A

Project Study Report

On

Training Undertaken at

ICICI BANK, Jaipur

Titled

“Customer Awareness About Safe

Banking ”

Submitted in partial fulfillment for the

Award of degree of

Master of Business Administration

Submitted By: Submitted To:

Amit Kumar Nagori Dr.Kavaldeep Dixit
(MBA/07/1348) Professor, ISIM

INTERNATIONAL SCHOOL OF INFORMATICS AND MANAGEMENT, JAIPUR

2007-09

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2
 PREFACE
Theoretical study combined with practical knowledge makes the
Learning meaningful and enables the individual to develop self- Confidence
because theoretical knowledge is always incomplete without its practical
implication like gun without bullet .seeing the necessity that the student
could know and take opportunity for practical exposures of the business
world.
As a part of course curriculum, project report is compulsory for all the
student of MBA. It is true that work experience in an organization of repute
adds an extensive knowledge and exposure to the individual.
The practical exposure makes the individual learn about the actual
Fieldwork. It makes him realize that not only the theory but also the
knowledge of the market is as important as the former. During the training
period the student learns through this own experience, the real situation of
the corporate world and put his theoretical knowledge into practice. This
experience is valuable for the student and plays a leading and an important
role in his career.
The starting days of the project training were very difficult but we
were full of joy and enthusiasm, and had the spirit to excel. Those days of
beginning were devoted to simply understand the services i.e. customer
awareness and satisfaction, coordinating with the office and later on with the
team. It was totally a new and different experience for me. Slowly and
steadily, as I started learning about customer perception, I realized that it
was not an easy task to do something commendable. Yet, I was determined
to achieve my objective.
The overall experience, exposure, knowledge and teamwork were a
great satisfaction for me. at this point (after the completion of the project
training ) I realized that there is no other and better way to learn the thing
expect practical experience.

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 ACKNOWLEDGEMENT

I express my sincere thanks to my Project Guide Mr. Mohit Gupta,

Manager, and Customer care Department for guiding me right from the
inception till the successful completion of the Project. I sincerely
acknowledge him for extending his valuable guidance, support for literature,
critical reviews of project and the report and above all the moral support he
had provided to me with all stages of this project.

I would also like to thank the supporting staff Mrs. Soniya Sharma,
Development Manager, Mr. Vikas Chodhari, Assistant Manager, for their
help and cooperation throughout our project.

Amit Kumar Nagori

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 EXECUTIVE SUMMARY

The Project was undertaken as a part of project in Customer Care

Department at ICICI Bank for 20 Days. The project studies were conducted
at different branches and ATM centre, of Jaipur.

The objectives of the project were as follows:

 To study & increase the “Customer awareness” for

 Better utilization of services.

 Increase Awareness.
 Aware customer about Safe Banking.

 To study how customers effectively utilize banking services .

 To study and Evaluate Credit card usage.

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 CONTENTS

1. Introduction to the Industry…………………………………….8-42

a) Banks in India
b) Banking services in India
c) Banking Reforms in India
2. Introduction to the Organization………………………………43-84
a) ICICI Group
b) ICICI Bank Limited
3. Research Methodology………………………………………85-105

4. Facts and Findings………………………………………….106-117

5. Analysis…………………………………………………………118

6. SWOT ANALYSIS………………………………….……..119-120

7. Conclusion………………………………………………………121

8. Recommendation and Suggestions……………………………...122

9. Bibliography…………………………………………………….123

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7
Introduction
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
 Nationalisation 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 nationalised 14 private banks in the mentioned year. This has
been elaborated in Nationalisationof 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 are
given on this page.

Banks In India
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 In India the banks are being segregated in different groups. Each
group has their own benefits and limitations in operating in India. Each has
their own dedicated target market. Few of them only work in rural sector
while others in both rural as well as urban. Many even are only catering in
cities. Some are of Indian origin and some are foreign players.

All these details and many more is discussed over here. The banks and
its relation with the customers, their mode of operation, the names of banks
under different groups and other such useful informations are talked about.

One more section has been taken note of is the upcoming foreign
banks in India. The RBI has shown certain interest to involve more of
foreign banks than the existing one recently. This step has paved a way for
few more foreign banks to start business in India.

Major Banks in India

 ABN-AMRO Bank

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 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

Major Banks in India

 Indian Bank

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  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

Public Sector Banks In India

Among the Public Sector Banks in India, United Bank of India is one
of the 14 major banks which were nationalised on July 19, 1969. Its

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predecessor, in the Public Sector Banks, the United Bank of India Ltd., was
formed in 1950 with the amalgamation of four banks viz. Comilla Banking
Corporation Ltd. (1914), Bengal Central Bank Ltd. (1918), Comilla Union
Bank Ltd. (1922) and Hooghly Bank Ltd. (1932).

Oriental Bank of Commerce (OBC), a Governmet of India

Undertaking offers Domestic, NRI and Commercial banking services. OBC
is implementing a GRAMEEN PROJECT in Dehradun District (UP) and
Hanumangarh District (Raiasthan) disbursing small loans. This Public
Secotor Bank India has implemented 14 point action plan for strengthening
of credit delivery to women and has designated 5 branches as specialized
branches for women entrepreneurs.

The following are the list of Public Sector Banks in India

 Allahabad Bank
 Andhra Bank
 Bank of Baroda
 Bank of India
 Bank of Maharastra
 Canara Bank
 Central Bank of India
 Corporation Bank
 Dena Bank
 Indian Bank
 Indian Overseas Bank
 Oriental Bank of Commerce
 Punjab & Sind Bank
 Punjab National Bank
 Syndicate Bank
 UCO Bank
 Union Bank of India
 United Bank of India
 Vijaya Bank

List of State Bank of India and its subsidiary, a Public Sector Banks
 State Bank of India
o State Bank of Bikaner & Jaipur
o State Bank of Hyderabad
o State Bank of Indore
o State Bank of Mysore

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 o State Bank of Saurastra
o State Bank of Travancore

Private Sector Banks

first private bank in India to be set up in Private Sector Banks in India
was IndusInd Private banking in India was practiced since the begining of
banking system in India. The Bank. It is one of the fastest growing Bank
Private Sector Banks in India. IDBI ranks the tength largest development
bank in the world as Private Banks in India and has promoted a world class
institutions in India.

The first Private Bank in India to receive an in principle approval

from the Reserve Bank of India was Housing Development Finance
Corporation Limited, to set up a bank in the private sector banks in India as
part of the RBI's liberalisation of the Indian Banking Industry. It was
incorporated in August 1994 as HDFC Bank Limited with registered office
in Mumbai and commenced operations as Scheduled Commercial Bank in
January 1995.

ING Vysya, yet another Private Bank of India was incorporated in the
year 1930. Bangalore has a pride of place for having the first branch
inception in the year 1934. With successive years of patronage and
constantly setting new standards in banking, ING Vysya Bank has many
credits to its account.

List of Private Banks in India

 Bank of Punjab
 Bank of Rajasthan
 Catholic Syrian Bank
 Centurion Bank
 City Union Bank
 Dhanalakshmi Bank
 Development Credit Bank
 Federal Bank
 HDFC Bank
 ICICI Bank
 IDBI Bank
 IndusInd Bank

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  ING Vysya Bank
 Jammu & Kashmir Bank
 Karnataka Bank
 Karur Vysya Bank
 Laxmi Vilas Bank
 South Indian Bank
 United Western Bank
 UTI Bank

Cooperative Banks in India

The Co operative banks in India started functioning almost 100 years
ago. The Cooperative bank is an important constituent of the Indian
Financial System, judging by the role assigned to co operative, the
expectations the co operative is supposed to fulfill, their number, and the
number of offices the cooperative bank operate. Though the co operative
movement originated in the West, but the importance of such banks have
assumed in India is rarely paralleled anywhere else in the world. The
cooperative banks in India play an important role even today in rural
financing. The businesses of cooperative bank in the urban areas also has
increased phenomenally in recent years due to the sharp increase in the
number of primary co-operative banks.
Co operative Banks in India are registered under the Co-operative
Societies Act. The cooperative bank is also regulated by the RBI. They
are governed by the Banking Regulations Act 1949 and Banking Laws
(Co-operative Societies) Act, 1965.

Cooperative banks in India finance rural areas under:

 Farming
 Cattle
 Milk
 Hatchery
 Personal finance

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Cooperative banks in India finance urban areas under:
 Self-employment
 Industries
 Small scale units
 Home finance
 Consumer finance
 Personal finance

Some facts about Cooperative banks in India

 Some cooperative banks in India are more forward than many of the
state and private sector banks.

 According to NAFCUB the total deposits & lendings of Cooperative

Banks in India is much more than Old Private Sector Banks & also the
New Private Sector Banks.
 This exponential growth of Co operative Banks in India is attributed
mainly to their much better local reach, personal interaction with
customers, their ability to catch the nerve of the local clientele.

Regional Rural Banks in India

India. Rural Banks in those days mainly focussed upon the agro
sector. Regional rural banks in India penetrated every corner of the country
and extended a helping hand in the growth process of the country.

SBI has 30 Regional Rural Banks in India known as RRBs. The rural
banks of SBI is spread in 13 states extending from Kashmir to Karnataka
and Himachal Pradesh to North East. The total number of SBIs Regional
Rural Banks in India branches is 2349 (16%). Till date in rural banking in
India, there are 14,475 rural banks in the country of which 2126
(91%) are located in remote rural areas. Apart from SBI, there are other few
banks which functions for the development of the rural areas in India. Few
of them are as follows.

Haryana State Cooperative Apex Bank Limited

The Haryana State Cooperative Apex Bank Ltd. commonly called as

HARCOBANK plays a vital role in rural banking in the economy of
Haryana State and has been providing aids and financing farmers, rural

15
artisans, agricultural labourers, entrepreneurs, etc. in the state and giving
service to its depositors.

NABARD

National Bank for Agriculture and Rural Development (NABARD) is

a development bank in the sector of Regional Rural Banks in India. It
provides and regulates credit and gives service for the promotion and
development of rural sectors mainly agriculture, small scale industries,
cottage and village industries, handicrafts. It also finance rural crafts and
other allied rural economic activities to promote integrated rural
development. It helps in securing rural prosperity and its connected matters.

Sindhanur Urban Souharda Co-operative Bank

Sindhanur Urban Souharda Co-operative Bank, popularly known as

SUCO BANK is the first of its kind in rural banks of India. The impressive
story of its inception is interesting and inspiring for all the youth of this
country.

United Bank of India

United Bank of India (UBI) also plays an important role in regional

rural banks. It has expanded its branch network in a big way to actively
participate in the developmental of the rural and semi-urban areas in
conformity with the objectives of nationalisation.

Syndicate Bank was firmly rooted in rural India as rural banking and
have a clear vision of future India by understanding the grassroot realities.
Its progress has been abreast of the phase of progressive banking in India
especially in rural banks.

Foreign Banks In India

Foreign Banks in India always brought an explanation about the
prompt services to customers. After the set up foreign banks in India, the
banking sector in India also become competitive and accurative.

New rules announced by the Reserve Bank of India for the foreign
banks in India in this budget has put up great hopes among foreign banks
which allows them to grow unfettered. Now foreign banks in India are

16
permitted to set up local subsidiaries. The policy conveys that forign banks
in India may not acquire Indian ones (except for weak banks identified by
the RBI, on its terms) and their Indian subsidiaries will not be able to open
branches freely. Please see the list of Foreign banks in India till date.

List of Foreign Banks in India

 ABN-AMRO Bank
 Abu Dhabi Commercial Bank
 Bank of Ceylon
 BNP Paribas Bank
 Citi Bank
 China Trust Commercial Bank
 Deutsche Bank
 HSBC
 JPMorgan Chase Bank
 Standard Chartered Bank
 Scotia Bank
 Taib Bank

By the year 2009, the list of foreign banks in India is going to become
more quantitative as number of foreign banks are still waiting with baggage
to start business in India.

Upcoming Foreign Banks in India

By 2009 few more names is going to be added in the list of foreign
banks in India. This is as an aftermath of the sudden interest shown by
Reserve Bank of India paving roadmap for foreign banks in India greater
freedom in India. Among them is the world's best private bank by
EuroMoney magazine, Switzerland's UBS.

The following are the list of foreign banks going to set up business in
India

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  Switzerland's UBS
 US-based GE Capital
 Royal Bank of Scotland
 Credit Suisse Group
 Industrial and Commercial Bank of China

Merrill Lynch is having a joint venture in Indian investment banking

space -- DSP Merrill Lynch. Goldman Sachs holds stakes in Kotak
Mahindra arms.

GE Capital is also having a wide presence in consumer finance through

GE Capital India.

India's GDP is seen growing at a robust pace of around 7% over the next
few years, throwing up opportunities for the banking sector to profit from.

The credit of banks has risen by over 25% in 2004-05 and the growth
momentum is expected to continue over the next four to five years.

Participation in the growth curve of the Indian economy in the next four
years will provide foreign banks a launch pad for greater business expansion
when they get more freedom after April 2009.

Banking services in India

With years, banks are also adding services to their customers. The
Indian banking industry is passing through a phase of customers market. The
customers have more choices in choosing their banks. A competition has
been established within the banks operating in India.

With stiff competition and advancement of technology, the services

provided by banks has become more easy and convenient. The past days are
witness to an hour wait before withdrawing cash from accounts or a cheque
from north of the country being cleared in one month in the south.

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 This section of banking deals with the latest discovery in the banking
instruments along with the polished version of their old systems.

Banking services

 Bank Account 
 Plastic Money 
 Loans 
 Money Transfer 
 Visa Money Transfer

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 separate 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 separately.

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.

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 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.

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 businesses 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 licenses to new private sector banks as part of the
liberalization process. The RBI has also been granting licenses 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 constraint 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

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 corporate

sanctioned by term-lending institutions.

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 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 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
dematerialization 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

21
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 unsavory
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 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

22
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.

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 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,

23
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 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

24
client or broker relationship more transparent which included separation of
client and broker accounts.

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

25
probably move towards 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.

Reserve Bank of India (RBI)

Reserve Bank of India (RBI) is the central bank of the country and is different
from Central Bank of India.

RBI Governor announces Mid-term Review of Annual Policy for 2006-07

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.

26
 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.

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

27
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 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

28
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 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

29
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 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

30
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 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

31
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 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.

Easy Banking

This section is fully dedicated to the Tech Banking. A decade

before, it was tough to belief that banking secctor will be at a finger tip. Now
its possible. A mobile hand set with a connection is the only instrument
needed to make a gateway to your banking transaction, the latest innovation
of technology.

Apart from the Mobile Banking, including of SMS Banking, Net

Banking and ATMs are the major steps taken by the banks in India towards
modernisation. With all these devises and systems, there is a complete
freedom to experience.

Check your account, transfer your fund, make payments and what
more, do anything of everything what has been followed in physical banking
since ages. But this time no standing for hours in front of cash counter and
no time boundation in withdrawing your own money.

Banking Services for NRIs in India

Almost all the Indian Banks provide services to the NRIs. There are different
types of accounts for them. They are:

32
  Non-Resident (Ordinary) Account - NRO A/c
 Non-Resident (External) Rupee Account - NRE A/c
 Non-Resident (Foreign Currency) Account - FCNR A/c

An Indian resident who is earning forign exchange can also maintain

Foreign Currency account in the country with an authorised dealer bank but
only to the maximum limit of 50% of such foreign exchange earnings under
the Exchange Earners Foreign Currency Account (EEFC) Scheme.
Some of the FAQs given below will make it easy to understand the services
provided by banks to the NRIs.

FAQ for NRIs

a. What are the special features of each bank account?

b. Can Non Resident accounts be opened/ operated by the Power of

Attorney holder in India, on behalf of the non-resident?
c. What happens to the status of these accounts when the non-resident
holder becomes a person, resident in India?
d. What are the various facilities available to NRIs/OCBs?
e. Are NRIs permitted to send remittances outside India out of the assets
in India that are inherited by them?
f. Can a person of Indian origin acquire any immovable property in
India by way of inheritance?
g. Can NRIs and Overseas Corporate Bodies (OCBs) invest in India?
h. What is the extent and application of Foreign Exchange Management
Act (FEMA)?
i. What is the penalty for contravention of FEMA?
j. Can a person of Indian origin resident outside India gift properties
acquired earlier in terms of the provisions of FERA/FEMA?
k. Can an NRI account be opened in the name of crew members of
shipping companies?

a. What are the special features of each bank account?

The special features are as under:

NRO A/c.: The funds, credited to this account, cannot be repatriated

outside India in foreign exchange, without prior permission of the
Reserve Bank of India. Interest, earned is eligible for repatriation outside
India, net of Indian taxes. The remittance of interest (net of taxes) will be

33
permitted by the authorised dealer who maintains the account, if the
account holder makes an application to the authorised dealer, in the
prescribed form. No RBI permission is required for remittance of interest.

NRE A/c.: The funds, standing to the credit of this account, as well as
interest earned thereon, are remittable outside India in free foreign
exchange, without permission of the RBI. The interest income is not
subject to Indian Income-tax. Credits to the accounts should be in the
form of remittance in foreign exchange from outside India, as well as
other funds, which are eligible to be remitted outside India, in free
foreign exchange. Funds, emanating from local sources, are not eligible
to be credited to these accounts, unless these funds are otherwise
remittable outside India, in terms of the existing Exchange Control
Regulations.

FCNR A/c.: These accounts can be opened in four foreign currencies:

o Pounds Sterling;
o US Dollars;
o Japanese Yen;
o Euro.

For the purpose of opening an account, remittance in foreign

exchange, in the same currency, should be received in India. The
accounts can be opened only as fixed deposits, with a minimum
maturity of one year and, a maximum maturity of three years. The
principal, as well as interest, earned on these accounts, is remittable
outside India, in the same currency or, in other convertible currency,
as desired by the account holder. The interest, earned on these
deposits, is exempt from Indian Income-tax.

b. Can Non Resident accounts be opened/ operated by the Power of

Attorney holder in India, on behalf of the non-resident?

The accounts cannot be opened by the Power of Attorney holder in India.

However, the latter can operate the accounts for the purpose of local
payments to be made on behalf of the non-resident account holder. The
Power of Attorney holder is not permitted to make gifts from these
accounts and, is not allowed to make remittances outside India.

34
c. What happens to the status of these accounts when the non-
resident holder becomes a person, resident in India?

The accounts are to be re-designed as resident accounts, when the non-

resident account holder becomes a person, resident in India. In the case of
fixed deposits opened by the account holder, before becoming resident in
India, the contracted rate of interest will be paid till maturity of the
deposits. Similarly, FCNR deposits will be eligible to be held in
respective currencies till maturity of the deposits, even after the non-
resident holder become a resident in India. He will, however, cease to get
tax exemption on interest on the erstwhile deposits (NRE/FCNR
deposits), after he becomes resident in India. In certain situations, it
might be advisable for the account holder to convert the account to a
Resident Foreign Currency Account Deposit (RFC)

d. What are the various facilities available to NRIs/OCBs?

The facilities available to NRIs/OCBs for making investment in India

are as follows:
o opening and maintenance of bank accounts in India;
o investment in shares and securities of Indian companies,
government securities, units of domestic mutual funds and
,deposits with Indian companies/firms;
o investment in immovable properties in India;
o investment in proprietorship/partnership concerns in India.

e. Are NRIs permitted to send remittances outside India out of the

assets in India that are inherited by them?

Yes. RBI will consider application from NRIs for remittance of assets,
inherited by them in India. Such remittance may be permitted up to US$
100,000 per year.

f. Can a person of Indian origin acquire any immovable property in

India by way of inheritance?

A person of Indian origin, resident outside India, may acquire any

immovable property in India by way of inheritance from a person,
resident outside India, who had acquired such property in accordance
with the provisions of foreign exchange law in force at the time of
acquisition by him or the provisions of Foreign Exchange Management

35
(Acquisition and Transfer of Immovable Property in India) Regulations,
2000. Immovable property, by way of inheritance, can also be acquired
by a person of Indian origin resident outside from a person resident in
India.

g. Can NRIs and Overseas Corporate Bodies (OCBs) invest in

India?

The Government of India has adopted a liberal policy, with respect to

investments by NRIs and OCBs in India. Such investments are
allowed, both, through the RBI route and also through the
Government route, i.e., through the Foreign Investment Promotion
Board (FIPB) NRIs and OCBs are permitted to invest up to 100%
equity in real estate development activity and civil aviation sectors.
Investment, made by the NRIs and OCBs, are fully repatriable, except
in the case of real estate, which has a 3 year lock-in period on original
investment and, 16% cap on dividend repatriation. For those proposals
that do not qualify under the automatic route, Government approval is
granted through FIPB.

h. What is the extent and application of Foreign Exchange

Management Act (FEMA)?

FEMA extends to the whole of India. It also applies to all branches,

offices and agencies outside India, owned or controlled by a person,
resident in India. It also applies to any contravention, there under,
committed in or, outside India, by any person to whom the Act
applies.
i. What is the penalty for contravention of FEMA?

Any person, contravening FEMA, shall be liable, upon adjudication, to a

penalty up to three times the sum involved in such contravention, where
such amount is quantifiable, or up to Rupees Two hundred thousand,

36
 where the amount is not quantifiable. In addition, where such
contravention is a continuing one, the person will be liable to further
penalty, which may extend to Rupees Five thousand for every day after
the first day, during which the contravention continues.

j. Can a person of Indian origin resident outside India gift

properties acquired earlier in terms of the provisions of
FERA/FEMA?

Yes. A person of Indian origin resident outside India may transfer

residential or commercial property in India by way of gift to a person
resident in India or to a person resident outside India who is a citizen of
India or to a person of Indian origin resident outside India. A Person of
Indian origin resident outside India may also transfer by way of gift
agriculture land/farm house/plantation property in India to a person
resident in India who is a citizen of India.

k. Can an NRI account be opened in the name of crew members of

shipping companies?

Yes, if their posting is not based in India and they derive their income
from other country in foreign currency.

Top Banks in India

With the advancement of technology and the birth of competition,
banks are in the race of becoming the best in the country. With an eye upon
customer satisfaction policy they are providing best of the best services with
the minimum hazards.

Banks like ABN AMRO introduced banking with a coffee. It made a

tie-up with one of the best coffee bar in the country, Barista and remained
open till late evening for customers with a setup of a coffee bar in the
premises.

Few banks have introduced world ATM card to make travellers

across the globe more safe and secure. What else. Internet and Phone
Banking is the call of the day for banks.

37
 In this race towards the best, we have selected top 20 banks in the
country from all segment. It is not the ranking of banks but only for general
information about the top banks in India.

 Abn Amro Bank 

 Allahabad Bank
 American Express Bank 
 Andhra Bank 
 Bank Of India 
 Canara Bank 
 Central Bank Of India 
 Citibank 
 Corporation Bank 
 HDFC Bank 
 HSBC Bank 
 ICICI Bank
 Indian Overseas Bank 
 Oriental Bank Of Commerce 
 Punjab National Bank
 State Bank Of India (SBI) 
 Standard Chartered Bank 
 IDBI
 United Bank Of India
 Axis bank

Indian Banks Association (IBA)

The Indian Banks Association (IBA) was formed on the 26th
September, 1946 with 22 members. Today IBA has more than 156 members
comprising of Public Sector banks, Private Sector banks, Foreign banks
having offices in India, Urban Co-operative banks, Developmental financial
institutions, Federations, merchant banks, mutual funds, housing finance
corporations, etc.

The functioning of IBA

 To promote sound and progressive banking principles and practices.

 To render assistance and to provide common services to members.

38
  To organise co-ordination and co-operation on procedural, legal,
technical, administrative and professional matters.
 To collect, classify and circulate statistical and other information.
 To pool together expertise towards common purposes such as
reduction in costs, increase in efficiency, productivity and improve
systems, procedures and banking practices.
 To project good public image of banking through publicity and public
relations.
 To encourage sports and cultural activities among bank employees.

The Organisational Structure of IBA

The Managing Committee manages the affairs, business and funds

of IBA. The managing Committee is elected by the Ordinary members of the
Association, and is the highest management and policy making body of the
Association.

The Chairman of the Association heads upon the working of the

Association. He provides guidelines to the Association. The administrative
head of IBA is the Chief Executive of IBA. He is also the Secretary to the
Managing Committee. He leads a team of executives, officers and other staff
members.

IBA constitutes standing committees/task forces/ small groups/

committees of experts from member banks for the examining of various
aspects relating to industry level issues to get solutions.

Recommendations of these groups/committees, are communicated

to members with the approval of the managing committee or taken up with
the concerned authorities for action

39
Proxy Banking in India
Indian villages were miles away from mutual funds, insurance and
even equity trading. Thanks to Internet Kiosk and the ATM duo which has
made it possible for rural India. This kiosk has been set up by ICICI Bank in
partnership with network n-Logue Communications in remote villages of
Southern part of the country. This is known as Proxi Banking. With the help
of fibre optic cables, this kiosk works on wireless in local loop technology.

Reasons for setting-up of Proxi Banking

 58% of rural households still do not have bank accounts.

 Only 21% of rural households have access to credit from a formal

source.
 70% of marginal farmers do not have deposit account.
 87% households have no formal credit.
 Only 1% rural househlods rely on a loan from a financial
intermediary. · The loans take between 24 to 33 weeks to get
sanctioned.
 Consumers bribe officials to get loans approved which varies between
10 and 20 per cent of the loan amount.
 Branch banking in rurals is a loss-making.

Benefits to rurals
 Small loans given for buying buffaloes.
 Loans for setting up a tea shop.
 Life and non-life insurance provided.
 Weather insurance given to farmers.
 Insurance policies sold to farmers like groundnut, castor, soya, paddy
crop, etc.

40
 The Proxy Banking is an innovative approach to rural lending and
will add to the government's expanding base of kisan credit cards and the
good old guidelines for agricultural lending.

Fact Files of Banks in India

The first, the oldest, the largest, the biggest, get all such types of
informations about Banking in India in this section.

The first bank in India to be given an ISO Certification Canara Bank

The first bank in Northern India to get ISO 9002 Punjab and Sind
certification for their selected branches Bank
The first Indian bank to have been started solely with Punjab National
Indian capital Bank
The first among the private sector banks in Kerala to South Indian
become a scheduled bank in 1946 under the RBI Act Bank
India's oldest, largest and most successful commercial
bank, offering the widest possible range of domestic, State Bank of
international and NRI products and services, through its India
vast network in India and overseas
India's second largest private sector bank and is now the The Federal Bank
largest scheduled commercial bank in India Limited
Bank which started as private shareholders banks, mostly Imperial Bank of
Europeans shareholders India
The first Indian bank to open a branch outside India in Bank of India,
London in 1946 and the first to open a branch in founded in 1906
continental Europe at Paris in 1974 in Mumbai
The oldest Public Sector Bank in India having branches
all over India and serving the customers for the last 132 Allahabad Bank
years
The first Indian commercial bank which was wholly Central Bank of
owned and managed by Indians India

Bank of India was founded in 1906 in Mumbai. It became the first Indian

41
bank to open a branch outside India in London in 1946 and the first to open
a branch in continental Europe at Paris in 1974.

42
43
ICICI GROUP
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.

3,997.95 billion (US$ 100 billion) at March 31, 2008 and profit after tax of
Rs. 41.58 billion for the year ended March 31, 2008. ICICI Bank is second
amongst all the companies listed on the Indian stock exchanges in terms of
free float market capitalisation*. The Bank has a network of about 1,308
branches and 3,950 ATMs in India and presence in 18 countries.

ICICI Prudential Life Insurance Company is a 74:26 joint

venture with Prudential plc (UK). It is the largest private sector life
insurance company offering a comprehensive suite of life, health and
pensions products. It is also the pioneer in launching innovative health care
products like Diabetes Care and Cancer Care. The company operates on a
multi-channel platform and has a distribution strength of over 2,90,000
financial advisors operating from 1956 branches spread across 1669
locations across the country. In addition to the agency force, it also has tie-
ups with various banks, corporate agents and brokers. In fiscal 2008, ICICI
Prudential attained a market share of 12.7% with new business weighted
premium growth of 68.3% to Rs. 66.84 billion and held assets of Rs. 285.78
billion at March 31, 2008.

44
ICICI Lombard General Insurance Company, a joint venture
with the Canada based Fairfax Financial Holdings, is the largest private
sector general insurance company. It has a comprehensive product portfolio
catering to all corporate and retail insurance needs and is present in over 200
locations across the country. ICICI Lombard General Insurance has achieved
a market share of 29.8% among private sector general insurance companies
and an overall market share of 11.9% during fiscal 2008. The gross return
premium grew by 11.4% from Rs. 30.3 billion in fiscal 2007 to Rs. 33.45
billion in fiscal 2008.

ICICI Securities Ltd is the largest equity house in the country

providing end-to-end solutions (including web-based services) through the
largest non-banking distribution channel so as to fulfill all the diverse needs
of retail and corporate customers. ICICI Securities (I-Sec) has a dominant
position in its core segments of its operations - Corporate Finance including
Equity Capital Markets Advisory Services, Institutional Equities, Retail and
Financial Product Distribution.

ICICI Securities Primary Dealership is the largest primary dealer

in Government securities. In fiscal 2008, it achieved a profit after tax of
Rs.1.40 billion.

ICICI Prudential Asset Management is the second largest mutual

fund with asset under management of Rs. 547.74 billion and a market share
of 10.2% as on March 31, 2008. The Company manages a comprehensive
range of mutual fund schemes and portfolio management services to meet
the varying investment needs of its investors through 235 branches spread
across the country.

45
Incorporated in 1987, ICICI Venture is the oldest and the largest private
equity firm in India. The funds under management of ICICI Venture have
increased at a 5 year CAGR of 49% to Rs.95.50 billion as on March 31,
2008.

*Free float holding excludes all promoter holdings, strategic investments

and cross holdings among public sector entities.

46
47
 OVERVIEW
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
1,442 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 specialised subsidiaries and affiliates in the areas of investment
banking, life and non-life insurance, venture capital and asset management.
The Bank currently has subsidiaries in the United Kingdom, Russia and
Canada, branches in United States, Singapore, Bahrain, Hong Kong, Sri
Lanka, Qatar and Dubai International Finance Centre and representative
offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand,
Malaysia and Indonesia. Our UK subsidiary has established branches in
Belgium and Germany.

ICICI Bank's equity shares are listed in India on Bombay Stock

Exchange and the National Stock Exchange of India Limited and its
American Depositary Receipts (ADRs) are listed on the New York Stock
Exchange (NYSE).

48
History

ICICI Bank was originally promoted in 1994 by ICICI Limited, an

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

After consideration of various corporate structuring alternatives in the

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

49
merger was approved by shareholders of ICICI and ICICI Bank in January
2002, by the High Court of Gujarat at Ahmedabad in March 2002, and by
the High Court of Judicature at Mumbai and the Reserve Bank of India in
April 2002. Consequent to the merger, the ICICI group's financing and
banking operations, both wholesale and retail, have been integrated in a
single entity.

ICICI Bank has formulated a Code of Business Conduct and Ethics

for its directors and employees.

ICICI NETWORK IN WORLD

50
Towards a Better Life

The ICICI Group was formed with the objective of supporting India’s
growth and development. While we have transformed from a development
bank to a diversified financial services group, this vision continues to form
the core of all we do. We partner the growth of Indian business and help
individuals improve their quality of life, through convenient access to
financial products and services. We are focusing on the full spectrum of
financial services needs, from banking in rural areas to banking for the
Indian community overseas. In addition to financial services, we support
initiatives for socio-economic development through projects focused on
healthcare, education and access to markets.
We seek to improve access to opportunity, and the ability to make the most
of it, for businesses and individuals - to help people move towards a better
life.

Vision
To be the leading provider of financial services in India and a major global
bank.

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.

51
Message from the Chairman

The world around us continues to change rapidly. We are seeing a new

world order taking shape, with the locus of the global economy shifting
towards India and China. These two nations are the key drivers of global
growth. The recent turmoil in western economies and the relative insulation
of Asia has heightened this trend. This is a time of opportunity, but also a
time to be conscious of risks as we cannot be wholly immune to the negative
consequences of global developments as well as our many internal
challenges. On balance, the outlook for India continues to support the
expectation of a long period of sustained high growth. In this context, Indian
businesses must be conscious of their role as participants in the
transformation of India. With power and wealth omes the responsibility to
use them judiciously in a way that has a positive impact on society and not
just on a narrow set of stakeholders. India continues to experience internal
issues that are erhaps even more challenging than the potential external
risks. These are the wide disparities in education, access to basic services,
income levels and standards of living among our people; regional and urban-
rural asymmetries in development and economic growth; and the resultant
inability of significant portions of our population to participate in our
country’s extraordinary growth and wealth creation. Indian business must
take cognizance of these issues, and apply its ntrepreneurial capabilities,
strengths in innovation and financial capital to devise and implement
solutions that will accelerate resolution of these problems in a sustainable
manner. We must work towards ensuring that the disadvantaged have equal
opportunity to improve the quality of their lives and are not left behind those
with ready access to the fruits of economic growth. It is heartening to note
that many Indian corporations are indeed thinking along these lines and
taking measures in this direction. What is essential now is industry-wide
collaboration and scaling up of these efforts to ensure that our objectives are
achieved in as accelerated a time-frame as possible. The second dimension
of responsible corporate behaviour is the maintenance of ethical standards in
the functioning of organisations. As businesses experience rapid growth with
increasing complexity and diversification, it is important to build and sustain
core values of upholding law and regulation and being fair in dealings with
all stakeholders. This is an ongoing and evolving process and no
organisation can claim perfection on these parameters. However, what they
must and can do is to ensure that the core values are clear and the ground

52
rules are laid down, and that the organizational structure and governance
process has mechanisms that incentivise appropriateness in all actions of the
organisation. On this aspect as well, it is a matter of satisfaction to see the
evolution and maturity of the governance standards of Indian business. By
and large, Indian business has recognised the critical importance of good
governance, in all its dimensions. Social responsibility and ethical behaviour
are not inconsistent with narrower objectives of profitability and shareholder
wealth maximisation. Indeed, they are critical to sustainable, long-term
value creation. Contributing to an ecosystem that empowers people to
participate productively in the economy creates new growth opportunities
for business; maintaining high ethical standards ensures healthy market
behaviour and the primacy of legitimate economic forces. At the ICICI
Group, we view our social initiatives and our ethical standards as core
elements of the foundation we are building for our growth. During the year,
we have sought to take our social initiatives to the next level through the
establishment of The ICICI Foundation for Inclusive Growth. We believe
that this will significantly expand the ICICI Group’s activities in the area of
corporate social responsibility, philanthropy and community development.
The Foundation will seek to catalyse and accelerate social and economic
inclusion by bridging economic and human development gaps. The ICICI
Group will continue to leverage growth opportunities in India and overseas,
seek to make a significant contribution to the integrated development of our
country and build a platform for sustained growth that will create value for
our stakeholders.

N. VAGHUL
Chairman
.

SUBSIDIARY COMPANIES
At March 31, 2008, ICICI Bank had 17 subsidiaries as listed below:

Domestic Subsidiaries
 ICICI Securities Limited
 ICICI Securities Primary Dealership Limited
 ICICI Prudential Life Insurance Company Limited
 ICICI Lombard General Insurance Company Limited

53
  ICICI Prudential Asset Management Company Limited
 ICICI Prudential Trust Limited
 ICICI Venture Funds Management Company Limited
 ICICI Home Finance Company Limited
 ICICI Investment Management Company Limited
 ICICI Trusteeship Services Limited

International Subsidiaries
 ICICI Bank UK PLC
 ICICI Bank Canada many Indians secure.
 ICICI Wealth Management Inc.
 ICICI Bank Eurasia Limited Liability Company
 ICICI Securities Holdings Inc.
 ICICI Securities Inc.
 ICICI International Limited

Business Overview

ECONOMIC OVERVIEW
The last year has witnessed significant developments in the global
economy. Following the deterioration in the US sub-prime housing loan
market, the US economy is expected to experience a sharp slowdown in
growth. The Federal Reserve has reduced its forecast for US GDP growth in
calendar year 2008 from the 1.3%–2.0% range to between 0.3%–1.2%.
Growth in the Euro zone remained above expectations at 0.8% in the first
quarter of calendar year 2008. However, downside risks to growth remain on
account of adverse financial market conditions and increases in energy and
food prices. Growth in China moderated slightly during the first quarter of
calendar year 2008 to 10.6% as compared to 11.7% during the same period
last year.
During fiscal 2008, the Indian economy continued on its high growth path,
despite some moderation due to difficult conditions in global markets and
increasing inflationary pressures and monetary tightening. The Central
Statistical Organisation (CSO) put GDP growth at 9.0% during fiscal 2008
following the 9.6% GDP growth in fiscal 2007, reflecting a slight
moderation in growth of the economy. Growth in fiscal 2008 was driven
mainly by double-digit growth in the services sector and growth in the
industrial sector. The Index of Industrial Production (IIP) recorded an annual

54
average growth rate of 8.1% in fiscal 2008, moderating from 11.5% in fiscal
2007. This was mainly due to moderation of growth in the manufacturing
sector from 12.5% in fiscal 2007 to 8.6% in fiscal 2008. The momentum of
growth in the services sector (including construction) continued with 10.7%
growth during fiscal 2008 following the 11.2% growth in fiscal 2007.
Growth in agriculture and allied activities increased 4.5% during fiscal 2008
as compared to 3.8% in fiscal 2007. Inflation remained under control for
most of fiscal 2008 with the annual average rate of inflation as measured by
the Wholesale Price Index easing from 5.3% in fiscal 2007 to 4.4% in fiscal
2008. However, inflationary pressures picked up sharply from March 2008
with the year-on-year rate of inflation increasing from 5.1% for the week
ending March 1, 2008 to 8.8% for the week ending May 31, 2008. The sharp
increase in inflation was mainly due to the higher prices of primary articles,
fuel group items and some manufactured products. The increase in inflation
was in line with global price movements. Global oil prices increased
sharply during fiscal 2008, increasing inflationary pressures experienced on
this account. International crude oil prices increased from US$ 65.87 per
barrel at March 30, 2007 to US$ 101.58 per barrel at March 31, 2008 and
further increased to US$ 135.90 per barrel at June 13, 2008. In view of rising
inflation, Reserve Bank of India (RBI) increased the Cash Reserve Ratio
(CRR) from 6.00% to 7.50% during fiscal 2008 and further to 8.25%
effective May 2008.
India’s exports were US$ 155.5 billion during fiscal 2008, a growth of
23.0% over the previous year. During April–December 2007, exports of
agriculture and allied products recorded a growth of 34.9% and exports of
petroleum products recorded a growth of 37.3%. According to RBI, net
invisibles receipts reached US$ 50.50 billion during the first nine months of
fiscal 2008, a growth of 39.2% over the corresponding period in the previous
year. Growing import demand for capital goods due to the strong investment
climate and the sharp increase in oil prices have led to a deficit in the current
account (US$ 16.05 billion during first nine months of fiscal 2008). Net
Foreign Direct Investment (FDI) into India was US$ 8.40 billion during the
first nine months of fiscal 2008 while net portfolio investment was US$
33.00 billion. Foreign exchange reserves continued to grow, reaching US$
309.16 billion on March 28, 2008. The resilience displayed by the economy
in fiscal 2008, in light of the developments in the global economy and the
sharp increase in global oil and commodity prices, is evidence of the broad-
based and sustainable nature of India’s growth momentum. The investment
pipeline and demand for credit from corporates continue to be robust.

55
Inflation conditions, global developments and external inflows will be key
factors impacting liquidity and interest rates during the current year.
Continued investment in infrastructure, reorienting education and skill-
building to the needs of the new economic drivers and holistic development
of the agricultural sector and the rural economy are the key imperatives to
realise India’s full potential in the long run.

FINANCIAL SECTOR OVERVIEW

The financial sector mirrored the developments in the Indian economy.

Credit growth during fiscal 2008 moderated, given the tightening of interest
rates in the economy. Non-food credit increased by 22.3% in fiscal 2008
compared to 28.0% in fiscal 2007. Based on data published by RBI, at
February 15, 2008, industry accounted for 39.6% of non-food gross bank
credit, retail credit for 24.5%, agriculture and allied activities for 11.7%,
trade for 5.8%, real estate for 2.6% and other sectors for the balance 15.8%.
The credit-deposit ratio remained within the range of 69.0%-74.0% during
fiscal 2008 and was about 73.0% in March 2008. The incremental credit-
deposit ratio was about 71.9% for fiscal 2008 compared to about 86.0% for
fiscal 2007. Deposits of the banking system grew by Rs. 6,029.54 billion, or
22.9%, in fiscal 2008 compared to 24.2% in fiscal 2007. In response to the
increase in the cash reserve ratio and the liquidity conditions, banks have
increased their lending rates. The average yield on 10-year Government
securities increased relatively moderately from 7.8% in fiscal 2007 to 7.9%
in fiscal 2008, given the continued demand for government securities on
account of the mandated holding requirement for banks and other financial
intermediaries. First year retail premium underwritten in the life insurance
sector recorded a growth of 30.7% (on weighted received premium basis) to
reach Rs. 526.59 billion in fiscal 2008 with the private sector’s retail market
share (on weighted received premium basis) increasing from 35.5% in fiscal
2007 to 50.5% in fiscal 2008. The non-life insurance industry was de-
tariffed with effect from January 1, 2007, whereby insurance premiums were
freed from price controls, resulting in a reduction in premium rates and a
negative impact on industry growth. Gross premium in the non-life
insurance sector (excluding specialised insurance institutions) grew by
12.6% to Rs. 281.31 billion in fiscal 2008 as compared to 22.4% growth in
fiscal 2007 with the private sector’s market share increasing from 34.9% in
fiscal 2007 to 39.9% in fiscal 2008. Total assets under management (on

56
average assets basis) of mutual funds grew by 50.0% from Rs. 3,590.97
billion in March 2007 to Rs. 5,385.08 billion in March 2008. Equity markets
remained stable and buoyant during the first half of fiscal 2008, followed by
a period of significant decline in the BSE Sensex on account of
developments in global financial markets. The Sensex continues to remain
volatile, due to global concerns as well as inflationary pressures and other
downside risks to growth. There were a number of key policy developments
in the banking sector during fiscal 2008. Price stability, management of
inflation expectations and stability of financial markets remain the key
monetary policy objectives of RBI. In August 2007, RBI issued guidelines
on external commercial borrowings. The guidelines permit external
commercial borrowings of more than US$ 20 million per company only for
foreign currency expenditure. For rupee expenditure, external commercial
borrowings were permitted only up to US$ 20 million with the prior
approval of RBI. Subsequently in May 2008, RBI increased the limit on
external commercial borrowings for rupee expenditure to US$ 100 million
for the infrastructure sector and US$ 50 million for other sectors. The Basel
II capital adequacy framework became applicable to certain banks including
ICICI Bank from fiscal 2008. The guidelines include an increase in the
minimum Tier-1 CAR from 4.5% to 6.0% and the introduction of capital for
operational risk. In November 2007, RBI issued guidelines for banks
engaging recovery agents asking them to put in place a due diligence process
for engagement of recovery agents. In February 2008, the Government of
India in its budget for fiscal 2009 has announced a debt waiver for small and
marginal farmers. In respect of other farmers, the scheme proposes a one-
time settlement of all overdue loans at 75% of the loan amount. The Indian
financial sector has remained resilient to the adverse developments in global
markets. Given the long-term growth prospects of the Indian economy, the
growth outlook of the financial sector in India continues
to be robust.

ORGANISATION STRUCTURE
Our organisation structure is designed to be flexible and customer-focused.
At the same time, we seek to ensure effective control and supervision and
consistency in standards across the organisation. The organisation structure
is divided into the following principal groups:
 Corporate Centre, comprising financial reporting; planning and
strategy; asset liability management; investor relations; secretarial;
corporate communications; risk management; compliance; internal
audit; legal; financial crime prevention and reputation risk

57
 management; and the Bank’s proprietary trading operations across
various markets.
 Retail Banking Group, comprising the retail liabilities, retail assets
and small enterprises businesses.
 Rural, Micro-banking and Agri-business Group, comprising the rural
and agricultural lending and other banking businesses.
 Wholesale Banking Group, comprising the corporate & investment
banking, project finance and government banking businesses.
 International Banking Group, comprising the Bank’s international
operations, including operations in various overseas markets as well
as products and services for non-resident Indians, international trade
finance, correspondent banking and wholesale resource mobilisation.
 Global Markets Group, comprising our global client-centric treasury
operations.
 Global Operations & Middle Office Groups, which are responsible for
back-office operations, controls and monitoring of our domestic and
overseas operations.
 The Human Resources Management Group is responsible for the
Bank’s recruitment, training, leadership development and other
personnel management functions and initiatives.
 The Technology Management Group (TMG) is responsible for
enterprise-wide technology initiatives, with dedicated technology
teams serving individual business groups and managing information
security and shared infrastructure.
 The Facilities Management & Administration Group is responsible for
management of corporate facilities and administrative support
functions.
 The Organisational Excellence Group is responsible for enterprise-
wide quality and process improvement initiatives.

BUSINESS REVIEW
During fiscal 2008, the Bank continued to grow and diversify its asset base
and revenue streams by leveraging the growth platforms created over the
past few years. We maintained our leadership position in retail credit,
achieved robust growth in our fee income from both corporate and retail
businesses, strengthened our deposit franchise and significantly scaled up
our corporate and international banking operations.

58
Retail Banking
We were among the first banks to identify the growth potential of
retail credit in India. Between 2003 and 2006 the banking system as a whole
saw significant expansion of retail credit, with retail loans accounting for a
major part of overall systemic credit growth. However, due to the increase in
interest rates following inflationary pressures, retail credit growth in the
banking system has moderated from about 30% over the last few years to
about 10–15% currently. We continue to believe that retail credit has robust
long-term growth potential, driven by sound fundamentals, namely, rising
income levels and favourable demographic profile. At the same time, the
retail credit business requires a high level of credit and analytical skills and
strong operations processes backed by technology.
Our retail strategy is centred around a wide distribution network,
comprising our branches and offices, direct marketing agents and dealer and
real estate developer relationships; a comprehensive and competitive product
suite; technology-enabled back-office processes; and a robust credit and
analytical framework.
We are the largest provider of retail credit in India. Our total retail
portfolio was Rs. 1,316.63 billion at March 31, 2008, constituting 58% of
our total loans at that date. During fiscal 2008, we continued our focus on
strengthening our retail deposit franchise to create a stable funding base. Our
current and savings account (CASA) deposits as a percentage of total
deposits increased from 22% at March 31, 2007 to 26% at March 31, 2008,
with savings account deposits increasing by 36% during fiscal 2008.
During the year, we have expanded our branch network substantially.
At March 31, 2008, we had 1,262 branches & extension counters compared
to 755 branches & extension counters at March 31, 2007, including the
addition of about 200 branches through the merger of Sangli Bank. Our
branch network has further increased to 1,367 as of May 31, 2008. We
continued to expand our electronic channels, namely internet banking,
mobile banking, call centres, point of sale terminals and ATMs, and migrate
customer transaction volumes to these channels.
We increased our ATM network to 3,881 ATMs at March 31, 2008
from 3,271 ATMs at March 31, 2007. Our call centres have a total seating
capacity of approximately 6,375 sales and service workstations. Transaction
volumes on internet and mobile banking have grown significantly,
constituting an increasing percentage of total customer Transactions.

59
 During the year, we launched a mobile banking service enabling a
wide range of banking transactions using the mobile phone.
Cross-selling new products and also the products of our life and
general insurance subsidiaries to our existing customers is a key focus area
for the Bank. Cross-sell allows us to deepen our relationship with our
existing customers and helps us reduce origination costs as well as earn fee
income. Our branches and other channels are increasingly becoming
important points of sale for our insurance subsidiaries. In fiscal 2008, about
19% of ICICI Prudential Life Insurance Company’s new business was
generated through ICICI Bank.
We will continue to focus on cross-sell as a means to improve
profitability and offer a complete suite of products to our customers. We
continue to leverage our multi-channel network for distribution of other third
party products like mutual funds, Government of India relief bonds and
initial public offerings of equity. Customer service is a key focus area for the
Bank and we have adopted a multi-pronged approach to continuously
monitor and enhance customer service levels. The Customer Service Council
comprising wholetime directors and senior management meets regularly to
review our customer service initiatives.
We have implemented a structured customer feedback process where
feedback is received from customers through e-mail, mobile messaging and
telephone. We conduct regular training programmes for employees to
improve customer handling and interaction and have incorporated customer
service metrics in performance evaluation. Our service quality team is also
responsible for tracking resolution and turn-around times for service
requests, identifying root causes to be addressed through process
improvements, rewarding achievements in customer service and
institutionalizing learnings from customer feedback. The Customer Service
Committee of the Board of Directors periodically reviews the initiatives
taken by the Bank in this area.

Small Enterprises
During fiscal 2008, our small enterprises customer base increased by 26% to
about 1.1 million accounts. We have introduced our service offerings in over
400 new branches, increasing our coverage to over 1,000 branches. During
the year, we have focused on product specialisation including investment
banking for SMEs. We have continued to focus on shaping the small and
medium enterprises sphere in India through initiatives such as the
“Emerging India Awards”, the SME CEO Knowledge Series - a platform to

60
mentor and assist SME entrepreneurs, and the “SME Dialogue” - a weekly
feature in a leading financial newspaper sharing SME best practices and
success stories. During the year, we have launched several new products and
services like the SME toolkit – an online business and advisory resource for
SMEs.

Corporate Banking
Our corporate banking strategy is based on providing comprehensive
and customised financial solutions to our corporate customers. We offer a
complete range of corporate banking products including rupee and foreign
currency debt, working capital credit, structured financing, syndication and
transaction banking products and services. Our corporate and investment
banking franchise is built around a core relationship team that has strong
relationships with almost all of the country’s corporate houses. The
relationship team is product agnostic and is responsible for managing
banking relationships with clients.
We have also put in place product specific teams with a view to focus
on specific areas of expertise in designing financial solutions for clients.
Through our relationship teams working in tandem with product solution
teams, we have deepened our client relationships across our product
portfolio resulting in significant growth in income and wallet share among
all our top corporate clients, as compared to the previous year. We have
created an integrated Global Investment Banking Group, which is
responsible for working with the relationship team in India and our
nternational subsidiaries and branches, for origination, structuring and
execution of investment banking mandates on a global basis. We have also
restructured our delivery team for transaction banking products by creating
dedicated sales teams for trade services and transaction banking products.
This has been done with the intent to increase our market share from
transaction banking products, which will translate into recurring fee income
for the Bank. We have also focused on increasing market share in trade
finance by leveraging and further strengthening correspondent banking
relationships.
Fiscal 2008 saw continued demand for credit from the corporate
sector, with growth and additional investment demand across all sectors. We
were able to leverage our international presence and deep corporate
relationships to work on overseas acquisitions made by Indian companies
and infrastructure projects in India. During fiscal 2008 we were involved in
75% of outbound mergers and acquisitions deals from India. We are now a

61
preferred partner for Indian companies for syndication of external
commercial borrowings and other fund raising in international markets and
have been ranked number one in offshore loan syndications of Indian
corporates in calendar year 2007. The resurgence of the Indian economy, the
need for infrastructure development and the international expansion of
Indian companies provide exciting opportunities for our corporate banking
business.
We believe that we are well-placed to capitalise on these opportunities
by combining our domestic and international balance sheets, and our credit
and structured financing expertise.

Project Finance
The Indian economy is witnessing significant investments with the
investment pipeline projected at US$ 700.0 billion over the next few years.
Our project finance proposition is based on our constant endeavour to
contribute to the project framework and enhance the bankability of projects
through our innovative structuring skills, sectoral knowledge and robust due
diligence techniques.
In fiscal 2008, we consolidated our lead arranger position across a
variety of signature project finance transactions in diverse sectors and also
forayed into select international project finance transactions. We believe that
there is significant potential in the infrastructure and manufacturing sectors.
The power sector is expected to witness large investments involving
significant capacity additions of more than 70 gigawatts over the next five
years predominantly driven by increased private sector participation. The
ultra mega power projects, increasing interest in hydroelectric generation,
and offering of transmission projects through competitive bidding are
expected to provide attractive funding opportunities. In the transportation
sector, road development is being undertaken across both the national
highways (through the National Highway Development Programme) and the
state highways. The port sector has been witnessing traffic growth of over
14% per annum for the last few years with increased participation of the
private sector and international players.
There is an increased focus on the railways sector with investments
expected in modernization of railway stations, logistic parks and dedicated
freight corridors. The modernisation, upgradation and expansion of metro
and non-metro airports are underway and are expected to provide significant
business opportunities in the future. In addition to the Delhi and Mumbai
airports, which have already been transferred to private developers, the

62
airports at Kolkata and Chennai are also proposed to be modernised through
a suitable model.
Greenfield airports are also proposed to be set up at key business and
tourist destinations, such as Bangalore and Hyderabad, which have already
seen project completion under private management. The telecom sector is
expected to see continued growth given the relatively low teledensity and the
fresh impetus provided by the issuance of new licenses, which would result
in large investments in rollout of new networks alongside the network
expansion of existing service providers. The oil and gas sector is witnessing
activity across the entire value chain, from exploration and production
through increased private sector participation under the New Exploration
Licensing Policy, to setting up of large-scale refineries by both public sector
and private sector players.
The manufacturing sector has seen significant capacity additions
being undertaken and planned including Greenfield projects in steel,
aluminium and cement. Strong growth in infrastructure, real estate and
demand for consumer goods and automobiles is expected to increase the
demand for steel, aluminium and cement. India’s advantage in terms of low
cost of manufacturing and availability of talent has led to several foreign
majors setting up large capacities in auto, auto ancillaries and engineering
industries to meet the growing domestic demand and also as a
manufacturing hub to serve global markets.

International Banking
In 2001, we identified international banking as a key opportunity,
aiming to cater to the cross-border needs of clients and leveraging our
domestic banking strengths to offer products internationally. We have made
significant progress in the international business since we set up our first
overseas branch in Singapore in 2003.
ICICI Bank currently has subsidiaries in the United Kingdom, Russia
and canada, branches in Singapore, Bahrain, Hong Kong, Sri Lanka, Dubai
International Finance Centre, Qatar Financial Centre and the United States
and representative offices in the United Arab Emirates, China, South Africa,
Bangladesh, Thailand, Malaysia and Indonesia. The Bank’s wholly owned
subsidiary ICICI Bank UK PLC has nine branches in the United Kingdom
and a branch each in Belgium and Germany. ICICI Bank Canada has eight
branches including three in Toronto.
ICICI Bank Eurasia LLC has six branches including three branches in
Moscow and one in St. Petersburg. Our international strategy is focused on

63
building a retail deposit franchise, diverse wholesale funding sources and
strong syndication capabilities to support our corporate and investment
banking business; achieving the status of a non-resident Indian (NRI)
community bank in key markets; and expanding private banking operations
for India-centric asset classes. During fiscal 2008, we focused on deepening
our presence in existing overseas locations and expanding our operations in
key markets. In line with our strategy to establish a presence in large
markets with significant savings pools, we entered into Germany through a
branch established by ICICI Bank UK PLC.
We have been able to successfully leverage our technology advantage
to create a growing international deposit base. Total deposits of ICICI Bank
UK PLC and ICICI Bank Canada increased by 76.0% from Rs. 191.28
billion at March 31, 2007 to Rs. 335.86 billion at March 31, 2008. We also
received approval for and ommenced branch operations in the United
States. We have established a strong franchise among NRIs by offering a
comprehensive product suite, technologyenabled access, a wide distribution
network in India and alliances with local banks in various markets.
Currently, we have over 500,000 NRI customers.
We have undertaken significant brand-building initiatives in
international markets and have emerged as a well-recognised financial
services brand for NRIs. We continue to maintain a market share of 25% in
inward remittances to India. During fiscal 2008, we launched innovative
products like instant money transfer and enhanced our focus on customer
relationship management and process automation. Additionally, we also
undertook the development of low cost remittance products in non-India
geographies with correspondent tie-ups for disbursements in over 100 such
geographies. Through our international private banking services, we offer
various products to mass affluent and high networth clients based on their
financial needs and risk appetite.
The offerings range from simple deposits and loans to more
sophisticated structured products, private equity and products giving
exposure to the real estate sector in India.

Rural banking and agri-business

We believe the rural economy has high growth potential and offers
large credit growth opportunities. Towards this end, our suite of products
and services is targeted to address the needs of both the farm and non-farm
sectors. Our retail product suite encompasses loans for crop production,

64
purchase of farm equipment, commodity based finance as well as various
savings, investment and insurance products.
We also offer micro-finance and jewel loans. We have also focused on
enhancing credit to farmers by leveraging on corporate partnerships. For
example, we have partnered with various dairies to provide financing to
farmers for purchase of milch cattle. We also provide credit and banking
services to SMEs active in the agricultural value chain. To enhance our
service quality and product delivery capabilities we have developed a large
network of rural branches which is further augmented by non-branch
channels. Rural banking in India is still at a nascent stage and the
deployment of technology channels and modern banking methods for rural
lending continues to be an evolving process.
In line with our learnings from our rural banking operations, we
undertook a comprehensive review of and realigned our channel
architecture, credit underwriting processes and account management
systems. We have put in place a robust risk management structure to
mitigate and manage credit, operational and fraud risks. Through this, we
aim to create a strong foundation for scaling up of our rural business.

RISK MANAGEMENT
Risk is an integral part of the banking business and we aim at
delivering superior shareholder value by achieving an appropriate trade-off
between risk and returns. The key risks are credit risk, market risk and
operational risk. Our risk management strategy is based on a clear
understanding of various risks, disciplined risk assessment and measurement
procedures and continuous monitoring.
The policies and procedures established for this purpose are
continuously benchmarked with international best practices. We have four
dedicated groups, the Global Risk Management Group (GRMG), the
Compliance Group, Internal Audit Group and the Financial Crime
Prevention and Reputation Risk Management Group (FCPRRMG) which are
responsible for assessment, management and mitigation of risk in ICICI
Bank.
During fiscal 2008, we formed the FCPRRMG to design and
implement appropriate internal controls in respect of anti-money laundering,
fraud prevention and reputation risk management. In addition, the Credit and
Treasury Middle Office Groups and the Global Operations Group monitor
operational adherence to regulations, policies and internal approvals. These
groups are completely independent of all business operations. GRMG is

65
further organised into the Global Credit Risk Management Group, the
Global Market Risk Management Group and the Operational Risk
anagement Group. The internal audit and compliance function are
responsible to the Audit Committee of the Board.

Credit Risk
Credit risk is the risk that a borrower is unable to meet its financial
obligations to the lender. We measure, monitor and manage credit risk for
each borrower and also at the portfolio level. We have standardised credit
approval processes, which include a well-established procedure of
comprehensive credit appraisal and rating. We have developed internal
credit rating methodologies for rating obligors. The rating factors in
quantitative and qualitative issues and credit enhancement features specific
to the transaction. The rating serves as a key input in the approval as well as
post-approval credit processes.
Credit rating, as a concept, has been well internalised within the Bank.
The rating for every borrower is reviewed at least annually. Industry
knowledge is constantly updated through field visits and interactions with
clients, regulatory bodies and industry experts. In our retail credit operations,
all products, policies and authorisations are approved by the Board or a
Board Committee or pursuant to authority delegated by the Board. Credit
approval authority lies only with our credit officers who are distinct from the
sales teams. Our credit officers evaluate credit proposals on the basis of the
approved product policy and risk assessment criteria.
Credit scoring models are used in the case of certain products like
credit cards. External agencies such as field investigation agencies are used
to facilitate a comprehensive due diligence process. Before disbursements
are made, the credit officer conducts a centralised check on the
delinquencies database and review of the borrower’s profile. We
continuously refine our retail credit parameters based on portfolio analytics.
We also draw upon reports from the Credit Information Bureau (India)
Limited (CIBIL).

Market Risk
Market risk is the possibility of loss arising from changes in the value
of a financial instrument as a result of changes in market variables such as
interest rates, exchange rates, credit spreads and other asset prices. Our

66
exposure to market risk is a function of our trading and asset-liability
management activities and our role as a financial intermediary in customer-
related transactions. The objective of market risk management is to
minimize the impact of losses on earnings and equity capital due to market
risk. Market risk policies include the Investment Policy and the Asset-
Liability Management (ALM) Policy.
The policies are approved by the Board of Directors. The Asset-
Liability Management Committee (ALCO) stipulates liquidity and interest
rate risk limits, monitors adherence to limits, articulates the organisation’s
interest rate view and determines the strategy in light of the current and
expected environment. These policies and processes are articulated in the
ALM Policy. The nvestment Policy addresses issues related to investments
in various trading products. The Global Market Risk Management Group
exercises independent control over the process of market risk management
and recommends changes in processes and methodologies for measuring
market risk.
Interest rate risk is measured through the use of re-pricing gap
analysis and duration analysis. Liquidity risk is measured through gap
analysis. We ensure adequate liquidity at all times through systematic funds
planning and maintenance of liquid investments as well as by focusing on
more stable funding sources such as retail deposits. We limit our exposure to
exchange rate risk by stipulating position limits. The Treasury Middle Office
Group monitors the asset-liability position under the supervision of the
ALCO. It also monitors the treasury activities and adherence to regulatory /
internal policy guidelines. The Treasury Middle Office Group is also
responsible for processing treasury transactions, tracking the daily funds
position and complying with all treasury-related management and regulatory
reporting requirements.

Operational Risk
Operational risk is the risk of loss resulting from inadequate or failed
internal processes, people and systems or from external events. Operational
risks in the Bank are managed through a comprehensive internal control
framework. The control framework is designed based on categorisation of all
functions into front-office, comprising business groups; mid-office,
comprising credit and treasury mid-offices; back-office, comprising
operations; and corporate and support functions. RBI has mandated all banks
to develop an operational risk management framework. In accordance with

67
these guidelines, our board of directors has approved an Operational Risk
Management Policy.
The policy is applicable across the Bank including overseas offices
and aims to ensure clear accountability, responsibility and mitigation of
operational risk. We have constituted an Operational Risk Management
Committee (ORMC) to oversee the implementation of the Operational Risk
Management framework. The framework comprises identification of risks,
assessment of controls to mitigate these risks, risks measurement, risks
monitoring and mitigation. We have formed an independent Operational
Risk Management Group to facilitate its implementation.

TREASURY
The treasury operations comprise the balance sheet management
function, the client-related corporate markets business and the proprietary
trading activity. Fiscal 2008 saw the continuation of volatility in interest
rates, varying liquidity conditions, global credit tightening and inflationary
concerns resulting in significant movement in the yield curve at various
points in time. The government bond markets witnessed significant volatility
in yields. The balance sheet management function continued to actively
manage the government securities portfolio held for compliance with SLR
norms to optimise the yield on this portfolio, while maintaining an
appropriate portfolio duration given the volatile interest rate environment.
The focus of our proprietary trading operations was to maximise profits from
positions across key markets including corporate bonds, government
securities, interest rate swap, equity and foreign exchange markets. While
the adverse market conditions in the last quarter of fiscal 2008 had an
adverse impact on equity proprietary trading operations, the Bank capitalised
on the opportunities in the fixed income markets realizing gains on its
portfolio.
The Bank’s overseas branches and subsidiaries also invest in credit
derivatives with a majority of exposures in this portfolio being to Indian
corporates. We provide foreign exchange and derivative products and
services to our customers through our Global Markets Group. These
products and services include foreign exchange products for hedging
currency risk, foreign exchange and interest rate derivatives like options and
swaps and bullion transactions. We also hedge our own exchange rate and
commodity risks related to these products with banking counterparties. In
line with the international expansion of the bank, treasury functions have
been set up in United States, Hong Kong, Sri Lanka, Bahrain, Singapore and

68
the Offshore Banking Unit in Mumbai to support the operations of these
branches.

HUMAN RESOURCES
We believe that it is imperative for industry in general, and the
financial services industry in particular, to invest in preparing industry-ready
human talent to sustain its growth trajectory. During fiscal 2008, we
launched the “Probationary Officer Programme.” It was a first of its kind,
nation wide initiative to provide a career opportunity to aspiring and bright
graduates who would have otherwise been excluded from participating in the
nation’s growth.
The ICICI Group collaborated with Manipal Universal Learning to
create the ICICI Manipal Academy for Banking & Insurance to generate
inclusive employment opportunities for capable, young graduates. It offers a
fully paid one-year residential training programme to more than 800
graduates who have been selected from across India through a rigorous
process. This one-year programme strives to increase efficiency and improve
customer experience by enabling first day employee productivity through
knowledge, skills and grooming inputs. It aims at integrating students into
the ICICI Group ethos and work ethics. Attempting to bridge the skills gap
that exists in India and especially in the banking industry, we launched the
Branch Banking Academy, Wealth Management Academy and Sales
Academy in fiscal 2008. T
hese academies have been launched with the premise that banking
skills can be created and extended to those who have the basic aptitude to
learn. These job-linked, skill-enhancement academies are aimed at
increasing the speed to job. We have effectively deployed certified branch
managers and branch operations managers for all our new branches within
six months through the Branch Leadership Program.
Our training initiatives attempt to build relevant and standardised
knowledge and skills that can be replicated and made accessible to our
distributed employee network easily. In fiscal 2008, we pioneered game-
based learning and simulation in banking. A branch banking simulator and
several game-based modules were created to provide virtual environments
for skills practice and enhance the quality of service delivery. In fiscal 2008,
we explored mobile learning as a channel to provide performance support
through instant learning. This channel, which is easily available to our entire
front line sales team, strives towards resolving all customer queries and
facilitates flawless sales closure.

69
 ICICI Bank was recognised in the global list of Top Companies for
Leaders in 2007, according to a survey conducted by Hewitt Associates in
partnership with the RBL group and Fortune magazine. Our in-house
leadership development programme continues to build leadership talent
within the organisation.

INFORMATION TECHNOLOGY
ICICI Bank continues to deploy technology for use in banking.
Continued focus on leveraging technology has resulted in process
efficiencies and enhanced convenience for customers. The emphasis on an
enterprise view of technology has led to an architecture that is highly aligned
to the changing business environment. During fiscal 2008, we have
augmented our traditional channels with offerings on the mobile and self-
service transaction capability.
With a view to enhance customer convenience and provide services
on a continuous and location independent basis, we have enabled financial
transactions through mobile phones. This allows customers to perform
banking transactions in a secure manner through an application that can be
downloaded on the phone. In order to strengthen decision making in our
asset businesses, we have implemented the business rules engine concept
during the last fiscal. The engine offers rule flows, decision tables, decision
trees and score models for asset product applicants and hence eliminates
subjectivity in decision-making, thereby limiting exposure risks. The
implementation of a comprehensive collections system has been another
development in the retail asset business.
Operations in new branches in Germany and US have been enabled
with standardised systems for banking accounts, internet banking and
regulatory reporting. To support the expansion of private banking and wealth
management businesses in overseas eographies, we have deployed a
comprehensive private banking system. This provides enhanced portfolio
management tools and effective risk management capabilities for our
overseas operations.
We have strengthened our security framework to include the mobile
channel. Effective steps have been taken to control online security threats
such as phishing, frauds and identity thefts. By adopting the transaction
security system at ATMs, all ATM transactions are now end-to-end secure
as per recommended industry standards.

70
KEY SUBSIDIARIES

ICICI Prudential Life Insurance Company

ICICI Prudential Life Insurance Company (ICICI Life) continued to
maintain its market leadership among private sector life insurance
companies with a retail market share of about 12.7% in the overall industry
in fiscal 2008 (on weighted received premium basis) as against 9.1% in
fiscal 2007. ICICI Life’s new business premium (on weighted received
premium basis) grew by 68.3% from Rs. 39.71 billion in fiscal 2007 to Rs.
66.84 billion in fiscal 2008. Life insurance companies worldwide make
losses in the initial years, in view of business set-up and customer
acquisition costs in the initial years as well as reserving for actuarial
liability. While the growing operations of ICICI Life had a negative impact
of Rs. 10.31 billion on the Bank’s consolidated profit after tax in fiscal 2008
on account of the above reasons, the company’s unaudited New Business
Profit (NBP) for fiscal 2008 was Rs. 12.54billion as compared to Rs. 8.81
billion in fiscal 2007. NBP is a metric for the economic value of the new
business written during a defined period. It is measured as the present value
of all the future profits for the shareholders, on account of the new business
based on standard assumptions of mortality, expenses and other parameters.
Actual experience could differ based on variance from these assumptions
especially in respect of expense overruns in the initial years.

ICICI Lombard General Insurance Company

ICICI Lombard General Insurance Company (ICICI General) enhanced its
leadership position with a market share of 29.8% among private sector
general insurance companies and an overall market share of about 11.9%
during fiscal 2008. ICICI General’s gross written premium (excluding share
of motor third party insurance pool) grew by 11.4% from Rs. 30.03 billion in
fiscal 2007 to Rs. 33.45 billion in fiscal 2008. The industry witnessed a
slowdown in growth on account of de-tariffication of the general insurance
industry whereby insurance premiums were freed from price controls,
resulting in a significant reduction in premium rates. The industry also
witnessed the formation of the motor third party insurance pool for third
party insurance of commercial vehicles. Accordingly, all insurance
companies are required to cede 100% of premiums collected and claims
incurred for this segment to the pool. At the end of the year, the results of
the pool are shared by all insurance companies in proportion to their overall
market share in the industry. The motor third party pool had a negative

71
impact of Rs. 0.53 billion on the profit of ICICI General. ICICI General is
also required to expense upfront, on origination of a policy, all sourcing
expenses related to the policy. ICICI General achieved a profit after tax of
Rs. 1.03 billion in fiscal 2008, a growth of 50.5% over fiscal 2007.

ICICI Prudential Asset Management Company

ICICI Prudential Asset Management Company (ICICI AMC) was the
second largest asset management company in India with average assets
under management of Rs. 543.55 billion for March 2008. ICICI AMC
achieved a profit after tax of Rs. 0.82 billion in fiscal 2008, a growth of
69.7% over fiscal 2007.

ICICI Venture Funds Management Company Limited

ICICI Venture Funds Management Company Limited (ICICI Venture)
strengthened its leadership position in private equity in India, with funds
under management of about Rs. 95.50 billion at year-end fiscal 2008. ICICI
Venture achieved a profit after tax of Rs. 0.90 billion in fiscal 2008
compared to Rs. 0.70 billion in fiscal 2007.

ICICI Securities Limited and ICICI Securities Primary Dealership

Limited
The securities and primary dealership business of the ICICI group have been
reorganised. ICICI Securities Limited has been renamed as ICICI Securities
Primary Dealership Limited. ICICI Brokerage Services Limited has been
renamed as ICICI Securities Limited and has become a direct subsidiary of
ICICI Bank. ICICI Securities achieved a profit after tax of Rs. 1.50 billion
and ICICI Securities Primary Dealership achieved a profit after tax of Rs.
1.40 billion, in fiscal 2008.

ICICI Bank UK PLC

ICICI Bank UK PLC (ICICI Bank UK) is a full-service bank offering retail
and corporate and investment banking services in the UK and Europe. ICICI
Bank UK’s total assets increased by 81.4% from US$ 4,868 million at
March 31, 2007 to US$ 8,829 million at March 31, 2008 while total deposits
grew by 84.2% from US$ 2,812 million at March 31, 2007 to US$ 5,180
million at March 31, 2008. ICICI Bank UK’s profit after tax was US$ 38.4
million during fiscal 2008 after taking into account investment valuation
charges.

72
ICICI Bank Canada
ICICI Bank Canada is a full-service direct bank established in Canada as a
wholly-owned subsidiary ofICICI Bank, and offers a wide range of financial
solutions to cater to personal, commercial, corporate, investment, treasury
and trade requirements. ICICI Bank Canada’s total assets increased by
92.3% from US$ 2,002 million at March 31, 2007 to US$ 3,849 million at
March 31, 2008. Total deposits increased by 77.7% from US$ 1,796 million
at March 31, 2007 to US$ 3,191 million at March 31, 2008. ICICI Bank
Canada recorded a net loss of US$ 14.3 million during fiscal 2008, after
taking into account investment valuation charges.

CREDIT RATINGS
ICICI Bank’s credit ratings by various credit rating agencies at March 31,
2008 are given below:
Agency Rating
Moody’s Investor Service (Moody’s) Baa2
Standard & Poor’s (S&P) BBB
Credit Analysis & Research Limited (CARE) CARE AAA
Investment Information and Credit Rating Agency (ICRA) AAA
CRISIL Limited AAA
Japan Credit Rating Agency (JCRA) BBB+

PUBLIC RECOGNITION
The Bank received several awards during fiscal 2008, including the
following:
 ”Best Bank in Asia” by Euromoney
 ”Best Bank in India” by Euromoney
 ”Fabulous 50 companies in Asia” by Forbes Asia
 ”Best Domestic Bank in India” by Asset Triple A
 ”Best Bank of the Year (India)” by The Banker
 ”Best Private Sector Bank” by Outlook Money NDTV Profit Awards
2007
 ”Asia’s Best Financial Borrower 2007“ by Euromoney
 ”Excellence in Remittance Business“ by Asian Banker
 ”Most Preferred Brand” for home loans, auto loans, credit cards and
financial advisory services by Awaaz.
 ”Innovative Technology Award” by CIO
 ”Best Regional Private Bank” by The Banker

73
  ”Excellence in Financial Reporting” by Institute of Chartered
Accountants of India (ICAI) CNBC.

Organisational Excellence
The Organisational Excellence Group (OEG) was set up in 2002 with the
mandate to build and institutionalise quality across the ICICI Group. OEG
has over the years worked towards integrating the local efforts of business
units on a common platform and building a quality strategy and roadmap to
meet the growing needs of the Group. The following have been the major
focus areas of OEG:
 Institutionalise quality across the ICICI Group;
 Work with business units to catalyse improvements;
 Create a culture of quality and continual improvement;
 Build knowledge capability in the domain of quality in business
groups;
 Develop and implement quality practices for the Bank;
 Cross-pollinate best practices among group companies; and
 Remain at the cutting edge in our global search for quality practices.
ICICI Bank was among the first services sector organisation to undertake
enterprise-wide deployment of Five S, an industrial quality methodology in
a services organisation. Today ICICI Bank has more than 1,300 locations
which regularly practice Five S. This simple, yet extremely powerful
technique, has helped in building workplace efficiency and engage teams in
local level improvements. The Bank has developed its own Process
Management Framework (PMF) which is built around the foundations of
leadership, process thinking, training, continual improvement and results.
The processes of the Bank have well-defined metrics and performance is
tracked through dashboards on an ongoing basis.
The leadership of each business unit continuously reviews existing
processes, drives improvements and works towards instilling process
thinking among employees. The organisation believes that Five S and
process management would form the basis of the larger excellence journey
of the Bank and significant efforts continue in instilling and sustaining the
practices of Five S and PMF. The Bank has an improvement engine branded
War on Waste (WoW) under which quality techniques such as Lean and Six
Sigma are used for business improvement. These projects are targeted
towards resolving chronic business difficulties and helping to meet the
strategic objectives of the business units.

74
 In FY 2008, 60 WoW projects were taken up which delivered significant
financial benefits. ICICI Bank is the first financial services company in the
Indian sub-continent to have leveraged “Lean” for operational excellence.
We began the developmental work of applying Toyota principles to a
services context as early as 2003 when it was still at its infancy globally.
Today we have attained expertise in applying lean principles for operational
excellence. These are accomplished through value stream mapping which
identifies inefficiencies in pocesses and is followed by project execution
vehicles called “Lean Breakthroughs” which focus on delivering
mprovements within a period of a week
. So far more than 150 lean breakthroughs have been executed in the ank
and we believe that this will be one of the major improvement vehicles
going forward for the ICICI Group. ver the years, OEG has evaluated and
drawn upon quality techniques practiced by world class companies in he
automobiles, hospitality, financial services, heavy engineering and aviation
sectors. The focus has been to dapt these practices at the ICICI Group. he
Bank recently won the award for the best six sigma project at the
improvement colloquium organised by the ndian Statistical Institute. The
Bank also won two awards at the Five S Excellence competition organised
by the onfederation of Indian Industry.

75
 ICICI BANK PRODUCT AND CUSTOMER
SEGMENTS

PERSONAL BANKING

Loan Product Deposit Product Investment & Insurance

 Auto Loan  Saving a/c  Mutual Fund

 Loan Against  Current a/c  Bonds
Security  Fixed deposit  Knowledge Centre
 Loan Against  Demat a/c  Insurance
Property  Safe Deposit  General and Health
 Personal loan Lockers Insurance
 Credit card  Equity and
 2-wheeler loan Derivatives
 Commercial  Mudra Gold Bar
vehicles finance
 Home loans
 Retail business
banking
 Tractor loan
 Working Capital
Finance
 Construction
Equipment
Finance
 Health Care
Finance

76
  Education Loan
 Gold Loan

Cards Payment Services Access To Bank

 Credit Card  NetSafe  NetBanking

 Debit Card  Merchant  OneView
 Prepaid Card  Prepaid Refill  InstaAlert
 Billpay MobileBanking
 Visa Billpay  ATM
 InstaPay  Phone Banking
----------------------------  DirectPay  Email Statements
----  VisaMoney  Branch Network
Forex Services Transfer
----------------------------  e–Monies
---- Electronic Funds
 Product & Transfer
Services  Online Payment
 Trade Services of Direct Tax
 Forex service
Branch Locater
 RBI Guidelines

77
 WHOLESALE BANKING

Corporate Small and Medium Financial Institutions

Enterprises and Trusts

 Funded  Funded Services BANKS

Services  Non Funded  Clearing Sub-
 Non Funded Services Membership
Services  Specialized Services  RTGS –
 Value Added  Value added submembership
Services services  Fund Transfer
 Internet  Internet Banking  ATM Tie-ups
Banking  Corporate Salary a/c
 Tax Collection
Financial Institutions

Mutual Funds

Stock Brokers

Insurance Companies

Commodities Business

Trusts

78
 NRI SERVICES

Accounts & Deposits Remittances

 Rupee Saving a/c  North America

 Rupee Current a/c  UK
 Rupee Fixed Deposits  Europe
 Foreign Currency Deposits  South East Asia
 Accounts for Returning  Middle East
Indians  Africa
 Others
Quick remit
IndiaLink
Cheque LockBox
Telegraphic/ Wire Transfer
Funds Transfer Cheques/DDs/TCs

Investment & Insurances Loans

 Mutual Funds  Home Loans

 Insurance  Loans Against Securities
 Private Banking  Loans Against Deposits
 Portfolio Investment Scheme  Gold Credit Card

Payment Services Access To Bank

 NetSafe  NetBanking
 BillPay  OneView
 InstaPay  InstaAlert
 DirectPay  ATM
 Visa Money  PhoneBanking
 Online Donation  Email Statements
 Branch Network

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84
 RESEARCH METHODOLOGY

“A Research is a careful investigation or inquiry, especially through search

for new facts in any branch of knowledge. It is a systemized effort to gain
more knowledge.”

Research methodology is a way to systematically solve the research

problem. It may be understood as a science of studying how research is done
scientifically. I it we study the various steps that are generally adopted by a
researcher in studying his research problem along with the logic behind
them. It is necessary for the researcher to know not only the research
methods or techniques but also the methodology. Researcher always needs
to understand the assumptions underline various technique and they need to
know the criteria by which they can decide that certain technique and
procedures will be applicable to certain problems and other will not.

The predefined objective can be achieved by following ways:

1. Studying the awareness of customers.
2. Measuring satisfaction of customers.

TYPE OF RESEARCH:

Personal interview approach was adopted for the project. In this type of
research, the researcher has to contact the person directly to know the
available information and analyze these to make a critical evaluation. The
facts or information required to analyze the data was available in
interviewer’s statements. This was one of the main sources for the project.
The other approach was PERSONNEL RESEARCH. It is based on the
personal knowledge. It is applicable to phenomenon that can be expressed in
terms of words.

85
RESEARCH PROCESS:

Research Process consists of a series of action or steps necessary to

effectively carry out the research and the desired sequencing of these steps.
The various steps, which provided guidelines to the research process
pertaining to the project, are as follows:

 Formulating the research problem

Formulation of research problem involves understanding the problem

thoroughly and rephrasing the same into meaningful terms from an
analytical point of view.

 Extensive literature survey

It is necessary for the researcher to conduct an extensive survey connected

with the problem. For the purpose manual, company records, journals,
published data can be used.

 Development of working hypotheses

Working hypotheses is a tentative assumption made in order to draw out and

rest its logical or empirical consequences.

 Preparing the research design

The researcher will be required to prepare a research i.e. he will have to state
the conceptual structure within which research would be conducted. The
function of research design is to provide the collection of relevant evidence
with minimum expenditure of efforts, time and money.

86
 Determining the sample design

The researcher must decide a way of selecting a sample or what is popularly

known as sample design. The types of sample design are:

 Simple Sampling
 Random sampling
 Systematic Random Sampling
 Stratified Sampling
 Quota Sampling
 Cluster and Area sampling
 Multistage Sampling
 Sequential Sampling

Col l ec t i on of dat a

While deciding the methods of data collection to be used for study the
researcher should keep in mind two types of data viz.

 Primary Data

The Primary data are those, which are collected afresh and for the first time
and thus happen to be original in character.

 Secondary Data

Secondary data means data that are already available i.e. they refer to the
data which have already been collected and segregated by someone else. The
researcher has to determine the various sources of obtaining secondary data.
Secondary data may be published or unpublished in nature.

Published data are available in:

 Publications of central, state and local newspapers

 Publication of foreign government or of international bodies

87
  Technical or trade journals
 Books, magazines and newspapers and Internet
 Public record and statistics, historical documents and sources of
public information.

 Data Collection

Data used for the project was the secondary and primary data.

Analysis of data

Analysis of data can of two types:

 Quantitative analysis
 Qualitative analysis
Thus analysis of data require a number of closely related operations such as
establishment of categories, the application of these categories into raw data
through tabulation, chart and then draw inferences. Analysis work is
generally based on the computation of various percentage, co-efficient etc.
by applying various statistical formulae.

Pr e par ati on of Re por t s

After analysis, the next step is in the preparation of the report. The report has
been prepared according to the report writing principles.
The Objective, clarity in presentation of ideas and the uses of charts have
been maintained throughout the report.
Once the data has been collected, the researcher has to process, analyze and
interpret the same. It was emphasized that the researcher should exercise
good care to ensure that reliable data are not properly processed and
analyzed. Sufficient attention is often not given to these aspects, with the
result that the quality of the report suffers.

88
Editing -The first task in data is editing. It is the process by which data are
prepared for subsequent coding. As it is very subjective process, editing is
the process of examining errors and omission in the collected data and
making necessary in the same this is desirable when there is more
inconsistency in the responses.

Coding - coding is the procedure of classifying the answers to a question in

meaningful categories the symbol used to indicate the categories are called
codes. Coding is necessary to carry out the subsequent operation of
tabulation and analyzing data.

Coding involves two steps:

The first is to specify the different categories or classes into which the
responses are classified. The second step is to allocate individual answers to
different categories.

Tabulation - tabulation comprises of sorting of data into different categories

and counting the number of cases that belongs to each categories One is
unvaried tabulation.

This includes the numbers of responses to one question or to count. It’s very
simplest way to tabulate where two or more variables are involved in
tabulation. It is called bivariate or multivariate tabulation. In marketing
research project, generally both type of tabulation is used.

Analysis and interpretation: - analysis and interpretation are the central steps
in the research process. The goal of analysis is to summaries the collected
data in such a way that they provide answer to questions that triggered while
research. Interpretation is the research for border, meaning of research
finding.

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PICTURE USED FOR CUSTOMR AWARENESS

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QUESTIONNARE

Name-………………………………………………………………………..
Profession-…………………………………………………………………...
Type of account-…………………………………………………………….

(1) Are you keep your PIN and card together?

1. Yes
2. No

(2) Are you give card or account details for any free gift or lottery?
1. Yes
2. No

(3) Are you use cyber cafes for Internet Banking?

1. Always
2. Seldom
3. Never

(4) Are you reply to e-mails which are asking for your password or
PIN?
1. Always
2. Seldom
3. Never

(5) What are you do after using Internet Banking?

1. Log off
2. Exit Browsing
3. Both

(6) Are you draw a line through unused space on the cheque?
1. Always
2. Seldom
3. Never

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(7) Will you report your lost or stolen ATM/credit card immediately?
1. Yes
2. No

(8) Are you check all most important information note before signing
banking documents?
1. Always
2. Seldom
3. Never
(9) Are you take help of strangers for handling your cash?
1. Always
2. Seldom
3. Never

(10) When you open your account in any bank are you take information
about
1. Services provided by your bank for your account. Yes/No
2. Charges for services. Yes/No
3. Penalties. Yes/No

(11) For opening an account how many bank are you compare?
1. No one bank
2. Two bank
3. More than two bank

(12) Are you satisfied with services of ICICI Bank?

1. Yes
2. No

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FACT AND FINDING OF SURVEY
(1) Are you keep your PIN and card together?
A. Yes
B. No

180
160
140
120
100
80 PERSON
60
40
20
0
YES NO

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(2) Are you give card or account details for any free gift or lottery?
A. Yes
B. No

180
160
140
120
100
80 PERSON
60
40
20
0
YES NO

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(3) Are you use cyber cafes for Internet Banking?
A. Always
B. Seldom
C. Never

ALWAYS
10%
SELDOM
20%

NEVER
70%

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(4) Are you reply to e-mails which are asking for your password or
PIN?
A. Always
B. Seldom
C. Never

ALWAYS
5% SELDOM
20%

NEVER
75%

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(5) What are you do after using Internet Banking?
A. Log off
B. Exit Browsing
C. Both

LOG OFF
23%

BOTH
49% EXIT
BROWSI
NG
28%

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 (6) Are you draw a line through unused space on the cheque?
A. Always
B. Seldom
C. Never

NEVER
2%
SELDOM
33%
ALWAYS
65%

(7) Will you report your lost or stolen ATM/credit card immediately?

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 A. Yes
B. No

NO
0%

YES
100%

(8) Are you check all most important information note before signing
banking documents?
A. Always

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 B. Seldom
C. Never

140
120
100
80
60 PERSON

40
20
0
ALWAYS NEVER

(9) Are you take help of strangers for handling your cash?
A. Always
B. Seldom
C. Never

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 140
120

100
80

60 PERSON

40

20

0
ALWAYS NEVER

(10) When you open your account in any bank are you take information
about -
A. Services provided by your bank for your account. Yes/No

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 B. Charges for services. Yes/No

C. Penalties. Yes/No

180
160
140
120
100 A
80 B
60 C
40
20
0
YES NO

(11) For opening an account how many bank are you compare?
A. No one bank
B. Two bank
C. More than two bank

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 120

100

80

60
PERSON
40

20

0
A B C

(12) Are you satisfied with services of ICICI Bank?

A. Yes
B. No

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180
160
140
120
100
80 PERSON
60
40
20
0
YES NO

Analysis
 Out of 200 people being surveyed to know the awareness and
perception about Banking services.
 People were interested in knowing about the Safe Banking.
 People take ICICI bank as higher class person Bank.

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  People are not aware about all services of Bank.

Findings
1. Preference to timely services.
2. High level of satisfaction.
3. Effective services
4. Effective Business Model

Observations
1. Personal relationship is important.
2. Customer base through good services
3. Best customer awareness programs.
4. Problem for the customer who is not aware about penalty and charges.

SWOT ANALYSIS

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 After going through a deep study and serving around so many people
basically investors and borrower and by observations following result came
into being we have classified into company strengths weakness,
opportunities and threats.

Strengths
 The major plus point of ICICI Bank is that being a big organization it
has branches all over the country and world.
 Another major strength of ICICI Bank is it’s dealing in many things
simultaneously that is mutual funds, depositories, gold coins, life
insurance, and general insurance etc.
 Bank has large range of banking services.
 Brand value and image in the market.
 Access to best distribution network.
 Innovative employees and services.

Weakness
 Some people consider a/c opening charges of Rs. 5000 as a constraint.
 Safe Banking articles are published only in English news paper not in
Hindi news paper.
 Office cost is large.
 Time constraint is the biggest constraint in taking up the study.
 Bank has not too much customer from lower middle class.

Opportunities
 ICICI Bank has many opportunities in almost every field it is
working.

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  Bank started Proxy Banking in south. It has opportunity to start it in
all over India.
 To open more branches in rural areas.
 It should create image in lower middle class so that it can find new
customers

Threats
 The main threats to ICICI Bank are from major banks like HDFC
Bank , HSBC Bank , IDBI, SBI, CITY BANK,AXIS BANK etc.

CONCLUSION

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 As been analyzed, people are not completely aware of ICICI Bank
services and the different plan, but when made aware they wanted to
get more information about the services. By this we can say that ICICI
Bank increasing it’s customer segments and it will increase it’s
popularity in lower middle class.

 Customers want best services on their account. And ICICI Bank give
best services to his customers.

 ICICI Bank services are very helpful for the people who want to save
their time in banking operation.

 Its Safe Banking Program is very helpful to people. By this it’s saving
people from fraud.

RECOMMENDATIONS AND
SUGGESTIONS

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  ICICI Bank should increase its branches in rural area by Proxy
Banking program.

 Adequate after opening an account services should be provided to

customer though booklet which have also pictures and instructions.

 Minimum deposit in account should be lowered.

 It should start its safe banking program articles in Hindi news papers.

 It should start services for lower middle class.

 Most of the complain are related from credit card services. So it

should be improved.

BIBLIOGRAPHY
Books

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  Kothari C.R., Research Methodology, New Delhi,Wishwa Prakashan,
2004
 Madura Jeff, financial Institutions & Markets, Florida, Thomson
South-western, 2007.
 Damania Sunil,”Customer Satisfaction” Dalal Street, vol-22
Dec10th 2008.

Magazines
 Business Today
 Business India
 Economic Tmes
 Material provided by the company
 Survey

Web sites
 www.icici.com
 www.moneycontrol.com
 www.amfi.com
 www.indiamat.com

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