RESEARCH REPORT ON

CASH MANAGEMENT OF ICICI BANK

SUBMITTED FOR PARTIAL FULFILLMENT OF AWARD OF Post Graduate Diploma in Management

BY MS. RINI NIGAM ROLL NO: MBF201014 UNDER THE SUPERVISION OF PROF. J. S. SHUKLA

APEEJAY INSTITUTE OF TECHNOLOGY, SCHOOL OF MANAGEMENT

February, 2012

DECLARATION The work in this report is based on the original work carried out by me at Apeejay Institute of Technology, School of Management, Greater Noida. No part of this report has been submitted elsewhere for any other degree or qualification and it is all my own work unless referenced to the contrary in the text.

Rini Nigam MBF201014

CERTIFICATE This to certify that Ms. Rini Nigam, Roll No.: MBF201014 a student of PGDM (B&F) 2010-2012 batch of Apeejay Institute of Technology, School Of Management, Greater Noida has done the project work on Cash Management of ICICI Bank under my supervision and guidance. I understand this project report is being submitted to Apeejay Institute of Technology, Greater Noida for award of degree of Post Graduate Diploma in Management. To the best of my knowledge, this report has not been submitted to any other University for award of any other degree.

During this period, I have found the performance of her work satisfactory.

Prof. J. S. Shukla

Date:

Prof. D. N. Bajpai Director, Apeejay Institute of Technology, Greater Noida

Date:

ACKNOWLEDGEMENT

I, hereby take the opportunity to express my deep and profound gratitude to Prof. J. S. Shukla, my research project guide for giving me an opportunity to do a project on CASH MANAGEMENT OF ICICI BANK. I thank him for his valuable guidance and support which proved indispensable in the completion of this report.

Last but not the least I would also like to thank my family and friends for their support during the completion of the project.

All may not have been mentioned but none is forgotten.

Name: Rini Nigam Course: PGDM (B&F) Roll No. MBF201014

TABLE OF CONTENTS
CHAPTER NO. NO.
DECLARATION CERTIFICATE ACKNOWLEDGEMENT 1) CORPORATE PROFILE i. ii. iii. iv. v. OVERVIEW HISTORY GRAPHICAL PRESENTATION FINANCIAL POSITION COMPETITORS

TITLE

PAGE
i ii iii

2) CASH MANAGEMENT SERVICE 3) RESEARCH METHODOLOGY 4) RESULT AND ANALYSIS 5) CASE STUDY i. ii. CASE STUDY ANALYSIS OF THE CASE STUDY

6) LIMITATIONS , CONCLUSION &

RECOMMENDATION i. ii. iii. 8) APPENDIX

i.

LIMITATIONS CONCLUSIONS RECOMMENDATIONS

7) REFERENCES QUESTIONNAIRE

ABSTRACT

In a business done financially affects cash eventually. Cash is to a business is what blood is to a living body. A business cannot operate without its life-blood cash, and without cash management, there may remain no cash to operate. Cash movement in a business is two-way traffic. It keeps on moving in and out of business. The inflow and outflow of cash never coincides. Important aspect which is unique to cash management is time dimension associated with the movement of cash. Due to non-synchronicity of cash inflow and outflow, the inflow may be more than the outflow or the outflow is more than the inflow at a particular point of time. Left to shift cash flow is apart to follow monotonic pattern, and showers of cash may be heavy, scanty or just normal. Hence there is a dire need to control its movement through skillful cash management. The primary aim of cash management is to ensure that there should be enough cash availability when the needs arise, not too much, but never too little.

OBJECTIVES:

It helps us to know more about the topic that is being undertaken and helps us to explore future prospects of the organization. Basically it tells what all have been studied while making the project.

To learn about various aspects of ICICI BANK cash management. To gain insights about functioning of ICICI cash management. To explore the future prospects of ICICI cash management.

CHAPTER -1 CORPORATE PROFILE

OVERVIEW ICICI Bank is India's second-largest bank with total assets of Rs. 3,793.01 billion (US$ 75 billion) at March 31, 2011 and profit after tax Rs. 37.58 billion for the year ended March 31, 2011. The Bank has a network of 1,443 branches and about 4,721 ATMs in India and presence in 18 countries. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management.

The ICICI Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has established branches in Belgium and Germany. ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE).

The Bank is expanding in overseas markets and has the largest international balance sheet among Indian banks. ICICI Bank now has wholly-owned subsidiaries, branches and representatives offices in 18 countries, including an offshore unit in Mumbai. This includes wholly owned subsidiaries in Canada, Russia and the UK (the subsidiary through which the hisave savings brand is operated), offshore banking units in Bahrain and Singapore, an advisory branch in Dubai, branches in Belgium, Hong Kong and Sri Lanka, and representative offices in Bangladesh, China, Malaysia, Indonesia, South Africa, Thailand, the United Arab Emirates and USA. Overseas, the Bank is targeting the NRI (Non-Resident Indian) population in particular. ICICI reported a 1.15% rise in net profit to Rs. 1,014.21 crore on a 1.29% increase in total income to Rs. 9,712.31 crore in Q2 September 2011 over Q2 September 2010. The bank's current and savings account (CASA) ratio increased to 28% in 2011 from 25% in 2010.

HISTORY

1955 The Industrial Credit and Investment Corporation of India

Limited (ICICI) was incorporated at the initiative of 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.

1994 ICICI established Banking Corporation as a banking

subsidiary. formerly Industrial Credit and Investment Corporation of India. Later, ICICI Banking Corporation was renamed as 'ICICI Bank Limited'. ICICI founded a separate legal entity, ICICI Bank, to undertake normal banking operations - taking deposits, credit cards, car loans etc.

2001 ICICI acquired Bank of Madura (est. 1943). Bank of Madura

was a Chettiar bank, and had acquired Chettinad Mercantile Bank (est. 1933) and Illanji Bank (established 1904) in the 1960s.

2002 The Boards of Directors of ICICI and ICICI Bank approved

the reverse merger of ICICI, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, into ICICI Bank. After receiving all necessary regulatory approvals, ICICI integrated the group's financing and banking operations, both wholesale and retail, into a single entity. Also in 2002, ICICI Bank bought

the Shimla and Darjeeling branches that Standard Chartered Bank had inherited when it acquired Grindlays Bank. ICICI started its international expansion by opening representative offices in New York and London.

2003 ICICI opened subsidiaries in Canada and the United

Kingdom (UK), and in the UK it established an alliance with Lloyds TSB. 2003 ICICI opened subsidiaries in Canada and the United Kingdom (UK), and in the UK it established an alliance with Lloyds TSB. It also opened an Offshore Banking Unit (OBU) in Singapore and representative offices in Dubai and Shanghai.

2004 ICICI opens a rep office in Bangladesh to tap the extensive 2005 ICICI acquired Investitsionno-Kreditny Bank (IKB), a Russia

trade between that country, India and South Africa.

bank with about US$4mn in assets, head office in Balabanovo in the Kaluga region, and with a branch in Moscow. ICICI renamed the bank ICICI Bank Eurasia. Also, ICICI established a branch in Dubai International Financial Centre and in Hong Kong.

2006 ICICI Bank UK opened a branch in Antwerp, in Belgium.

ICICI opened representative offices in Bangkok, Jakarta, and Kuala Lumpur.

2007 ICICI amalgamated Sangli Bank, which was headquartered

in Sangli, in Maharashtra State, and which had 158 branches in Maharashtra and another 31 in Karnataka State. Sangli Bank had been founded in 1916 and was particularly strong in rural areas.

ICICI also received permission from the government of Qatar to open a branch in Doha.

ICICI Bank Eurasia opened a second branch, this time in St. Petersburg. 2008 The US Federal Reserve permitted ICICI representative office in New York into a branch. to convert its

GRAPHICAL REPRESENTATION OF ICICI GROUP AND SOME GROWTH REPORT OF ICICI BANK

ICICI GROUP

FINANCIAL POSITION

Mar ' 08

Mar ' 09

Mar ' 10

Mar ' 11

Operating income

39,467.92 28,457.13 17,517.83 11,838.10

Material consumed Manufacturing expenses Personnel expenses Selling expenses Administrative expenses Expenses capitalized Cost of sales Operating profit Other recurring income Adjusted PBDIT Financial expenses Depreciation Other write offs Adjusted PBT Tax charges Adjusted PAT Non recurring items Other non cash adjustments Reported net profit Earnings before appropriation Equity dividend Preference dividend Dividend tax Retained earnings

2,078.90 1,750.60 6,447.32 10,276.8 2 5,706.85 65.58 5,772.43 23,484.24 578.35 5,194.08 1,611.73 4,092.12 65.61 4,157.73 5,156.00 1,227.70 149.67 3,778.63

1,616.75 1,741.63 4,946.69 8,305.07 3,793.56 309.17 4,102.73 16,358.5 0 544.78 3,557.95 984.25 2,995.00 115.22 3,110.22 3,403.66 901.17 153.10 2,349.39

1,082.29 840.98 2,727.18 4,650.45 3,269.94 466.02 3,735.96 9,597.45 623.79 3,112.17 556.53 2,532.95 7.12 2,540.07 2,728.30 759.33 106.50 1,862.46

737.41 601.71 1,248.31 2,587.43 2,679.78 448.46 3,128.25 6,570.89 590.36 2,537.88 522.00 2,007.28 -2.08 2,005.20 2,058.29 632.96 90.10 1,335.22

COMPETITORS The financial sector in India has become stronger in terms of capital and the number of customers. It has become globally competitive and diverse aiming, at higher productivity and efficiency. Exposure to worldwide competition and deregulation in Indian financial sector has led to the emergence of better quality products and services. Reforms have changed the face of Indian banking and finance. The banking sector has improved manifolds in terms of capital adequacy, asset classification, profitability, income recognition, provisioning, exposure limits, investment fluctuation reserve, risk management, etc.

Sum of the competitors of ICICI bank from last few years are State Bank of India, Citibank, Canara Bank and HDFC Bank. The details of the competitors are as follows:

State Bank of India was established in the year 1806. It has

network of more than 14,000 domestic and 70 foreign offices and branches. 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 but it has 7236 numbers of ATMs. 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 Citibank was incorporated in the year 1812, when a group

of New York merchants came together to found it. It is an International bank with its operations spreading across many countries. It has more than 100 branches all over the countries and territories around the world, where half of its 1,400 offices and ATMs are over 5,500re in the United States. It has $3.5 billion in assets and approximately 120,000 new customers in the state. It provides various strategic financial advisory services including acquisitions, mergers, financial restructurings, loans, foreign exchange, cash management, etc.

The products and services offered by the bank are Loans, Citibusiness, etc. Banking, Insurance services, Credit cards, Investment, Online services, NRI services, Wealth management

HDFC Bank Limited was incorporated in August 1994.

The bank has a Pan India network of 758 branches in 325 cities and over 1716 ATMs. Net Profit for the year ended March 31, 2006 was Rs. 1,141 crores. It has technical expertise, maintains product quality and has set global standards for itself. The bank has corporate governance and aims to attain fairness for the stakeholders. Some of the products & services offered by the bank are Accounts & Deposits - saving, current & fixed deposits, Private Banking, Loans, Cards - Credit Cards, Debit Cards, Prepaid Cards, Investment & Insurance, Forex Services, Payment Services, Internet Banking etc.

Canara Bank was established in 1906 . The bank, along

with 13 other major commercial banks of India, was nationalized on 19th July, 1969, by the Government of India. It has a network of 2542 branches, spread over 25 States/4 Union Territories of India. Its head office is located in Bangalore, India. In terms of business it is one of the largest nationalized commercial banks in India, with a total business of about Rs. 2 trillion.

CUSTOMERS

This is a common believe among the customers that, credit cards are no longer tools of personal finance. They provide an alternative means of raising working capital for companies, especially in the small and medium sector. Typically, this business segment

operates by availing themselves of overdraft facility against current accounts to meet the credit requirements. However, ICICI's credit card offers them credit for short periods, without waiting for the bank to approve the overdraft. Due to which the customers have some of the follows reactions: Most of the customers say that when they took a home

loan from ICICI Bank, got a credit card free shortly thereafter, without asking for it or having to fill any form. These customers have the impression that the products of this bank must be having several hidden charges which are reveled later on. Similarly many customers say they have been paying annual fee on different companies like Citibank and Standard Chartered bank credit cards for eight years. But they also have been waiving their fee for the last two years. They have got an SBI credit card free, even without asking for it. But this facility is not possible in case of ICICI bank credit card. The customers believe that, the credit card which is recently launched by ICICI Bank i.e. Future card is more beneficial then other credit cards. This card provides lots of benefits and facilities to the customer, who can use the card in all the retail stores of future group. It is a life time free card, at the time of your survey we found that people where more interested to know about this card. Due to recent controversy with ICICI bank the customers have lost faith upon this bank. When we approach them or create an awareness of future card of ICICI Bank, they try to give some reasons like they dont have time or they are busy.

INTRODUCTION: Cash management is a marketing term for certain services offered primarily to larger business customers. It may be used to describe all bank accounts (such as checking accounts) provided to businesses of a certain size, but it is more often used to describe specific services such as cash clearing concentration, zero house facilities. balance accounting, and automated Sometimes, private

banking customers are given cash management services.

Cash Management Services offered. The following is a list of services generally offered by banks and utilized by larger businesses and corporations:

Account Reconcilement Services: Balancing a checkbook can be

a difficult process for a very large business, since it issues so many checks it can take a lot of human monitoring to understand which checks have not cleared and therefore what the company's true balance is. To address this, banks have developed a system which allows companies to upload a list of all the checks that they issue on a daily basis, so that at the end of the month the bank statement will show not only which checks have cleared, but also which have not. More recently, banks have used this system to prevent checks from being fraudulently cashed if they are not on the list, a process known as positive pay.

Armored Car Services: Large retailers who collect a great deal of

cash may have the bank pick this cash up via an armored car , instead of asking its employees to deposit the cash.

Positive Pay: Positive pay is a service whereby the company

electronically shares its check register of all written checks with the bank. The bank therefore will only pay checks listed in that register, with exactly the same specifications as listed in the register (amount, payee, serial number, etc.). This system dramatically reduces check fraud.

Sweep accounts: are typically offered by the cash management

division of a bank. Under this system, excess funds from a company's bank accounts are automatically moved into a money market mutual fund overnight, and then moved back the next morning. This allows

them to earn interest overnight. This is the primary use of money market mutual funds.

Zero Balance Accounting: Companies with large numbers of

stores or locations can very often be confused if all those stores are depositing into a single bank account. Traditionally, it would be impossible to know which deposits were from which stores without seeking to view images of those deposits. To help correct this problem, banks developed a system where each store is given their own bank account, but all the money deposited into the individual store accounts are automatically moved or swept into the company's main bank account. This allows the company to look at individual statements for each store. U.S. banks are almost all converting their systems so that companies can tell which store made a particular deposit, even if these deposits are all deposited into a single account. Therefore, zero balance accounting is being used less frequently.

Wire Transfer: A wire transfer is an electronic transfer of funds. Wire transfers can be done by a simple bank account transfer, or by a transfer of cash at a cash office. Bank wire transfers are often the most expedient method for transferring funds between bank accounts. A bank wire transfer is a message to the receiving bank requesting them to effect payment in accordance with the instructions given. The message also includes settlement instructions. telephone call. The actual wire transfer itself is virtually instantaneous, requiring no longer for transmission than a

Controlled Disbursement: This is another product offered by

banks under Cash Management Services. The bank provides a daily report, typically early in the day, that provides the amount of disbursements that will be charged to the customer's account. This early knowledge of daily funds requirement allows the customer to invest any surplus in intraday investment opportunities, typically money market investments. This is different from delayed disbursements, where payments are issued through a remote branch of a bank and customer is able to delay the payment due to increased float time.

Optimum Utilization of Operating Cash:

Implementation of a sound cash management programme is based on rapid generation, efficient utilization and effective conversation of its cash resources. Cash flow is a circle. The quantum and speed of the flow can be regulated through prudent financial planning facilitating the running of business with the minimum cash balance. This can be achieved by making a proper analysis of operative cash flow cycle along with efficient management of working capital. Cash Forecasting: Cash forecasting is backbone of cash planning. It forewarns a business regarding expected cash problems, which it may encounter, thus assisting it to regulate further cash flow movements.

Cash Management Techniques: Every business is interested in accelerating its cash collections and decelerating cash payments so as to exploit its scarce

cash resources to the maximum. There are techniques in the cash management which a business to achieve this objective. Liquidity Analysis: The importance of liquidity in a business cannot be over emphasized. If one does the autopsies of the businesses that failed, he would find that the major reason for the failure was their usability to remain liquid. Liquidity has an intimate relationship with efficient utilization of cash. It helps in the attainment of optimum level of liquidity.

Profitable Deployment of Surplus Funds Due to non-synchronization of ash inflows and cash

outflows the surplus cash may arise at certain points of time. If this cash surplus is deployed judiciously cash management will itself become a profit centre. However, much depends on the quantum of cash surplus and acceptability of market for its short-term investments. Economical Borrowings Another product of non-synchronization of cash inflows and cash outflows is emergence of deficits at various points of time. A business has to raise funds to the extent and for the period of deficits. Rising of funds at minimum cost is one of the important facets of cash management.

Purpose of Cash Management

Cash management is the stewardship or proper use of an entitys cash resources. It serves as the means to keep an organization functioning by making the best use of cash or liquid resources of the organization. The function of cash management at the U.S. Treasury is threefold:

1.

To eliminate idle cash balances. Every dollar held as cash

rather than used to augment revenues or decrease expenditures represents a lost opportunity. Funds that are not needed to cover expected transactions can be used to buy back outstanding debt (and cease a flow of funds out of the Treasury for interest payments) or can be invested to generate a flow of funds into the Treasurys account. Minimizing idle cash balances requires accurate information about expected receipts and likely disbursements. 2. To deposit collections timely. Having funds in-hand is

better than having accounts receivable. The cash is easier to convert immediately into value or goods. A receivable, an item to be converted in the future, often is subject to a transaction delay or a depreciation of value. Once funds are due to the Government, they should be converted to cash-in-hand immediately and deposited in the Treasury's account as soon as possible.

3.

To properly time disbursements. Some payments must be

made on a specified or legal date, such as Social Security payments. For such payments, there is no cash management

decision. For other payments, such as vendor payments, discretion in timing is possible.

Government vendors face the same cash management needs as the Government. They want to accelerate collections. One way vendors can do this is to offer discount terms for timely payment for goods sold.

TYPES OF CASH MANAGEMENT SERVICES IN ICICI BANK

There are two types of Cash Management Services they are as:

COLLECTIONS :ICICI Bank's Cash Management Services helps you make optimum use of your working capital, leveraging the float between faster collections and just-in-time payments. ICICI Banks vast network across the length and breadth of the country uses superior technology based solutions to deliver speedy, efficient collections. You get customized daily transaction reports and online reports. CMS solutions are customized to your specific needs for the most productive use of your cash flow. The collection services are of two types: 1- Local cheque collections(LCC) and 2- Upcountry cheque collection (UCC).

4. Local Cheque Collections (LCC) Internet Clear Collect

& Internet Swift Collect. Under LCC, they offer collection facility for local cheques from more than 340 own branch locations apart from over 315 tie-up locations and providing funds centrally on guaranteed basis. This service includes location wise MIS, which is available online too. We offer courier pick-up facility, flexible day arrangement, competitive pricing and customized MIS.

5. Upcountry cheque collection (UCC) Internet smart

Collect, Internet quick Collect & Internet Anywhere Collect. Under UCC, we offer collection facility for upcountry cheques, which a customer can draw on any location in India and deposit at more than 340 ICICI Bank centers. We offer a huge network of more than 4,900 locations covering the length and breadth of the country. This network includes our own branch network at more than 340 locations apart from our tie-up locations. Under this product, we offer flexible day arrangement, competitive pricing and customized MIS.

Processing Fees & Other Charges Processing Fees for CMS (cash management system) Facilities : 3%

Other Charges: Charges would be subject to volumes & value of collections / disbursements & Locations for pickup with a maximum limit of Rs. 10/- per 000 subject to minimum charges per instrument. Minimum Charges - Rs 10/- to Rs 30/- per instrument. Courier Charges - maximum of Rs 50/- per instrument Cheque Return Charges - maximum of Rs 500/- per instrument.

PAYMENTS:-

ICICI Bank's Cash Management Services helps you make optimum use of your working capital, leveraging the float between faster collections and just-in-time payments. Our vast network across the length and breadth of the country uses superior technology based solutions to deliver speedy, efficient payments. Our solution is customized to your needs. So you can leave the burden of bulk demand drafts and pay orders, dividend and interest warrants, fund transfers, cheque writing and more to ICICI Bank. You also get customized daily transaction reports and online reports for complete MIS.

Payments/Internet Multi Pay:Under payments, who offers the following services?

Bulk DD/PO printing. DDs can be issued payable at more than 540 locations in India. Remote printing of pay orders at 46 major centers.

Fund Transfers. Cheque writing. Benefiiciry advices. A secure technology platform to meet bulk payment requests from ERP integration.

client quickly.

At Par Payments Internet Safe Pay Make payments through dividend warrants, interest warrants, refund orders, redemption warrants, etc. These warrants are payable at par at the centers/locations selected by you. You can avail of this service through over 340 ICICI Bank locations and 200 correspondent bank locations. You get monthly reconciliation statement showing the account status and unpaid list of warrants on a monthly basis. I-Safe Pay offers you a complete solution for executing your payments through different modes including Warrants, Demand Drafts / PO, ECS, Direct Credit, Swift Remittances and Foreign DD. Cash Management to benefit from Electronic Payments

The new electronic payment products and services offer the corporate clients an improved bottom line by helping manage cash requirements. It helps corporate to make the best use of their funds and provides an effective means of managing their financial requirements.

Several of the trends in cash flow forecasting favor the use of electronic payment products like Electronic Funds Transfer (EFT) and card payments. Improved technology and systems integration makes it more attractive to use electronic payment products because these methods of payment can be incorporated into firm-wide computing systems. Electronic payments and cards provide control over incoming funds, and allow companies to limit access to these funds to authorized parties. In addition, limiting corporate purchases to electronic payments makes it easier for firms to monitor cash outflows and prevent unauthorized expenditures, because these payments are easier to document and provide an audit trail.

From the perspective of a Corporate, the electronic payment systems ensure speed and security of the transaction processing chain, from verification and authorization to clearing and settlement. Also it gives a great deal of freedom from more costly labor, materials, and accounting services that are required in paper-based processing, better management of cash flow, inventory, and financial planning due to swift bank payments.

BANK OF INDIA (BoI) & ICICI Bank Tie Up For Cash Management

The state-owned Bank of India (BoI) has entered into a strategic correspondent banking arrangement with ICICI Bank for making use of the formers wide branch network covering 1,000 branches for the latters cash management services. BoI expects an Rs 2,000-crore turnovers through the arrangement which will generate fee-based income for it. The Mumbai-based BoI has its cash management service available at 29 operating branches and 11 polling branches. More centres are being set up to provide wider coverage to corporates. ICICI Bank, with its network of 409 branches and extension counters, (another 100 ICICI centres will be converted into branches in the future) and over 1,000 ATMS, is making efforts to spread into larger part of the country via correspondent-banking relationship with more public sector banks to implement its retail focus. The second largest bank in the country is also one of the top 12 internet banks in the world. Recently, it took over two branches of StanChart Grindlays in Shimla and Darjeeling with a deposit base of over Rs 100 crore. BoI has a tie-up with ICICI Prudential Life Insurance the insurance subsidiary of ICICI Bank to provide reference of its customers to the life risk firm. BoI charges a referral fee for the service. The scheme is being piloted at seven centers, covering 70 branches, which will be expanded to other centers in a phased manner. Bank of India has been constantly exploring uncharted viable and profitable business opportunities. Well distributed branch network and

wide customer base are the banks strength. These are being leveraged for generating new business to augment fee income. Meanwhile, BoI has entered into a strategic tie-up with the Securities Trading Corporation of India in facilitating secondary market sale of government securities to retail investors through the banks branches. The bank has taken several initiatives in providing value additon through various products and services to satisfy the needs of the customers using technology to its full advantage. Multi-branch banking project of the bank has been extended to cover around 194 branches in five cities which will give the operational flexibility to the customers. The bank is also in the advanced stage of covering another 80 branches within the network. The bank has already commissioned 48 ATMs (both on-site and off-site) and another 102 ATMs are at various stages of implementation through an outsourcing model.

SOILED AND MUTILATED CURRENCY

NOTES Members of public are hereby informed that the Reserve Bank of India (RBI) has authorized all branches of public sector banks and all currency chest branches of private sector banks to accept and exchange all types of soiled/mutilated notes of all denominations. Refund value of such notes in exchange is, however, paid as per RBI (note Refund) Rules, 1975. With a view to render better service to the public the exchange facility for mutilated notes is also offered by RBI through TLR (Triple Lock Receptacle) covers. Members of public can obtain from the Enquiry Counter of all the Regional offices of RBI such TLR cover and put their notes in the cover with particulars and deposit them in the respective RBI office against a paper token. This box is kept at the Enquiry counter at each Issue Office of RBI. The admissible exchange value of the mutilated notes will be remitted by means of a bank draft or a pay order. Mutilated notes can also be sent to any of the RBI Offices by registered/insured post. Notes which have become excessively soiled, brittle or burnt and therefore cannot withstand normal handling can be tendered only at Issue Office of the RBI. Persons holding such notes may approach the Officerin-Charge of the Claims Section, Issue Department of the Reserve Bank for this purpose. The facilities provided to the members of public for exchange of their soiled, mutilated etc. notes are as under.

Soiled Notes

Soiled notes are those which have become dirty and slightly cut. Notes which have numbers on two ends, i.e. notes in the denomination of Rs.10 and above which are in two pieces, are also treated as soiled note. The cut in such notes, should, however, not have passed through the number panels. All these notes can be exchanged at the counters of any public sector bank branch, any currency chest branch of a private sector bank or any Issue Office of the Reserve Bank of India. There is no need to fill any form for doing this.

Mutilated Notes Notes which are in pieces and/or of which the essential portions are missing can also be exchanged. Essential portions in a currency note are name of issuing authority, guarantee, promise clause, signature, Ashoka Pillar emblem/portrait of Mahatma Gandhi, water mark. Refund value of these notes is, however, paid as per RBI (Note Refund) Rules. These can also be exchanged at the counters of any public sector bank branch, any currency chest branch of a private sector bank or any Issue Office of the RBI without filling any form.

GUIDELINES FOR ASSESSMENT OF MUTILATED NOTES There are three categories of redemption value of a mutilated note as follows :(i) Full value should be awarded to any piece of note which is more than two-thirds (2/3) in size of the original note or; (ii) Half value should be awarded to any piece of note which is more than half (1/2) but less than two-thirds (2/3) in size of the original note.

(iii) No value should be awarded to any piece of note which is less than half (1/2) in size of the original note.

Other facilities for exchange To suit public convenience, the exchange facility for mutilated notes is also offered through TLR (Triple Lock Receptacle) covers. Members of public can obtain from the Enquiry Counter of the Reserve Bank a TLR cover and put their notes in the cover with particulars, such as, name, address, denominations of notes deposited, etc. filled in the columns provided on the cover, close it and deposit it in a box called Triple Lock Receptacle against issue of a paper token. This box is kept at the Enquiry counter at each Issue Office of the Reserve Bank. The admissible exchange value of the mutilated notes will be remitted by means of a bank draft or a pay order. Mutilated notes can also be sent to any of the RBI offices by registered/insured post.

Excessively soiled, brittle, burnt notes Notes which have become excessively soiled, brittle or are burnt and, therefore, cannot withstand normal handling can be exchanged only at Issue Office of the RBI. Persons holding such notes may approach the Officer-in-charge of the Claims Section, Issue Department of the Reserve Bank for this purpose. Minting & Issue

The Government of India has the sole right to mint coins. The responsibility for coinage vests with the Government of India in terms of the Coinage Act, 1906 as amended from time to time. The designing and minting of coins in various denominations is also the responsibility of the Government of India. Coins are minted at the four India Government Mints at Mumbai, Alipore(Kolkata), Saifabad(Hyderabad), Cherlapally (Hyderabad) and NOIDA (UP). The coins are issued for circulation only through the Reserve Bank in terms of the RBI Act. Denominations Coins in India are presently being issued in denominations of 10 paisa, 20 paisa, 25 paisa, 50 paisa, one rupee, two rupees and five rupees. Coins upto 50 paisa are called 'small coins' and coins of Rupee one and above are called 'Rupee Coins'. Coins can be issued up to the denomination of Rs.1000 as per the Coinage Act, 1906.

Distribution Coins are received from the Mints and issued into circulation through its Regional Issue offices/sub-offices of the Reserve Bank and a wide network of currency chests and coin depots maintained by banks and Government treasuries spread across the country. The RBI Issue Offices/sub-offices are located at Ahmedabad, Bangalore, Belapur (Navi Mumbai), Bhopal, Bhubaneshwar, Chandigarh, Chennai, Guwahati,

Hyderabad, Jammu, Jaipur, Kanpur, Kolkata, Lucknow, Mumbai, Nagpur, New Delhi, Patna and Thiruvananthapuram. These offices issue coins to the public directly through their counters and also send coin remittances to the currency chests and small coin depots. There are 4422 currency chest branches and 3784 small coin depots spread throughout the country. The currency chests and small coin depots distribute coins to the public, customers and other bank branches in their area of operation. The members of the public can approach the RBI offices or the above agencies for requirement of coins. Measures to improve the supply of coins

The various Mints in the country have been modernized and upgraded to enhance their production capacities. Government has in the recent past, imported coins to augment the indigenous production. Notes in denomination of Rs.5 have been reintroduced to supplement the supply of coins.

New initiatives for distribution

Coin Dispensing Machines have been installed at select Regional Offices of the Reserve Bank on pilot basis. Dedicated Single-window counters have been opened in several of the Reserve Bank's offices for issuing coins of different denominations packed in pouches. Mobile counters are being organized by the Reserve Bank in commercial and other important areas of the town where soiled notes can be exchanged for coins.

Research Methodology Research is a process through which we attempt to achieve systematically and with the support of data the answer to a question, the resolution of a problem, or a greater understanding of a phenomenon. This process, which is frequently called research methodology, has eight distinct characteristics: 1. Research originates with a question or problem. 2. Research requires a clear articulation of a goal. 3. Research follows a specific plan of procedure. 4. Research usually divides the principal problem into more manageable sub problems. 5. Research is guided by the specific research problem, question, or hypothesis. 6. Research accepts certain critical assumptions. 7. Research requires the collection and interpretation of data in attempting to resolve the problem that initiated the research. 8. Research is, by its nature, cyclical; or more exactly, helical. Descriptive research is used in this project report in order to know about cash management services to clients and determining their level of satisfaction. This is the most popular type of research technique,

generally used in survey research design and most useful in describing the characteristics of consumer behavior. The methods used were following:

Questionnaire method Direct Interaction with the clients.

MODE OF DATA COLLECTION

Primary Data: - The sources of Primary data was questionnaire

Secondary data: - the sources of secondary data were internet, books and newspaper articles.

RESULT AND ANALYSIS

1) Are you aware of ICICI bank straight to bank services? (a) Yes (b) No

Analysis of the above diagram

Its very good for the ICICI bank as most of the population is aware of the cash management services provided by the bank. The bank can look into companies as to propose its services to the concerned company personals.

2. (a) (b) (c) (d)

In which company bank do you have your account? Axis Bank ICICI Bank HSBC Bank standard chartered Bank

Analysis of the above diagram

From the above diagram it can be easily inferred that ICICI bank is facing neck to neck competition from HSBC Bank and it should keep on improving to remain at the top position.

3. (a) (b)

Are you satisfy with your company services? Yes No

Analysis of the above diagram

From the above analysis it can be interpreted that most of the companies were satisfied by there CMS provider but still they found few areas of improvement ICICI Bank can give solutions for those areas So as to attain business rom these companies.

4. (a) (b) (c)

What are your main modes making payments? Cheque Cash DD

Analysis of the above diagram

Like premium most of the companies distribute their payments through cheques only DD and cash are made out under special circumstances

5. (a) (b)

Do you reinsure your polices? Yes No

Analysis of the above diagram Most of the companies re-insure themselves from one another or by a reinsurer it helps them to reduce risk on there part ICICI Bank can look into to the opportunity to become the re-insuring bank as its quite rewarding

CASE STUDY (ICICI BANK) GROUND REALITIES: The ABC Ltd. is a FMCG Company. The company has presence in more than 15 cities and has its head quarter in Mumbai. The company has Depots at these cities. And each depot has some turnover every month. The name of Cities, the monthly turns over of the each depots and no. Of retailers in each cities are as follows: Sr. No. Cities Monthly Turnover (Rs. In Crore) 1 2 3 4 5 6 7 8 9 10 11 12 13 Mumbai New Delhi Calcutta Madras Ahmedabad Banglore Hyderabad Pune Jaipur Indore Cochin Agra Jalandhar 1.5 1.25 1.00 0.75 0.75 0.70 1.00 0.50 0.60 0.75 0.50 0.50 0.40 200 180 175 180 150 160 155 140 150 120 130 120 110 No. of Retailers

14 15 16

Jammu Nagpur Lucknow

0.10 0.10 0.10

115 135 140

The requirements of the ABC Ltd. are as follows:

1.

All money should be deposited at ABC Ltd. a/c at New All money should be collected on the next day basis. Details of cheques deposited at different location on daily Location No. of cheques deposited Cheque number Cheque amount Date of deposit Clearing date Retailer name/code

Delhi.
2.

3. basis:

Returned cheques Date Reason Location Amount

4. 5. 6.

Courier pick-up service at each location. Monthly reports of each location about sales, collection, Other MIS reports

expenditures etc.

ANALYZING PROCESS: These are the conditions and facts of the organization. Now, what the bank will do? I have taken the case of ICICI BANK Cash Management Service. This is regarding how the bank makes deal with the company.

The ICICI BANK will analyze the location of the company. The ABC Ltd. has sixteen locations in the country. This is not always possible to have the branches at each location of the client for the banks. In this case, we are taking the assumptions as follows: In 10 locations of the company, the bank has its own presence. In 2 locations of the company, the bank has tie-up with correspondent bank And in remaining 4 locations, the bank has no presence as well as no tie-up with any other bank.

1 How the bank makes allocation of the different instruments?

The bank broadly categorized the instruments into two types: I. Local Cheque Collections (LCC)

LCC are the cheques, which are drawn and deposited at the same location. Eg. A Cheque drawn at Jaipur and deposited at Jaipur only. The LCC is again categorised into two types: 1) LCC BRN: A local Cheque which is drawn and deposited at the same location where the bank has its own presence. 2) LCC COR: A local Cheque which is drawn and deposited at the same location where the bank doesnt have its own presence but has tied up with correspondent Bank.

II.

Upcountry Cheque Collections (UCC) The UCC are the cheques, which are drawn and deposited at

different locations. Eg. A Cheque drawn at Jaipur and deposited at Delhi.

The UCC is again categorised into three types: 1) UCC BRN: An upcountry Cheque which is drawn at one location and deposited at another location where the bank has its own presence.

2) UCC COR: An upcountry Cheque which is drawn at one location and deposited at another location where the bank has tie-up with correspondent Bank.

3)

UCC ONW: An upcountry Cheque which is drawn at one location and deposited at another location where the bank neither has its own presence nor have tie-up with correspondent bank.

PRICING: Pricing is competitive; varies from centre to centre. It also varies from instruments to instruments.

Special pricing can be worked out taking into account the volume of funds & the centres. The pricing part of the CMS is very complex. Normally, the ICICI bank takes into account the following factors while going for pricing:

1) Bank In Funds/ Out of Funds & Correspondent Bank Charges:

When Cheque is deposited in the bank it passes through the clearing house. In India, clearing is done through RBI, SBI and PNB banks. The RBI has presence in 15 cities in India while SBI has 938 locations in India including its associates. Other cities where clearing house is not there, the clearing is done through Correspondent Bank, mostly these are PNB Banks or Co-operative Banks.

Suppose I deposit the Cheque on day 0, then the time taken by the clearing houses to debit the bank account would be different. The ICICI BANK has to debit its customers account on the next day basis irrespective of days to clear.

Day

when

the Clearing Bank

Days which is out fund

for Bank bank Fund/Out Fund

In of

Cheque will be credited Day1 Day2 RBI SBI

0 1

Not out of funds 1 Day out of funds

Day3

Correspondent Bank

1 Day out of funds

In this case, the bank charges interest on the money which it gives in form of Credit Against Uncleared Cheque, to the company. When it comes to the Correspondent bank, the bank has to pay extra charges to these banks. It depends upon the Banks.
2)

Overheads: The bank takes into account the outstanding charges, which occurs in the process. The outstanding charges include salary, administration charges, maintenance etc.

3) Margin: After including the transaction and other outstanding charges, the bank gets the cost of transaction. On this the bank adds its margin for being in the business.

In pricing, other elements like courier charges return cheques etc. also considered. Pricing in CMS in generally negotiable between the company and the Bank. Features of ICICI Bank CMS: Exclusive Cash Management Process desks with infrastructure Debit Transfers Courier pick-up at branches No collection a/cs needed at branches Customized Reports Transmission of data through Internal LAN system Direct credit to accounts Benefits to Customers: Centralized Control of cash Cost reduction Enhanced Liquidity Interchange of Information between treasury & operating units Reduced excess cash balance Cash forecasting & scheduling Effective control over disbursements Timely & effective investments

LIMITATIONS OF THE REPORT Following are the limitations faced by me during this project:
1. The allotted time period for the research study was relatively

insufficient. 2. The study might not produce absolutely accurate results as it was based on a sample taken from the population. .CONCLUSION The study allowed us get answers regarding the service awareness among people and the problems it faces. The key findings and analysis of the research are as follows:.

All the respondents wanted to carry out the banking needs at their convenience. This means the service caters the banking needs that customers generally require.

Few of the respondents were aware about the service which was desired by 100% respondents clearly showing that there has been a fault in its promotion and awareness strategies.

Customers were not aware that the service was a free one, this is clear that almost all the attributes of the services are favorable to the customers still customers are not using the service and are not even aware of it.

Almost all customers once educated about the service readily enrolled for it whereas a mere portion did not trust the bank and thought that the bank would have some hidden charges that they are not putting forward.

RECOMMENDATIONS We suggest following measures, which ICICI Bank could take so as to take on heavy competition from HSBC Bank, SBI, PNB and other Banks: Try to reduce cost, so that benefits can be passed on to customers.

 ICICI Bank should provide competitive prices as now-a-days a lot business is being acquired by SBI, AXIS bank and HSBC bank and ICICI is facing a lot competition from these banks. ICICI Bank should contact with their clients regularly for knowing the problems faced by them. This will help ICICI Bank in providing best services to customers. This will result in additional customer base by getting further references from satisfied clients.

REFERENCES Books/ Magazines: Managerial Decision Modeling with spreadsheets Nagraj Balakrishnan, Barry Render & Ralph M. Stair Business Research Methods William G. Zikmund Business today

Websites:

www.icicibank.com www.inc.com www.investopedia.com

www.google.com

APPENDIXE QUESTIONNAIRE Dear Respondent, I am student of Apeejay Institute of Technology, School of Management, Greater Noida. I am doing this research to know awareness of Cash Management Services. 1. (a) (b) Are you aware of ICICI bank straight to bank services? Yes No

2. (a) (c) (e)

In which company bank do you have your account? Axis bank HSBC Bank HDFC Bank (b) (d) ICICI Bank SBI Bank

3. (a) (b)

Are you satisfy with your company services? Yes No

4. (a) (b) (c) 5. (a) (b)

What are your main modes making payments? Cheque Cash DD Do you reinsure your polices? Yes No

Personal Information

Name: Age: Sex: ( ) Male ( ) Female

Phone No: Occupation: