A

Project Study Report

On

Training Undertaken at

ICICI Bank & SBI Bank

“Comparison of Microfinance products of ICICI & SBI bank and Customer Perception
towards these products”

Submitted in partial fulfillment for the

Award of degree

Master of Business Administration

Submitted By:

Shivanshu Vinay Krishna

MBA Part 2nd year

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 Preface

Decision making is a fundamental part of the research process. Decisions

regarding that what you want to do, how you want to do, what tools and techniques
must be used for the successful completion of the project. In fact it is the researcher’s
efficiency as a decision maker that makes project fruitful for those who concern to the
area of study.

This project report has been prepared as per the requirement of the syllabus of
MBA course structure under which the students are required to undertake project. My
job during the making of project was to get an overview of availability of microfinance
products provided by Banking sector. And how’s the lower availability of credits in
market affect the Economy.

The project title is-“Comparison of microfinance products of ICICI & SBI Bank
and customer perception about these products.” Different types of micro products are
provided by the banks. These micro finance products help to raise the level of economy
and standard of poor people.

Basically when we are playing with computer in every part of life, I used it in my
project not for the ease of mine but for the ease of result explanation to those who will
read this project. The project presents the role of microfinance products in life of
persons.

Now I take this opportunity to present the project report and sincerely hope that it
will be as much knowledge enhancing to the readers as it was to use during the
fieldwork and the completion of the report.

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 ACKNOWLEDGEMENTS

To acknowledge all the persons who had helped for the fulfillment of the project
is not possible for any researcher but in spite of all that it becomes the foremost
responsibility of the researcher and also the part of research ethics to acknowledge
those who had played a great role for the completion of the project.

I express my sincere thanks to my project guide Mrs.Prachi Mam & Ms. Ity patni
Mam and all my faculty members, Department of management studies, Poornima
Group Of Colleges for guiding me right from the inception till the successful completion
of the project.

I sincerely acknowledge him for extending their valuable guidance, support of

literature, critical review of project and the report and above all the moral support they
had provided to me with all stages of this project.

I would also like to acknowledge Mr. Amish Duggar for expending his valuable
guidance.

I would also like to thanks the supportive staff, Department of management

studies, Poornima Group Of Colleges, for their help & cooperation throughout the
project.

Shivanshu Vinay Krishna

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 Executive Summary

In the growing global competition, the productivity of any business concern

depends upon the behavioural aspect of consumers. This topic deals with the

customer’s perception towards other Micro finance Products from SBI and ICICI

investment. This project report contains 5 different chapters. The report begins with the

introduction to industry and after that introdustion of company, its area of operation, its

organization structure, its achievements, etc.

The second chapter is the introduction to the Micro finance Products which gives

a brief idea regarding Micro Finance Products . It also contains the objectives and

limitations of the project.

The third chapter, methodology adopted in preparing this report is mentioned. It

covers the sample procedure, types of data used and the data collection method.

The fourth chapter comprehensive coverage of forecasting concepts and techniques

which shows the analysis of data through tabulation, computation and graphical

representation of data collected from survey.

The fifth chapter deals with the findings, suggestion & conclusion part which is

very much important after analysis is made.

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 As we know that only analysis and conclusion is not the end of a research, so in

the sixth chapter the recommendation part is covered which are made after a depth

study of the analysis part of thesis.

In each of the five chapters as described above, every chapter has been

scheduled in a manner so as to enable the reader to appreciate the contents easily. The

report is supported by figures and data wherever necessary with a view to assist the

reader in developing a clear cut understanding of the topic.

I hope this report will be extremely useful for those it is meant. Constructive and

healthy suggestions for improvements of the report will be great fully appreciated.

INDUSTRY PROFILE

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History

Banking in the modern sense of the word can be traced to medieval and
early Renaissance Italy, to the rich cities in the north like Florence, Venice
and Genoa. The Bardi and Peruzzi families dominated banking in 14th century
Florence, establishing branches in many other parts of Europe. Perhaps the most
famous Italian bank was the Medici bank, set up by Giovanni Medici in 1397. The
earliest known state deposit bank, Banco di San Giorgio (Bank of St. George), was
founded in 1407 at Genoa, Italy.

Banks can be traced back to ancient times even before money

when temples were used to store commodities. During the 3rd century AD, banks
in Persia and other territories in the Persian Sassanid Empire issued letters of
credit known as Ṣakks. Muslim traders are known to have used
the cheque or ṣakk system since the time of Harun al-Rashid (9th century) of
the Abbasid Caliphate.
In the 9th century, a Muslim businessman could cash an early form of the
cheque in China drawn on sources in Baghdad, a tradition that was significantly
strengthened in the 13th and 14th centuries, during the Mongol Empire. Fragments
found in the Cairo Geniza indicate that in the 12th century cheques remarkably similar
to our own were in use, only smaller to save costs on the paper. They contain a sum to
be paid and then the order "May so and so pay the bearer such and such an amount".
The date and name of the issuer are also apparent.

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Origin of the word

The word bank was borrowed in Middle English from Middle French banque, from
Old Italian banca, from Old High German banc, bank "bench, counter". Benches were
used as desks or exchange counters during the Renaissance by Florentine bankers,
who used to make their transactions atop desks covered by green tablecloths.

The earliest evidence of money-changing activity is depicted on a silver Greek drachm

coin from ancient Hellenic colony Trapezus on the Black Sea, modern Trabzon, c. 350–
325 BC, presented in the British Museum in London. The coin shows a banker's table
(trapeza) laden with coins, a pun on the name of the city. In fact, even today in Modern
Greek the word Trapeza (Τράπεζα) means both a table and a bank.

Definition

The definition of a bank varies from country to country.

Under English common law, a banker is defined as a person who carries on the
business of banking, which is specified as:

 conducting current accounts for his customers

 paying cheques drawn on him, and
 collecting cheques for his customers.

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Banco de Venezuela.

In most common law jurisdictions there is a Bills of Exchange Act that codifies
the law in relation to negotiable instruments, including cheques, and this Act contains
a statutory definition of the termbanker: banker includes a body of persons, whether
incorporated or not, who carry on the business of banking' (Section 2, Interpretation).
Although this definition seems circular, it is actually functional, because it ensures that
the legal basis for bank transactions such as cheques does not depend on how the
bank is organised or regulated.

The business of banking is in many English common law countries not defined
by statute but by common law, the definition above. In other English common law
jurisdictions there are statutory definitions of the business of banking orbanking
business. When looking at these definitions it is important to keep in mind that they are
defining the business of banking for the purposes of the legislation, and not necessarily
in general.
In particular, most of the definitions are from legislation that has the purposes of
entry regulating and supervising banks rather than regulating the actual business of
banking. However, in many cases the statutory definition closely mirrors the common
law one. Examples of statutory definitions:

 "Banking business" means the business of receiving money on current or deposit

account, paying and collecting cheques drawn by or paid in by customers, the
making of advances to customers, and includes such other business as the Authority

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 may prescribe for the purposes of this Act; (Banking Act (Singapore), Section 2,
Interpretation).

 "Banking business" means the business of either or both of the following:

1. Receiving from the general public money on current, deposit, savings or

other similar account repayable on demand or within less than [3 months] ... or
with a period of call or notice of less than that period;
2. paying or collecting cheques drawn by or paid in by customers

Since the advent of EFTPOS (Electronic Funds Transfer at Point Of Sale), direct
credit, direct debit and internet banking, the cheque has lost its primacy in most
banking systems as a payment instrument. This has led legal theorists to suggest that
the cheque based definition should be broadened to include financial institutions that
conduct current accounts for customers and enable customers to pay and be paid by
third parties, even if they do not pay and collect cheques.

Banking Standard activities

Large door to an old bank vault.

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 Banks act as payment agents by conducting checking or current accounts for
customers, paying cheques drawn by customers on the bank, and collecting cheques
deposited to customers' current accounts. Banks also enable customer payments via
other payment methods such as telegraphic transfer, EFTPOS, and ATM.

Banks borrow money by accepting funds deposited on current accounts, by

accepting term deposits, and by issuing debt securities such as banknotes and bonds.
Banks lend money by making advances to customers on current accounts, by
makinginstallment loans, and by investing in marketable debt securities and other
forms of money lending.

Banks provide almost all payment services, and a bank account is considered
indispensable by most businesses, individuals and governments. Non-banks that
provide payment services such as remittance companies are not normally considered
an adequate substitute for having a bank account.

Banks borrow most funds from households and non-financial businesses, and lend most
funds to households and non-financial businesses, but non-bank lenders provide a
significant and in many cases adequate substitute for bank loans, and money market
funds, cash management trusts and other non-bank financial institutions in many cases
provide an adequate substitute to banks for lending savings too.

Channels
Banks offer many different channels to access their banking and other services:

 ATM is a machine that dispenses cash and sometimes takes deposits without
the need for a human bank teller. Some ATMs provide additional services.
 A branch is a retail location
 Call center

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  Mail: most banks accept check deposits via mail and use mail to communicate to
their customers, e.g. by sending out statements
 Mobile banking is a method of using one's mobile phone to conduct banking
transactions
 Online banking is a term used for performing transactions, payments etc. over
the Internet
 Relationship Managers, mostly for private banking or business banking, often
visiting customers at their homes or businesses
 Telephone banking is a service which allows its customers to perform
transactions over the telephone without speaking to a human
 Video banking is a term used for performing banking transactions or
professional banking consultations via a remote video and audio connection.
Video banking can be performed via purpose built banking transaction machines
(similar to an Automated teller machine), or via a videoconference enabled bank
branch.

Business model
A bank can generate revenue in a variety of different ways including interest,
transaction fees and financial advice. The main method is via charging interest on the
capital it lends out to customer. The bank profits from the differential between the level
of interest it pays for deposits and other sources of funds, and the level of interest it
charges in its lending activities.

This difference is referred to as the spread between the cost of funds and the
loan interest rate. Historically, profitability from lending activities has been cyclical and
dependent on the needs and strengths of loan customers and the stage of the economic
cycle. Fees and financial advice constitute a more stable revenue stream and banks

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have therefore placed more emphasis on these revenue lines to smooth their financial
performance.

In the past 20 years American banks have taken many measures to ensure that
they remain profitable while responding to increasingly changing market conditions.
First, this includes the Gramm-Leach-Bliley Act, which allows banks again to merge with
investment and insurance houses. Merging banking, investment, and insurance
functions allows traditional banks to respond to increasing consumer demands for "one-
stop shopping" by enabling cross-selling of products (which, the banks hope, will also
increase profitability).

Second, they have expanded the use of risk-based pricing from business lending
to consumer lending, which means charging higher interest rates to those customers
that are considered to be a higher credit risk and thus increased chance of default on
loans. This helps to offset the losses from bad loans, lowers the price of loans to those
who have better credit histories, and offers credit products to high risk customers who
would otherwise be denied credit.

Third, they have sought to increase the methods of payment processing available
to the general public and business clients. These products include debit cards, prepaid
cards, smart cards, and credit cards. They make it easier for consumers to conveniently
make transactions and smooth their consumption over time (in some countries with
underdeveloped financial systems, it is still common to deal strictly in cash, including
carrying suitcases filled with cash to purchase a home).

However, with convenience of easy credit, there is also increased risk that
consumers will mismanage their financial resources and accumulate excessive debt.
Banks make money from card products through interest payments and fees charged to
consumers andtransaction fees to companies that accept the cards. This helps in
making profit and facilitates economic development as a whole.

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Products

A former building society, now a modern retail bank in Leeds, West Yorkshire.

An interior of a branch of National Westminster Bank on Castle Street,Liverpool

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Retail

 Business loan
 Cheque account
 Credit card
 Home loan
 Insurance advisor
 Mutual fund
 Personal loan
 Savings account

Wholesale

 Capital raising (Equity / Debt / Hybrids)

 Mezzanine finance
 Project finance
 Revolving credit
 Risk management (FX, interest rates, commodities, derivatives)
 Term loan

Risk and capital

Banks face a number of risks in order to conduct their business, and how well these
risks 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 risk: risk of loss arising from a borrower who does not make payments as
promised.
 Liquidity risk: risk that a given security or asset cannot be traded quickly enough
in the market to prevent a loss (or make the required profit).

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  Market risk: risk that the value of a portfolio, either an investment portfolio or a
trading portfolio, will decrease due to the change in value of the market risk
factors.
 Operational risk: risk arising from execution of a company's business functions.

 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 (see risk-
weighted asset).

Banks in the economy

Economic functions

The economic functions of banks include:

1. Issue of money, in the form of banknotes and current accounts subject

to cheque or payment at the customer's order. These claims on banks can act as
money because they are negotiable or repayable on demand, and hence valued
at par. They are effectively transferable by mere delivery, in the case
of banknotes, or by drawing a cheque that the payee may bank or cash.
2. Netting and settlement of payments – banks act as both collection and
paying agents for customers, participating in interbank clearing and settlement
systems to collect, present, be presented with, and pay payment instruments.
This enables banks to economise on reserves held for settlement of payments,
since inward and outward payments offset each other. It also enables the
offsetting of payment flows between geographical areas, reducing the cost of
settlement between them.
3. Credit intermediation – banks borrow and lend back-to-back on their own
account as middle men.

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 4. Credit quality improvement – banks lend money to ordinary commercial
and personal borrowers (ordinary credit quality), but are high quality borrowers.
The improvement comes from diversification of the bank's assets and capital
which provides a buffer to absorb losses without defaulting on its obligations.
However, banknotes and deposits are generally unsecured; if the bank gets into
difficulty and pledges assets as security, to raise the funding it needs to continue
to operate, this puts the note holders and depositors in an economically
subordinated position.
5. Maturity transformation – banks borrow more on demand debt and short
term debt, but provide more long term loans. In other words, they borrow short
and lend long. With a stronger credit quality than most other borrowers, banks
can do this by aggregating issues (e.g. accepting deposits and issuing
banknotes) and redemptions (e.g. withdrawals and redemptions of banknotes),
maintaining reserves of cash, investing in marketable securities that can be
readily converted to cash if needed, and raising replacement funding as needed
from various sources (e.g. wholesale cash markets and securities markets).

Bank crisis
Banks are susceptible to many forms of risk which have triggered occasional
systemic crises. These include liquidity risk (where many depositors may request
withdrawals in excess of available funds), credit risk (the chance that those who owe
money to the bank will not repay it), and interest rate risk (the possibility that the bank
will become unprofitable, if rising interest rates force it to pay relatively more on its
deposits than it receives on its loans).

Banking crises have developed many times throughout history, when one or
more risks have materialized for a banking sector as a whole. Prominent examples
include the bank run that occurred during the Great Depression, the U.S. Savings and
Loan crisis in the 1980s and early 1990s, the Japanese banking crisis during the 1990s,
and the subprime mortgage crisis in the 2000s.

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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 $96.4 trillion while profits declined by 85% to $115bn. Growth
in assets in adverse market conditions was largely a result of recapitalisation. 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 totalled $66.3bn 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
(ICBC:18000+, BOC:12000+, CCB:13000+, ABC:24000+) 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.

Regulation

Currently in most jurisdictions commercial banks are regulated by government

entities and require a special bank licence 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.

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 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 licences banks, and some commercial banks (such as theBank 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 cheques 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 cheque drawn by the customer.
4. The bank agrees to promptly collect the cheques 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 cheques 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.

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 8. The bank must not close a customer's account without reasonable notice,
since cheques 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 licence requirements, and therefore regulated
under separate rules.

The requirements for the issue of a bank licence 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

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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

National Bank of the Republic, Salt Lake City 1908

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ATM Al-Rajhi Bank

National Copper Bank, Salt Lake City 1911

 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.

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 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.
 Offshore banks: banks located in jurisdictions with low taxation and regulation.
Many offshore banks are essentially private banks.
 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 decentralised distribution network, providing
local and regional outreach—and by their socially responsible approach to
business and society.
 Building societies and Landesbanks: institutions that conduct retail banking.
 Ethical banks: banks that prioritize the transparency of all operations and make
only what they consider to be socially-responsible investments.

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  A Direct or Internet-Only bank is a banking operation without any physical bank
branches, conceived and implemented wholly with networked computers.

Types of investment banks

 Investment banks "underwrite" (guarantee the sale of) stock and bond issues,
trade for their own accounts, make markets, 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.

Both combined

 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 bancassurance, a portmanteau wordcombining "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 resortin event of a crisis.

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 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.

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Banking Sector

Banking in a traditional sense is the business of accepting deposits of money

from public for the purpose of lending and investment. These deposits can have a
distinct feature can be withdrawn by cheques, which no other financial institution can
offer. In addition, banks also offer financial services, which include:

 Issuing demand draft & traveler’s cheque.

 Credit Cards, Debit Cards
 Collection of cheques, bill of exchange.
 Safe deposit lockers
 Custodian services.
 Investment and Insurance Services.
 Other Pra- Banking Products

The business of banking is highly regulated since banks deal with money offered to
them by the public and ensuring the safety of this public money is one of the prime
responsibilities of any bank. That is why banks are expected to be prudent in their
leading and investment activities.

Every bank has a compliance department, which is responsible to ensure that all
the services offered by the bank, and the processes followed are in compliance with the
local regulations and the Bank’s corporate policy.

The Indian banking market is growing at an astonishing rate, with Assets

expected to reach US$1 trillion by 2010. An expanding economy, middle class, and
technological innovations are all contributing to this growth.

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 The country’s middle class accounts for over 320 million people. In correlation
with the growth of the economy, rising income levels, increased standard of living, and
affordability of banking products are promising factors for continued expansion.

The Indian banking Industry is in the middle of an IT revolution, focusing on the

expansion of retail and rural banking. Players are becoming increasingly customer -
centric in their approach, which has resulted in innovative methods of offering new
banking products and services. Banks are now realizing the importance of being a big
player and are beginning to focus their attention on mergers and acquisitions
to take advantage of economies of scale and/or comply with Basel II regulation.

The major regulations and act govern the banking business are:-

 Banking Regulation Act, 1949

 Foreign Exchange Management Act,1999
 Indian Contract Act
 Negotiable Instruments Act, 1881
Bank lend money either for productive purposes to individual, firms, Corporate etc. of for
buying house property, cars and other consumer durables and for investment purposes
to individuals and the others. However, banks do mot finance any speculative activity.
Lending is risk taking. The depositor of banks is also assured of safety of their money
by deploying some percentage of deposit in statutory reserves like SLR & CLR.

Banking System

Banking system is an integral sub-system of the financial system. It represent an

important channel of collecting small saving from the households and ending it to the
corporate sector.

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 The Indian Banking system has the Reserve Bank of India (RBI) as the apex
body for all matters relating to the banking system.

Classification of Banks

1. Non-Schedule Banks

These are banks, which are mot included in the second schedule of the

Banking Regulations Act, 1965. It means they do mot satisfy the conditions laid down by
that schedule. They are further classified as back:

 Central co-operative banks and primary credit societies

 Commercial Banks

2. Schedule Banks

Must have paid-up capital and reserve of mot less than Rs. 50, 00,000. The must
satisfy the RBI than its affairs are mot conducted in a manner detrimental to the
interests of its depositors. These are further classified as follow:

 State co-operative Banks

 Commercial Banks

Banks are further sub-divided as:-

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1. Indian Banks:

These banks are companies registered in India under companies act, 1956, their
place of origin is in India. These are further classified into.

A. State Bank of India and its Subsidiaries:

This group comprises of the State Bank of India (SBI) and its seven subsidiaries
viz., State Bank of Patiala, State Bank of Hyderabad, State Bank of Travancore, State
Bank of Bikaner & jaipur State Bank of Indore.

B. Other Nationalized Banks:

This group consists of private sector bank that were national. The Government of
India Nationalized 14 private banks in 1969 and another 6 in the year 1980.

C. Regional Rural Banks:

The RBI established these in the year 1975 of Banking Commission. It was

Established to operate exclusively in rural areas to provide credit and other facilities to
small and marginal armers, agricultural alboras, artisans and small entrepreneurs.

D. Old private Sector Banks:

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 This group consists of Banks that were established by the privy states,
community organization or by a group of professionals for the cause of economic
betterment in their area of operations. Initially their branches slowly speard throughout
the national as they grew.

E. New Private Sector Banks:

These banks were started as profit oriented companies after the RBI opened the
banking sector to the private sector, these banks are monthly technology driven and
betterment in their branches slowly spread throughout the nation as they grew.

3. Foreign Banks:
There are banks that were registered outside India and had origiented in a
foreign country.

Current Scenario:

The industry is currently in a transition phase. On the one hand, the PSBs, which
are the mainstay of the Indian Banking System, are in the process of shedding their flab
in terms of excessive manpower, excessive non Performing Assets (NPAs) and
excessive governmental equity, while on the other hand the private sector banks are
consolidating themselves through mergers and acquisitions.

PSBs, which currently account for more than 78 percent of total banking industry
assets are saddled with NPAs (a mind-boggling Rs 830 billion in 2000), falling revenues
from traditional sources, lack of modern technology and a massive workforce while the
new private sector banks are forging ahead and rewriting the traditional banking
business model by way of their sheer innovation and service.

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 The PSBs are of course currently working out challenging strategies even as 20
percent of their massive employee strength has dwindled in the wake of the successful
Voluntary Retirement Schemes (VRS) schemes.

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

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INDIAN BANKING INDUSTRY

The banking
section will navigate through all the aspects of the Banking System in India. It will
discuss upon the matters with the birth of the banking concept in the country to new
players adding their names in the industry in coming few years.

The banker of all banks, Reserve Bank of India (RBI), the Indian Banks
Association (IBA) and top 20 banks like IDBI, HSBC, ICICI, ABN AMRO, etc. has been
well defined under three separate heads with one page dedicated to each bank.

However, in the introduction part of the entire banking cosmos, the past has been
well explained under three different heads namely:

• History of Banking in India

• Nationalization of Banks in India
• Scheduled Commercial Banks in India

The first deals with the history part since the dawn of banking system in India.
Government took major step in the 1969 to put the banking sector into systems and it
nationalized 14 private banks in the mentioned year. This has been elaborated in
Nationalization Banks in India. The last but not the least explains about the scheduled
and unscheduled banks in

India. Section 42 (6) (a) of RBI Act 1934 lays down the condition of scheduled
commercial banks. The description along with a list of scheduled commercial banks is
given on this page.

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CENTRAL BANK OF INDIA

RESERVE BANK OF INDIA (RBI):

The central bank of the country is the Reserve Bank of India (RBI). It was
established in April 1935 with a share capital of Rs. 5 crores on the basis of the
recommendations of the Hilton Young Commission. The share capital was divided into
shares of Rs. 100 each fully paid which was entirely owned by private shareholders in
the begining. The Government held shares of nominal value of Rs. 2,20,000.
Reserve Bank of India was nationalised in the year 1949. The general
superintendence and direction of the Bank is entrusted to Central Board of Directors of
20 members, the Governor and four Deputy Governors, one Government official from
the Ministry of Finance, ten nominated Directors by the Government to give
representation to important elements in the economic life of the country, and four
nominated Directors by the Central Government to represent the four local Boards with
the headquarters at Mumbai, Kolkata, Chennai and New Delhi. Local Boards consist of
five members each Central Government appointed for a term of four years to represent
territorial and economic interests and the interests of co-operative and indigenous
banks.
The Reserve Bank of India Act, 1934 was commenced on April 1, 1935. The Act,
1934 (II of 1934) provides the statutory basis of the functioning of the Bank.

The Bank was constituted for the need of following:

• To regulate the issue of banknotes

• To maintain reserves with a view to securing monetary stability and
• To operate the credit and currency system of the country to its advantage.

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Functions of Reserve Bank of India

The Reserve Bank of India Act of 1934 entrust all the important functions of a central
bank the Reserve Bank of India.

Bank of Issue
Under Section 22 of the Reserve Bank of India Act, the Bank has the sole right to issue
bank notes of all denominations. The distribution of one rupee notes and coins and
small coins all over the country is undertaken by the Reserve Bank as agent of the
Government. The Reserve Bank has a separate Issue Department which is entrusted
with the issue of currency notes. The assets and liabilities of the Issue Department are
kept separate from those of the Banking Department. Originally, the assets of the Issue
Department were to consist of not less than two-fifths of gold coin, gold bullion or
sterling securities provided the amount of gold was not less than Rs. 40 crores in value.
The remaining three-fifths of the assets might be held in rupee coins, Government of
India rupee securities, eligible bills of exchange and promissory notes payable in India.
Due to the exigencies of the Second World War and the post-was period, these
provisions were considerably modified. Since 1957, the Reserve Bank of India is
required to maintain gold and foreign exchange reserves of Ra. 200 crores, of which at
least Rs. 115 crores should be in gold. The system as it exists today is known as the
minimum reserve system.

Banker to Government
The second important function of the Reserve Bank of India is to act as Government
banker, agent and adviser. The Reserve Bank is agent of Central Government and of all
State Governments in India excepting that of Jammu and Kashmir. The Reserve Bank
has the obligation to transact Government business, via. to keep the cash balances as
deposits free of interest, to receive and to make payments on behalf of the Government
and to carry out their exchange remittances and other banking operations. The Reserve

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Bank of India helps the Government - both the Union and the States to float new loans
and to manage public debt. The Bank makes ways and means advances to the
Governments for 90 days. It makes loans and advances to the States and local
authorities. It acts as adviser to the Government on all monetary and banking matters.

Bankers' Bank and Lender of the Last Resort

The Reserve Bank of India acts as the bankers' bank. According to the provisions
of the Banking Companies Act of 1949, every scheduled bank was required to maintain
with the Reserve Bank a cash balance equivalent to 5% of its demand liabilites and 2
per cent of its time liabilities in India. By an amendment of 1962, the distinction between
demand and time liabilities was abolished and banks have been asked to keep cash
reserves equal to 3 per cent of their aggregate deposit liabilities. The minimum cash
requirements can be changed by the Reserve Bank of India.
The scheduled banks can borrow from the Reserve Bank of India on the basis of
eligible securities or get financial accommodation in times of need or stringency by
rediscounting bills of exchange. Since commercial banks can always expect the
Reserve Bank of India to come to their help in times of banking crisis the Reserve Bank
becomes not only the banker's bank but also the lender of the last resort.

Controller of Credit
The Reserve Bank of India is the controller of credit i.e. it has the power to
influence the volume of credit created by banks in India. It can do so through changing
the Bank rate or through open market operations. According to the Banking Regulation
Act of 1949, the Reserve Bank of India can ask any particular bank or the whole
banking system not to lend to particular groups or persons on the basis of certain types
of securities. Since 1956, selective controls of credit are increasingly being used by the
Reserve Bank.
The Reserve Bank of India is armed with many more powers to control the Indian
money market. Every bank has to get a licence from the Reserve Bank of India to do
banking business within India, the licence can be cancelled by the Reserve Bank of

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certain stipulated conditions are not fulfilled. Every bank will have to get the permission
of the Reserve Bank before it can open a new branch. Each scheduled bank must send
a weekly return to the Reserve Bank showing, in detail, its assets and liabilities. This
power of the Bank to call for information is also intended to give it effective control of the
credit system. The Reserve Bank has also the power to inspect the accounts of any
commercial bank.
As supereme banking authority in the country, the Reserve Bank of India,
therefore, has the following powers:

(a) It holds the cash reserves of all the scheduled banks.

(b) It controls the credit operations of banks through quantitative and qualitative
controls.

(c) It controls the banking system through the system of licensing, inspection and calling
for information.

(d) It acts as the lender of the last resort by providing rediscount facilities to scheduled
banks.

Custodian of Foreign Reserves

The Reserve Bank of India has the responsibility to maintain the official rate of
exchange. According to the Reserve Bank of India Act of 1934, the Bank was required
to buy and sell at fixed rates any amount of sterling in lots of not less than Rs. 10,000.
The rate of exchange fixed was Re. 1 = sh. 6d. Since 1935 the Bank was able to
maintain the exchange rate fixed at lsh.6d. though there were periods of extreme
pressure in favour of or against

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the rupee. After India became a member of the International Monetary Fund in 1946,
the Reserve Bank has the responsibility of maintaining fixed exchange rates with all
other member countries of the I.M.F.

Besides maintaining the rate of exchange of the rupee, the Reserve Bank has to act as
the custodian of India's reserve of international currencies. The vast sterling balances
were acquired and managed by the Bank. Further, the RBI has the responsibility of
administering the exchange controls of the country.

Supervisory functions
In addition to its traditional central banking functions, the Reserve bank has
certain non-monetary functions of the nature of supervision of banks and promotion of
sound banking in India. The Reserve Bank Act, 1934, and the Banking Regulation Act,
1949 have given the RBI wide powers of supervision and control over commercial and
co-operative banks, relating to licensing and establishments, branch expansion, liquidity
of their assets, management and methods of working, amalgamation, reconstruction,
and liquidation.
The RBI is authorised to carry out periodical inspections of the banks and
to call for returns and necessary information from them. The nationalisation of 14 major
Indian scheduled banks in July 1969 has imposed new responsibilities on the RBI for
directing the growth of banking and credit policies towards more rapid development of
the economy and realisation of certain desired social objectives. The supervisory
functions of the RBI have helped a great deal in improving the standard of banking in
India to develop on sound lines and to improve the methods of their operation.

Promotional functions
With economic growth assuming a new urgency since Independence, the range of the
Reserve Bank's functions has steadily widened. The Bank now performs a varietyof
developmental and promotional functions, which, at one time, were regarded as outside
the normal scope of central banking. The Reserve Bank was asked to promote banking

- 36 -
habit, extend banking facilities to rural and semi-urban areas, and establish and
promote new specialised financing agencies. Accordingly, the Reserve Bank has helped
in the setting up of the IFCI and the SFC; it set up the Deposit Insurance Corporation in
1962, the Unit Trust of India in 1964, the Industrial Development Bank of India also in
1964, the Agricultural Refinance Corporation of India in 1963 and the Industrial
Reconstruction Corporation of India in 1972.
These institutions were set up directly or indirectly by the Reserve Bank to
promote saving habit and to mobilise savings, and to provide industrial finance as well
as agricultural finance. As far back as 1935, the Reserve Bank of India set up the
Agricultural Credit Department to provide agricultural credit. But only since 1951 the
Bank's role in this field has become extremely important. The Bank has developed the
co-operative credit movement to encourage saving, to eliminate moneylenders from the
villages and to route its short term credit to agriculture. The RBI has set up the
Agricultural Refinance and Development Corporation to provide long-term finance to
farmers.

Classification of RBIs functions

The monetary functions also known as the central banking functions of the RBI
are related to control and regulation of money and credit, i.e., issue of currency, control
of bank credit, control of foreign exchange operations, banker to the Government and to
the money market. Monetary functions of the RBI are significant as they control and
regulate the volume of money and credit in the country.

Equally important, however, are the non-monetary functions of the RBI in the
context of India's economic backwardness. The supervisory function of the RBI may be
regarded as a non-monetary function (though many consider this a monetary function).
The promotion of sound banking in India is an important goal of the RBI, the RBI has
been given wide and drastic powers, under the Banking Regulation Act of 1949 - these
powers relate to licencing of banks, branch expansion, liquidity of their assets,
management and methods of working, inspection, amalgamation, reconstruction and

- 37 -
liquidation. Under the RBI's supervision and inspection, the working of banks has
greatly improved. Commercial banks have developed into financially and operationally
sound and viable units. The RBI's powers of supervision have now been extended to
non-banking financial intermediaries. Since independence, particularly after its
nationalisation 1949, the RBI has followed the promotional functions vigorously and has
been responsible for strong financial support to industrial and agricultural development
in the country.

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Financial and Banking Sector Reforms:

The last decade witnessed the maturity of India's financial markets. Since 1991, every
governments of India took major steps in reforming the financial sector of the country.
The important achievements in the following fields is discussed under serparate heads:

 Financial markets
 Regulators
 The banking system
 Non-banking finance companies
 The capital market
 Mutual funds
 Overall approach to reforms
 Deregulation of banking system
 Capital market developments
 Consolidation imperative

Now let us discuss each segment seperately.

Financial Markets

In the last decade, Private Sector Institutions played an important role. They grew
rapidly in commercial banking and asset management business. With the openings in
the insurance sector for these institutions, they started making debt in the market.

Competition among financial intermediaries gradually helped the interest rates to

decline. Deregulation added to it. The real interest rate was maintained. The borrowers
did not pay high price while depositors had incentives to save. It was something
between the nominal rate of interest and the expected rate of inflation.

- 39 -
Regulators

The Finance Ministry continuously formulated major policies in the field of financial
sector of the country. The Government accepted the important role of regulators. The
Reserve Bank of India (RBI) has become more independant. Securities and Exchange
Board of India (SEBI) and the Insurance Regulatory and Development Authority (IRDA)
became important institutions. Opinions are also there that there should be a super-
regulator for the financial services sector instead of multiplicity of regulators.

The banking system

Almost 80% of the business are still controlled by Public Sector Banks (PSBs). PSBs
are still dominating the commercial banking system. Shares of the leading PSBs are
already listed on the stock exchanges.

The RBI has given licences to new private sector banks as part of the liberalisation
process. The RBI has also been granting licences to industrial houses. Many banks are
successfully running in the retail and consumer segments but are yet to deliver services
to industrial finance, retail trade, small business and agricultural finance.

The PSBs will play an important role in the industry due to its number of branches and
foreign banks facing the constrait of limited number of branches. Hence, in order to
achieve an efficient banking system, the onus is on the Government to encourage the
PSBs to be run on professional lines.

Development finance institutions

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FIs's access to SLR funds reduced. Now they have to approach the capital market for
debt and equity funds.

Convertibility clause no longer obligatory for assistance to corporates sanctioned by

term-lending institutions.

Capital adequacy norms extended to financial institutions.

DFIs such as IDBI and ICICI have entered other segments of financial services such as
commercial banking, asset management and insurance through separate ventures. The
move to universal banking has started.

Non-banking finance companies

In the case of new NBFCs seeking registration with the RBI, the requirement of
minimum net owned funds, has been raised to Rs.2 crores.

Until recently, the money market in India was narrow and circumscribed by tight
regulations over interest rates and participants. The secondary market was
underdeveloped and lacked liquidity. Several measures have been initiated and include
new money market instruments, strengthening of existing instruments and setting up of
the Discount and Finance House of India (DFHI).

The RBI conducts its sales of dated securities and treasury bills through its open market
operations (OMO) window. Primary dealers bid for these securities and also trade in
them. The DFHI is the principal agency for developing a secondary market for money
market instruments and Government of India treasury bills. The RBI has introduced a
liquidity adjustment facility (LAF) in which liquidity is injected through reverse repo
auctions and liquidity is sucked out through repo auctions.

On account of the substantial issue of government debt, the gilt- edged market occupies

- 41 -
an important position in the financial set- up. The Securities Trading Corporation of India
(STCI), which started operations in June 1994 has a mandate to develop the secondary
market in government securities.

Long-term debt market: The development of a long-term debt market is crucial to the
financing of infrastructure. After bringing some order to the equity market, the SEBI has
now decided to concentrate on the development of the debt market. Stamp duty is being
withdrawn at the time of dematerialisation of debt instruments in order to encourage
paperless trading.

The capital market

The number of shareholders in India is estimated at 25 million. However, only an

estimated two lakh persons actively trade in stocks. There has been a dramatic
improvement in the country's stock market trading infrastructure during the last few
years. Expectations are that India will be an attractive emerging market with
tremendous potential. Unfortunately, during recent times the stock markets have been
constrained by some unsavoury developments, which has led to retail investors
deserting the stock markets.

Mutual funds

The mutual funds industry is now regulated under the SEBI (Mutual Funds) Regulations,
1996 and amendments thereto. With the issuance of SEBI guidelines, the industry had
a framework for the establishment of many more players, both Indian and foreign
players.

The Unit Trust of India remains easily the biggest mutual fund controlling a corpus of
nearly Rs.70,000 crores, but its share is going down. The biggest shock to the mutual
fund industry during recent times was the insecurity generated in the minds of investors
regarding the US 64 scheme. With the growth in the securities markets and tax

- 42 -
advantages granted for investment in mutual fund units, mutual funds started becoming
popular.

The foreign owned AMCs are the ones which are now setting the pace for the industry.
They are introducing new products, setting new standards of customer service,
improving disclosure standards and experimenting with new types of distribution.

The insurance industry is the latest to be thrown open to competition from the private
sector including foreign players. Foreign companies can only enter joint ventures with
Indian companies, with participation restricted to 26 per cent of equity. It is too early to
conclude whether the erstwhile public sector monopolies will successfully be able to
face up to the competition posed by the new players, but it can be expected that the
customer will gain from improved service.

The new players will need to bring in innovative products as well as fresh ideas on
marketing and distribution, in order to improve the low per capita insurance coverage.
Good regulation will, of course, be essential.

Overall approach to reforms

The last ten years have seen major improvements in the working of various financial
market participants. The government and the regulatory authorities have followed a
step-by-step approach, not a big bang one. The entry of foreign players has assisted in
the introduction of international practices and systems. Technology developments have
improved customer service. Some gaps however remain (for example: lack of an inter-
bank interest rate benchmark, an active corporate debt market and a developed
derivatives market). On the whole, the cumulative effect of the developments since
1991 has been quite encouraging. An indication of the strength of the reformed Indian
financial system can be seen from the way India was not affected by the Southeast
Asian crisis.

- 43 -
However, financial liberalisation alone will not ensure stable economic growth. Some
tough decisions still need to be taken. Without fiscal control, financial stability cannot be
ensured. The fate of the Fiscal Responsibility Bill remains unknown and high fiscal
deficits continue. In the case of financial institutions, the political and legal structures
hve to ensure that borrowers repay on time the loans they have taken. The
phenomenon of rich industrialists and bankrupt companies continues. Further, frauds
cannot be totally prevented, even with the best of regulation. However, punishment has
to follow crime, which is often not the case in India.

Deregulation of banking system

Prudential norms were introduced for income recognition, asset classification,

provisioning for delinquent loans and for capital adequacy. In order to reach the
stipulated capital adequacy norms, substantial capital were provided by the Government
to PSBs.

Government pre-emption of banks' resources through statutory liquidity ratio (SLR) and
cash reserve ratio (CRR) brought down in steps. Interest rates on the deposits and
lending sides almost entirely were deregulated.

New private sector banks allowed to promote and encourage competition. PSBs were
encouraged to approach the public for raising resources. Recovery of debts due to
banks and the Financial Institutions Act, 1993 was passed, and special recovery
tribunals set up to facilitate quicker recovery of loan arrears.

Bank lending norms liberalised and a loan system to ensure better control over credit
introduced. Banks asked to set up asset liability management (ALM) systems. RBI
guidelines issued for risk management systems in banks encompassing credit, market
and operational risks.

A credit information bureau being established to identify bad risks. Derivative products

- 44 -
such as forward rate agreements (FRAs) and interest rate swaps (IRSs) introduced.

Capital market developments

The Capital Issues (Control) Act, 1947, repealed, office of the Controller of Capital
Issues were abolished and the initial share pricing were decontrolled. SEBI, the capital
market regulator was established in 1992.

Foreign institutional investors (FIIs) were allowed to invest in Indian capital markets
after registration with the SEBI. Indian companies were permitted to access
international capital markets through euro issues.

The National Stock Exchange (NSE), with nationwide stock trading and electronic
display, clearing and settlement facilities was established. Several local stock
exchanges changed over from floor based trading to screen based trading.

Private mutual funds permitted

The Depositories Act had given a legal framework for the establishment of depositories
to record ownership deals in book entry form. Dematerialisation of stocks encouraged
paperless trading. Companies were required to disclose all material facts and specific
risk factors associated with their projects while making public issues.

To reduce the cost of issue, underwriting by the issuer were made optional, subject to
conditions. The practice of making preferential allotment of shares at prices unrelated to
the prevailing market prices stopped and fresh guidelines were issued by SEBI.

SEBI reconstituted governing boards of the stock exchanges, introduced capital

adequacy norms for brokers, and made rules for making client or broker relationship
more transparent which included separation of client and broker accounts.

- 45 -
Buy back of shares allowed

The SEBI started insisting on greater corporate disclosures. Steps were taken to
improve corporate governance based on the report of a committee.

SEBI issued detailed employee stock option scheme and employee stock purchase
scheme for listed companies.

Standard denomination for equity shares of Rs. 10 and Rs. 100 were abolished.
Companies given the freedom to issue dematerialised shares in any denomination.

Derivatives trading starts with index options and futures. A system of rolling settlements
introduced. SEBI empowered to register and regulate venture capital funds.

The SEBI (Credit Rating Agencies) Regulations, 1999 issued for regulating new credit
rating agencies as well as introducing a code of conduct for all credit rating agencies
operating in India.

Consolidation imperative

Another aspect of the financial sector reforms in India is the consolidation of existing
institutions which is especially applicable to the commercial banks. In India the banks
are in huge quantity. First, there is no need for 27 PSBs with branches all over India. A
number of them can be merged. The merger of Punjab National Bank and New Bank of
India was a difficult one, but the situation is different now. No one expected so many
employees to take voluntary retirement from PSBs, which at one time were much
sought after jobs. Private sector banks will be self consolidated while co-operative and
rural banks will be encouraged for consolidation, and anyway play only a niche role.

In the case of insurance, the Life Insurance Corporation of India is a behemoth, while
the four public sector general insurance companies will probably move towards

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consolidation with a bit of nudging. The UTI is yet again a big institution, even though
facing difficult times, and most other public sector players are already exiting the mutual
fund business. There are a number of small mutual fund players in the private sector,
but the business being comparatively new for the private players, it will take some time.

We finally come to convergence in the financial sector, the new buzzword

internationally. Hi-tech and the need to meet increasing consumer needs is encouraging
convergence, even though it has not always been a success till date. In India
organisations such as IDBI, ICICI, HDFC and SBI are already trying to offer various
services to the customer under one umbrella. This phenomenon is expected to grow
rapidly in the coming years. Where mergers may not be possible, alliances between
organisations may be effective.
Various forms of bancassurance are being introduced, with the RBI
having already come out with detailed guidelines for entry of banks into insurance. The
LIC has bought into Corporation Bank in order to spread its insurance distribution
network. Both banks and insurance companies have started entering the asset
management business, as there is a great deal of synergy among these businesses.
The pensions market is expected to open up fresh opportunities for insurance
companies and mutual funds.

It is not possible to play the role of the Oracle of Delphi when a vast nation like India is
involved. However, a few trends are evident, and the coming decade should be as
interesting as the last one.

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

The origin of the State Bank of India goes back to the first decade of the
nineteenth century with the establishment of the Bank of Calcutta in Calcutta on 2 June
1806. Three years later the bank received its charter and was re-designed as the Bank
of Bengal (2 January 1809). A unique institution, it was the first joint-stock bank of
British India sponsored by the Government of Bengal. The Bank of Bombay (15 April
1840) and the Bank of Madras (1 July 1843) followed the Bank of Bengal. These three
banks remained at the apex of modern banking in India till their amalgamation as the
Imperial Bank of India on 27 January 1921.

Primarily Anglo-Indian creations, the three presidency banks came into existence
either as a result of the compulsions of imperial finance or by the felt needs of local
European commerce and were not imposed from outside in an arbitrary manner to
modernise India's economy.
Their evolution was, however, shaped by ideas culled from similar
developments in Europe and England, and was influenced by changes occurring in the
structure of both the local trading environment and those in the relations of the Indian
economy to the economy of Europe and the global economic framework.

The State Bank of India, the country’s oldest Bank and a premier in terms of
balance sheet size, number of branches, market capitalization and profits is today going
through a momentous phase of Change and Transformation – the two hundred year old
Public sector behemoth is today stirring out of its Public Sector legacy and moving with
an agility to give the Private and Foreign Banks a run for their money.

The bank is entering into many new businesses with strategic tie ups – Pension
Funds, General Insurance, Custodial Services, Private Equity, Mobile Banking, Point of
Sale Merchant Acquisition, Advisory Services, structured products etc – each one of
these initiatives having a huge potential for growth.

- 49 -
 The Bank is forging ahead with cutting edge technology and innovative new
banking models, to expand its Rural Banking base, looking at the vast untapped
potential in the hinterland and proposes to cover 100,000 villages in the next two years.

It is also focusing at the top end of the market, on whole sale banking
capabilities to provide India’s growing mid / large Corporate with a complete array of
products and services. It is consolidating its global treasury operations and entering into
structured products and derivative instruments. Today, the Bank is the largest provider
of infrastructure debt and the largest arranger of external commercial borrowings in the
country. It is the only Indian bank to feature in the Fortune 500 list.

The Bank is changing outdated front and back end processes to modern
customer friendly processes to help improve the total customer experience. With about
8500 of its own 10000 branches and another 5100 branches of its Associate Banks
already networked, today it offers the largest banking network to the Indian customer.
The Bank is also in the process of providing complete payment solution to its clientele
with its over 8500 ATMs, and other electronic channels such as Internet banking, debit
cards, mobile banking, etc.

With four national level Apex Training Colleges and 54 learning Centres spread
all over the country the Bank is continuously engaged in skill enhancement of its
employees. Some of the training programes are attended by bankers from banks in
other countries.

The bank is also looking at opportunities to grow in size in India as well as

Internationally. It presently has 82 foreign offices in 32 countries across the globe. It has
also 7 Subsidiaries in India – SBI Capital Markets, SBICAP Securities, SBI DFHI, SBI
Factors, SBI Life and SBI Cards - forming a formidable group in the Indian Banking
scenario. It is in the process of raising capital for its growth and also consolidating its
various holdings.

Throughout all this change, the Bank is also attempting to change old mindsets,
attitudes and take all employees together on this exciting road to Transformation. In a
recently concluded mass internal communication programme termed ‘Parivartan’ the

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 Bank rolled out over 3300 two day workshops across the country and covered
over 130,000 employees in a period of 100 days using about 400 Trainers, to drive
home the message of Change and inclusiveness. The workshops fired the imagination
of the employees with some other banks in India as well as other Public Sector
Organizations seeking to emulate the Program.

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

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Branches
The corporate center of SBI is located in Mumbai. In order to cater to different
functions, there are several other establishments in and outside Mumbai, apart from the
corporate center. The bank boasts of having as many as 14 local head offices and 57
Zonal Offices, located at major cities throughout India. It is recorded that SBI has about
10000 branches,Well networked to cater to its customers throughout India.

ATM Services
SBI provides easy access to money to its customers through more than 8500
ATMs in India.

The Bank also facilitates the free transaction of money at the ATMs of State
Bank Group, which includes the ATMs of State Bank of India as well as the Associate
Banks – State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of
Indore, etc. You may also transact money through SBI Commercial and International
Bank Ltd by using the State Bank ATM-cum-Debit (Cash Plus) card.

Subsidiaries
The State Bank Group includes a network of eight banking subsidiaries and
several non-banking subsidiaries. Through the establishments, it offers various services
including merchant banking services, fund management, factoring services, primary
dealership in government securities, credit cards and insurance.

The eight banking subsidiaries are:

• State Bank of Bikaner and Jaipur (SBBJ)

• State Bank of Hyderabad (SBH)
• State Bank of India (SBI)

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• State Bank of Indore (SBIR)
• State Bank of Mysore (SBM)
• State Bank of Patiala (SBP)
• State Bank of Saurashtra (SBS)
• State Bank of Travancore (SBT)

Foreign Offices:

State Bank of India is present in 32 countries, where it has 84 offices serving the
international needs of the bank's foreign customers, and in some cases conducts retail
operations. The focus of these offices is India-related business.

Foreign Branches:

SBI has branches in these countries:

 Australia
 Bahrain
 Bangladesh
 Belgium
 Canada
 Dubai
 France
 Germany
 Hong Kong
 Israel
 Japan

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  People's Republic of China
 Republic of Maldives
 Singapore
 South Africa
 Sri Lanka
 Sultanate of Oman
 The Bahamas
 U.K.
 U.S.A

Subsidiaries and Joint Ventures:

In addition to the foreign branches above, SBI has these wholly owned
subsidiaries and joint ventures:

 Nepal State Bank Limited

 SBI Mauritius
 Indian Ocean International Bank (Mauritius)
 SBI Canada
 SBI California

Growth:

State Bank of India has often acted as guarantor to the Indian Government, most
notably during Chandra Shekhar's tenure as Prime Minister of India. With more than
9400 branches and a further 4000+ associate bank branches, the SBI has extensive
coverage. Following its arch-rival ICICI Bank, State Bank of India has electronically
networked most of its metropolitan, urban and semi-urban branches under its Core
Banking System (CBS), with over 4500 branches being incorporated so far. The bank

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has the largest ATM network in the country having more than 5600 ATMs [1]. The State
Bank of India has had steady growth over its history, though the Harshad Mehta scam
in 1992 marred its image. In recent years, the bank has sought to expand its overseas
operations by buying foreign banks. It is the only Indian bank to feature in the top 100
world banks in the Fortune Global 500 rating and various other rankings. According to
the Forbes 2000 listing it tops all Indian companies.

Fortune Global 500 Ranking – 2007:

SBI debuted in the Fortune Global 500[2] at 498 in 2006. In 2007 it moved up to
495. As per fortune 500-2007 following are the data for SBI in $ million. Revenues
15,119.4. Profits 1,407.3. Assets 187,547.1. Stockholders' Equity 9,786.2

Group companies:

 SBI Capital Markets Ltd

 SBI Mutual Fund (A Trust)
 SBI Factors and Commercial Services Ltd
 SBI DFHI Ltd
 SBI Cards and Payment Services Pvt Ltd
 SBI Life Insurance Co. Ltd - Banc assurance (Life Insurance)
 SBI Funds Management Pvt Ltd
 SBI Canada

IT Initiatives:

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 According to PM Network (December 2006, Vol. 20, No. 12), State Bank of India
launched a project in 2002 to network more than 14,000 domestic and 70 foreign offices
and branches. The first and the second phases of the project have already been
completed and the third phase is still in progress. As of December 2006, over 10,000
branches have been covered. The new infrastructure serves as the bank's backbone,
carrying all applications, such as the IP telephone network, ATM network, Internet
banking and internal e-mail. The new infrastructure has enabled the bank to further
grow its ATM network with plans to add another 3,000 by the end of 2007 raising the
total number to 8,600. As of September 20, 2007 SBI has 7236 ATMs.

Corporate Details:

State Bank of India is actively involved since 1973 in non-profit activity called
Community Services Banking.

State Bank of India is India's largest bank amongst all public and private sector banks
operating in India. State Bank of India owns and operates the following subsidiaries and
Joint Ventures –

 State Bank Of India Credit Card

 State Bank Of India Online
 State Bank Of India USA
 State Bank Of India Services
 State Bank Of India Mutual Funds
 State Bank Of India Branch
 State Bank Of India NRI Account

Foreign Subsidiaries:

 State bank of India International (Mauritius) Ltd.

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  State Bank of India (California).
 State Bank of India (Canada).
 INMB Bank Ltd, Lagos.

Non- banking Subsidiaries

 SBI Capital Markets Ltd (SBICAP)

 SBI Funds Management Pvt Ltd (SBI FUNDS)
 SBI DFHI Ltd (SBI DFHI)
 SBI Factors and Commercial Services Pvt Ltd (SBI FACTORS)
 SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)

Joint ventures:

 SBI Life Insurance Company Ltd (SBI LIFE).

Activities:

State Bank of India administrative structure is well equipped to oversee the large
network of branches in India and abroad. The State Bank of India 14 Local Head Offices
and 57 Zonal Offices are located at important cities spread throughout the country.
State Bank of India has 52 foreign offices in 34 countries across the globe. The
Corporate Accounts Group is a Strategic Business Unit of the Bank set up exclusively to
fulfill the specialized banking needs of top corporate in the country.

The main activities of are into -

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  Personal Banking.
 NRI Services.
 Agriculture.
 International.
 Corporate.
 SME.
 Domestic Treasury.

State Bank of India offers the following services to its customers

 Domestic Treasury.
 SBI Vishwa Yatra Foreign Travel Card.
 Broking Services
 Revised Service Charge.
 ATM Services.
 Internet Banking.
 E-Pay.
 E-Rail.
 RBIEFT.
 Safe Deposit Lockers.
 Gift Cheques.
 MICR Codes.
 Foreign Inward Remittances.

Moreover, State Bank of India has Colleges/Institutes/Training Centers that are the
seats of learning and research and development. It caters not only to the employees of
State Bank of India but also other banks/establishments in India and abroad.

Performance:

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 SBI Bank India had Total Income of Rs 68376.83 crore for the financial year 2006
-07. State Bank of India has posted Net Income to the tune of Rs 6364.38 crore or the
financial year 2006 -07.

Products And Services

Personal Banking

• SBI Term Deposits SBI Loan For Pensioners

• SBI Recurring Deposits Loan Against Mortgage Of Property
• SBI Housing Loan Loan Against Shares & Debentures
• SBI Car Loan Rent Plus Scheme
• SBI Educational Loan Medi-Plus Scheme

Other Services

• Agriculture/Rural Banking
• NRI Services
• ATM Services
• Demat Services
• Corporate Banking
• Internet Banking
• Mobile Banking
• International Banking
• Safe Deposit Locker
• RBIEFT
• E-Pay
• E-Rail
• SBI Vishwa Yatra Foreign Travel Card
• Broking Services
• Gift Cheques

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The CNN IBN, Network 18 recognized this momentous transformation journey, the
State Bank of India is undertaking, and has awarded the prestigious Indian of the Year –
Business, to its Chairman, Mr. O. P. Bhatt in January 2008

INVESTMENT
MUTUAL FUND EQUITY SCHEMES
DABT SCHEMES
BALANCED SCHEMES
EXCHANGE TREADED SCHEMES
LIFE INSURENCE Unit Linked Products: Pension
Products:Pure Protection
Products:Protection cum Savings
Products:Money Back Scheme
Products:SBI Life - SARAL
ULIP Protection Plans: Specialized Term
Insurance:Retirement Solutions: SBI
Life - Swadhan (Group): SBI Life -
Dhanaraksha Plus: SBI Life - Grameen
Shakti, Health Products:
EQUITY ALL TYPES

SBI Mutual Fund is India’s largest bank sponsored mutual fund and has an enviable
track record in judicious investments and consistent wealth creation.

The fund traces its lineage to SBI - India’s largest banking enterprise. The institution has
grown immensely since its inception and today it is India's largest bank, patronised by
over 80% of the top corporate houses of the country.

SBI Mutual Fund is a joint venture between the State Bank of India and Société
Générale Asset Management, one of the world’s leading fund management
companies that manages over US$ 500 Billion worldwide.

Mumbai, August 26, 2008 – SBI Life Insurance has achieved a unique distinction of
ranking third globally in terms of number of Million Dollar Round Table (MDRT)

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members. Of the 40,000 SBI Life Insurance Advisors, 1,662 have qualified for the
prestigious MDRT membership. Among these, 124 qualified for Court of Table (COTs)
and 20 for Top of Table (TOTs).

2008
RANK COMPANY NAME COUNTRY MEMBERS
1 Samsung Life Ins Korea 2,486
2 New York Life USA 2,167
3 SBI Life Insurance India 1,662

Northwestern
4 Mutual USA 1,411
5 AIA-Hong Kong Hong Kong 1,159
11 LIC of India India 595
14 HDFC Standard Life India 536
22 Max New York Life India 343
68 ICICI Pru India 125
69 Birla Sunlife India 124

Management
The bank has 14 directors on the Board and is responsible for the management
of the Bank’s business. The board in addition to monitoring corporate performance also
carries out functions such as approving the business plan, reviewing and approving the
annual budgets and borrowing limits and fixing exposure limits. Mr. O. P. Bhatt is the
Chairman of the bank.

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 The five-year term of Mr. Bhatt will expire in March 2011. Prior to this
appointment, Mr. Bhatt was Managing Director at State Bank of Travancore. Mr. Bhatt
has more than 30 years of experience in the Indian banking industry and is seen as
futuristic leader in his approach towards technology and customer service. Mr. Bhatt
has had the best of foreign exposure in SBI. We believe that the appointment of Mr.
Bhatt would be a key to SBI’s future growth momentum. Mr. T S Bhattacharya is the
Managing Director of the bank and known for his vast experience in the banking
industry.
Recently, the senior management of the bank has been broadened
considerably. The positions of CFO and the head of treasury have been segregated,
and new heads for rural banking and for corporate development and new business
banking have been appointed. The management’s thrust on growth of the bank in terms
of network and size would also ensure encouraging prospects in time to come.

Micro Credit / Micro Finance : State Bank of India

SHG Movement - A Mission:

SBI has taken up SHG movement as a mission.A noble mission to reach those families
who were hitherto having no access to the credit by any formal financial institution and,
therefore, were depending on informal sources and moneylenders.

Micro Finance - Deep Roots in SBI:

Micro finance is not new to State Bank of India.Bank's association with non-government
organizations (NGOs) or voluntary agencies in extending financial help can be traced as
far back as 1976 well before NABARD introduced SHG-Bank Credit Linkage
Programme as a pilot project in 1992.

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Steady Growth in SHG - Bank Credit Linkage Programme:
SBI has actively participated in SHG-Bank Credit Linkage programme since its inception
in 1992 as a pilot project of NABARD.Since then the Bank has made a steady progress
in financing SHGs.As on March 2006, SBI's branches spread throughout the length and
breadth of the country have opened 6,30,067 Savings Bank account of SHGs out of
which more than 5.41 lac SHGs have been provided with credit facilities thus benefiting
more than 75 lac poor people.Majority of these SHGs are women SHGs. The year-
wise cumulative position of SHGs-Bank Linkage programme for the last 4 years is as
under:

Year March - 03 March - 04 March - 05 March - 06

SHGs linked (financed) 1,07,553 1,74,666 3,43,691 5,40,481
No. of beneficiaries 12,33,660 21,50,752 48,11,674 75,68,842
Amount disbursed 324.84 cr. 614.87 cr. 1311.45 cr. 2262.95 cr.
Amount outstanding 269.43 cr. 462.77 cr. 872.08 cr. 1459.89 cr.
No. of SHGs maintaining
2,79,466 3,69,568 5,08,396 6,36,067
Savings a/c in the Bank
Amount in Savings a/c
261.36 cr. 348.31 cr. 411.82 cr. 434.07 cr.
(Amt. in Rs.)

SBI - Leader in SHG - Bank Credit Linkage

SBI is maintaining its position as a leader among Commercial Banks in credit linking of
SHGs and is a prime driver for the movement.As at the end of March 2006, SBI with a
share of approximately 47% of total SHGs financed by Commercial Banks is far ahead
of others.

Innovations & Initiatives

Bank has successfully initiated various measures toward widening its SHG network.To
list a few examples:

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(i) Sensitisation of staff
Bank's aim is to sensitise the entire staff from Manager to Messenger working in rural
and semi-urban branches towards the programme.

(ii) Special training programmes in SHGs are being conducted at 54 training centres of
the Bank in the country apart from State Bank Institute of Rural Development,
Hyderabad.

(iii) Close liaison with NGOs

Operating functionaries at branch level and region level are in close contact with NGOs
in their area to take the movement ahead.For the purpose, regular meetings are
arranged with the NGOs and their support is solicited.

(iv) SHG cells: Special SHG cells have been opened at major branches.

(v) Lending to NGOs / Federations of SHGs: Lending to credible NGOs / Federations of

SHGs on selective basis for on lending to SHGs is being encouraged.

(vi) Sahayog Niwas: SBI has launched its Housing Loan product ‘SAHAYOG NIWAS
meant for SHG members.Under the scheme formulated keeping the socio economic
conditions of villages insight, housing loans are given to the SHG members without any
mortgage of house / land.Response to this product is very encouraging.

(vii) SBI Life - Shakti: SBI Life, our insurance subsidiary, is the first to introduce a life
insurance scheme, especially designed for SHG members.Special feature of the
scheme is that entire premium amount paid by the member is refunded after maturity,
i.e., 10 years.

(viii) Rural training institutes: To help the rural youth to stand on their feet, two
RUDSETI type training institutes have been established at Gulbarga and Gadag in
Karnataka State, to impart training in self employment to youth free of cost.

- 64 -
(ix) SBI staff as SHPI: The main role of formation and nurturing of SHGs have been
played by NGOs who, apart from their fundamental role of social service, also aim to
make the poor economically self sufficient.But in SBI, our committed work force is not
lagging behind and a number of committed staff members have worked hard to form
and nurture SHGs on their own.

(x) Appreciation by Government: A number of our branches / Circles have also received
commendation and appreciation from various State Governments for doing excellent job
in SHG-Bank Credit Linkage programme.

NABARD felicitated 15 SHGs at a function organized in New Delhi on 13th September

2005.The function was presided over by the Hon’ble Union Finance Minister.Out of
total 15 SHGs felicitated, 4 were financed by our branches, one each from Orissa,
Jharkhand, Madhya Pradesh and Uttaranchal.

(xi) Samanwita: Bank has sponsored and financially supported NGO SAMANWITA in
collaboration with Government of Orissa for supplementing the process of socio
economic upliftment of the tribals and the downtrodden in the poorest and most
backward Kandhamal district of Orissa State where 52% of the population is that of
tribals.Core activities performed by Samanwita is empowerment of people through
promotion of SHGs, especially women SHGs and development of human resources.

(xii) SHPI status: State Bank of India is the first Commercial Bank to which NABARD
has recently given SHPI status.

Future Plans
SBI has set for itself an ambitious target of credit linking 1 million SHGs up to March
2008.The Bank has started to leverage our vast SHG network for various services
beyond credit delivery.

INTRODUCTION OF ICICI BANK

- 65 -
 ICICI Group offers a wide range of banking products and financial services to
corporate and retail customers through a variety of delivery channels and through its
specialised group companies, subsidiaries and affiliates in the areas of personal
banking, investment banking, life and general insurance, venture capital and asset
management. With a strong customer focus, the ICICI Group Companies have
maintained and enhanced their leadership position in their respective sectors.

ICICI Bank is India's second-largest bank with total assets of Rs. 3,793.01 billion
(US$ 75 billion) at March 31, 2009 and profit after tax Rs. 37.58 billion for the year
ended March 31, 2009. The Bank has a network of 1,451 branches and about 4,721
ATMs in India and presence in 18 countries.

HITORY
1955:
The Industrial Credit and Investment Corporation of India Limited (ICICI) incorporated at
the initiative of the World Bank, the Government of India and representatives of Indian
industry, with the objective of creating a development financial institution for providing
medium-term and long-term project financing to Indian businesses. Mr.A.Ramaswami
Mudaliar elected as the first Chairman of ICICI Limited.

ICICI emerges as the major source of foreign currency loans to Indian industry. Besides
funding from the World Bank and other multi-lateral agencies, ICICI was also among the
first Indian companies to raise funds from international markets.

1956:
ICICI declared its first dividend of 3.5%

1961:

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The first West German loan of DM 5 million from Kredianstalt obtained

1967:

ICICI made its first debenture issue for Rs.6 crore, which was oversubscribed

1972:

The second entity in India to set up merchant banking services

1977:

ICICI sponsored the formation of Housing Development Finance Corporation. Managed

its first equity public issue.

1986:

ICICI became the first Indian institution to receive ADB Loans.

ICICI, along with UTI, set up Credit Rating Information Services of India Limited, India's
first professional credit rating agency.

ICICI promotes Shipping Credit and Investment Company of India Limited

1993:

Promoted TDICI - India's first venture capital company

1994:

- 67 -
ICICI Securities and Finance Company Limited in joint venture with J. P. Morgan set up

1996:

ICICI Asset Management Company set up.

ICICI Bank set up.

ICICI Ltd became the first company in the Indian financial sector to raise GDR

2000:

ICICI launched retail finance - car loans, house loans and loans for consumer durables.

ICICI becomes the first Indian Company to list on the NYSE through an issue of
American Depositary Shares

2001:

ICICI Bank became the first commercial bank from India to list its stock on NYSE.

ICICI Bank announces merger with Bank of Madura.

The Boards of ICICI Ltd and ICICI Bank approved the merger of ICICI with ICICI Bank.
2002: ICICI Ltd merged with ICICI Bank Ltd to create India's second largest bank in
terms of assets.

ICICI assigned higher than sovereign rating by Moody's. : ICICI Bank launched India's
first CDO (Collateralised Debt Obligation) Fund named Indian Corporate Collateralised
Debt Obligation Fund (ICCDO Fund).

- 68 -
"E Lobby", a self-service banking centre inaugurated in Pune. It was the first of its kind
in India.

ICICI Bank launched Private Banking.

1100-seat Call Centre set up in Hyderabad

ICICI Bank Home Shoppe, the first-ever permanent aggregation and display of housing
projects in the county, launched in Pune,

ATM-on-Wheels, India's first mobile ATM, launched in Mumbai.

2003:

The first Integrated Currency Management Centre launched in Pune.

ICICI Bank announced the setting up of its first ever offshore branch in Singapore.

The first offshore banking unit (OBU) at Seepz Special Economic Zone, Mumbai,
launched.

ICICI Bank's representative office inaugurated in Dubai.

Representative office set up in China.

ICICI Bank's UK subsidiary launched.

India's first ever "Visa Mini Credit Card", a 43% smaller credit card in dimensions
launched.

- 69 -
ICICI Bank subsidiary set up in Canada.

Temasek Holdings acquired 5.2% stake in ICICI Bank.

ICICI Bank became the market leader in retail credit in India.

2005:
ICICI Bank and CNBC TV 18 announced India's first ever awards recognising the
achievements of SMEs, a pioneering initiative to encourage the contribution of Small
and Medium Enterprises to the growth of Indian economy.

ICICI Bank opened its 500th branch in India.

ICICI Bank introduced partnership model wherein ICICI Bank would forge an alliance
with existing micro finance institutions (MFIs). The MFI would undertake the promotional
role of identifying, training and promoting the micro-finance clients and ICICI Bank
would finance the clients directly on the recommendation of the MFI.

ICICI Bank introduced 8-8 Banking wherein all the branches of the Bank would remain
open from 8a.m. to 8 p.m. from Monday to Saturday.

ICICI Bank introduced the concept of floating rate for home loans in India.

First rural branch and ATM launched in Uttar Pradesh at Delpandarwa, Hardoi.

"Free for Life" credit cards launched wherein annual fees of all ICICI Bank Credit Cards
were waived off.

ICICI Bank and Visa jointly launched mChq – a revolutionary credit card on the mobile
phone.

- 70 -
Private Banking Masters 2005, a nationwide Golf tournament for high networth clients of
the private banking division launched. This event is the largest domestic invitation
amateur golf event conducted in India.

First Indian company to make a simultaneous equity offering of $1.8 billion in India, the
United States and Japan.

Acquired Ivestitsionno Kreditny Bank of Russia.

ICICI Bank became the largest bank in India in terms of its market capitalisation

2007:

Introduced a new product - 'NRI smart save Deposits' – a unique fixed deposit scheme
for nonresident Indians.

Representative offices opened in Thailand, Indonesia and Malaysia.

ICICI Bank became the largest retail player in the market to introduce a biometric
enabled smart card that allow banking transactions to be conducted on the field. A low-
cost solution, this became an effective delivery option for ICICI Bank's micro finance
institution partners.

Financial counseling centre Disha launched. Disha provides free credit counseling,
financial planning and debt management services.

Bhoomi puja conducted for a regional hub in Hyderabad, Andhra Pradesh.

ICICI Bank's USD 2 billion 3-tranche international bond offering was the largest bond
offering by an Indian bank.

- 71 -
Sangli Bank amalgamated with ICICI Bank.
ICICI Bank raised Rs 20,000 crore (approx $5 billion) from both domestic and
international markets through a follow-on public offer.

ICICI Bank's GBP 350 million international bond offering marked the inaugural deal in
the sterling market from an Indian issuer and also the largest deal in the sterling market
from Asia.

Launched India's first ever jewellery card in association with jewelry major Gitanjali
Group.

ICICI Bank became the first bank in India to launch a premium credit card -- The Visa
Signature Credit Card.

Foundation stone laid for a regional hub in Gandhinagar, Gujarat.

Introduced SME Toolkit, an online resource centre, to help small and medium
enterprises start, finance and grow their business.

ICICI Bank signed a multi-tranche dual currency US$ 1.5 billion syndication loan
agreement in Singapore.

ICICI Bank became the first private bank in India to offer both floating and fixed rate on
car loans, commercial vehicles loans, construction equipment loans and professional
equipment loans.

In a first of its kind, nation wide initiative to attract bright graduate students to pursue a
career in banking, ICICI Bank launched the "Probationary Officer Programme".

- 72 -
Launched Bank@home services for all savings and current a/c customers residing in
India

ICICI Bank Eurasia LLC inaugurated its first branch at St Petersburg, Russia.

2008:

ICICI Bank enters US, launches its first branch in New York.

ICICI Bank enters Germany, opens its first branch in Frankfurt.

ICICI Bank launched iMobile, a breakthrough innovation in banking where practically all
internet banking transactions can now be simply done on mobile phones.

ICICI Bank concluded India's largest ever securitisation transaction of a pool of retail
loan assets aggregating to Rs. 48.96 billion (equivalent of USD 1.21 billion) in a multi-
tranche issue backed by four different asset categories. It is also the largest deal in Asia
(ex-Japan)

in 2008 till date and the second largest deal in Asia (ex-Japan & Australia) since the
beginning of 2007.

BANK SEVIES

- 73 -
 • Personal Banking o Savings & Deposits
o Loans
o Cards
o Wealth management
• Global Private Clients

• Corporate Banking o Transaction Banking

• Business Banking
o Treasury Banking
o Investment Banking
o Capital Markets
o Custodial Services
o Rural & Agri Banking
o Structured Finance
o Technology Finance
o Current Account

o Business Loans
o Forex

o Trade

o Cash Management
Services
• NRI Banking o Money Transfer
o Bank Accounts
o Investment
o Property Solutions
o Insurance
o Loans

INSURENCE & INVESTMENT

• Life Insurance o Life Insurance

o Retirement Solutions

- 74 -

General Insurance
• Securities
• Mutual Fund
• Private Equity Practice
INVESTOR RELATIONS
o Health Solutions
o Education Solutions
o Health Insurance
o Overseas Travel
Insurance
o Student Medical
Insurance
o Motor Insurance
o Home Insurance
o Corporate Finance
o Primary Dealership
o Institutional Equities
o Retail Equities
o Our Funds
o Performance Analyser
o Systematic Investing
o Compare Schemes
- 75 -
 It is ICICI Group's belief that all stakeholders should have access to complete
information regarding its position to enable them to accurately assess its future
potential. ICICI Group regularly publishes information on its operations and
various initiatives for its investors.

 Annual Reports

 Investor Presentations

 Quarterly Financial Results

 Share price and ownership

 SEC Filings

 Credit Ratings

 Investor FAQs

NATURE OF BUSINESS:

ICICI is a financial intermediary which brings together the savers and borrowers
in the economic system. It collects funds from surplus units and lends the same to those
units whose income exceeds its expenditure. In the pursuit of these objectives the ICICI
Bank Limited (ICICI Bank) offers products and services in the areas of commercial
banking to retail and corporate customers (both domestic and international), treasury
and investment banking and other products, such as insurance and asset management.
Its commercial banking operations for retail customers consist of retail lending
and deposits, distribution of third-party investment products and other fee-based
products and services, as well as issuance of unsecured redeemable bonds. ICICI Bank
provides a range of commercial banking and project finance products and services,
including loan products, fee and commission-based products and services, deposits and

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foreign exchange and derivatives products to corporations, growth-oriented middle
market companies and small and medium enterprises.

ONWNERSHIP TYPE

JOINT STOCK COMPANY:

ICICI BANK LIMITED, is the joint stock company which is incorporated under the

Companies Act, 1956 and licensed as a bank under the Banking Regulation Act, 1949

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

VISION

To be the leading provider of financial services in India and a major

global bank.

To be the preferred brand for total financial and banking solutions for both corporates
and individuals

To be the dominant Life, Health and Pensions player built on trust by world-class people
and service.

This we hope to achieve by:

 Understanding the needs of customers and offering them superior products and
service
 Leveraging technology to service customers quickly, efficiently and conveniently

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  Developing and implementing superior risk management and investment
strategies to offer sustainable and stable returns to our policyholders
 Providing an enabling environment to foster growth and learning for our
employees
 And above all, building transparency in all our dealings

The success of the company will be founded in its unflinching commitment to 5 core
values -- Integrity, Customer First, Boundaryless, Ownership and Passion. Each of the
values describe what the company stands for, the qualities of our people and the way
we work.

We do believe that we are on the threshold of an exciting new opportunity, where we

can play a significant role in redefining and reshaping the sector. Given the quality of
our parentage and the commitment of our team, there are no limits to our growth.

MISSION

We will leverage our people, technology, speed and financial capital to:

 Be the banker of first choice for our customers by delivering high quality, world-
class products and services.
 expand the frontiers of our business globally.
 play a proactive role in the full realisation of India’s potential.
 maintain a healthy financial profile and diversify our earnings across businesses
and geographies.
 maintain high standards of governance and ethics.
 contribute positively to the various countries and markets in which we operate.
 create value for our stakeholders
 Provide the social facilities to the society

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 IN order to build some brand equity by doing social service, ICICI Bank has decided
to undertake a MISSION for reducing low birth weight incidence at the village level.

Undertaken by ICICI Bank's Social Initiatives Group, the bank has decided to identify
effective and scalable strategies for delivering the services required to impact female
nutritional status to tackle the incidence of low birth babies.

Appointing several partners to work on this project an ICICI Bank official says, ``This
is going to be a significant MISSION supported by the bank and the aim to understand
whether a suitably trained health worker working with the public health system and the
integrated child development scheme can provide quality services to impact low birth
incidence at the village level.''

The MISSION is based in Ranchi district in Jharkhand and is being implemented

through a partnership between the Department of Health, Government of Jharkhand,
Krishi Gram Vokas Kendra(KGVK) and Care, both of whom are NGOs based in
Jharkhand and the Child in Need Institute (CINI), an NGO based in West Bengal.

Adds the ICICI Bank official, ``ICICI Bank needs to participate in the all round
development of the country by focusing on some of its fundamental problems.

It seeks to perform this role primarily as a funding agency, through its Social
Initiatives Group.''

ICICI Bank's Social Initiative Group's (SIG) mission is ``to identify and support
initiatives designed to improve the capacities of the poorest of the poor to participate in
the larger economy.''

The group seeks to achieve its mission by supporting initiatives that are cost-
effective, capable of large-scale replication and have the potential for near and long-
term impact.

``ICICI Bank believes in strengthening or supplementing existing systems rather

than investing in parallel structures.

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 The purpose is also to build long-term relationships with sustainable partners,'', adds
the bank official.

In the past, ICICI Bank has undertaken projects in the area of elementary education
and micro financial services.

REGISTERED OFFICE

ICICI Bank Limited

Registered Office: Landmark, Race Course Circle, Vadodara 390 007.

Corporate Office: ICICI Bank Towers, Bandra Kurla Complex, Mumbai 400 051.

SUBSIDIARIES

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ORGANITION STRUCTURE

An organization structure as an integral part of a system or a group. It has to accept the

discipline and regulatory ethics of the system/group. It has also to compete within the
group and strive to excel in its performance. An organization structure also operates
with in a social, economic and political environment

We believe that the structure of an organization needs to be dynamic, constantly

evolving

and responsive to changes both in the external and internal environments. Our
organizational

structure is designed to support our business goals, and is flexible while at the same
time

ensuring effective control and supervision and consistency in standards across

business

groups.

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- 82 -
- 83 -
ICICI Banks the Poor in India:

Demonstrates That Serving Low-Income Segments Is Profitable

The traditional image of microfinance is one of a charitable activity conducted mostly by

non-profit organizations and separate from the mainstream financial system. However,
this image has been changing in India in the last few years as commercial banks have
been widely entering the sector, led by ICICI Bank. But why would ICICI, the largest
private bank in India, be interested in serving low-income segments? Simply because it
recognizes that poor people are bankable, and that microfinance provides a new,
profitable opportunity. ICICI Bank sees an opportunity to make profits in untouched
markets, while improving the lives of poor people. Who would not appreciate the win-
win of this situation?

Rapid Growth

ICICI's microfinance portfolio has been increasing at an impressive speed. From 10,000
microfinance clients in 2001, ICICI Bank is now lending to 1.2 million clients through its
partner microfinance institutions, and its outstanding portfolio has increased from Rs.
0.20 billion (US$4.5 million) to Rs. 9.98 billion (US$227 million). A few years ago, these
clients had never been served by a formal lending institution.

There is an increasing shift in the microfinance sector from grant-giving to investment in

the form of debt or equity, and ICICI believes grant money should be limited to the
creation of facilitative infrastructure. "We need to stop sending government and funding
agencies the signal that microfinance is not a commercially viable system", says
Nachiket Mor, Executive Director of ICICI Bank.

As a result of banks entering the game, the sector has changed rapidly. "There is no
dearth of funds today, as banks are looking into MFIs favorably, unlike a few years ago",
says Padmaja Reddy, the CEO of one of ICICI Bank's major MFI partners, Spandana.
And with banks entering the sector, interest rates have also dropped. "Interest rates
have come down from 14% to 10%", says Reddy.

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Partnership Models

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

The MFI as Collection Agent

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

Securitisation
Another way to enter into partnership with MFIs is to securitize microfinance portfolios.
In 2004, the largest ever securitisation deal in microfinance was signed between ICICI
Bank and SHARE Microfin Ltd, a large MFI operating in rural areas of the state of Andra
Pradesh. Technical assistance and the collateral deposit of US$325,000 (93% of the
guarantee required by ICICI) were supplied by Grameen Foundation USA. Under this
agreement, ICICI purchased a part of SHARE's microfinance portfolio against a
consideration calculated by computing the Net Present Value of receivables amounting
to Rs. 215 million (US$4.9 million) at an agreed discount rate. The interest paid by
SHARE is almost 4% less than the rate paid in commercial loans. Partial credit
provision was provided by SHARE in the form of a guarantee amounting to 8% of the

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receivables under the portfolio, by way of a lien on fixed deposit. This deal frees up
equity capital, allowing SHARE to scale up its lending. On the other hand, it allows ICICI
Bank to reach new markets. And by trading this high quality asset in capital markets, the
bank can hedge its own risks.

Janet MacKinley, chairman of the Income Fund of America and Vice Chair of Grameen
Foundation USA's Program Committee welcomes this deal; she says: "I believe it will
encourage more of these types of transactions that can play a strategic role in making
microfinance more widely available to the world's poorest communities". Another
securitisation deal was also signed with Bhartya Samruddhi Finance Limited (BSFL), in
which ICICI Bank securitised the receivables of a selected portfolio of microfinance
loans by BSFL amounting to Rs 42.1 million (US$ 957,000). Both under the partnership
model and under the securitisation deal, the bank provides organizations with financial
support at a mezzanine level which enables them to offer credit protection in the
microfinance portfolios to a reasonable extent.

Training New Partners

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

Working with Venture Capitalists

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

Beyond Microcredit

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

Technology

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

The Centre for Microfinance Research

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

The CMFR Research Unit supports initiatives aimed at understanding and analyzing the
following issues: impact of access to financial services; contract and product designs;
constraints to household productivity; combination of microfinance and other

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development interventions; evidence of credit constraints; costs and profitability of
microfinance organizations; impact of MFI policies and strategies; people's behavior and
psychology with respect to financial services; economics of micro-enterprises; and the
effect of regulations.

The CMFR is involved in several studies with researchers from leading universities,
including MIT, Harvard, and Yale. For example, it is implementing an impact evaluation
of Spandana's microcredit programme in Hyderabad; as the first randomized evaluation
of microcredit, it will allow estimating the effects of the MFI's programme in an unbiased
manner. Other on-going projects include the impact evaluation of smokeless chulhas on
health and productivity in Orissa, a study on the break-up of transaction costs of MFIs
and SHGs, and an analysis of Sewa Bank's loans and accounts panel data base in
Ahmedabad.

In order to bring together academics and practitioners, the CMFR also organizes regular
seminars and conducts courses for managers and researchers from NGOs,
government, international organizations, and academics.

In addition to undertaking research, the CMFR directly helps MFIs in terms of strategy
building. In partnership with MicroSave, the CMFR Microfinance Strategy Unit will offer
advanced financial management training for microfinance practitioners. A training series
on Building Blocks of Banking and Finance will also be conducted, aimed at financial
institutions both large and small that wish to acquire a comprehensive and detailed set
of skills to effect their transformation.

Finally, the CMFR recognizes that while MFIs aim to meet the credit needs of poor
households, there are other missing markets and constraints facing households, such
as healthcare, infrastructure, and gaps in knowledge. These have implications in terms
of the scale and profitability of client enterprises and efficiency of household budget
allocation, which in turn impacts household well-being. The CMFR Microfinance
Strategy Unit will address these issues through a series of workshops which will bring
together MFI practitioners and sectoral experts (in energy, water, roads, health, etc).

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The latter will bring to the table knowledge of best practices in their specific areas, and
each consultation workshop will result in long-term collaboration between with MFIs for
implementing specific pilots.

While the microfinance sector is growing fast in India, challenges must be addressed in
order to make this growth both effective and sustainable. Microfinance needs to become
more accessible, more customized and more comprehensive. In order for microfinance
to be a useful mechanism for poverty alleviation, several questions need to be
answered. Is microfinance the solution? ICICI Bank believes it is, if growth is properly
managed and questions are correctly answered.

CURRENT SCENARIO

SBI profit rises 46% in Q4 on higher other income

Kolkata, May 9 Riding on higher other income including profits from treasury operations,
State Bank of India posted a 46 per cent rise in net profit at Rs 2,742 crore for the fourth
quarter ended March 31, 2009, up from Rs 1,883 crore during the corresponding
quarter of last year.

The bank made a profit of Rs 1,508 crore on account of sale of investments in the
quarter ended March 31, 2009, according to its Chairman, Mr O.P. Bhatt.

Other income for the quarter under consideration grew by 67 per cent at Rs 4,718 crore
(Rs 2,817 crore).

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The net profit for the year ended March 31, 2009 increased by 35.5 per cent at Rs 9,121
crore, against Rs 6,729 crore during the corresponding period last year.

The board of directors at a meeting here on Saturday recommended a dividend of 290

per cent or Rs 29 per share (215 per cent) for the year under review.

The bank’s treasury income in 2008-09 increased by 171 per cent to Rs 2,566 crore on
account of profit on sale of investments, Mr Bhatt said.

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Pillar of growth

Treasury would continue to be an important pillar of growth for the bank, he maintained.

“Historically, treasury was our residual business but this year treasury has registered
outstanding growth. We are now trying to offer products at par with other multinational
banks. Our fee-based income, which was earlier growing in single digits, also grew by
30 per cent in 2008-09,” Mr Bhatt said explaining the reason for the growth in the bank’s
net profit.

Referring to the lower growth in net profit in 2008-09 vis-À-vis 2007-08 when the growth
was 48 per cent, he said, “It was due to the rise in overhead costs due to branch
expansion, liquidity overhang and the cost of carrying it and also on account of higher
provisioning for salary revisions and for pensions.”

A 30 per cent growth in advances also contributed to the growth of net profit, he said.

“There has been a robust growth in our advances not only in terms of volumes but also
in terms of income,” he pointed out.

Performance

The bank’s core fee-based income for the year ended March 2009 grew by 29 per cent
to Rs 7,617 crore contributed by commission, exchange, loan processing fee and
account maintenance charges.

Other income increased by 46 per cent at Rs 12,691 crore (Rs 8,695 crore).

Domestic deposits grew by 33 per cent at Rs 6,96,340 crore (Rs 5,22,589).

Current Account and Savings Bank Account (CASA) deposits increased by 22 per cent
to Rs 2,73,396 crore (Rs 2,23,627 crore) and term deposits grew by 41.5 per cent to Rs

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4,22,944 crore (Rs 2,98,962 crore). The share of bulk deposits to total deposits declined
to 10.81 per cent (14.13 per cent).

Advances went up 30 per cent at Rs 5,48,540 crore (Rs 4,22,331 crore). The credit-
deposit ratio declined to 66.63 per cent (72.59 per cent).

“There has been an unprecedented flow of deposits since November 2008 to the tune of
Rs 1,000 crore a day; on the other hand there has been a decline in credit offtake. This
has led to a decline in CD ratio,” Mr Bhatt observed.

The net interest margin (NIM) declined to 2.93 per cent (3.07 per cent). “The huge
growth in deposits, lesser growth and lower yield on advances has put a pressure on
our margins,” Mr Bhatt said.

The bank witnessed a two basis point dip in NIM in April 2009. However, with the cost of
deposits coming down, the bank was hopeful of either maintaining or registering a slight
improvement in its NIM, he said.

NPAs flat

The net non-performing assets remained almost flat at 1.76 per cent (1.78 per cent).

“International NPAs increased by 955 crore as a result of economic slowdown,

particularly in the US and Singapore.

Domestic NPAs increased by Rs 1,774 crore of which Ratnagiri Power alone

contributed to Rs 1,651 crore,” Mr Bhatt said and added that the bank would be able to
manage NPAs at the current level.

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PRODUCTS OF ICICI BANK

ICICI Bank offers a wide range of banking products and financial services to dynamic.)
ICICI Bank is also the largest issuer of credit cards in India. corporate and retail
customers through a variety of delivery channels and specialised subsidiaries and
affiliates in the areas of investment banking, life and non-life insurance, venture capital
and asset management.

TYPES OF ACCOUNTS

1. SAVING ACCOUNT

A Savings Account for everyone with a host of convenient features and banking
channels to transact through. So now you can bank at your convenience, without the

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stress of waiting in queues. We service savings accounts with 8 to 8 banking and ‘out of
branch’ banking

2. LIFE PLUS SENIOR CITIZEN SAVING ACCOUNT

We understand that a Savings Account needs to do more after you reach the age of
seniority; we understand your concerns for safety and security. We have an ideal
Savings Bank Service for those who are 60 years and above. The Senior Citizen
Services from ICICI Bank has several advantages that are tailored to bring more
convenience and enjoyment in your life.

3. YOUNG STAR SAVING ACCOUNT

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It's really important to help children learn the value of finances and money management
at an early age. Banking is a serious business, but we make banking a pleasure and at
the same time fun. Children learn how to manage their personal finances.

4. RECURRING DEPOSIT ACCOUNT

When expenses are high, you may not have adequate funds to make big investments.
An ICICI Bank Recurring Deposit lets you invest small amounts of money every month
that ends up with a large saving on maturity. So you enjoy twin advantages- affordability
and higher earnings

4.FIXED DEPOSIT ACCOUNT

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Safety, Flexibility, Liquidity and Returns!!!!

A combination of unbeatable features of the Fixed Deposit from ICICI Bank.

LOANS

1. HOME LOANS

The No. 1 Home Loans Provider in the country, ICICI Bank Home Loans offers some
unbeatable benefits to its customers - Doorstep Service, Simplified Documentation and
Guidance throughout the Process. It's really easy !

2. PERSONAL LOAN

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If you're looking for a personal loan that's easy to get, your search ends here. ICICI
Bank Personal Loans are easy to get and absolutely hassle free. With minimum
documentation you can now secure a loan for an amount upto Rs. 15 lakhs.

3. CAR LOAN

The most preferred financier for car loans in the country. Network of more than 1000
channel partners in over 200 locations. Tie-ups with all leading automobile
manufacturers to ensure the best deals.

4. COMMERCIAL VEHICAL LOAN

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Range of services on existing loans & extended products like funding of new vehicles,
refinance on used vehicles, balance transfer on high cost loans, top up on existing
loans, Xtend product, working capital loans & other banking products.

5. FARM EQUIPMENT LOAN

Preferred financier for almost all leading tractor manufacturers in the country. Flexible
repayment options in tandem with the farmer's seasonal liquidity. Monthly, Quarterly
and Half-yearly repayment patterns to choose from. Comfortable repayment tenures
from 1 year to 9 years.

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6. BUSINESS INSTALMENT LOAN

Business Installment Loan (BIL) helps the entities take a giant strides by fulfilling their
business requirements, be it working capital requirement, business expansion or to grab
that once in a lifetime business opportunity.

CARDS

1.CREDIT CARD

Credit Cards give you a smart way to shop, and offer you flexibility and convenience in
managing your finances. ICICI Bank credit cards provide a host of exciting offers and
benefits such as low interest rates, rewards programs, and a high credit and cash limit.
We offer different types of credit card to suit the different needs and requirements for
added features.

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2.TRAVEL CARD

Presenting ICICI Bank Travel Card. The Hassle Free way to Travel the world. Traveling
with US Dollar, Euro, Pound Sterling or Swiss Francs; Looking for security and
convenience; take ICICI Bank Travel Card. Issued in duplicate. Offers the Pin based
security. Has the convenience of usage of Credit or Debit card.

3. DEBIT CARD

The ICICI Bank Debit Card is a revolutionary form of cash that allows customers to
access their bank account around the clock, around the world. The ICICI Bank Debit
Card can be used for shopping at more than 3.5 Lakh merchants in India and 24 million
merchants worldwide.

4. COMMERCIAL CARD

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ICICI Bank Commercial Cards have been designed as payment solutions for large &
mid-sized organizations. A widely accepted concept internationally, Commercial Cards
help to better streamline payment processes & thus increase efficiencies.

5. MERCHANT SERVICE

Give your customer quick and convenient ways to make payments. with ICICI bank's
two payment acceptance solution, enjoy business like never before. POS Machine at
your retail establishment will assist you to accept cards. Payseal, online payment
gateway will make e-commerce more convenient, easy and secure on internet... your
business can only get even bigger and better.

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Literature Review

Dweep Chanana ⋅ January 18, 2010 ⋅

David Roodman called 2009 a “milestone year for microfinance.” And it certainly
was – providing two separate randomized studies on the impact of microcredit.
Simultaneously, other studies have also emerged on the broader topic of
microfinance. Yet, certainly the literature of microfinance cannot be so new? After
all, governments have long known that increasing access to rural and low-income
finance was important. India instituted a rural bank expansion program in 1977.
Mexico did something similar in 1992.

In order to help get some kind of bearing on the impact of microfinance, we

present here a short literature review on how microfinance affects the lives of the
poor. The selected papers are organized into three categories: the broader context,
the impact of microcredit, and the impact of microsavings (surprisingly, there seems
to have been more work done on savings than credit).

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FernandoAportelo,BankofMexico
December 1999

This paper assesses the impact of increasing financial access on low-income

people savings. Effects on households’ saving rates and on different informal savings
instruments are considered. The paper uses an exogenous expansion of a Mexican
savings institute, targeted to low-income people, as a natural experiment and the 1992
and 1994 National Surveys of Income and Expenditures. Results show that the
expansion increased the average saving rate of affected households by more than 3 to
almost 5 percentage points. The effect was even higher for the poorest households in
the sample: their saving rate increased by more than 7 percentage points in some
cases. Furthermore, the expansion, in general, had no effect on high income
households. In the case of informal savings instruments, evidence of crowding out of
these instruments caused by the expansion is limited. Results do not rule out the
possibility that a considerable fraction of the increase in households’ savings could have
come from new savings.

Abhijit Banerjee, Esther Duflo, Rachel Glennerster, Cynthia Kinnan; MIT Jameel
PovertyActionLab,IndianCentreforMicroFinance,Spandana
October2009
Hyderabad, India

The researchers from the Abdul Latif Jameel Poverty Action Lab (J-PAL) at MIT
and the Indian Centre for Micro Finance worked with Spandana to randomize the roll-
out of its microcredit operations in Hyderabad, India’s fifth-largest city. Spandana chose
104 areas of the city to expand into eventually, rejecting some districts as having too
many construction workers, who come and go and might take Spandana’s money with
them. In 2006–-07.

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 Spandana started lending in a randomly chosen 52 of the 104.
Researchers followed up by surveying more than 6,000 households between August
2007 and April 2008, restricting their visits to families that seemed more likely to borrow:
ones that had lived in the area at least three years and had at least one working-age
woman. The surveyors made sure not to visit an area until Spandana had been there at
least a year. They surveyed in “treatment” areas (ones where Spandana worked) and
control ones (where it did not yet).

Journal of Entrepreneurial Finance and Business Ventures, Vol. 9, Issue 1, 2004,

pp. 1-26

James C. Brau*

Department of Finance

Jim Brau is Assistant Professor of Finance and Goldman Sachs Faculty Fellow at
the Marriott School, Brigham Young University. His research includes entrepreneurial
finance, initial public offerings, and microfinance/microenterprise. He has published in
the Journal of Financial Economics, Journal of Business, Journal of Financial Research,
Journal of Small Business Management, Journal of Entrepreneurial Finance,
Managerial Finance, and Journal of Business Education among others.

Journal of Entrepreneurial Finance and Business Ventures, Vol. 9, Issue 1, 2004,

pp. 1-26

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Gary M. Woller

Department of Public Management

Gary Woller is Associate Professor of Public Management at the Marriott School,

Brigham Young University. His articles on microfinance and international development
have appeared in a number of peer-reviewed academic journals, including Journal of
International Development, World Development, Policy Studies Journal, Journal of
Developmental Entrepreneurship, NonProfit and Voluntary Sector Quarterly,
Contemporary Economic Policy, and the International Review of Economics and
Finance. Gary is co-founder and co-editor of the Journal of Microfinance.

December 2005

Valerie Rozycki

Advisor: Dr. David Brady

Department of Public Policy

Microfinance as a tool for economic development has been growing in

importance in the past three decades. As the sector expands, so do the challenges
faced by practitioners.

Theoretical and empirical studies show that one important solution to some of
these challenges is a system for sharing credit information between lending institutions.

Experiences with CIS for microfinance reveal trends and lessons about
successful models, but it is critical to explore countries with underdeveloped CIS and
consider nontraditional, innovative solutions.

- 106 -
Authors: Harper, Malcolm; Kirsten, Marié

Source: Small Enterprise Development, Volume 17, Number 1, March 2006 , pp.
30-39(10)

Publisher: Practical Action Publishing

Linking the formal financial sector with poor microfinance clients seemed
impossible even a decade ago. Increasingly such linkages are emerging, either
spontaneously or enforced, and it is crucial that we share the knowledge gained from
these efforts. One of India's most innovative linkage models is ICICI Bank's recent
'facilitation linkage' with several NGO/MFIs. This approach is based on a partnership
between ICICI Bank and selected NGOs/MFIs, according to which the latter takes the
responsibility of monitoring and recovering loans from individuals and self-help groups,
but the credit (and most of the risk) is directly between ICICI Bank and the SHG or
individual clients. This article explains the model and provides two case study
examples, PSS and BISWA, to illustrate this linkage methodology.

Valerie Rozycki

Stanford University, Stanford, CA, USA 94309

Microfinance services (predominantly the disbursement of very small loans to the

poorest sectors of society) have expanded rapidly over the past three decades and
have much potential to affect grass-roots economic development. However, without
proper information sharing systems in place, maturing microfinance sectors often
operate sub-optimally.
When lending institutions lack complete information about the credit-
worthiness of borrowers, lending decisions are not optimized and the performance of
microfinance institutions suffers. Several countries have solved this problem with formal
systems for sharing credit information. Current research focuses on country cases

- 107 -
where such systems have been successful as well as on general analyses of barriers to
creating such systems.

Kofi Annan

United Nations secretary-General

Micro finance is the provision of financial services to the economically active

poor.In the last two decades ,the field has grown in both size and sophistication as
measured, by the number and the stage of development of the Microfinance Institutions
and the clients they serve. Microfinance has achieved prominence among development
strategies because of its scale and continued success- in terms of sustainability,
resiliency to shocks and continued innovation. MFIs continue to expand their reach (in
terms of clients served, funds disbursed, saving mobilized etc.) and in many developing
countries, they are among the most profitable financial institutions operating.

July 2006

Madhurima Bhattacharyay

An outstanding economic growth and a bright future prospect notwithstanding,

poverty reduction is still the most daunting challenge for India. Strengthening access to
financial services for the rural sector, particularly the rural poor, is essential for attaining
income poverty as prescribed in the Millennium Development Goals (MDGs). Despite
various initiatives taken for the expansion of the commercial bank branch network into
the rural and semi-urban areas of the country to promote lending to key disadvantaged
and underprivileged economic sectors, their socio-economic impact did not match
expectations as planned.
India needs to develop a more inclusive financial market by enhancing
direct access to finance for poor communities and small rural businesses. This paper
examines the current - and potential - role of the financial sector, particularly
microfinance, in developing a more inclusive and robust economy. This paper which
examines rural finance for the poor and its impact on income poverty also analyzes the

- 108 -
performance of the rural financial services system in India and outlines trends and
patterns in farmers’ access to financial services over the course of the past half-a-
century. In particular, it analyzes the performance of microfinance institutions (MFIs) in
the rural area, with particular emphasis on commercial bank-linked, largely successful
Self-Help Group (SHG) programs.

34 Morduch, J. and Haley, B. 2002.

Working Ppaer No. 1014. New York University, NY.28

The Indian government has taken a bold step in introducing a new microfinance
law to bring microfinance institutions under prudential supervision. The Union Cabinet
has cleared the bill on 6th February 2007. The bill will be submitted in Parliament soon
for approval. Under the provision of the bill, the National Bank for Rural and Agricultural
Development (NABARD) will regulate the microfinance sector in India. All MFIs,
operating in the form of trusts, societies and co-operatives will now be regulated by
NABARD. However, non-bank finance companies will not come under NABARD. MFIs
operating as co-operatives, trusts and societies have to register under the Microfinance
Development Council, which will be promoted by NABARD.

Ambuj Gupta
University of Petroleum and Energy Studies Dehradun (U.K.) India
August 24, 2010

The waves of liberalization, privatization and globalization have transformed the

face of service sector in India. On account of this, service sector has witnessed massive
growth in the form of innovative products, expansion of services and wider outreach.
Financial services are no exception to his. The present study takes a sneak preview of
various financial services developed after economic liberalization in India.

Amlan Ghosh
August 9, 2007

- 109 -
 Since the opening up of the economy and reforms in the banking sector in India,
rural finance is in back foot. To keep the momentum of the growth at present level India
needs to serve the financial need of the excluded masses to bring them into the main
stream of developmental process. This article examines the problems of formal banking
in providing credit (micro) to the poor of rural and urban areas in the present era and
suggests that the POSB can be used to cater the financial need of rural India where
MFIs have very little presence in total demand of finance.

Franklin Allen
University of Pennsylvania - Finance Department;
European Corporate Governance Institute (ECGI)
With recent growth rates among large countries second only to China's, India has
experienced nothing short of an economic transformation since the liberalization
process began in the early 1990's. In the last few years, with a soaring stock market,
significant foreign portfolio inflows including the largest private equity inflows in Asia,
and a rapidly developing derivatives market, the Indian financial system has been
witnessing an exciting era of transformation. The banking sector has seen major
changes with deregulation of interest rates and the emergence of strong domestic
private players as well as foreign banks. At the same time, there is some evidence of
credit constraints for India's SME firms that rely heavily on trade credit.

Rajesh Chakrabarti
Indian School of Business
The banking sector has seen major changes with deregulation of interest rates
and the emergence of strong domestic private players as well as foreign banks. At the
same time, there is some evidence of credit constraints for India's SME firms that rely
heavily on trade credit. Corporate governance norms in India have strengthened rapidly
in the past few years. Family businesses, however, still dominate the landscape and
investor protection, while excellent on paper, appears to be less effective owing to an
overburdened legal system and corruption. In the last few years microfinance has
contributed in a big way to financial inclusion and is now attracting venture capital and
for-profit companies - both domestic and foreign.

- 110 -
 Research methodology

Research methodology is a methodology for collecting all sorts of information & data

pertaining to the subject in question. The objective is to examine all the issues involved

& conduct situational analysis. The methodology includes the overall research design,

sampling procedure & fieldwork done & finally the analysis procedure. The methodology

used in the study consistent of sample survey using both primary & secondary data.

The primary data has been collected with the help of questionnaire as well as personal

observation book, magazine;journals have been referred for secondary data. The

questionnaire has been drafted & presented by the researcher himself.

Definition of Research

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The word research is derived from the Latin word meaning to know. It is a
systematic and a replicable process which identifies and defines problems, within
specified boundaries. It employs well designed method to collect the data and
analyses the results. It disseminates the findings to contribute to generalizeable
knowledge.

The five characteristics of research presented below will be examined in greater

detail later are:

 Systematic problem solving which identifies variables and

tests relationships between them.

 Logical, so procedures can be duplicated or understood by

others.

 Empirical, so decisions are based on data collected.

 Reductive, so it investigates a small sample which can be

generalized to a larger population.

 Replicable, so others may test the findings by repeating it.

OBJECTIVE OF RESEARCH

Research design phase :-

This phase mainly involve stating the conceptual structure within which
research would be conducted. The main steps involved in this phase are
as:

Sampling Plan:

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 The sample was selected for the study by convenient method. This type
of sampling where each & every item in the population has an equal
chance of inclusion in the sample.

Sample unit:

Under the study the customers are considered the sample unit in Jaipur
District.

Sample Size:

 Sample of 50 people was taken into study, and their data was collected.

Sampling Technique:

 To study the Project, a Simple Random Sampling technique is used.

Data Collection:

Collection of data is done by

 Secondary Data & through

 Questionnaire

i.e., Primary data was collected through Questionnaire.

Data Analysis:

- 113 -
  After data collection, I’m able to analyze customer’s views, ideas and opinions

related to Advance Product & investment and about SBI & ICICI .

Data Interpretation:

 Interpretation of data is done by using statistical tools like Pie diagrams,

 Bar graphs, and also using quantitative techniques (by using these techniques)

accurate information is obtained.

Classification & tabulation of data:

 The data thus collected were classified according to the categories, counting

sheets & the summary tables were prepared. The resultant tables were one

dimensional, two dimensional.

Statistical tools used for analysis:

 Out of the total respondents, the respondents who responded logically were

taken into account while going into statistical details & analysis of data. The tools

that have been used for analyzing data & inference drawing are mainly statistical

tools like percentage, ranking, averages, etc.

As per questionnaire and market surveys I have find out different responses from

different people. According to their responses I analyze the findings and draw certain

remarks.

- 114 -
 FACTS, FINDINGS & ANALYSIS

Facts & Analysis:

ADVANTAGES OF ICICI OVER SBI:

ICICI is growing at a very fast rate with a total asset of Rs. 3,744.10 billion.

In the area of human relations, the two are taking divergent paths. SBI, which had
over 1 lacks employees, has reduced headcount through a voluntary retirement
scheme and is cautious about adding headcount.
ICICI Bank, on the other hand, is setting up regional hubs where its workforce would

- 115 -
 be concentrated and plans to add 20,000 to its headcount every year. The group
plans to add between 75,000 and 1, 00,000 employees in the next few years.

ICICI Bank is also set to outdo SBI is in its international book

- An area where it has been very aggressive.

ADVANTAGES OF SBI OVER ICICI:

 SBI is the largest and oldest bank of India. Its major stocks are held by
government of India. So this bank enjoys the trust of its Customers a lot.
 SBI offers flexible tenures of loan repayment.
 State bank of India has vast experience in the field of SME
 (Small and Medium Enterprises) Financing.

 As it is the oldest name so it enjoys public trust a lot.

 SBI have four national level Apex Training Colleges and 54

 Learning Centers spread all over the country the Bank is

 Continuously engaged in skill enhancement of its employees.

 Some of the training programs are attended by bankers from

 banks in other countries.

 SBI group, which has over 10,000 branches, is planning to add another 3,000
branches.
 It is also set to become the largest issuer of debit cards and is the second largest
credit card issuer.

- 116 -
Six reasons why we currently prefer SBI over ICICI

Reason #1 - Stronger CASA base

 CASA franchise of 42% provides comfort on margin sustainability for SBI.

 Though CASA for ICICI will also improve from the current 27%, we believe SBI’s
liability franchise will strengthen further with the opening of ~2,000 branches in
FY09.

- 117 -
Reason #2 – Asset-liability match of SBI is better

 SBI has a better asset-liability match, with 60% of liabilities of more than 1-year
maturity, while ~71% of assets have more than 1-year maturity.
 ICICI has 43% of its liabilities with more than 1-year maturity, while ~61% of
assets have more than 1-year maturity.

- 118 -
 

Reason #3 - Proxy insurance plays on both

 Any upside on insurance reforms can be played through SBI as well.

 Cost ratios of SBI Life are better than ICICI Prudential Life due to its strong
bancassurance model and better agency productivity.

- 119 -
Reason #4 - SBI has more diversified loan book

 While asset quality risks persist for both banks, SBI’s loan book is well diversified
across a variety of segments; ICICI’s loan book is still skewed towards retail.

- 120 -
 According to our analysis, over the next 18 months the retail segment is likely to
be more vulnerable than the corporate segment.

Reason #5 - Market share gain in favor of SBI

- 121 -
 SBI will continue to gain market share in both advances and deposits at ICICI’s
expense due to the latter’s strategy of going slow.
 Advances growth for SBI as at Q1FY09 was 28% versus 13% for ICICI.
 Deposit growth for SBI was at 25%, while for ICICI it was 2% as at Q1FY09.

Reason #6 - Return ratios for SBI are better

- 122 -
  SBI is trading at 0.94x FY10E adjusted book, while ICICI is trading at 1.0x
FY10E adjusted book (assuming value of subsidiaries for SBI at INR 301 and
for ICICI at INR 283 on FY10E basis).
 ROE for ICICI is expected to be in the range of 8-10% in FY09-10E, while that
of SBI will be in the range of 14-16%.

Key risks

- 123 -
  SBI’s low provisioning coverage (44%) will lead to higher provisioning cost in
FY10E, considering the aggressive balance sheet growth.
 For ICICI, the expectation of bad asset quality is priced in and further negative
surprises look unlikely.
Like any other PSU bank, the bulk of SBI’s loan origination happens through
branches where underwriting standards are stricter, unlike the DSA model that ICICI
follows. Hence, while we expect NPAs to increase for SBI in FY10E and FY11E, we
do not expect SBI to go through a similar experience as ICICI.

 Also, revised loan waiver guidelines could keep SBI’s Q2FY09 profits muted

due to higher provision requirement.

Graphical Representation of data

- 124 -
Q.1 On which bank you depend for your regular transaction?

Table-1

SBI 62% 31
ICICI 36% 18
HDFC 2% 1
OTHER 0 0
TOTAL NO. OF 50

PEOPLE

Chart-1

- 125 -
 70%

60%

50%

SBI
40%
ICICI
HDFC
30%
OTHER

20%

10%

0%

It has been observed that approximately 62% correspondents are using the service of

SBI for their daily transaction, around 36% of people are using ICICI Bank for their

transaction and only 2% of people are using HDFC . It also shows that SBI have the

highest market position .

Q.2 Are you aware of products & services provided by SBI and ICICI?

- 126 -
 Table-2

YES 90% 45
NO 10% 5
Total No. of People 50

Chart-2

- 127 -
 90%

80%

70%

60%

50% YES
40% NO

30%

20%

10%

0%

From the above data it is clear that most of the customers (around 90%) of Jaipur have

the idea about the product & services of SBI, the rest 10% have no idea about the

product they are using. In this 10% most of the people are from typical rural area

(Farmers).

Q.3 Are you aware of the micro finance products of SBI and ICICI?

- 128 -
 Table-3

YES 80% 40
NO 20% 10
Total No. of People 50

Chart-3

- 129 -
 80%
70%
60%
50%
YES
40%
NO
30%
20%
10%
0%

It is clear that most of the people have the idea about the advance product of SBI.

Almost all the 80% people who have the idea about the advance product are the user of

SBI product & service.

Q.4 which product of SBI or ICICI you have used?

- 130 -
 Table-4

Fix Deposit 30% 15

INSURANCE 20% 10
MF 30% 15
EQUITY 16% 8
OTHER 4% 2

Chart-4

- 131 -
 30%

25%

20% Fix Deposit

INSURANCE
15% MF
EQUITY
10%
OTHER
5%

0%

30% of People in Jaipur use Fix deposits and others 30% use Mutual funds and about
20% use Insuranse and rest use other products of SBI & ICICI Bank.

Q. 5 what do you feel about the services providing by SBI or ICICI in micro finance

products?

- 132 -
 Table-5

SBI & ICICI

Good 40% 20
Average 24% 12
Best 36% 18

Chart-5

- 133 -
 40%

35%

30%

25%
Good
20% Average
Best
15%

10%

5%

0%

From this it is clear that the service provide by SBI in its advance product is good in

between the customer. All of them satisfy with the product provide by SBI.40% of

people said that the service provide by SBI & ICICI is good & 36% said it is best & 24%

of people said that it is average.

Q.6 according to you which factors are most crucial for rapid growth of MFIs?

- 134 -
 Table-6

Low interset rate 32% 16

Availability 24% 12
Instalment factor 20% 10
Processing & sanctioning 24% 12

of loan
Total no. of people 50

Chart-6

- 135 -
 35%

30% Lowinterset rate

25%
Availability
20%

Instalment factor
15%

10%
Processing&
sanctioningof
5% loan

0%

From this it is clear that the low interest rate is major factor for the success of Banks

and after that availability and processing time comes.

Q.7 Do you think Microfinance has helped in Rural India?

- 136 -
 Table-7

Yes 78% 39
NO 22% 11
Toal no. of people 50

Chart-7

- 137 -
 80%

70%

60%

50%
Yes
40%
NO
30%

20%

10%

0%

It is clear that most of the people said that Micro finance helped in Rural areas and rest

of the people says no about this.

Q.8 Microfinance concept makes relevance in rural India as well as urban area. Do you

agree?

- 138 -
 Table-8

Yes 70% 35
No 30% 15
Total no. of people 50

Chart-8

- 139 -
 70%

60%

50%

40%
Yes
No
30%

20%

10%

0%

It is clear that most of the people said that Micro finance concept has relevance in rural

areas and rest of the people says no.

Q. 9 Which features you like most in SBI and ICICI bank?

- 140 -
 Table-9

Various products 20% 10

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

Chart-9

- 141 -
 25%

Various products

20%
Attractive ROI

Transparency
15%
Simple & fast
processing
10% Strong Capital

Any other feature

5%
Total no. of people

0%

From this it is clear that attractive ROI provided by banks attracts customers different

products and fast response also attracts the mind of customers.

Q. 10 According to you which factor can enhance the popularity of SBI and ICICI micro

finance products.

- 142 -
 Table-10

Customer relationship 40% 20

Transparency 32% 16
Low charges 28% 14
Total No. of people 50

Chart-10

- 143 -
 40%

35%

30%

Customer
25%
relationship

20% transparency

15% Low charges

10%

5%

0%

It is clear that most of the people said that customer relationship affects the customers

and 32 % people said that it depends on transparency and rest of the people says that it

depends on low charges.

Project Findings :

- 144 -
 From this project it is found that SBI advance product having the 1st place in the
market at Delhi & NCR, there is a great opportunity to compete with ICICI Bank &
to retain its customer by fulfilling the requirement of customer in SBI and ICICI
advance product.
 It has been observed that approximately 85% correspondents are using advance
 product of SBI and 15% are not using any type of advance product of SBI in
Delhi & NCR.
 All of SBI customers are satisfied with the services provided by the bank.
 Most of the customers at Delhi & NCR prefer to take loan from SBI.
Approximately 43% of advance product users said that the service of SBI in
advance product is excellent.
 A response from customer care is so clear & good.
 Many customers have no time to call customer care so that they are not able to
know about the service & features of SBI advance product.
 Government employees are more concern than private employees for advance
product.
 Biggest problem people don’t invest their money in Share due to lack of
knowledge.
 People want securities that’s why choose SBI than ICICI bank.
 More flexible requirement given by this bank.
 Creating an efficient and effective organization.
 This live project topic gives opportunity to know about various loan schemes
provided by the bank.
 The study shows all the important aspects of Bank loan schemes & how this
affects to current financial trends.
 It also describes the core features of borrowers as well as bankers for financing
loan which is a complex process.

- 145 -
REASONS FOR HIGHLY USE OF SBI ADVANCE PRODUCT :
 Biggest bank of india
 Attractive rate of retorns
 Transparency
 Simple & fast processing
 Quick processing

REASON S FOR HIGHLY USE OF ICICI ADVANCE PRODUCT & INVESTMENT :

 Less paper work
 Attractive roi but less than sbi.
 Transparency
 Quick prosessing

- 146 -
SWOT ANALYSIS OF SBI
Strength/ Opportunities:
 The growth for SBI in the coming years is likely to be fueled by the following
factors:
 Continued effort to increase low cost deposit would ensure improvement in NIMs
and hence earnings.
 Growing retail & SMEs thrust would lead to higher business growth.
 Strong economic growth would generate higher demand for funds pursuant to
higher corporate demand for credit on account of capacity expansion.

Weakness/ Threats:
 The risks that could ensue to SBI in time to come are as under:
 SBI is currently operating at a lowest CAR. Insufficient capital may restrict the
growth prospects of the bank going forward.
 Stiff competition, especially in the retail segment, could impact retail growth of
SBI and hence slowdown in earnings growth.
 Contribution of retail credit to total bank credit stood at 26%. Significant thrust on
growing retail book poses higher credit risk to the bank.
 Delay in technology upgradation could result in loss of market shares.
 Management indicated a likely pension shortfall on account of AS-15 to be close
to Rs50bn.
 Slow down in domestic economy would pose a concern over credit off-take
thereby impacting earnings growth.

- 147 -
SWOT ANALYSIS OF ICICI BANK

 STRENGHTS:

1) Online Services: ICICI Bank provides online services of all it’s banking facilities. It
also provides D-Mart account facilities on-line, so a person can access his account from
anywhere he is.

[D-Mart is a dematerialized account opened by a salaried person for purchase & sale of
shares of different companies.]

2) Advanced Infrastructure: Branches of ICICI Bank are well equipped with advanced
technology to provide the customers with taster banking services. All the computerized
machines are located in suitable manner & are very useful to the customers & staff of
the bank.

3) Friendly Staff: The staff of ICICI Bank in all branches is very friendly & help the
customers in all cases. They provide faster services along with bonding & personal
relationship with the customers.

4) 12 hrs. Banking services: Compared to other bank ICICI bank provides long hrs. of
services i.e. 8-8 services to the customers. This service is one of it’s kind & is very
helpful for the customers who are in urgent need of money.

5) Other Facilities to the Customers & Employees: ICICI Bank also provides other
facilities like drinking water facilities, proper sitting arrangements to the customers. And
there are also proper Ventilation & sanitary facilities for the employees of the bank.

6) Late night ATM services: ICICI bank provides late night ATM services to the
customers. The ATM centers of ICICI bank works even after 11:00pm. at night in certain
branches.

- 148 -
 Weakness:

1) High Bank Service Charges: ICICI bank charges highly to customers for the
services provided by them when compared to other bank & that is why it is only in
the reach of higher class of society.

2) Less Credit Period: ICICI bank provides credit facilities but only upto limited
period. Even when the credit period is not over it sends reminder letters to the
customers which may annoy them.

 OPPORTUNITIES:

1) Bank –Insurance services: The bank should also provide insurance services. That
means the bank can have a tie-up with a insurance company. The bank will advertise &
promote the different policies introduced by the insurance company & convince their
customers to buy insurance policies.

2) Increase in percentage of Returns on increase: The bank should provide higher

returns on deposits in comparison of the present situation. This will also upto large
extent help the bank earn profits & popularity.

3) Recruit professionally guided students: Bank & Insurance is a special non-aid

course where the students specialize in the functioning & services of the bank & also
are knowledge about various tax policies. The bank can recruit these students through
tie-ups with colleges. Such students will surely prove as an asset to the bank.

4) Associate with social cause: The bank can also associate itself with social causes
like providing relief aid patients, funding towards natural calamities. But this falls in the
4th quadrant so the bank should neglect it.

- 149 -
  THREATS

1) Competition: ICICI Bank is facing tight competition locally as well as internationally.

Bank like CITI Bank, HSBC, ABM, Standered Chartered, HDFC also provide equivalent
facilities like ICICI do and also ICICI do not have consistency in its international
operation.

2) Net Services: ICICI Bank provides all kind of services on-line. There can be easy
access to the e-mail ids of the customers through wrong people. The confidential
information of the customers can be leaked easily through the e-mail ids.

3) Decentralized Management: Each branch manager is given the authority of taking

decisions in their respective branches. The decisions made by different managers are
diverse and any one wrong decision can laid to heavy losses to the bank.

4) No Proper Facilities To Uneducated customers: ICICI Bank provides all services

through electronic computerized machines. This creates problems to the less educated
people. But this threat falls in the 4th quadrant so its negligible. The company can avoid
this threat.

- 150 -
 CONCLUSION:

The gap between SBI and the rest of the bank is so wide that SBI comes out as
number one on almost all counts. This includes assets, branch network, ATM network,
number of employees, and size of profits. The only place that ICICI Bank has been able
to upset the monolith has been in the area of market capitalization.

One reason why SBI has lagged in market cap despite its size has been its
inability to unlock value from its various businesses. However, there are signs that this
is changing and the bank is making attempts to realize the value of its investments in
the life insurance and asset management business.

SBI and ICICI are both India’s largest banks. Their growth means India’s growth.
And by this competition customers will be benefited and Indian economy will get a
boost.

- 151 -
 Suggestion & Recommendation

 Customer awareness programme is required so that more people should attract

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

- 152 -
Suggestions given by the consumers at the time of survey:
 There is more time period for repayment of education loan.
 Education loan should be providing to private college also which is not under
AICTE or any kind of University.
 SBI should take steps to solve customer problems immediately.
 Agents should be trained, well educated & proper trained to convince the people
about different advance product.
 Loan sanction date should be according to customer convenient.
 A customer awareness programme should be taking place in rural area.
 Guarantee should give in investment money in share market.

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 Appendix

Questionnaire

Name - _____________________________________

Occupation-__________________________________

Contact Detail -_______________________________

Q.1 On which bank you depend for your regular transaction?

a) SBI

b) ICICI Bank

c) HDFC Bank

d) Other Bank, Specify (_____________)

Q.2 Are you aware of products & services provided by SBI and ICICI?

a) YES

b) NO

Q.3 Are you aware of the micro finance products of SBI and ICICI?

a) YES

b) NO

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Q.4 which product of SBI or ICICI you have used?

a) Fix deposit

b) Insurance

c) Mutual Fund

d) Equity

e) Other, Specify ( ______________ )

Q. 5 what do you feel about the services providing by SBI or ICICI in micro finance

products?

a) Good

b) Average

c) Best

Q.6 according to you which factors are most crucial for rapid growth of MFIs?

a) Low interest rate

b) Availability

c) Instalment factor

d) Processing & sanctioning of loan

Q.7 Do you think Microfinance has helped in Rural India?

a)Yes

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b) No

Q.8 Microfinance concept makes relevance in rural India as well as urban area. Do you

agree?

a) Yes

b) No

Q. 9 Which features you like most in SBI and ICICI bank?

a) Various Product

b) Attractive ROI

c) Transparency

d) Simple & fast processing

e) Strong capital

f) Any other feature, specify ( _____________ )

Q. 10 According to you which factor can enhance the popularity of SBI and ICICI micro

finance products.

a) Customer Relationship

b) Transparency

c) Low charges

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LIST OF FIGURES :

SERIAL FIGURE DETAILS PAGE

NO. NO. NO.

1. 1 Concept of Financial System 41

2. 2 Financial System 41

LIST OF TABLES :

SERIAL TABLE NO. DETAILS PAGE

NO. NO.

1. 1 Angel Group of Companies 6

2. 2 List of Stock Exchanges 44

3. 3 Comparison of charges of Broking Houses 57

4. 4 Profession Tax on Salaries 85

5. 1 Mode of Data Collection 96

6. 2 No. of Users and Non Users of e-Broking 98

7. 3 The age of the people using e-Broking Service 99

8. 4 The occupation of the people using e-Broking 100

Service

9. 5 The yearly income of the people using 101

e-Broking Service

10. 6 The Broking House from where people using 102

e-Broking Service prefer to invest

11. 7 The features liked by people using e-Broking 104

Service

12. 8 The age of the people not using e-Broking 106

Service

13. 9 The occupation of the people not using e- 107

Broking Service

14. 10 The yearly income of the people not using e- 108

- 157 -
 Broking Service

15. 11 The Broking House from where people not 109

using e-Broking Service prefer to invest

LIST OF GRAPHS:

SERIAL GRAPH DETAILS PAGE

NO. NO. NO.

1. 1 Users and Non Users of e-Broking 98

2. 2 The age of the people using e-Broking Service 99

3. 3 The occupation of the people using e-Broking 100

Service

4. 4 The yearly income of the people using e- 101

Broking Service

5. 5 The Broking House from where people using 102

e-Broking Service prefer to invest

6. 6 The features liked by people using e-Broking 104

Service

7. 7 The age of the people not using e-Broking 106

Service

8. 8 The occupation of the people not using e- 107

Broking Service

9. 9 The yearly income of the people not using e- 108

Broking Service

10. 10 The Broking House from where people not 109

using e-Broking Service prefer to invest

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- 159 -
Questionare master sheet

- 160 -
Bibliography:

www.geocities.com

www.empowerpoor.com

www.microfinancegateway.org

www.nabard.org/microfinance/successstories

www.icmr.icfai.org

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ADB, “Key Indicators 2006: Measuring Policy Effectiveness in Health and Education”,
Asian

Development Bank, Manila, 2005.

Banerjee, A., Duflo, E., Glennerster, R., “A Snapshot of Micro enterprises in

Hyderabad”, Mimeo,

Massachusetts Institute of Technology, Boston, 2006.

Banker, “Microfinance Gains Momentum”, February, The Banker, 2005

Basu P., “Improving Access to Finance to for India’s Rural Poor”, Direction in
Development, 36448,

World Bank, Washington D.C., 2006.

Bhattacharyay, M. “Performance Assessment of Self Help Groups in Poverty

Reduction in the state

of Uttarakhand in India,” a Research Paper submitted to GRIPS (primarily based on

the data and

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Uttarakhand:

Role of Institutions and Policies for Performance Assessment of Self Help Groups in
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Reduction in the state of Uttarakhand in India).30

Brocklesby, M. A., and Fisher, E., “Community development in sustainable

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An introduction”, Community Development Journal, 38(3), 2003.

Carney, D ed., Sustainable Rural Livelihoods: What Contribution can we make?

Department for

International Development (DFID), 1998

CIA, The World Factbook 2009-India, Central Intelligence Agency,

https://www.cia.gov/library/publications/the-world-factbook/geos/in.html

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