively aspects but also the
qualitative aspects.
8) It is high time to focus on work than the work-achieved.
9) Bank should increase its retail portfolio.
10) Bank should manage its all risk such as credit, market and operational risk properly and
should be managed by a person who are highly skilled and qualified.
11) Bank should pay attention on its subsidiary “ICICI Pru dential LifeInsurance Company
Limited”.

SUGGESTIONS

Some of the recommendation and suggestion are as follows:

12) The attention is required on the areas of growth, profitability service level and
building talent.

13) To increase the profit of bank, bank should decrease their o perating expenses
and increase their income.

14) To increase its liquidity, bank should keep some more cash in its hand instead
of giving more and more advances.

15) Introduce quality consciousness and standardization of the work system and
procedures.

16) Make manager competitive and introduce spirit of market-orientation and

culture of working for customer satisfaction.

17) There is need to build the knowledge and skill base among the employees in
the context of technology.

18) Performance measure should not only cover financial a spects i.e.quantitatively
aspects but also the qualitative aspects.

19) It is high time to focus on work than the work-achieved.

66
20) Bank should increase its retail portfolio.

21) Bank should manage its all risk such as credit, market and operational risk
properly and should be managed by a person who are highly skilled and qualified.

22) Bank should pay attention on its subsidiary “ICICI Pru dential LifeInsurance
Company Limited”.

BIBLIOGRAPHY

1) gemini.google.com

2) www.icicidirect.com
3) moneycontrol.com

4)icicibank.com

Books Reffered:
 Accountancy. R.K. Mittal,A.K.Jain.
Gaurav Narang
B.B.A
101

67
 Financial Management- Theory and Practice. Shashi.K.Gupta , R.K. Sharma.
 Essentials of Corporate Finance 2
nd
edition ,Irwin /McGraw-Hill.Ross, S.A.,R.W.
Westerfield and B.D. Jordan.
 Basic Financial Management ,8
th
edition ,Prentice -Hall,Inc. Scott, D.F., J.D
Martin, J.W. Petty and A.Keown.
Internet websites:
 Www.Icicibank.Com
 Www.Moneycontrol.Com
 WWW.Money.Rediff.Com
 Www.Wikipedia.Org
 Www.Google.Com
 Www.Scribd.Com
 Www.Managementparadise.Com

68
69
CHAPTER 7

Annexure:

This project report uses data provided by Statistica, eMarketer, CIRP, Amazon and
Wikipedia.

70
 Business capital is broadly divided into two groups: fixed capital and working
capital. Fixed capital refers to the funds investment in such fixed or permanent asset
as land, building machinery etc. while working capital refers to funds loc ked up in
materials, work-in-progress, finished goods, receivable and cash etc..since these asset
are known as current assets in very simple term “working capital may be defined as
capital invested in current assets” “working capital management is concerned with
the problems that arises in attempting to manage the current assets, current liabilities
and the interrelationship that exists between them”.

The term current assets refers to those assets which in the ordinary coerce of
business can be turned in to cash with in one year without distrusting the firm’s
operations and consist of cash. Inventory receivables and marketable securities.

The term current liability are those which are intended at their inception to
paid in the ordinary course of business, within a year out of CA or earning of the firm
and consists of account payables, bank OD & out standing expenses.

The working capital management is thus concerned with maintaining a trade

off between profitability and risk associated within a firm’s level of CA & CL.

The basic goal of working capital is to manage the firm’s CA & CL so as to

achieve a satisfaction level of working capital it is. Necessary because if the firm is not
able to maintain these level it is likely to because in solvent and may even be forced
into bankruptcy.

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WEAKNESSLower response time with efficient and effective serviceSome gaps in range
for certain sectors.Customer service staff needs training.Processes and systems,
etc.Management covers insufficient.OPPORTUNITIES Profit margins will be
good.Could extend to overseas broadly.New specialist applications.Could seek better
customer dealsFast – track career development opportunities on an industry – wide
basis.THREATS Legislation could impact.Great risk involvedVery high competition
prevailing in the industry.Vulnerable to reactive attack by major competitorsLack of
infrastructure in rural areas could constrain investmentHigh volume/low cost market is
intensely competitive

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Liomitations of study Difficulty in data collection.
 Limited knowledge about the bank in the initial stages.
 Branch manager was reluctant for giving financial data of the
bank.
 The analysis and interpretation are based on secondary data
contained in the published annual reports of ICICI Bank for the
study period.
 Due to the limited time available at the disposable , the study has
been confined for a period of 5 years (2005-2009).
 Ratio itself will not completely show the company’s good or bad
financial position.
 Inter firm comparison was not possible due to the non
availability of competitors data.
 The study of financial performance can be only a means to know
about the financial condition of the company and cannot show a
through picture of the activities of the company

interpretation
The capital of bank increased by 14% in 2005-06,0.8% in
2006-07,17% in 2007-08,and .04 % in 2008-09.This shows
that there is fluctuation in the rate of increase in the capital. In
2005-06 and 2007-08 the rate of increase in capital is more
than that of 2006-07 and 2008-09.
Gaurav Narang
B.B.A
77
 There is a huge fluctuation in the rate of increase in reserves
and surplus also. This shows that bank is effectively utilizing
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its reserves and surplus.
 In 2005-06 deposits increase by 65%,in 2006-07 it increased
by 40%,and an increase of 6% in 2007-08.in 2008-09
deposits fall by 11%.this shows that the bank has repayed its
deposits in this year.
 The borrowings are also showing a fluctuating rate of
increase.in 2008-08 the borrowings have increased at a very
low rate.this shows that bank has repaid a large amount of
borrowings in this year and thereby reducing the dependence
on outside debt.
 The investments are also increasing but with lower rates
compared to the preceding years.
 Similarly advances rose by 60% in 2005-06,an increase of
34% in 2006-07,15% increase in 2007-08 and finally
decresed by 3.25% in 2008-09.
 Thre has been a consistent decline in the fixed assets over
years.in 2005-06 and 2006-07 it decreased by 1.4 %
,increased by 5% in 2007-08 and again decreasing by 7.5% in
2008-09.this is mainly due to increase in the rate of
depreciation in the subsequent years.
 A huge fluctuation is revealed from current assets. it
increased by 37% in 2005-06,rate of increase rose to 80% in
2006-07 and then the it increased at a much lower rate i.e at
10%.this shows that the bank is effectively ustilising its
working capital.there is a fall in current assets in 2008-09 by
8 %.this is mainly due to the repayment of deposits in the
years 2008-09.

The Bank’s capital adequacy at March 31, 2009 as per Reserve Bank of India’s
74
revised guidelines on Basel II norms was 15.5% and Tier-1 capital adequacy was
11.8%, well above RBI’s requirement of total capital adequacy of 9.0% and Tier-1
capital adequacy of 6.0%. The above capital adequacy takes into account the impact
of dividend recommended by the Board.
Also the capital is being effectively utilized in the bank as it shows better return on
capital employed over years.
 Asset quality
At March 31, 2009, the Bank’s net non-performing asset ratio was 1.96%. During the
year the Bank restructured loans aggregating to Rs. 1,115 crore (US$ 220 million).
 Dividend on equity shares
Since the dividend per share has shown a promising increase for the period under
study.It shows that the bank is following a sound dividend policy and is capable of
distributing higher dividends.in this way the investors will feel investing in capital of
the bank a much beneficial option and will be reluctant to withdraw capital for a long
time.
 Earnings per share
The earnings per share for the period under study also shows a promising increase.it
suggests that bank has better profitability position and in future it can be a better or
attractive channel of investment for shareholders.
 Higher trends of credit deposit ratio – A positive sign
High trends of credit deposit ratio reveals that bank has performed satisfactorily as
regard
to granting loans and advances to generate income. It suggests that credit performance
is
good and the bank is doing its business good by fulfilling its major objective as regards
to
granting loans and accepting deposits.
Conclusion
On the basis of various techniques applied for the financial analysis of ICICI Bank we
can arrive at a conclusion that the financial position and overall performance of the
bank
is satisfactory. Though the income of the bank has increased over the period but not in
the
Gaurav Narang
B.B.A
97
same pace as of expenses. But the bank has succeeded in maintaining a reasonable
profitability position.
The bank has succeeded in increasing its share capital also which has increased
around

75
50% in the last 5 years. Individuals are the major shareholders. The major achievement
of
the bank has been a tremendous increase in its deposits, which has always been its
main
objective. Fixed and current deposits have also shown an increasing trend.
Equity shareholders are also enjoying an increasing trend in the return on their
capital.
Though current assets and liabilities (current liquidity) of the bank is not so
satisfactory
but bank has succeeded in maintaining a stable solvency position over the years. As far
as
the ratio of external and internal equity is concerned, it is clear that bank has been
using
more amount of external equity in the form of loans and borrowings than owner’s
equity.
Bank’s investments are also showing an increasing trend. Due to increase in
advances,
the interest received by the bank from such advances is proving to be the major source
of
income for the bank.
Suggestions
 Although the short term liquidity position is quite satisfactory as per revealed by
liquid ratio but the current ratio is below the ideal ratio of 2:1.So the bank should
make efforts to increase its current assets to maintain a safety margin and to
maintain a better liquidity position.
Gaurav Narang
B.B.A
98
 The profitability of the bank for the period under study is not satisfactory. Profits
are increasing but not with same pace as of the expenditure due to higher reliance
on debt capital in the form of borrowings and loans for financing capital structure.
So in order to improve profitability, the bank should reduce its dependence on
external equities for meeting capital requirements. Consequently, the interest
expenses will decline and profits will increase which is good for the bank.
Similarly non productive expenses should be curtailed to improve profitability.
 Higher trend of credit deposit ratio reveals that the bank has performed
satisfactorily as regard to granting loans and advances to generate income. It
suggests that the credit performance of bank is good and it is performing its
business well by fulfilling the major objective of granting credit and accepting
deposit. So in order to have more creditability in the market the bank should
maintain its credit deposit ratio.
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 Though the bank has been successful in increasing it’s deposits but to further
improve upon such situation it can introduce some new and attractive schemes for
public. Such schemes can be in the form of higher rate of interest and shorter
maturity period for FD’s etc.
 Bank should try to finance more and more projects. Financing will help it to earn
higher amount of profits.
 The bank is having a greater reliance on debt capital. The increasing reliance on
external equities may prove hazardous in the long run. So in order to remedy this
situation bank should increase its focus on internal equities and other sources of
internal financing.
 Bank can also think for improving it’s day-to -day service to its clients. Such
service can be improved by providing prompt service and showing an attitude of
co-operation to its clients. It will help to give a kind of confidence to the public
and build a better public image.
 To achieve the objective of Rural development it should open more and more
branches in different rural areas of the country. It will facilitate in providing help
to rural poor farmers and other living below the poverty line. Bank can appoint
commission agents for different area who can encourage general public to invest
in the capital of the bank and make more deposits in ICICI Bank.
 The bank should simplify the procedure of advances for quick disbursement.
 To achieve organizational success a proper independent working atmosphere
should be developed to achieve desired objective more effectively.
 Last but not least, bank should adopt branch automation experiment to control the
operational cost.
Gaurav Narang
B.B.A
99

77