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PREFACE
ICICI Bank
2
Enroll No-A150006990
ACKNOWLEDGEMENT
3
Sandeep Kumar Pathak
M.B.A. Final Year
Enroll No-A150006990
Table of content
Chapter no. PARTICULARS Page no.
Acknowledgement 3
Preface 4
1. Introduction Of Banking 6-18
a. Introduction of banking…………………. 7
b. History of banking in India……………… 8
c. Banks in India…………………………… 11
d. Fact files of banks in India……………… 17
e. Indian banking industry…………………. 18
2. Company’s Profile 19-55
a. Introduction to ICICI Bank………… 21
b. ICICI Bank today…………………… 27
c. Business profile……………………... 28
d. Board of directors…………………… 29
e. Board committee……………………. 30
f. Business objective…………………… 31
g. Technology used in ICICI Bank…….. 32
h. Products and services………………... 34
i. Awards and recognition……………… 54
3. Research Methodology 56-62
a. Objective of study…………………… 58
b. Importance of study…………………. 58
c. Meaning of research………………… 59
d. Research problem…………………… 59
e. Research design……………………... 60
f. Data collection method……………… 61
g. Analysis and interpretation of data….. 62
h. Limitation of study………………….. 62
4. Financial Analysis 63-92
a. Introduction of the topic………………. 64
b. Method/Tools of financial analysis……. 67
c. Balance sheet of ICICI Bank….. 73
d. Profit and Loss Account of ICICI
Bank…………………………….. 75
e. Financial statement analysis…………… 76
1) Comparative financial
statement………………………. 76
2) Trend
analysis……………………. 79
3) Ratio
analysis…………………….. 80
4
5. Findings ,Suggestions And 93-98
Conclusion……………………….
6. Bibliography………………………………………… 99-100
Chapter 1
INTRODUCTION OF BANKING
INTRODUCTION OF BANKING
Definition Of Bank:
Banking Means "Accepting Deposits for the purpose of lending or Investment of deposits
of money from the public, repayable on demand or otherwise and withdraw by cheque,
draft or otherwise."
-Banking Companies (Regulation) Act,1949
BANK” :
ORIGIN OF THE WORD “
The origin of the word bank is shrouded in mystery. According to one view point the
Italian business house carrying on crude from of banking were called banchi bancheri"
According to another viewpoint banking is derived from German word "Branck" which
mean heap or mound. In England, the issue of paper money by the government was
referred to as a raising a bank.
ORIGIN OF BANKING :
Its origin in the simplest form can be traced to the origin of authentic history. After
recognizing the benefit of money as a medium of exchange, the importance of banking
5
was developed as it provides the safer place to store the money. This safe place ultimately
evolved in to financial institutions that accepts deposits and make loans i.e., modern
commercial banks.
Without a sound and effective banking system in India it cannot have a healthy
economy.The banking system of India should not only be hassle free but it should be able
to meet new challenges posed by the technology and any other external and internal
factors.
For the past three decades India's banking system has several outstanding achievements
to its credit. The most striking is its extensive reach. It is no longer confined to only
metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even
to the remote corners of the country. This is one of the main reasons of India's growth
process.
Banking in India has its origin as early or Vedic period. It is believed that the transitions
from many lending to banking must have occurred even before Manu, the great Hindu
furriest, who has devoted a section of his work to deposit and advances and laid down
rules relating to the rate of interest. During the mogul period, the indigenous banker
played a very important role in lending money and financing foreign trade and
commerce.
During the days of the East India Company it was the turn of agency house to carry on
the banking business. The General Bank of India was the first joint stock bank to be
established in the year 1786. The other which followed was the Bank of Hindustan and
Bengal Bank. The Bank of Hindustan is reported to have continued till 1906. While other
two failed in the meantime. In the first half of the 19th century the East India Company
established there banks, The bank of Bengal in 1809, the Bank of Bombay in 1840 and
the Bank of Bombay in1843. These three banks also known as the Presidency banks were
the independent units and functioned well. These three banks were amalgamated in 1920
and new bank, the Imperial Bank of India was established on 27th January, 1921.
With the passing of the State Bank of India Act in 1955 the undertaking of the Imperial
Bank of India was taken over by the newly constituted SBI. The Reserve Bank of India
(RBI) which is the Central bank was established in April, 1935 by passing Reserve bank
of India act 1935. The Central office of RBI is in Mumbai and it controls all the other
banks in the country.
In the wake of Swadeshi Movement, number of banks with the Indian management were
established in the country namely, Punjab National Bank Ltd., Bank of India Ltd., Bank
of Baroda Ltd., Canara Bank. Ltd. on 19th July 1969, 14 major banks of the country were
6
nationalized and on 15th April 1980, 6 more commercial private sector banks were taken
over by the government.
The first bank in India, though conservative, was established in 1786. From 1786 till
today,the journey of Indian Banking System can be segregated into three distinct phases.
They areas mentioned below:
New phase of Indian Banking System with the advent of Indian Financial &
Banking Sector Reforms after 1991.
To make this write-up more explanatory, I prefix the scenario as Phase I, Phase II and
Phase III.
Phase I
The General Bank of India was set up in the year 1786. Next came Bank of Hindustan
and Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of
Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency
Banks.
These three banks were amalgamated in 1920 and Imperial Bank of India was established
which started as private shareholders banks, mostly Europeans shareholders.
In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab
National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and
1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank,
and Bank of Mysore were set up. Reserve Bank of India came in 1935.
During the first phase the growth was very slow and banks also experienced periodic
failures between 1913 and 1948. There were approximately 1100 banks, mostly small. To
streamline the functioning and activities of commercial banks, the Government of India
came up with The Banking Companies Act, 1949 which was later changed to Banking
Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of
India was vested with extensive powers for the supervision of banking in India as the
Central Banking Authority.
During those day’s public has lesser confidence in the banks. As an aftermath deposit
mobilization was slow. Abreast of it the savings bank facility provided by the Postal
department was comparatively safer. Moreover, funds were largely given to traders.
7
Phase II
Government took major steps in this Indian Banking Sector Reform after independence.
In1955, it nationalized Imperial Bank of India with extensive banking facilities on a large
scale especially in rural and semi-urban areas. It formed State Bank of India to act as the
principal agent of RBI and to handle banking transactions of the Union and State
Governments all over the country.
Seven banks forming subsidiary of State Bank of India was nationalized in 1960 on 19th
July,1969, major process of nationalization was carried out. It was the effort of the then
Prime Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country
was nationalized.
Second phase of nationalization Indian Banking Sector Reform was carried out in 1980
with seven more banks. This step brought 80% of the banking segment in India under
Government ownership.
The following are the steps taken by the Government of India to Regulate
BankingInstitutions in the Country:
After the nationalization of banks, the branches of the public sector bank India rose to
approximately 800% in deposits and advances took a huge jump by 11,000%.
Banking in the sunshine of Government ownership gave the public implicit faith and
immense confidence about the sustainability of these institutions.
Phase III
This phase has introduced many more products and facilities in the banking sector in its
reforms measure. In 1991, under the chairmanship of M Narasimham, a committee was
set up by his name which worked for the liberalization of banking practices.
The country is flooded with foreign banks and their ATM stations. Efforts are being put to
give a satisfactory service to customers. Phone banking and net banking is introduced.
The entire system became more convenient and swift. Time is given more importance
than money.
8
The financial system of India has shown a great deal of resilience. It is sheltered from any
crisis triggered by any external macroeconomics shock as other East Asian Countries
suffered. This is all due to a flexible exchange rate regime, the foreign reserves are high,
the capital account is not yet fully convertible, and banks and their customers have
limited foreign exchange exposure.
BANKS IN INDIA
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 information’s 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.
9
(2) Scheduled Cooperative Banks
Public Sector Banks
Public sector banks are those banks which are owned by the Government. The Govt. runs
these Banks. In India 14 banks were nationalized in 1969 & in 1980 another 6 banks were
also nationalized. Therefore in 1980 the number of nationalized bank 20. At present there
are total 26 Public Sector Banks in India (As on 26-09-2009). Of these 19 are
nationalised banks, 6(STATE BANK OF INDORE ALSO MERGED RECENTLY)
belong to SBI & associates group and 1 bank (IDBI Bank) is classified as other public
sector bank. Welfare is their primary objective.
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Private Sector Banks
These banks are owned and run by the private sector. Various banks in the country such as ICICI
Bank, HDFC Bank etc. An individual has control over there banks in preparation to the share of
the banks held by him.
Private banking in India was practiced since the beginning of banking system in India. The first
private bank in India to be set up in Private Sector Banks in India was IndusInd Bank. It is one of
the fastest growing Bank Private Sector Banks in India. IDBI ranks the tenth largest development
bank in the world as Private Banks in India and has promoted 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 liberalization 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
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Old Private Sector Banks New Private Sector Banks
Foreign Banks In India
12
ABN AMRO Bank N.V.
Abu Dhabi Commercial
Bank Ltd HSBC (Hongkong &
American Express Bank Shanghai Banking
Antwerp Diamond Bank Corporation)
Arab Bangladesh Bank JPMorgan Chase Bank
Bank International Krung Thai Bank
Indonesia Mashreq Bank
Bank of America Mizuho Corporate Bank
Bank of Bahrain & Kuwait Oman International Bank
Bank of Ceylon Shinhan Bank
Bank of Nova Scotia Société Générale
Bank of Tokyo Mitsubishi Sonali Bank
UFJ Standard Chartered Bank
Barclays Bank State Bank of Mauritius
BNP Paribas
Calyon Bank
ChinaTrust Commercial
Bank
Citibank
DBS Bank
Deutsche Bank
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Cooperative banks in India
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
fulfil, 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 plays an important role even today in rural financing. The businessess 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.
Rural banks in India
Rural banking in India started since the establishment of banking sector in 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.
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 artisans, agricultural labourers, entrepreneurs,
etc. in the state and giving service to its depositors.
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NABARD
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 (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
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.
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Fact Files of Banks in India
The first Bank in India to be given an ISO certification. Canara Bank
The first Bank in Northern India to get ISO 9002 certification Punjab and Sind
for their selected branches. Bank
The first Indian Bank to have been started solely with Indian capital. Punjab National
Bank
The first among the Private Sector Banks in Kerala to become Scheduled South Indian Bank
Bank in 1946 under the RBI act.
India’s oldest,largest and the most successful commercial bank offering the State Bank of India
widest possible rang of domestic,international and NRI products and
services,through its vast network in India and overseas.
India’s second largest Private Sector Bank and is now the largest scheduled The Federal Bank
commercial bank in India. Limited
The first Indian Bank to open a branch outside India in London in 1946 and Bank of India,
the first to open a branch in continental Europe at Paris in 1974 founded in 1906 in
Mumbai.
The oldest Public Sector Bank in India having branches all over India and Allahabad Bank
serving the customers for the last 132 years.
The first Indian Commercial Bank which was wholly owned and managed by Central Bank of
Indians. India
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INDIAN BANKING INDUSTRY
The Indian banking market is growing at an astonishing rate, with Assets expected to
reach US$1 trillion by 2010. An expanding economy, middleclass, and technological
innovations are all contributing to this growth.
The country’s middle class accounts for over 320 million People. In correlation with the
growth of the economy, rising income levels, increased standard of living, and
affordability of banking products are promising factors for continued expansion.
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Chapter 2
Type Private
BSE & NSE:ICICI,
COMPANY’S PROFILE
NYSE: IBN
Industry Banking
Insurance
Capital Markets and allied
industries
K.V. Kamath,Chairman
Chanda Kochhar, Managing
Director & CEO
Key people Sandeep Bakhshi, Deputy Managing
Director
N.S. Kannan, Executive Director &
CFO
K. Ramkumar, Executive Director
Sonjoy Chatterjee, Executive
Director
History Of ICICI
1955: The Industrial Credit and Investment Corporation of India
Limited (ICICI) was incorporated at the initiative of World Bank,
the Government of India and representatives of Indian industry,
with the objective of creating a development financial institution
for providing medium-term and long-term project financing to
Indian businesses. Mr.A.Ramaswami Mudaliar elected as the first
Chairman of ICICI Limited. ICICI emerges as the major source of
foreign currency loans to Indian industry. Besides funding from the
World Bank and other multi-lateral agencies, ICICI was also
among the first Indian companies to raise funds from international
markets.
1967 : ICICI made its first debenture issue for Rs.6 crore, which
was oversubscribed.
1969 : The first two regional offices in Calcutta and Madras set up.
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1978 : Mr. James Raj appointed the fourth Chairman of ICICI.
1982 : 1982 : ICICI became the first ever Indian borrower to raise
European Currency Units. : ICICI commences leasing business.
1997 : ICICI Ltd was the first intermediary to move away from
single prime rate to three-tier prime rates structure and introduced
yield-curve based pricing. : The name The Industrial Credit and
20
Investment Corporation of India Ltd changed to ICICI Ltd. : ICICI
Ltd announced the takeover of ITC Classic Finance.
1998 : Introduced the new logo symbolizing a common corporate
identity for the ICICI Group. : ICICI announced takeover of
Anagram Finance.
1999 : ICICI launched retail finance - car loans, house loans and
loans for consumer durables. : ICICI becomes the first Indian
Company to list on the NYSE through an issue of American
Depositary Shares.
2000 : ICICI Bank became the first commercial bank from India to
list its stock on NYSE.
2001: ICICI acquired Bank of Madura (est. 1943). Bank of Madura
was a Chettiar bank, and had acquired Chettinad Mercantile Bank
(est. 1933) and Illanji Bank (established 1904) in the 1960s. 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.
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2004 : Max Money, a home loan product that offers the dual
benefit of higher eligibility and affordability to a customer,
introduced. : Mobile banking service in India launched in
association with Reliance Infocomm. : India’s first multi-branded
credit card with HPCL and Airtel launched. : Kisan Loan Card and
innovative, low-cost ATMs in rural India launched. : ICICI Bank
and CNBC TV 18 announced India’s first ever awards recognizing
the achievements of SMEs, a pioneering initiative to encourage the
contribution of Small and Medium Enterprises to the growth of
Indian economy. : ICICI Bank opened its 500th branch in India. :
ICICI Bank introduced partnership model wherein ICICI Bank
would forge an alliance with existing micro finance institutions
(MFIs). The MFI would undertake the promotional role of
identifying, training and promoting the micro-finance clients and
ICICI Bank would finance the clients directly on the
recommendation of the MFI. : ICICI Bank introduced 8-8 Banking
wherein all the branches of the Bank would remain open from
8a.m. to 8 p.m. from Monday to Saturday. : ICICI Bank introduced
the concept of floating rate for home loans in India. At the same
time, ICICI opened a representative office in Bangladesh to tap the
extensive trade between that country, India and South Africa.
2006 : ICICI Bank became the first Indian bank to issue hybrid
Tier-1 perpetual debt in the international markets. : ICICI Bank
subsidiary set up in Russia. ; Introduced a new product - ‘NRI
22
smart save Deposits’ – a unique fixed deposit scheme for
nonresident Indians. : Representative offices opened in Thailand,
Indonesia and Malaysia. ; ICICI Bank UK opened a branch in
Antwerp, in Belgium ; ICICI Bank became the largest retail player
in the market to introduce a biometric enabled smart card that
allow banking transactions to be conducted on the field. A low-cost
solution, this became an effective delivery option for ICICI Bank’s
micro finance institution partners. ; Financial counseling centre
Disha launched. Disha provides free credit counseling, financial
planning and debt management services. ; Bhoomi puja conducted
for a regional hub in Hyderabad, Andhra Pradesh.
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2008 : ICICI Bank enters US The US Federal Reserve permitted
ICICI to convert its representative office in New York into a
branch.; ICICI Bank enters Germany, opens its first branch in
Frankfurt ; ICICI Bank launched iMobile, a breakthrough
innovation in banking where practically all internet banking
transactions can now be simply done on mobile phones. ; ICICI
Bank concluded India's largest ever securitization transaction of a
pool of retail loan assets aggregating to Rs. 48.96 billion
(equivalent of USD 1.21 billion) in a multi-tranche issue backed by
four different asset categories. It is also the largest deal in Asia (ex-
Japan) in 2008 till date and the second largest deal in Asia (ex-
Japan & Australia) since the beginning of 2007. ; ICICI Bank
launches ICICIACTIVE - Banking Interactive Service - along with
DISHTV, which will allow viewers to see information about the
Bank's products and services and contact details on their DISHTV
screens. ; ICICI Bank and British Airways launch co-branded
credit card, which is designed to earn accelerated reward points to
the card holders with every British Airways flight or by spending
on everyday purchases.
24
to have entered into this arrangement with China Exim ; ICICI
Bank with Singapore Airlines launched “ICICI Bank Singapore
Airlines Visa Platinum Credit Card”, the Card has exclusive
privileges especially designed for the members. ; ICICI Bank
announced an association with mChek, India’s leading mobile
payment solutions provider, to facilitate mChek services to all
ICICI Bank Debit and Credit Card customers. These are electronic
cards issued to the customers with mChek application on their
mobile phone. ; Ms Chanda Kochhar took charge as the Managing
Director & CEO of ICICI Bank from May 1, 2009.
ICICI reported a net profit of Rs. 3,758 crore (US$ 741 million) for FY2009. The bank's
Current and savings account (CASA) ratio increased to 28.7% at March 31, 2009 from
26.1% at March 31, 2008. Increase of Rs. 5,286 crore in CASA deposits in quarter ended
March 31,2009.
ICICI Bank is one of the Big Four Banks of India with State Bank of India, Axis Bank
and HDFC Bank
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ICICI Bank Group
BUSINESS PROFILE
Products & Services
Personal Banking
Deposits
Loans
Cards
Investments
Insurance
Demat Services
Wealth Management
NRI Banking
Money Transfer
Bank Accounts
Investments
Property Solutions
Insurance
Loans
Business Banking
Corporate Net Banking
Cash Management
Trade Services
FXOnline
SME Services
Online Taxes
Custodial Services
Head Office
ICICI Bank
9th Floor, South Towers
ICICI Towers
Bandra Kurla Complex
Bandra (E)
26
Mumbai.
Phone: 91-022-653 7914
Website: www.icicibank.com
Capital structure
The Authorized Capital of ICICI Bank is 214.75 Crores. The Issued, Subscribed and Paid Up
Capital is divided into 1113250642 equity shares @ Rs.10/- each.
Board of Directors
Board Members
27
.........................................................
Mr. K. Ramkumar,
Executive Director
.........................................................
Mr. Sonjoy Chatterjee,
Executive Director
Board committee
28
Mr. V. Prem Watsa
Ms. Chanda D. Kochhar
BUSINESS OBJECTIVE
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
service.
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.
TECHNOLOGY Used In ICICI Bank
29
ICICI use many type of advance technological software like Pinnacle 7.0 and
Pinnacle7.016.Among from this software ICICI bank uses the e-banking, core banking,
mobile banking electronic display sy ICICI Bank was using Teradata for its data
warehouse. However, due to its proprietary hardware, the cost of procurement, upgrades
and administration was soaring. The closed box architecture of Teradata imposed
restrictions on scalability. Secondly, querying and loading could not happen
simultaneously. Queries could only be run during business hours because the loading of
data had to take place during off business hours. This meant that the refresh rate of EDW
was delayed, so queries may not reflect the most current data. ICICI Bank was also
dependent on Teradata for support and other activities: The bank was completely tied
down to that solution.
These issues compelled ICICI Bank to look for more efficient and flexible solutions. The
solution would have to address not only current issues, but accommodate future growth
expectations and business requirements. ICICI Bank evaluated numerous data
warehousing solutions in the pursuit of solving its issues, and developed a shortlist of
alternatives for its migration proof-of-concept: Sybase, SAS and Netezza. The primary
criteria for evaluation was the price-to-performance ratio where Sybase IQ emerged the
clear winner. During this rigorous testing, Sybase IQ delivered faster results on
independent hardware and operating systems with minimum infrastructure. Commending
the improvements achieved, Amit Sethi, Joint General Manager, ICICI bank says, "What
impressed us wasthat even with overall lower costs, we could achieve significantly better
query performanceafter implementing the Sybase enterprise warehouse solution." ICICI
Infotech today launched an enterprise resourceplanning (ERP) solution for the small and
medium enterprises.
The ERP package - Orion Advantage - comes bundled with an HP dual processor Xeon
server, Oracle 9i database, Windows 2003 server and costs about Rs 9.90 lakh and has a
15-user license.
An ERP package helps a manufacturer or any other business implementing it to manage
all the important parts in the company such as product planning, parts purchasing,
maintaining inventory and interacting with suppliers and customers.
ICICI Infotech officials told a press conference here today that Orion Advantage offered
a set of business practice solutions for industry segments such as engineering, auto
ancillary, pharmaceuticals, chemicals and IT distribution. Besides the cost advantage, the
ERP package also came pre-configured. ICICI Infotech had mapped the processes
specific to each industry segment into the package.
Mr. Manoj Kunkalienkar, Executive Director and President, ICICI Infotech, said that
smalland medium enterprises (SMEs) offered a good market and ICICI Infotech hoped to
become a leading solution provider to this segment.
Mr. R.K. Kanthi, Deputy General Manager, ICICI Infotech, said there was no ERP
packagefor the SMEs that bundled the server, database and operating system right now.
That was the advantage ICICI Infotech offered to SMEs as Orion Advantage came
bundled and preconfigured. Besides the high cost of generic ERP packages, their
30
implementation time as far as SMEs were concerned was also long. Orion Advantage
could be installed in 45 days.
ICICI Infotech had signed up six customers so far for the package and hoped to garner a
15 per cent market share of the SME segment, whose number in the country was
estimated at 2.30 lakh.
Mr. K.S. Natarajan, Managing Director, Trident Pneumatics Pvt Ltd of Coimbatore, one
of the companies that had installed Orion Advantage, said that the company had tried
three other ERP packages, all of which had failed, before settling on Orion Advantage.
Mr Kunkalienkar said that ICICI Infotech planned to move the two development centers
in Chennai into a single location and double the staff strength from 300 now in the next
two years.
The Chennai centers were involved in research and development of Orion ERP solutions
and Premia, an insurance package.
We can see that the how technology gives the best results in the below diagram. There are
drastically changes seen in the use of Internet banking, in a year 2001 (2%) and in the
year 2008 (25%).
These type of technology gives the freedom to retail customers.
The country’s middle class accounts for over 320 million people. In correlation with
thegrowth of the economy, rising income levels, increased standard of living, and
affordability of banking products are promising factors for continued expansion.
PRODUCTS AND SERVICES
PERSONAL BANKING
31
Loan against Current A/C Bonds
security Fixed Deposits 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
Education loan
Gold loan
Cards Payment Services Access To Bank
Credit Card Net Safe Net Banking
Debit Card Merchant One View
Prepaid Card Prepaid Refill InstaAlert Mobile
Bill Pay Banking
-------------------------------- Visa Bill Pay ATM
Forex services InstaPay Phone Banking
-------------------------------- Direct Pay Email Statements
Product And VisaMoney Branch Network
Services Transfers
Trade Services E-Monies Electronic
Forex Service Funds Transfer
Branch Locater Online Payment Of
RBI Guidelines Direct Tax
WHOLESALE BANKING
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Funded Services Funded Services BANKS
Non Funded Non Funded
Services Services Clearing Sub-Membership
Value Added Specialized Services RTGS Sub-Membership
Services Value Added Fund Transfer
Internet Banking Services ATM Tie- Ups
Internet Banking Corporate Salary A/C
Tax Collection
Financial Institutions
Mutual Funds
Stock Brockers
Insurance Companies
Commodities Business
Trusts
NRI SERVICES
Accounts & Deposits Remittances
33
Rupee Current A/C Uk
Rupee Fixed Deposits Europe
Foreign Currency Deposits South East Asia
Accounts For Returning Indians Middle East
Africa
Others
Quick Remit
India Link
Check Lock Box
Telegraphic/ Wire Transfer
Fund Transfer Cheques/Dds/Tcs
Investment & Insurances Loans
Payment Services Access To Bank
PRODUCTS
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ICICI Bank offers wide variety of Deposit Products to suit your requirements. Coupled
with convenience of networked branches/ ATMs and facility of E-channels like Internet
and Mobile Banking, ICICI Bank brings banking at your doorstep. Select any of its
deposit products and provide your details online and their representative will contact you
for Account Opening.
SAVING ACCOUNTS
ICICI Bank offers customers a power packed Savings Account with a host
of convenient features and banking channels to transact through. So now
customers can bank at their convenience, without the stress of waiting in
queues.
Special Savings Account:
The Special Savings Account has been designed keeping in mind the specific needs of
organizations such as Trusts, Associations, Societies, Councils, Clubs etc. It provides
organizations solutions with added value and is ideal for tax exempted entities.
“ LIFE PLUS”Senior citizens savings account
Young Stars Account:
35
Young Stars is a banking service for children, aged 1day -18
years, brought to you by ICICI Bank to help the parents meet
the present and future aspirations that they hold for their
child. It offers various savings and investment options to the
parent along with teaching the child to manage his/her
personal finance in a more responsible and independent
manner.Young Stars will guide your child through the world of banking -through checking the
account balance, fun zones and special pages on the internet. It makes banking a pleasure and of
course teaches your child to manage their personal finances.With the pocket money that you
transfer to your child's account, you can even shop with him / her at Young Stars very own
shopping page. You can even open a recurring deposit in your child's name.
Once you are done with your 'banking', you can access your child's account with all the fun links
to special zones designed to suit your child's area of interests and also impart knowledge on the
current events of the world.
Advantage woman savings account
Current Accounts:
Every business requires efficient banking facilities to support its business activities. ICICI Bank
offers premium quality service, unfolding a wide array of class products. With technology
leadership and service the bank is able to meet some of the most challenging financial needs of
clients.A Current Account is one that is required by Businessman, Joint stock companies,
Institutions, Public authorities, public corporations etc. Any business that has
numerous banking tranactions need a current account as it
Roaming Current Account
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Only Roaming Current Account from ICICI Bank travels the distance with customers
business. With advanced technological features such as MCC and LCC, banking needs are
well taken care of, customers can access their accounts at over 500 networked branches
across the country.
So while customers take care of their business, ICICI Bank’s Roaming Current Account
simplifies banking for them.
Salary Accounts
Salary Account is a feature rich corporate payroll account with benefits for both corporates and its
employees.
ICICI Bank Salary Account is a benefit-rich payroll account for Employers and Employees.As an
organization, you can opt for our Salary Accounts to enable easy disbursements of salaries and
enjoy numerous other benefits too.With ICICI Bank Salary Accounts your employees will enjoy
the convenience of :
All that the organization would require to do is to send ICICI Bank an advice (in form of a
cheque/debit instruction, ecs, etc) for the total salary amount along with the salary details of the
designated employees in a soft and hard copy format and we will credit the respective employees'
accounts as per your statement of advice.ICICI Bank Salary Accounts benefits you in more than
one ways:-
• Reduces paperwork.
Employees receive instant credit of salaries. More convenient than ECS. Besides all of the above,
employees automatically become ICICI Bank account holders with special benefits and privileges
of 8-8 banking, Investment advisory and much more...
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Fixed deposits:
Fixed deposits are options which help you grow your money
thus creating wealth in a safer and secure way.
ICICI provides its customers with various kinds of Fixed
deposit facilities that are flexible and cater to customers who
have different needs and wants in their fixed deposits.
ICICI provides a Fixed Deposit that allows customers to
deposit their money for just as long as you wish.
Recurring Deposits:
Security Deposits:
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ICICI Bank’s Tax-Saver Fixed Deposit enables you to save tax and earn high returns. A dual
benefit option structured to maximise your advantage. ICICI Bank’s Tax Saver FD is the perfect
solution for your investment needs.
EEFC Account
Indian exports have surged over the last decade owing to an unprecedented boom in sectors like
software, biotechnology, gems, jewellery, textiles etc. As a result of this, the volume of inward
remittances has also increased significantly. To shield the firms engaged in regular export and
import from the exchange rate fluctuations RBI has allowed parking of foreign currency by
exporters in an account designated as Exchange Earners Foreign Currency Account (EEFC).
EEFC accounts are Current Accounts held in foreign currency with authorized dealers of foreign
exchange in the country.
Do you want to save money while buying foreign currency for travelling abroad? You can buy
traveller’s cheques, foreign currency in cash and foreign currency demand draft for your expenses
overseas. If you are a frequent traveller, you may not want to go through the hassles of buying
foreign currency every time you travel abroad.
The Reserve Bank of India has now made it easier for you to access foreign currency by
permitting a foreign currency account (domestic) for resident Indians. In line with RBI
guidelines, ICICI Bank has come up with a scheme that helps you get rid of all your forex
worries. You can park your foreign currency in ICICI Bank under RFC (D) account. Non-interest
bearing Resident Foreign Currency (D) (RFC (D)) with ICICI Bank can be maintained in four
major currencies (USD, EURO, GBP and Japanese Yen)
PRIVILEGE BANKING:
Privilege banking service ensures preferential treatment to its customers.
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Quarterly Average Balance(QAB) requirement of Rs.50000 .
Family banking:
Outward Remittance:
ICICI Bank offers you a simple way to send money outside India. Our Outward Remittance
facilities make remitting money abroad quick, and reliable. ICICI Bank’s Outward Remittance is
the solution for your all your needs. Be it money for education, gift money or maintenance for
loved ones or donation for a cause. Our extensive network gives us reach to most parts of the
world.
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Advantage Deposit
Advantage Deposit is a combination of fixed deposit and mutual fund investment, offering you
the safety of a fixed deposit and the returns of an equity fund. Advantage Deposit counters equity-
market fluctuations through Systematic Investment Plans.
ICICI Bank with 49 branches is a Point of Presence (POP) for the NEW PENSION SYSTEM
launched on May 1, 2009 by the Government of India. The scheme, promoted by the PFRDA
(Pension Fund Regulatory and Development Authority, Government of India), is a first of its kind
in India and is being launched pan-India by 22 other POP's as well.
The purpose of this pension scheme is to promote security of income to its subscribers in their old
age. The scheme will empower a subscriber to plan his own retirement and pension. It not only
will help him save for life after retirement but also is a good investment tool as the returns are
market-driven. For optimum returns, the Government has appointed six fund managers for
subscribers to choose from.
LOANS
HOME LOAN
Interest rates on home loans have come down considerably in the last
few years. Individuals who opted for housing loans in the years gone
by, are still servicing them at 17% to 21% per annum. Quite a price
to pay, since one can get a loan today for around 12% per annum. In
such a case, you can opt for a balance transfer. Under this scheme,
customers can replace their existing old high interest loan by a
cheaper (equal to applicable current rates) loan. ICICI Home Finance
will not only finance the balance amount of outstanding loan but also
your prepayment charges to the old housing finance company.
The result:
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PERSONAL LOANS
ICICI Bank Personal Loans are easy to get and absolutely hassle
free. With
minimum documentation you can now secure a loan for an amount
up to Rs.
15 lakhs.
Loans can be used for any purpose with no questions asked regarding the end use of the
loan.
A balance transfer facility available for those who want to retire any higher debt.
All loan repayments are done via equated monthly instalments (EMI).
CAR LOAN
The NO. 1 financier for car loans in the country. Network of more
than 1500 channel partners in over 780 locations. Tie-ups with all
leading automobile manufacturers to ensure the best deals. Flexible
schemes & quick processing. Hassle-free application process on
the click of a mouse.
COMMERCIAL VEHICLE LOAN
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Range of services on existing loans & extended products like funding of new vehicles,
refinance on used vehicles, balance transfer on high cost loans, top up on existing loans,
Xtend product, working capital loans & other banking products..
Preferred financier status with most of the leading manufacturers.
Simple documentation.
Quick turn around time.
Flexible financing solutions to meet the individual requirement.
TWO WHEELER LOANS:
FARM EQUIPMENT LOANS:
CONSTRUCTION EQUIPMENT LOAN
Having funded infrastructure for over 4 decades, ICICI
understands the need of the customers better. ICICI Bank offers
attractive financial packages through their excellent distribution
network. The products are customised for new entrepreneur to
large business houses. ICICI has tie-up with leading construction
equipment manufacturers for wide range of products. The Bank
take over existing high cost loans at competitive terms resulting in huge savings and is quick
43
in processing due to easy formalities and one time sanction of loans for disbursement over a
period of time.
OFFICE EQUIPMENT LOAN:
Professional doctors are aware of the distinct advantages that the latest medical equipment
can give their patients. ICICI Bank Medical Equipment Loans supports professionals in their
effort to give the best to their patients. It's our humble way of being involved in a noble
profession.
Loans are offered for:
Doorstep Service.
Funding in more than 150 locations across the country.
The bank provides Competitive interest rates.
ICICI also offers flexible repayment structure.
LOAN AGAINST SECURITIES
Loans against Securities enables customers to obtain loans against their securities. So they get
instant liquidity without having to sell their securities.
All customers have to do is pledge your securities in favour of ICICI Bank The Bank will then
grant them an overdraft facility upto a value determined on the basis of the securities pledged by
them. A current account will be opened and customer can withdraw money as and when they
require. Interest will be charged only on the amount withdrawn and for the time span utilised.
ICICI offer loans against:
Demat Shares
RBI Relief Bonds
Mutual Funds Units
India Millennium Deposits (IMDs)
ICICI Bank Bonds
Life Insurance Policies (Single Premium)
44
CREDIT CARDS:
ICICI Bank Credit Cards give you the facility of cash, convenience
and a range of benefits, anywhere in the world. These benefits range
from life timefree cards, Insurance benefits, global emergency
assistance service,discounts, utility payments, travel discounts and
much more.
DEBIT CARDS:
TRAVEL CARD:
Presenting ICICI Bank Travel Card. The Hassle Free way to Travel
the world. Traveling with US Dollar, Euro, Pound Sterling or Swiss
Francs; Looking for security and convenience; take ICICI Bank
Travel Card. Issued in duplicate. Offers the Pin based security. Has
the convenience of usage of Credit or Debit card.
PRE PAID CARDS:
45
are available on a VISA platform thus providing accessibility to over one lakh merchant
establishments & cash withdrawal from all VISA ATMs in India.
INVESTMENTS
ICICI Bank cares about all
needs. Along with Deposit
products and Loan
offerings, ICICI Bank
assists people to manage
their finances by providing various investment options ranging from ICICI Bank Tax Saving
Bonds to Equity Investments through Initial Public Offers and Investment in Pure Gold.
ICICI Bank facilitates following investment products:
ICICI Bank Tax Saving Bonds
Government of India Bonds
Investment in Mutual Funds
Initial Public Offers by Corporate
Investment in "Pure Gold"
Foreign Exchange Services
Senior Citizens Savings Scheme, 2004
Customers can invest in above products through any of ICICI bank branches. For select products
ICICI Bank also provides the ease of investing through electronic channels like ATMs and
Internet (ICICIdirect.com)
ICICI BANK BONDS
All ICICI Bank Bonds have been rated "AAA" by CARE and "LAAA" by ICRA
indicating the highest degree of safety for your money.
Investment in ICICI Bank Bonds are eligible for tax rebate under Sec 88 to the full extent
possible.
Bonds are listed on BSE, NSE.
GOI BONDS
46
8% Savings Bonds (Taxable), 2003.
Low risk.
Reasonable investment tenure.
Nomination facility available.
Cannot be traded in secondary market.
Interest income taxable.
Mutual Funds
Mutual Funds pool money of various investors to purchase a wide variety of securities while
pursuing a specific goal. Selection of Securities for the purpose is done by specialists from the
field. Returns generated are distributed to the Investors.
Mutual Fund Companies offer various schemes. Investors can choose any particular
Fund/Scheme or mix of Funds/Schemes depending upon their perception towards risk.
Investment is done on the basis of prevailing Net Asset Values of various schemes. Mutual Funds
Investments are subject to Market Risks.
ICICI Bank helps investor determine which types of funds you need to meet your investment
goals. This may include the following types of funds:
Debt: Liquid schemes, Income schemes, G-sec schemes, Monthly Income Schemes
etc.
Through ICICI Bank investor can invest in various schemes of multiple mutual funds with decent
performance record. investor can take the aid of ICICI Bank’s various research reports on mutual
funds and their schemes before choosing a scheme for investment. ICICI Bank offers investment
in Mutual Funds through Multiple Channels. With ICICI Bank, investor can invest in Mutual
Funds through following channels.
ICICI Bank Branches
ICICI Bank ATM’S
ICICIdirect.com
Before being deputed, our officers complete a comprehensive training program and, once
deputed, they receive thorough instructions in financial planning skills and techniques
Throughout their careers officers also attend programs to update their skills. All officers
in charge of Mutual Funds are certified professionals by AMFI (Association of Mutual
Funds in India)
47
Many of these officers also hold professional degrees like - MBA, CA, ICWA, and CFA
etc.
ICICI keeps the investors updated on the latest happenings in the Mutual Fund industry and the
various financial markets through regular electronic updates (daily & weekly) through Emails.
ICICI also send out a monthly magazine on investments to their customers.
Initial public offerings (IPO)
Investor can invest in IPOs online through www.icicidirect.com with same convenience of
investing in equities - hassle-free and with zero paper work. Also, get in-depth analyses of new
IPOs issues (Initial Public Offerings) which are about to hit the market. IPO calendar, recent IPO
listings, prospectus/offer documents and live prices will help you keep on top of the IPO markets.
ICICI Bank Pure Gold
Gold has been traditionally the most favored form of investment for Indians. In fact, India,
even today is amongst the highest consumers of Gold in the world. However, the Gold market
remains largely unorganized with reliability and convenience remaining the key issues for
gold buyers in the country.ICICI Bank with its `Pure Gold' offer attempts to bridge the gap
between the need of the customers for buying gold and availability of an organized avenue to
satisfy that need, by taking care of the two key components:-
Reliability 24 Carat ICICI Bank Pure Gold is imported from Switzerland. This Gold carries a
99.99% Assay Certification, signifying highest level of purity, as per international standards.
Convenience
ICICI Bank Pure Gold is competitively priced based on daily prices in the international bullion
market. Currently, gold is available in 2.5g, 5g, 8g, 20g and 50g categories.
PRIVATE BANKING
Benefits:
-Savings Account, Fixed Deposits, Recurring Deposits, Quantum Optima, Current Accounts,
-Resident Foreign Currency (Domestic) Accounts etc.
-Asset Products- Home Loans, Car & Personal Loans, Loan Against Securities etc.
-Investments- Government of India Bonds, Mutual Funds, Capital Gain Bond etc.
-Insurance
-Web Trade and Demat Accounts
-Gold Coins & Bureau de Change
48
-International Debit and Credit cards
-And many more....
Competitive Pricing
-Value-linked benefits
SERVICES
INVESTMENT SERVICES
DematServices
A Demat Account allows employees transact in shares instantaneously in a safe and
secure manner.
ReliefBonds/MutualFunds/Insurance
Salary Account customers can now invest in Government of India relief and savings
bonds, a basket of mutual funds, foreign exchange facilities and Insurance products
through ICICI Bank.
GoldCoin
Employees can buy 24 karats Pure Gold, which ICICI Bank brings to you. Each coin
comes to you straight from Switzerland. Refined to 99.99% fine gold and sealed with a
unique Certificate of Authencity- guaranteeing you its purity.
FOREX SERVICES
49
ICICI Bank's Foreign Exchange Services will help you organize your foreign exchange in the
most hassle free manner. Whether its Foreign Currency, Travelers Cheques or Travel Card, ICICI
Bank Foreign Exchange Services is a one-stop solution to your foreign exchange requirement .
NRI SERVICES
Wherever people may be, in India or abroad, ICICI Bank has created a wide range of products
and services that provide customers complete financial solutions. Helping them to make the right
decisions at the right time and can be rest assured that they are in the safe and trustworthy hands
of ICICI bank.
Deposit Products:
1. NRE Account: An NRI can open a Non-Resident External Account(NRE Account)with any
bank in India. The account not only lets customers manage their money that they earn in India (as
permitted by FEMA Regulations) but also of the money earned abroad. The money in the account
and the interest earned on it can be sent back outside India without any authorization from RBI.
The Account can be opened and funded in any permissible currency, and is later converted into
Indian Rupees. This Account offers dual benefits of high returns as offered by the fixed deposits
and liquidity as offered by the savings account. The Account helps customers take care of all their
financial needs, quickly and conveniently. In addition to attractive rupee interest rates customers
get free money transfers, easy access for the customer as well as for his/her family back in India,
and a free mandate card for the loved ones in India.
2 . NRO Account: The Non-Resident Ordinary Account (NRO Account) allows customers to hold
the money they have earned in India such as rent, dividends, pensions etc. They can open the
account and can fund it in any permissible currency and is later converted into Indian Rupees.
NRO account offers attractive exchange rates upon conversion of foreign currency into Indian
Rupees. This account to offers high returns and liquidity. However, the interest earned on the
principal amount in the account can be sent back after the deductions of tax in India.
3. FCNR Account:A Foreign Currency Non Resident Account (FCNR Account) allows
customers to maintain funds as Term Deposits in various foreign currencies, thereby guarding
customers against fluctuating exchange rates. Under this account both the principal amount and
the interest can be sent back fully, and are taxable in India. The tenures range from 12 to 36
month
Advisory Services
50
Private Equity Placement
ICICI Bank's Small Enterprises Group's (SEG) Investment Banking team is dedicated to provide
you niche and exclusive investment banking services.
Capital Raising
At times for a growing company, the amount of capital that a promoter can infuse in the
business becomes limited. Businesses can be self sufficient for capital needs in their
nascent and initial growth phases. However to meet expansion and growth plans, external
capital is imperative. We at ICICI Bank, with our lending experience, fully understand
this and help clients raise equity to fund growth. We have developed a strong network of
domestic and international investors who are keen to partner with such success stories in
India and these players solicit our advice for investing into such companies. .
Buy And Sell Side Advisory
Inorganically adding growth to a business or hiving off non-core activities or opportunity
to realize right value for the business created or an instance of taking a company on a
bigger scale are the ways to strategize today. We at ICICI Bank provide assistance on
both buy side and sell side transaction. With a large client franchise built, more than
10,000 asset clients and international linkages in developed economies, ICICI Bank can
bring in the best synergy partner to conclude a sell side or buy side advisory assignment.
Special Situation Solutions
Backed by institutional legacy, in-depth understanding and linkages with key
stakeholders in the process of turnaround, ICICI Bank's Investment Banking team can
design solutions for special situations like CDR, BIFR, OTS, etc. Count on us to turn
around the capital structure of your company and bring in additional capital for growth.
Online Services
ICICI Bank provides a variety of online services.now these is no need of walking up to the bank
branch, every time you need to do your banking. As you can do a lot of it online. From paying
your bills to transferring funds, booking your rail/air tickets, shopping, sending a money order
and doing lots more.
ICICI Bank won the Most Admired Knowledge Enterprises (MAKE) India 2009 Award. ICICI Bank won the
first place in "Maximizing Enterprise Intellectual Capital" category, October 28, 2009.
Ms Chanda Kochhar, MD and CEO was awarded with the Indian Business Women Leadership Award at
NDTV Profit Business Leadership Awards , October 26, 2009.
51
ICICI Bank received two awards in CNBC Awaaz Consumer Awards; one for the most preferred auto loan and
the other for most preferred credit Card, on September 30, 2009.
Ms. Chanda Kochhar, Managing Director & CEO ranked in the top 20 of the World's 100 Most Powerful
Women list compiled by Forbes, August 2009.
Financial Express at its FE India's Best Banks Awards, honoured Mr. K.V. Kamath, Chairman with the
Lifetime Achievement Award , July 25, 2009.
ICICI Bank won Asset Triple A Investment Awards for the Best Derivative House, India. In addition ICICI
Bank were Highly commended , Local Currency Structured product, India for 1.5 year ADR GDR linked
Range Accrual Note., July 2009.
ICICI bank won in three categories at World finance Banking awards on June 16, 2009
• Best NRI Services bank
• Excellence in Private Banking, APAC Region
• Excellence in Remittance Business, APAC Region.
ICICI Bank Mobile Banking was adjudged "Best Bank Award for Initiatives in Mobile Payments and Banking"
by IDRBT, on May 18, 2009 in Hyderabad.
ICICI Bank's b2 branchfree banking was adjudged "Best E-Banking Project Implementation Award 2008" by
The Asian Banker, on May 11, 2009 at the China World Hotel in Beijing.
ICICI Bank bags the “Best bank in SME financing (Private Sector)” at the Dun & Bradstreet Banking awards
2009.
ICICI Bank NRI services wins the “Excellence in Business Model Innovation Award” in the eighth Asian
Banker Excellence in Retail Financial Services Awards Programme.
ICICI Bank's Rural Micro Banking and Agri-Business Group wins WOW Event & Experiential Marketing
Award in two categories - “Rural Marketing programme of the year” and “Small Budget On Ground Promotion
of the Year”. These awards were given for Cattle Loan 'Kamdhenu Campaign' and 'Talkies on the move
campaign' respectively.
ICICI Bank's Germany Branch has been certified by “Stiftung Warrentest”. ICICI Bank is ranked 2nd amongst
57 savings products across 19 banks
52
ICICI Bank Germany won the yearly banking test of the investor magazine €uro in the “call money”category.
The ICICI Bank was awarded the runner's up position in Gartner Business Intelligence and Excellence Award
for Asia Pacific for its Business Intelligence functions.
ICICI Bank's Organisational Excellence Group was recently awarded ISO 9001:2008 certification by TUV
Nord. The scope of certification comprised processes around consulting and capability building on methods of
quality & improvements.
ICICI Bank has been awarded the following titles under The Asset Triple A Country Awards for 2009:
• Best Transaction Bank in India
• Best Trade Finance Bank in India
• Best Cash Management Bank in India
• Best Domestic Custodian in India
ICICI Bank has bagged the Best Cash Management Bank in India award for the second year in a row. The
other awards have been bagged for the third year in a row.
ICICI Bank Canada received the prestigious Canadian Helen Keller Award at the Canadian Helen Keller
Centre's Fifth Annual Luncheon in Toronto. The award was given to ICICI Bank its long-standing support to
this unique training centre for people who are deaf-blind.
53
Chapter 3
RESEARCH METHODOLOGY
Research methodology
The procedure adopted for conducting the research requires a lot of attention as it has
direct bearing on accuracy, reliability and adequacy of results obtained. It is due to this
reason that research methodology, which we used at the time of conducting the research,
needs to be elaborated upon. It may be understood as a science of studying how research
is done scientifically. So, the research methodology not only talks about the research
methods but also considers the logic behind the method used in the context of the
research study. Research Methodology is a way to systematically study and solve the
research problems. If a researcher wants to claim his study as a good study, he must
clearly state the methodology adapted in conducting the research the research so that it
way be judged by the reader whether the methodology of work done is sound or not.
54
Objective of study
Meaning of Research.
Research Problem.
Research Design.
Limitation of study
OBJECTIVE OF THE STUDY
Objectives are the ends that states specifically how goal be achieved. Every study must
have an objective for which all the efforts have been done. Without objective no research
can be conducted and no result can be obtained. On the basis of objective all the research
process is followed. Objectives are the main aspect of every study. The objective of the
study
gives direction to go through the research problem. It guides the researcher and keeps
him on track. I have two objectives regarding my research project. These are shown
below :-
1. Primary objective
2. Secondary objective
1. Primary objective :-
1) To study the software used in ICICI Bank.
2) To analyse the financial statements of the corporation to assess it’s
true financial position by the use of ratios.
2. Secondary objective :-
1) To find out the shortcomings in ICICI Bank.
2) To see whether ICICI Bank is going well or not in different areas.
55
IMPORTANCE OF THE STUDY
Meaning of Research:
Research Problem
The first step while conducting research is careful definition of Research Problem. “To
ERR IS THE HUMAN” is a proverb which indicates that no one is perfect in this world.
Every researcher has to face many problemswhich conducting any research that’s why
problem statement is defined to know which type of problems a researcher has to face
while conducting any
study. It is said that,
56
“Problem well defined is problem half solved.”
“TO MAKE A FINANCIAL ANALYSIS OF FINANCIAL
STATEMENTS OF ICICI BANK”
Research Design
A research designs is the arrangement of conditions for collection and analysis data in a
manner that aims to combine relevance to the research purpose with economy in
procedure. Research Design is the conceptual structure with in which research in
conducted. It constitutes the blueprint for the collection measurement and analysis of
data. Research Design includes and outline of what the researcher will do form writing
the hypothesis and it operational implication to the final analysis of data. A research
design is a framework for the study and is used as guide in collection and analyzing the
data. It is a strategy specifying which approach will be used for gathering and analyzing
the data. It also include the time and cost budget since most studies are done under these
two cost budget since most studies are done under theses tow constraints. The design is
such studies must be rigid and not flexible and most focus attention on the following:-
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TYPES OF RESEARCH DESIGN :
Exploratory Research Design: This research design is preferred when researcher has a
vague idea about the problem the researcher has to explore the subject.
Experimental Research Design – The research design is used to provide a strong basis
for the existence of casual relationship between two or more variables.
Descriptive Research Design – It seeks to determine the answers to who, what, where,
when and how questions. It is based on some previous understanding of the matter.
Diagnostic Research Design It determines the frequency with which something occurs
or its association with something else.
Descriptive research design is used in this study because it will ensure the minimization
of bias and maximization of reliability of data collected. Descriptive study is based on
some previous understanding of the topic. Research has got a very specific objective and
clear cut data requirements The researcher had to use fact and information already
available through financial statements of earlier years and analyse these to make critical
evaluation of the available material. Hence by making the type of the research conducted
to be both Descriptive and Analytical in nature. From the study, the type of data to be
collected and the procedure to be used for this purpose were decided.
Data Collection Method
The process of data collection begins after a research problem has been
defined and research design ahs been chalked out. There are two types of
data –
PRIMARY DATA -
It is first hand data, which is collected by researcher itself. Primary data is collected by
various approaches so as to get a precise, accurate, realistic and relevant data. The main
tool in gathering primary data was investigation and observation. It was achieved by a
direct approach and observation from the officials of the company.
58
SECONDARY DATA - it is the data which is already collected by someone else.
Researcher has to analyze the data and interprets the results. It has always been important
for the completion of any report. It provides reliable, suitable, adequate and specific
knowledge.
The required data for the study are basically secondary in nature and the data are
collected from
Methods of data analysis
The data collected were edited, classified and tabulated for analysis. The analytical tools
used in this study are:
Limitations of study
59
The analysis and interpretation are based on secondary data
contained in the published annual reports of ICICI Bank for the
study period.
Due to the limited time available at the disposable , the study has
been confined for a period of 5 years (2005-2009).
Ratio itself will not completely show the company’s good or bad
financial position.
Inter firm comparison was not possible due to the non
availability of competitors data.
The study of financial performance can be only a means to know
about the financial condition of the company and cannot show a
through picture of the activities of the company
.
Chapter 4
FINANCIAL ANALYSIS
INTRODUCTION OF THE TOPIC
Meaning Of Financial Statements
Financial statements refer to such statements which contains financial information about
an enterprise. They report profitability and the financial position of the business at the
end of accounting period. The team financial statement includes at least two statements
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which the accountant prepares at the end of an accounting period. The two statements are:
-
They provide some extremely useful information to the extent that balance Sheet mirrors
the financial position on a particular date in terms of the structure of assets, liabilities and
owners equity, and so on and the Profit And Loss account shows the results of operations
during a certain period of time in terms of the revenues obtained and the cost incurred
during the year. Thus the financial statement provides a summarized view of financial
positions and operations of a firm.
Meaning Of Financial Analysis
The term financial analysis is also known as ‘analysis and interpretation of financial
statements’ refers to the process of determining financial strength and weakness of the
firm by establishing strategic relationship between the items of the Balance Sheet, Profit
and Loss account and other operative data.
The first task of financial analysis is to select the information relevant to the decision
under consideration to the total information contained in the financial statement. The
second step is to arrange the information in a way to highlight significant relationship.
The final step is interpretation and drawing of inference and conclusions. Financial
statement is the process of selection, relation and evaluation.
Features of Financial Analysis
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To make comparative study with other firms.
Procedure of Financial Statement Analysis
The analyst should acquaint himself with principles and postulated of accounting.
He should know the plans and policies of the management so that he may be able
to find out whether these plans are properly executed or not.
The extent of analysis should be determined so that the sphere of work may be
decided. If the aim is find out. Earning capacity of the enterprise then analysis of
income statement will be undertaken. On the other hand, if financial position is to
be studied then balance sheet analysis will be necessary.
A relationship is established among financial statements with the help of tools &
techniques of analysis such as ratios, trends, common size, fund flow etc.
Types Of Financial Analysis
There are different ways of analysis the financial statements:
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This analysis indicates the strengths and weaknesses of the firm. This analysis is
also called as dynamic analysis because it also shows the trend of the business.
Among these two types of analysis, horizontal analysis is more useful because it
brings out more clearly the trends of working of a firm. This gives us more concrete
bases for future planning.
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given the assumptions about these changes and the limitation of the forecasting technique
used. This is quite complicated analysis.
Methods/Tools Of Financial Analysis
A number of methods can be used for the purpose of analysis of financial statements.
These are also termed as techniques or tools of financial analysis. Out of these, and
enterprise can choose those techniques which are suitable to its requirements. The
principal techniques of financial analysis are:-
a. Comparative Financial Statements:
When financial statements figures for two or mote years are placed side-side to facilitate
comparison, these are called ‘comparative Financial Statements’. Such statements not
only show the absolute figures of various years but also provide for columns to indicate
to increase ort decrease in these figures from one year to another. In addition, these
statements may also show the change from one year to another on percentage form. Such
cooperative statements are of great value in forming the opinion regarding the progress of
the enterprise.
Comparative financial statement is a tool of financial analysis that depicts change in each
item of the financial statement in both absolute amount and percentage term, taking the
item in preceding accounting period as base.
Comparison and analysis of financial statements may be carried out using the following
tools:
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1.Comparative Balance Sheet : The comparative balance sheet shows increase and
decrease in absolute terms as well as percentages ,in various assets ,liabilities and capital.
A comparative analysis of balance sheets of two periods provides information regarding
progress of the business firm.
The main purpose of comparative balance sheet is to measure the short- term and long-
term solvency position of the business.
b. Common Size Statements:
Common size statements are such statements in which the items of financial statements
are covered into percentage of common base. In common-size income statement, by
assuming net sales as 100(i.e %)and other individual items are converted as percentage of
this. Similarly, in common –size balance sheet ,total assets are assumed to be 100 (i.e %)
and individual assets are expressed as percentage.
1. Presenting the change in various items in relation to total assets or total liabilities
or net sales.
2. Establishing a relationship.
3. Providing a common base for comparison.
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analyzed vertically. One can draw conclusion, regarding the behaviour of
expenses over period of time by examining these percentages.
c. Trend Analysis:
Trend percentage are very useful is making comparative study of the financial statements
for a number of years. These indicate the direction of movement over a long tine and help
an analyst of financial statements to form an opinion as to whether favorable or
unfavorable tendencies have developed. This helps in future forecasts of various items.
For calculating trend percentages any year may be taken as the ‘base year’. Each item of
bease year is assumed to be equal to 100 and on that basis the percentage of item of each
year calculated.
d. Ratio Analysis:
Meaning :
TYPES OF RATIOS
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ANALYSIS
CLASSIFICATION OF RATIOS
Liquidity Ratios : These are the ratios which measure the short-term solvency or
financial position of a firm. These ratios are calculated to comment upon the short-term
paying capacity of a concern or the firm’s ability to meet its current obligations.
Long –Term Solvency and Leverage Ratios : Long-term solvency ratios convey a
firm’s ability to meet the interest cost and repayment schedules of its long-term
obligation e.g. Debit Equity Ratio and Interest Coverage Ration. Leverage Ratios.
Activity Ratios: Activity ratios are calculated to measure the efficiency with which the
resource of a firm have been employed. These ratios are also called turnover ratios
because they indicate the speed with which assets are being turned over into sales e.g.
debtors turnover ratio.
Profitablity Ratios: These ratios measure the results of business operations or overall
performance and effective of the firm e.g. gross profit ratio, operating ratio or capital
employed. Generally, two types of profitability ratios are calculated.
(a) In relation to Sales, and
(b)In relation in Investment
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FUNCTIONAL CLASSIFICATION IN VIEW OF
FINANCIAL MANAGEMENT OR CLASSIFICATION
ACCORDING TO TESTS
CASHFLOW STATEMENT
A cash – flow statement is a statement showing inflows (receipts) and
outflows (payments) of cash during a particular period. In other words, it is a
summary of sources and applications of each during a particular span of
time.
Objectives of Cash Flow Statement :
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6. Helpful in Ascertaining Cash Flow from various Separately.
7. Helpful in Making Dividend Decisions.
ASSETS:
Cash And 6344.90 8934.37 18706.88 29377.53 17536.33
Balances With
RBI
Balances With 6585.07 8105.85 18414.45 8663.60 12430.23
Banks,Money At
Call
Advances 91405.15 146163.11 195865.60 225616.08 218310.85
Investments 50487.35 71547.39 91257.84 111454.34 103058.31
Gross Block 5525.65 5968.57 6298.56 7036.00 7443.71
Accumulated 1487.61 1987.85 2375.14 2927.11 3642.09
Depreciation
Net Fixed Assets 4038.04 3980.72 3923.42 4108.89 3801.62
Capital Work In 96.30 147.94 189.66 0.00 0.00
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Progress
Other Assets 8702.59 12509.57 16300.26 20574.63 24163.62
Total Assets 167659.40 251388.95 344658.11 399795.07 379300.96
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Operating 3299.15 4479.51 6690.56 8154.18 7045.11
Expenses
Total Expenses 9870.04 14076.96 23049.06 31638.42 29771.04
Operating Profit 2956 4690.67 5874.40 7960.69 8925.23
Other Provision 428.80 1594.07 2226.36 2904.59 3808.26
And Contigencies
Provision For Tax 522 556.53 537.82 898.37 1358.84
Net Profit 2005.20 2540.07 3110.22 4157.73 3758.13
Extraordinary 0.00 0.00 0.00 0.00 (0.58)
Items
Profit B/F 53.09 188.22 293.44 998.27 2436.32
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LIABILITIES:
Capital 153.08 14 9.51 0.8 213.34 17 0.61 .04
Reserves and 9502.96 80 2097.76 10 21943.61 94 3062.2 7
surplus
Deposits 65264.39 65 65427.02 40 13920.86 6 (26083.23) (11)
Borrowings 4977.41 15 12734.12 33 14392.4 28 1675.26 2.5
Other Liabilities 3831.71 18 13000.76 51.5 4666.75 12 851.04 2
and Provisions
ASSETS:
Interpretation
The capital of bank increased by 14% in 2005-06,0.8% in
2006-07,17% in 2007-08,and .04 % in 2008-09.This shows
that there is fluctuation in the rate of increase in the capital.
In 2005-06 and 2007-08 the rate of increase in capital is more
than that of 2006-07 and 2008-09.
There is a huge fluctuation in the rate of increase in reserves
and surplus also. This shows that bank is effectively utilizing
its reserves and surplus.
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The investments are also increasing but with lower rates
compared to the preceding years.
EXPENDITURE:
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Operating 1180.36 36 2211.05 49.3 1463.62 22 (1109.07 (14)
expenses
Total expenses 4206.92 43 8972.1 64 8589.36 37.2 (1867.38) (5.9)
Operating profit 1734.67 59 1183.73 25.2 2086.29 35.5 964.54 12.1
Interpretation:-
The net profit shows a fluctuating trend i.e it increased by 27% in 2005-06,22.4%
increase in 2006-07,and increased by 34% in 2007-08 and finally if falls by 10%
in2008-09.this may be due to decline in operating income and inresed tax liability
in the year 2008-09.
The interest expenses from the period 2005 to 2008 showed an increasing trend
but decresed in 2008-09 due to repayment of borrowings.
2. TREND ANALYSIS
Trend Percentage Of ICICI Bank From 2004-2005 To 2008-2009
(base year 2004 -05) Percentage(%) figures
Particulars 2005 2006 2007 2008 2009
Deposits 100 165 231 245 219
Advances 100 160 214 247 239
Net profit 100 127 155 207 187
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Interpretation:
There is a continous increase in the deposits till the year ending 2008 followed by a
downfall in the year ending 2009 due to repayment od deposits in this year.
Similarly advances also shows as increasing trend till the year ending 2008 followed by a
slight downfall in the year ending 2009.
There has been a substantial increase in net profit till the year year ending 2008.In four
years it has been more than double.
3. RATIO ANALYSIS
CURRENT RATIO:
An indication of a company's ability to meet short-term debt obligations; the
higher the ratio, the more liquid the company is. Current ratio is equal to current assets
divided by current liabilities. If the current assets of a company are more than twice the
current liabilities, then that company is generally considered to have good short-term
financial strength. If current liabilities exceed current assets, then the company may have
problems meeting its short-term obligations.
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Year Current Assets Current Liabilities Current Ratio
(Rs. In crores) (Rs. In crores)
2005 21632.56 21396.16 1.01
2006 29549.79 25227.88 1.17
2007 53421.59 38228.64 1.39
2008 58615.76 42895.38 1.36
2009 54130.18 43746.43 1.23
Interpretation:
An ideal solvency ratio is 2. The ratio of 2 is considered as a safe margin of solvency due
to the fact that if current assets are reduced to half (i.e.) 1 instead of 2, then also the
creditors will be able to get their payments in full.
But here the current ratio is less than 2 and more than 1 which shows that the bank have current
assets just equal to the current liabilities which is not satisfactory as the safety margin is very less
or zero. Therefore the bank should keep more current assets so that it can maintain a satisfactory
safety margin.
LIQUID RATIO:
Liquid ratio is also known as ‘Quick’ or ‘Acid Test ‘Ratio. Liquid assets refer to
assets which are quickly convertible into cash. Current Assets other stock and prepaid expenses
are considered as quick assets.
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2005 12929.97 21396.16 0.60
2006 17040.22 25227.88 0.67
2007 37121.33 38228.64 0.97
2008 38041.13 42895.38 0.88
2009 29966.56 43746.43 0.68
Interpretation:
A quick ratio of 1:1 is considered favourable because for every rupee of current liability,there is
atleast one rupee of liquid assets. A higher value of ratio is considered favourable. Here this ratio
is less than 1 in 2005,2006 & 2009 but in 2007 & 2008 it is close to 1 which is not satisfactory.
This means the bank has not managed its funds properly in this particular period.Therefore bank
should rationally utilise its funds to maintain an ideal liquid ratio.
EARNING PER SHARE:
In order to avoid confusion on account of the varied meanings of the term capital
employed, the overall profitability can also be judged by calculating earning per share
with the help of the following formula:
The earning per share of the company helps in determining the market price of the
equity shares of the company. A comparison of earning per share of the company with
another will also help in deciding whether the equity share capital is being effectively
used or not. It also helps in estimating the company’s capacity to pay dividend to its
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equity shareholders.
Interpretation:
Earning Per Share is the most commonly used data which reflects the performance and prospects
of the company.It affects the market price of shares.
Here the Earning Per Share is shows a persistent increase till the year 2008 after that in the year
2009 Earning Per share is followed by a downfall due to decline in profits.
DIVIDEND PER SHARE :
It is expressed by dividing dividend paid to equity shareholders by no. of equity shares.this shows
the per share dividend given to equity shareholders.It is very helpful for potential investors to
know the dividend paying capacity of the company.It affects the market value of the company.
Dividend Per Share = Dividend Paid To Equity Shareholders
No. Of Equity Shares
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Year Dividend Paid No. Of Equity DPS
Shares
(Rs. In crores) (Rs. In crores)
2005 632.96 73.6716 8.59
2006 759.33 88.9823 8.53
2007 901.17 89.9266 10.02
2008 1227.7 111.2687 11.03
2009 1224.58 111.325 11
Interpretation:
Here the Dividend Per Share is increasing year after year except a little decline in 2009.otherwise
the dividend per share ratio of the bank is quite satisfactory which shows the bank has a good
dividend paying capacity.
NET PROFIT RATIO:
This ratio indicates the Net margin on a sale of Rs.100. It is calculated as follows:
This ratio helps in determining the efficiency with which affairs of the business
are being managed. An increase in the ratio over the previous period indicates
improvement in the operational efficiency of the business. The ratio is thus on effective
measure to check the profitability of business.
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Year Net Profit Sales Net Profit Ratio
(Rs. In crores) (Rs. In crores) (in %)
2005 2005.2 9409.9 21.3
2006 2540.07 13784.49 18.42
2007 3110.22 22994.29 13.52
2008 4157.73 30788.34 13.5
2009 3758.13 31092.55 12.08
Interpretation:
Although both the sales and net profit have increased during the above period but the Net
Profit Ratio of the bank is declining continuously. This is because of the reason that net
profits have not increased in the same proportion as of the sales.
OPERATING PROFIT RATIO:
The difference between net profit ratio and net operating profit ratio is that net operating profit is
calculated without considering non-operating expenses and non-operating incomes. If we deduct
this ratio from 100,the result will be operating ratio. Higher operating profit ratio enable the
organization to recoup non-operating expenses out of operating profits and provide reasonable
return.
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Year Operating Profit Sales Operating Profit
(Rs. In crores) (Rs. In crores) Ratio (in %)
2005 2956 9409.9 31.41
2006 4690.67 13784.49 34.02
2007 5874.4 22994.29 25.54
2008 7960.69 30788.34 25.85
2009 8925.23 31092.55 28.7
Interpretation:
In the year 2005 & 2006 the operating profit is 31.41% & 34.02% respectively. After that it has
been consistently declined from the year 2007 till 2008 and again gaining momentum in 2009.
This may be due to the reason that operating expenses have been increased more as compared to
sales during the above period consequently reducing the operating profits.Therefore the bank
should check on unnecessary operating expenses to correct this situation and to provide a
sufficient return.
RETURN ON NET WORTH:
It measures the profitability of the business in view of the shareholders. It judges the earning
capacity of the company and the adequacy of return on proprietor’s funds.Shareholders and
potential investors are interested in this ratio.It is calculated as below:
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Year Net Profit After Shareholder's Fund Return On Net
Interest And Tax Worth (in %)
(Rs. In crores) (Rs. In crores)
2005 2005.2 12899.97 15.54
2006 2540.07 22555.99 11.26
2007 3110.22 24663.26 12.61
2008 4157.73 46820.21 8.88
2009 3758.13 49883.02 7.53
Interpretation:
The net profit after interest and tax have increased slowly till the year 2008 followed by a
downfall due to high interest payments,operating expenses and taxation liability.consequently the
networth ratio has declined considerably and has reduced to more than half in the year 2009 than
it was in 2005.
RETURN ON CAPITAL EMPLOYED:
It establishes relationship between profit before interest and tax and capital employed. It indicates
the percentage of return on the total capital employed in the business.This ratio is also known as
Return On Investment. It measures the overall efficiency and profitabilityof the business in
relation to investment made in business. It also shows how efficiently the resources are used in
the business.comparison of one unit with that of the other or performance in one year with that of
the same unit is possible. It is calculated as below:
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Year Net Profit Before Capital Employed Return On Capital
Interest And Tax Employed (in %)
(Rs. In crores) (Rs. In crores)
2005 9098.09 146263.25 6.22
2006 12694.05 226161.17 5.61
2007 20006.54 306429.48 6.52
2008 28540.34 356899.69 7.99
2009 27842.9 335554.53 8.29
Interpretation:
The above table exhibit the return on capital employed ratio of the bank for last five years.This
ratio measures the earning of the net assets of the business. The ratio was 6.22% in year 2005.
After that it rised to the tune of 5.61%,6.52%,7.99% and 8.29% in year 2006, 2007, 2008 and
year 2009 respectively. It lead to the conclusion bank rising but very little proportion of return on
capital employed.
DEBT EQUITY RATIO:
The Debt-Equity ratio is calculated to find out the long-term financial position of the firm.This
ratio indicates the relationship between long-term debts and shareholder’s funds.The soundness of
long-term financial policies of a firm can be determined with the help of this ratio.
It helps to assess the soundness of long-term financial policies of a business.It also helps to
determine the relative stakes of outsiders and shareholders.Long-term creditors can assess the
security of their funds in a business.it indicates to what extent a firm depends upon lenders to
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meet its long-term financial requirements.A low Debt-Equity ratio is considered better from the
point of view of creditors.
Interpretation:
The ratio shows the extent to which funds have been provided by long-term creditors as
compared to the funds provided by the owners.Here the Debt-Equity ratio for the above
period is always high.this shows that the bank is more relying on outside funds as compared
to internal sources of capital,in its capital structure. From the long-term lenders point of view
this ratio is not satisfactory.
PROPRIETORY RATIO:
It is also called shareholders equity to total equity ratio or net worth to total assets ratio or equity
ratio.It compares the shareholder’s funds to total assets.It is calculated by dividing shareholder’s
funds by total assets.
84
It helps to determine the long-term solvency of a company.This ratio measures the protection
available to the creditors.Higher the ratio,lesser is the likelihood of insolvency in future,as the
management has to use lessor debts and vice versa.Thus,this ratio is of great importance to the
creditors.
Interpretation:
Above table exhibits the proprietary ratio of the bank for last five years . It was 7% in 2005,After
that was 8% in year 2006. Similarly it was once again reduced to 7 % in the year 2007. After
2007 it registered increase and was 12% and 13% in the year 2008 and 2009 respectively. Hence
it leads to the conclusion owners have less than 13% stake in the total assets of the bank. It is not
a good sign as far the long term solvency is concerned.
FIXED ASSETS TURNOVER RATIO:
It is also called as Sales to Fixed Assets Ratio.It measures the efficient use of fixed assets.This
ratio is a measure of efficient use of fixed assets.it is calculated as:
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It measures the efficiency and profit earning capacity of the business.Higher the ratio,greater is
the intensive utilization of fixed assets and a lower ratio shows under utilization of the fixed
assets.This ratio has a special importance for manufacturing concerns where investment in fixed
assets,is vey high and the profitability is significantly dependent on the utilization of these assets .
Interpretation:
Here the fixed assets employed in the business shows a decreasing trend except in the year 2008
where fixed assets have again increased.This may be due to increase in rate of depreciation in
subsequent years. Neverthless,the fixed assets turnover ratio has been consistently increasing.It
indicates that fixed assets have been effectively used in the business without much additional
investment in the period of study and also the capital is not blocked in fixed assets.
CREDITDEPOSIT RATIO:
This ratio is very important to assess the credit performance of the bank. The ratio shows the
relationship between the amount of deposit generated by the bank has well as their deployment
towards disbursement of loan and advances. Higher credit deposit ratio shows overall good
efficiency and performance of any banking institution.
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Credits
Credit Deposit Ratio 100
Deposits
Interpretation:
Above table exhibits credit deposit ratio of the bank during last 5 years. In the year 2005 ratio
was 91% and it declined to 88% and 84%in the year 2006 and 2007 respectively. In the year
2008 and 2009 ratio was increased to 92% and 99% respectively. it leads to conclusion that
credit performance of the bank is very good.
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4. CASH FLOW STATEMENT OF ICICI BANK
88
Chapter 5
FINDINGS,SUGGESTIONS &
CONCLUSION
Findings
Profit before tax for the year ended March 31, 2009 (FY2009) was Rs. 5,117 crore
(US$ 1,009 million), compared to Rs. 5,056 crore (US$ 997 million) for the year
ended March 31, 2008 (FY2008).
Profit after tax for FY2009 was Rs. 3,758 crore (US$ 741 million) compared to
Rs. 4,158 crore (US$ 820 million) for FY2008 due to the higher effective tax rate
on account of lower proportion of income taxable as dividends and capital gains.
Net interest income increased 15% from Rs. 7,304 crore (US$ 1,440 million) for
FY2008 to Rs. 8,367 crore (US$ 1,650 million) for FY2009. While the advances
declined marginally year-on-year, the net interest income increased due to
improvement in net interest margin from 2.2% in FY2008 to 2.4% in FY2009.
Operating expenses (including direct marketing agency expenses) decreased 14%
to Rs. 6,835 crore (US$ 1,348 million) in FY2009 from Rs. 7,972 crore (US$
1,572 million) in FY2008. The cost/average asset ratio for FY2009 was 1.8%
compared to 2.2% for FY2008.
During the year, the Bank has pursued a strategy of prioritizing capital
conservation, liquidity management and risk containment given the challenging
economic environment. This is reflected in the Bank’s strong capital adequacy
and its focus on reducing its wholesale term deposit base and increasing its CASA
ratio. The Bank is maintaining excess liquidity on an ongoing basis. The Bank has
also placed strong emphasis on efficiency improvement and cost rationalization.
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The Bank continues to invest in expansion of its branch network to enhance its
deposit franchise and create an integrated distribution network for both asset and
liability products.
In line with the above strategy, the total deposits of the Bank were Rs. 218,348 crore
(US$ 43.0 billion) at March 31, 2009, compared to Rs. 244,431 crore (US$ 48.2 billion)
at March 31, 2008. The reduction in term deposits by Rs. 24,970 crore (US$ 4.9 billion)
was primarily due to the Bank’s conscious strategy of paying off wholesale deposits.
During Q4-2009, total deposits increased by Rs. 9,283 crore (US$ 1.8 billion), of which
Rs. 5,286 crore (US$ 1.0 billion), or about 57%, was in the form of CASA deposits. The
CASA ratio improved to 28.7% of total deposits at March 31, 2009 from 26.1% at March
31, 2008.
The branch network of the Bank has increased from 755 branches at March 31,
2007 to 1,438 branches at April 24, 2009. The Bank is also in the process of
opening 580 new branches which would expand the branch network to about
2,000 branches, giving the Bank a wide distribution reach in the country.
In line with the strategy of prioritizing capital conservation and risk containment, the loan
book of the Bank decreased marginally to Rs. 218,311 crore (US$ 43.0 billion) at March
31, 2009 from Rs. 225,616 crore (US$ 44.5 billion) at March 31, 2008.
Liquidity position
The liquid ratio of the bank in the year 2005,2006 and 2009 is 0.60,0.67and 0.68
respectively and the year 2007 and 2008 liquid ratio is 0.97 and 0.88 respectively
which is close to 1.Though it is not equal to the ideal liquid ratio of 1:1 but still its
under control. So in nut shell, it can be concluded that the liquidity position of the
bank is quite satisfactory.
The Bank’s capital adequacy at March 31, 2009 as per Reserve Bank of India’s
revised guidelines on Basel II norms was 15.5% and Tier-1 capital adequacy was
11.8%, well above RBI’s requirement of total capital adequacy of 9.0% and Tier-1
capital adequacy of 6.0%. The above capital adequacy takes into account the impact
of dividend recommended by the Board.
Also the capital is being effectively utilized in the bank as it shows better return on
capital employed over years.
Asset quality
At March 31, 2009, the Bank’s net non-performing asset ratio was 1.96%. During the
year the Bank restructured loans aggregating to Rs. 1,115 crore (US$ 220 million).
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Dividend on equity shares
Since the dividend per share has shown a promising increase for the period under
study.It shows that the bank is following a sound dividend policy and is capable of
distributing higher dividends.in this way the investors will feel investing in capital of
the bank a much beneficial option and will be reluctant to withdraw capital for a long
time.
The earnings per share for the period under study also shows a promising increase.it
suggests that bank has better profitability position and in future it can be a better or
attractive channel of investment for shareholders.
High trends of credit deposit ratio reveals that bank has performed satisfactorily as regard
to granting loans and advances to generate income. It suggests that credit performance is
good and the bank is doing its business good by fulfilling its major objective as regards to
granting loans and accepting deposits.
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Conclusion
On the basis of various techniques applied for the financial analysis of ICICI Bank we
can arrive at a conclusion that the financial position and overall performance of the bank
is satisfactory. Though the income of the bank has increased over the period but not in the
same pace as of expenses. But the bank has succeeded in maintaining a reasonable
profitability position.
The bank has succeeded in increasing its share capital also which has increased around
50% in the last 5 years. Individuals are the major shareholders. The major achievement of
the bank has been a tremendous increase in its deposits, which has always been its main
objective. Fixed and current deposits have also shown an increasing trend.
Equity shareholders are also enjoying an increasing trend in the return on their capital.
Though current assets and liabilities (current liquidity) of the bank is not so satisfactory
but bank has succeeded in maintaining a stable solvency position over the years. As far as
the ratio of external and internal equity is concerned, it is clear that bank has been using
more amount of external equity in the form of loans and borrowings than owner’s equity.
Bank’s investments are also showing an increasing trend. Due to increase in advances,
the interest received by the bank from such advances is proving to be the major source of
income for the bank.
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Suggestions
Although the short term liquidity position is quite satisfactory as per revealed by
liquid ratio but the current ratio is below the ideal ratio of 2:1.So the bank should
make efforts to increase its current assets to maintain a safety margin and to
maintain a better liquidity position.
The profitability of the bank for the period under study is not satisfactory. Profits
are increasing but not with same pace as of the expenditure due to higher reliance
on debt capital in the form of borrowings and loans for financing capital structure.
So in order to improve profitability, the bank should reduce its dependence on
external equities for meeting capital requirements. Consequently, the interest
expenses will decline and profits will increase which is good for the bank.
Similarly non productive expenses should be curtailed to improve profitability.
Higher trend of credit deposit ratio reveals that the bank has performed
satisfactorily as regard to granting loans and advances to generate income. It
suggests that the credit performance of bank is good and it is performing its
business well by fulfilling the major objective of granting credit and accepting
deposit. So in order to have more creditability in the market the bank should
maintain its credit deposit ratio.
Though the bank has been successful in increasing it’s deposits but to further
improve upon such situation it can introduce some new and attractive schemes for
public. Such schemes can be in the form of higher rate of interest and shorter
maturity period for FD’s etc.
Bank should try to finance more and more projects. Financing will help it to earn
higher amount of profits.
The bank is having a greater reliance on debt capital. The increasing reliance on
external equities may prove hazardous in the long run. So in order to remedy this
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situation bank should increase its focus on internal equities and other sources of
internal financing.
Bank can also think for improving it’s day-to -day service to its clients. Such
service can be improved by providing prompt service and showing an attitude of
co-operation to its clients. It will help to give a kind of confidence to the public
and build a better public image.
To achieve the objective of Rural development it should open more and more
branches in different rural areas of the country. It will facilitate in providing help
to rural poor farmers and other living below the poverty line. Bank can appoint
commission agents for different area who can encourage general public to invest
in the capital of the bank and make more deposits in ICICI Bank.
The bank should simplify the procedure of advances for quick disbursement.
Last but not least, bank should adopt branch automation experiment to control the
operational cost.
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CHAPTER 6
BIBLIOGRAPHY
Books Reffered:
Basic Financial Management ,8th edition ,Prentice -Hall,Inc. Scott, D.F., J.D
Martin, J.W. Petty and A.Keown.
Internet websites:
Www.Icicibank.Com
Www.Moneycontrol.Com
WWW.Money.Rediff.Com
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Www.Wikipedia.Org
Www.Google.Com
Www.Scribd.Com
Www.Managementparadise.Com
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