Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
NO. NO.
ACKNOWLEDGEMENT 4
EXECUTIVE SUMMARY 5
2 Globalization
2.1 Introduction 27
2.2 Globalization in India 29
2.3 Merits and Demerits 35
5 Privatization
5.1 Introduction 55
5.2 Advantages and disadvantages 56
1
6 ICICI bank
7.1 Introduction 63
ACKNOWLEDGEMENT
It has been a great prestige and pleasure to work on the project “EFFECTS
OF GLOBALIZATION ON INDIAN BANKING INDUSTRY.” I have gained
valuable information and knowledge regarding role of advertisement in growth of
banks.
Lastly I would like to thank the college staff, my colleagues, family and all those
who extended necessary help during the course of our project work.
BHAVYA FOFARIYA
ROLL NO.11
2
EXECUTIVE SUMMARY
3
the largest Authorized Capital Base in the Banking System in India i.e. having a
total capacity to raise Rs. 19,000,000,000 (Non – Premium Value). Though having
an international presence, ICICI Bank has not been able to keep up the
international standards in providing customer service as well as banking works.
4
Chapter.1
• Introduction
• Banking structure
• History of banking
in India
5
INDIAN BANKING INDUSTRIES
6
BANKING STRUCTURE IN INDIA
7
Here we more concerned about private sector banks and competition among
them. Today, there are 27 private sector banks in the banking sector: 19 old private
sector banks and 8 new private sector banks. These new banks have brought in state-
of-the-art technology and aggressively marketed their products. The Public sector
banks are facing a stiff competition from the new private sector banks.
The banks which have been setup in the 1990s under the guidelines of the
Narasimham Committee are referred to as NEW PRIVATE SECTOR BANKS.
8
on mergers and acquisitions to take advantage of economies of scale and/or
comply with “Basel-II” regulation.“Indian banking industry assets are expected to
reach US$1 trillion by 2010 and are poised to receive a greater infusion of foreign
capital,” says Prathima Rajan, analyst in Celent's banking group and author of the
report.“The banking industry should focus on having a small number of large
players that can compete globally rather than having a large number of fragmented
players." Globalization has offered a number of advantages to the banking sector in
India. Remarkable advancements in communication and information technology
have facilitated the globalization of these domestic banks. Apart from the benefits,
several risks are also associated with the opportunities made available by
globalization. In order to fortify the Indian baking sector against the risks involved
in globalization, appropriate regulatory, prudential and supervisory framework
need to be adopted. This will help in strengthening the domestic banking system in
a global environment.
9
There are three different phases in the history of banking in India.
1) Pre-Nationalization Era.
2) Nationalization Stage.
3) Post Liberalization Era.
PRE-NATIONALIZATION ERA:
In India the business of banking and credit was practices even in very
early times. The remittance of money through Hundies, an Indigenous credit
instrument, was very popular. The Hundies were issued by bankers known as
Shroffs, Sahukars, Shahus or Mahajans in different parts of the country.
ORIGIN:
10
trading firms for the benefit of their business. Both Messer’s Alexander & co. and
Ferguson & co. combined their banking with other kinds of business.
PRESIDENCY BANKS:
11
Rs. 3 lakhs as capital in each of these banks. These three banks were called the
Presidency banks, because they were partly financed by the East India Company.
12
IMPERIAL BANK OF INDIA:
The bank of Bengal, the bank of Bombay and the bank of Madras referred as
Presidency banks got amalgamated in to the Imperial bank of India, which came
into existence on January 27, 1921 by the Imperial bank of India was created by
the special act (XLVII OF 1920), the liability of its shareholders was limited as
that of shareholders of all other banks registered under the Indian companies act.
The only difference that the word limited does not form parts of its name, as it does
in the case of banks constituted under the latter act.
This act, however did not give the bank power to issue notes and thus
it was left without any control over currency of the country. However, it was
allowed to hold government balances and to manage public debt and
clearinghouses till the Establishment of the Reserve bank of India in 1935.the
Reserve bank of India was established as a body corporate under the Reserve bank
of India, which came in to effect on April 1, 1935 with a paid up capital of Rs.5
crore. The RBI was nationalized in 1948 soon after the country’s independence.
13
Though originally privately owned, after nationalization the RBI is fully owned by
the government of India. The RBI took over all the functions of the Imperial bank
of India, but the later was given the privilege of acting as agents of the former in
places in which it had no branches.
14
SHORTCOMINGS OF INDIAN COMMERCIAL BANKS AFTER
INDEPENDENCE
15
Their area of operation was confined to urban center and port towns.
Rural and interior areas totally neglected by these institutions. In banking
development while states like Assam, Jammu Kashmir, Uttar Pradesh, Bihar,
Orissa and Madhya Pradesh were totally neglected, state like Maharashtra, Gujarat
and Tamil Nadu were adequately banked. In 1969, it was observed that in 13
districts of India there were no commercial bank offices at all.
There were also regional disparities in the distribution of bank credit. The
distribution of bank credit in 1967 indicates that the three states of Maharashtra
(32.4 %), West Bengal (27.5%) and Tamil Nadu (10.2%) accounted for two thirds
of the total bank credit disbursed in the country.
Banks neglected for a long period of time the credit needs of several priority
sectors of the economy such as, agriculture, small scale industry and cottage
industry, retail trade and exports.
16
NATIONALIZATION STAGE
17
Government took major steps in this Indian Banking Sector Reform after
independence. In 1955, 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.
18
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.
Banks are among the main participants of the financial system in India.
Banking offers several facilities & Opportunities. All the banks in India were
earlier private banks. They were founded in the pre-independence era to cater to
the banking needs of the people. After the nationalization of 14 commercial banks
in 1969, no new private banks were licensed by RBI in the country and public
sector banks came to occupy dominant role in the banking structure.
In the early 1990s the then Narasimha Rao government embarked on a policy
of liberalization and gave licenses to a small number of private banks, which
came to be known as New Generation tech-savvy banks, which included banks
like ICICI Bank and HDFC Bank. The Narasimham Committee report of
1991, has envisaged a larger role for private sector banks. Now in all there are
21
Old private sector banks and 7 new private sector banks.
The Financial Reforms that were initiated in the early 90s and the
globalization and liberalization measures brought in a completely new operating
environment to the Banks that was till then operating in highly protected
surroundings. The setting up of a number of private banks and the measures of de-
19
regulation that encouraged competition has led to a situation where the survival of
those who do not join the race will become difficult. The arrival of private banks
with their superior state-of-the-art technology-based services pushed Indian Banks
also to follow suit by going in for the latest technologies so as to meet the threat of
competition and retain customer base.
1. The banks shall be governed by the provisions of The Reserve Bank of India
Act, 1934, the Banking Regulations Act, 1949 other relevant statuaries.
20
5. Preference will be given to those banks whose headquarters are proposed to be
located in a centre, which does not have headquarters of any other bank.
7. The new bank would not be allowed to have as its director any person who is
already a director in a banking company.
9. The banks will be free to open branches anywhere once they satisfy the capital
adequacy and prudential accounting norms.
10. The banks would not be allowed to have investments in subsidiaries, mutual
funds and portfolio investments in other companies in excess of 20% of the banks'
own paid up capital and reserves.
21
11. The banks would be required to use modern infrastructure facilities in office
equipment, computer, telecommunications, etc.
The RBI was granting approvals for entry of private sector banks
provided such banks were offering competitive, efficient and low cost financial
intermediation services, result in up gradation of technology in the banking sector,
are financially viable and do not resort to unfair means like preemption and
concentration of credit, monopolization of economic power, cross holding with
industrial groups etc.
The return on assets of the private sector banks has been the highest. Most of
the investments held by private banks were in a maturity bucket of less than a year.
At the same time, technological development in the sector helped the banks in
diversifying their business activities to offer different services to customers.
22
STRUCTURE OF THE ORGANISED BANKING IN INDIA
23
Chapter.2
Globalization in India
• Introduction
• Globalization in
India
• Merits & Demarits
24
GLOBALIZATION
The human society around the world, over a period of time, has
established greater contact, but the pace has increased rapidly since the mid
1980’s.The term globalization means international integration. It includes an array
of social, political and economic changes. Unimaginable progress in modes of
communications, transportation and computer technology have given the process a
new lease of life.
25
The world is more interdependent now than ever before .Multinational
companies manufacture products across many countries and sell to consumers
across the globe. Money, technology and raw materials have broken the
International barriers. Not only products and finances, but also ideas and cultures
have breached the national boundaries.
26
HISTORICAL DEVELOPMENT
Globalization has been a historical process with ebbs and flows. During the
Pre-World War I period of 1870 to 1914, there was rapid integration of the
economies in terms of trade flows, movement of capital and migration of people.
The growth of globalization was mainly led by the technological forces in the
fields of transport and communication. There were less barriers to flow of trade
and people across the geographical boundaries. Indeed there were no passports
and visa requirements and very few non-tariff barriers and restrictions on fund
flows. The pace of globalization, however, decelerated between the First and the
Second World War. Most economies thought that they could thrive better under
high protective walls. After World War II, all the leading countries resolved not to
repeat the mistakes they had committed previously by opting for isolation.
Although after 1945, there was a drive to increased integration; it took a long time
to reach the Pre-World War I level. In terms of percentage of exports and imports
to total output, the US could reach the pre-World War level of 11 per cent only
around 1970. Most of the developing countries which gained Independence from
the colonial rule in the immediate Post-World War II period followed an import
substitution industrialization regime.The Soviet bloc countries were also shielded
from the process of global economic integration. However, times have changed.
In the last two decades, the process of globalization has proceeded with greater
vigour. The former Soviet bloc countries are getting integrated with the global
economy. More and more developing countries are turning towards outward
oriented policy of growth. Yet, studies point out that trade and capital markets are
no more globalized today than they were at the end of the 19th century.
Nevertheless, there are more concerns about globalization
27
GLOBALIZATION IN INDIA
India's economy opened up during the early nineties. The policy measures
on the domestic front demanded that there was a requirement of multinational
organizations to set up their offices here. The market became more open and the
economy started responding to the external (global) market. Due to globalization,
contacts have been developed all across the globe, with the pace of integration
dramatically increasing. Idea behind the new economic model known as
Liberalization, Privatization and Globalization in India (LPG), was to make the
Indian economy one of the fastest growing economies in the world. An array of
reforms was initiated with regard to industrial, trade and social sector to make the
economy more competitive.
The economic changes initiated have had a dramatic effect on the overall
growth of the economy. It also heralded the integration of the Indian economy into
the global economy. The Indian economy was in major crisis in 1991 when foreign
currency reserves went down to $1 billion and inflation was as high as 17%. Fiscal
deficit was also high and NRI's were not interested in investing in India. Then the
following measures were taken to liberalize and globalize the economy.
28
IMPACTS OF GLOBALIZATION
It was in July 1991, when foreign currency reserves had tumbled down to
almost $1 billion; inflation was at a soaring high of 17%, highest level of fiscal
deficit, and foreign investors loosing confidence in Indian Economy. With all these
coupling factors, capital was on the verge of flying out of the country and we were
on the brink of become loan defaulters. It was at this time that with so many
bottlenecks at bay, a complete overhauling of the economic system was required.
Policies and programs changed accordingly. This was the best time for us to realize
the importance of globalization.
Measures of Globalization
1. Devaluation: The first initiative towards globalization had been taken the
29
3. Allowing Foreign Direct Investment (FDI): Allowing FDI inflows is a major
30
MERITS & DEMRITS OF GLOBALIZATION
• Greater and faster flow of information between countries and greater cultural
interaction has helped to overcome cultural barriers.
31
• Developing countries benefit a lot from globalization, as there is a sound
flow of money and thus, a decrease in the currency difference.
• The focus is diverted and segregated among all the nations. No country
remains the single power head; instead there are compartmentalized power
sectors. The decisions at higher levels are meant for the people at large.
• Communication among the countries is on the rise, which allows for better
understanding and broader vision.
32
The Demerits of Globalization are as follows
• For smaller developing nations at the receiving end, it could indirectly lead
to a subtle form of colonization.
33
• The high rate of profit for the companies, in Asia, has resulted in a pressure
on the employed Europeans, who are always under the threat of the business
being outsourced.
• There are experts who believe that globalization is the cause for the invasion
of communicable diseases and social degeneration in countries.
• The threat that the corporate would rule the world is on high, as there is a lot
of money invested by them.
• It is often argued that poor countries are exploited by the richer countries
where the work force is taken advantage of and low wages are implemented.
34
Chapter.3
• On Industrial
sector
• On Petrol sector
• On Chemical
sector
• On social Life &
economic Life
35
EFFECTS OF GLOBALIZATION ON DIFFERENT INDUSTRIES
36
Industry are that with the coming of technology the number of labor required
decreased and this resulted in many people being removed from their jobs. This
happened mainly in the pharmaceutical, chemical, manufacturing, and cement
industries.
37
Globalization and Structural Changes in the Indian Industrial
Sector
It took place in the early 1990s when the government decided to open
the markets to foreign investments by forming new economic polices.
The Structural Changes in the Indian Industrial Sector was brought about by
the New Economic Policy of 1991 which did away with many of the regulations
and restrictions. The various advantages of Globalization and Structural Changes
in the Indian Industrial Sector are that it brought in huge amounts of foreign
investments and this gave a major boost to this sector.
38
Many foreign companies entered the Indian market and they brought
in highly technologically advanced machines into the country as a result of which
the Indian Industrial Sector became technologically advanced. With new
companies being set up in the Indian Industrial Sector it provided employment
opportunities for many people in the country which in its turn helped to reduce the
level of poverty in the country. The number of factories in India in 1990-1991
stood at 110,179 and in 2003-2004, the figure increased to 129,074.
39
Globalization and the Indian Petroleum Industry
40
Indian Petroleum Industry's Globalization is beneficial for the industry and not
harmful.
41
class manufacturing infrastructure is the main leveraging factor for the rise of this
industry. India offers high class chemical products at a substantial discount than its
western counterparts while delivering the same grade of output.
Experts say that the introduction of a wide range of sectors have led to
the favorable growth of the economy in the country. With more and more industry
segments coming up, there has been a high demand for quality workforce. As such,
lots of young people are taking jobs in all these segments in order to start a good
career.
42
In the unorganized sector as well, there has been an increase in various
sectors which has improved the rate of employment in the country. As per the
recent surveys, there has been a significant increase in the number of people
working in the unorganized and allied sectors. The pay package in all these
unorganized sectors have also increased to a great extent.
43
place. In the other sectors such as industry and agriculture, the rate of employment
has gone up. The industrial sector contributes around 29 % while the agricultural
sector contributes around 17 % to the gross domestic product. Some of the well
known exports of the country consist of tea, cotton, jute, wheat, sugarcane and so
on. Due to the growth of customer base in all these sectors, more and more
employment opportunities are opening up. In fact even young people and freshers
are getting jobs in all these sectors. In the manufacturing sector, there has been a
growth of around 12% while the communication and storage sector has also grown
up by around 16.64%.
44
the recent surveys, there has been a significant increase in the number of people
working in the unorganized and allied sectors. The pay package in all these
unorganized sectors have also increased to a great extent.
45
Chapter.4
Liberalization in India
• Introduction
• Liberalization in
India
• Merits & Demarits
46
LIBERALIZATION
By the mid-90s, the private capital had surpassed the public capital. The
management system had shifted from the traditional family based system to a
system of qualified and professional managers. One of the most significant effects
of the liberalization era has been the emergence of a strong, affluent and buoyant
middle class with significant purchasing powers and this has been the engine that
has driven the economy since. Another major benefit of the liberalization era has
been the shift in the pattern of exports from traditional items like clothes, tea and
spices to automobiles, steel, IT etc. The ‘made in India’ brand, which did not
evoke any sort of loyalty has now become a brand name by itself and is now
known all over the world for its quality. Also, the reforms have transformed the
education sector with a huge talent pool of qualified professionals now available,
waiting to conquer the world with their domain knowledge.
47
India, after all these years of economic reforms, is at the crossroads. While
one road leads India to economic prosperity and glory, the other road leads it to
social inequality. Presently, as India is one of the fastest growing economies in the
world, the social aspects have been ridden roughshod by the economic benefits.
What has been conveniently forgotten or suppressed till date have been the
disparities, mainly the socio-economical issues. This has led to growing discontent
among the population and it has gathered momentum since the reforms began 15
years ago. It will very soon reach a critical point wherein the very purpose for
which the reforms were started, will start to lose their significance rapidly and
throw the country back into the ‘license raj’ and ‘unionist’ era.
The chasm between the rich and the poor has increased so vastly that the
rich are just getting richer and the poor are just getting poorer. The real benefits of
the economic reforms have rarely percolated to the lowest strata of society. Just to
illustrate the same with an example, most of the states today vie with one another
to grab a project of any significance, be it chemical, auto or even IT. In doing so,
the benefits they are offering, right from free land to tax sops are being given on a
platter. But the benefits or savings that a company gains from this does not affect
the lower strata of management, but remains in the hands of the top management,
thus depriving the former of the economic benefits. Also, most of the labor laws in
the country are outdated and have not kept pace with economic reforms. Thus, the
exploitation of the working class becomes much easier. A classic example is the
BPO industry in our country. While most of them work in the nights, the pressure
each employee faces to deliver results and the working conditions are appalling, to
say the least.
48
The agricultural sector has also seen this disproportionate growth, as it is a
field that has been left high and dry in the pursuit of agricultural reforms. The
sector has been opened up to the multi-nationals, without having evolved a
comprehensive cover for our farmers, most of who are poor and own very little
land of their own. A case in point is the spate of farmer suicides that our country
has witnessed in the past few years. The developed countries, which clamour for
open-ended policies, have, in fact, some of the fiercest protection policies when it
comes to their agricultural sector.
Small scale industries (SSIs), the heart and soul of many towns and villages,
have been virtually ignored. More than half of them have closed down in the last
few years in the face of intense competition from multi nationals who have
unmatched financial and political muscle.
On a parting note, what are essential for India are economic reforms with a
social face. The economic policies and their subsequent reforms must be
accompanied by suitable clauses to benefit the economically weaker sections.
Various schemes must be thoroughly scrutinized and efforts must be made to see
that the rewards must reach everyone. Then India will not only be economically
prosperous, but will also forge ahead towards its goal of world dominance.
49
ADVANTAGES
1. Integration of markets: Markets are interlinked- European Union.
3. Leads to Outsourcing in some cases which can lead to job loses: Moving call
centers to India.
6. Helps prevent market Saturation in a specific market: stops there being too much
competitors in one place e.g. too much call canters in UK, so move to India
7. Standardization of product: the same products can be seen in some many places
- e.g coke and McDonalds
50
DISADVANTAGES
1. Intense Competition
5. Income generated in Host country is not always spent in the same country -
money earned from supplying cheap call centers’ in India will not be spent in India
but maybe in UK or US.
51
Chapter.5
Privatization in India
• Introduction
• Privatization in
India
• Merits & Demerits
52
PRIVATIZATION
ADVANTAGES OF PRIVATIZATION
53
DISADVANTAGES OF PRIVATIZATION
54
GROWTH OF FOREIGN BANKS IN INDIA
By 2009 few more names is going to be added in the list of foreign banks in
India. This is as an aftermath of the sudden interest shown By Reserve Bank of
India paving roadmap for foreign banks in India greater freedom in India. Among
them is the world's best private bank by Euro Money magazine, Switzerland's
UBS.
The following are the list of foreign banks going to set up business in India:-
55
TOP BANKS IN INDIA
With the advancement of technology and the birth of competition, banks are
in the race of becoming the best in the country. With an eye upon customer
satisfaction policy they are providing best of the best services with the minimum
hazards.
Banks like ABN AMRO introduced banking with a coffee. It made a tie-up
with one of the best coffee bar in the country, Barista and remained open till late
evening for customers with a setup of a coffee bar in the premises.
Few banks have introduced world ATM card to make travelers across the
globe more safe and secure. What else. Internet and Phone Banking is the call of
the day for banks.
In this race towards the best, we have selected top 20 banks in the country
from all segments. It is not the ranking of banks but only for general information
about the top banks in India.
56
Chapter.6
• Introduction
• Product & services
• SWOT Analysis
57
INTRODUCTION OF ICICI BANK
58
Russia and the UK (the subsidiary through which the heaves savings brand is
operated), offshore banking units in Bahrain and Singapore, an advisory branch in
Dubai, branches in Belgium, Hong Kong and Sri Lanka, and representative offices
in Bangladesh, China, Malaysia, Indonesia, South Africa, Thailand, the United
Arab Emirates and USA. Overseas, the Bank is targeting the NRI (Non-Resident
Indian) population in particular.
COMPANY PROFILE
59
ICICI BANK
Branches 1,485
ATMs 4,816
60
The Bank also has a network of 1,485 branches and about 4,816 ATMs in
India and presence in 18 countries, as well as some 24 million customers. Bank has
total assets of about USD 77 billion.
ICICI reported a 1.15% rise in net profit to Rs. 1,014.21 crore on a 1.29%
increase in total income to Rs. 9,712.31 crore. The bank's current and savings
account (CASA) ratio increased to 30%.
BOARD OF DIRECTORS
61
Name Designation
MISSION
62
ICICI BANK PRODUCT
1. Personal banking
2. Wholesale banking
3. NRI banking
PERSONAL BANKING
63
Loan Product Deposit Product Investment & Insurance
CARDS
64
Cards Payment Services Access To Bank Forex Services
• Phone • Forex
• Instant Pay
Banking service
• Direct Pay
• Email Branch
• Visa Money
Statements Locater
Transfer
Branch Network • RBI
• e–Monies
Guidelin
Electronic
es
Funds Transfer
Online Payment of
Direct Tax
65
WHOLESALE BANKING
66
Accounts & Deposits
67
BUSINESS STRETEGY
1. Identify and support projects and programmed that are within its focus areas and,
• capacity building;
• Providing access to research and information; and providing platforms for an
effective exchange of ideas, thoughts and experiences.
68
SWOT ANALYSIS
STRENGTH:
1. AUTHORIZED CAPITAL:
It is well know that ICICI Bank has the largest Authorized
Capital Base in the Banking System in India i.e. having a total capacity to raise Rs.
19,000,000,000 (Non – Premium Value).
69
having a low operations cost though having huge number of branches and services
provided.
WEAKNESS:
1. WORKFORCE:
It is well known that workforce responsiveness in banking sector is Very
low in Indian banking sector, though ICICI Bank has better responsible staff but
it still lacks behind its counterparts like HSBC, HDFC BANK, CITI BANK, YES
BANK etc.
OPPORTUNITY:
MARKET EXPANSION:
Seeing the present financial & economic development of Indian
Economy and also the tremendous growth of the Indian Companies
including the acquisition spree followed by them, it clearly states the
expanding market for finance requirements and also the growth in surplus
disposal income of Indian citizens has given a huge rise in savings deposits –
from the above point it is clear that there is a huge market expansion possible in
banking sector in India.
70
OUTSOURCING OF NON-CORE BUSINESS:
In the present world, India is preferred one of the best places for out –
sourcing of business process works and many more.
THREAT:
1. COMPETITION:
After showing a significant growth overall, India is able
to attract many international financial & banking institutes, which are known
for their state of art working and keeping low operation costs.
71
PRIMARY DATA & ITS ANALYSIS
With respect to the topic of my project, I made a survey in the ICICI bank.
There was a set of common questions asked in respective bank. The information
was provided by MR. SANTOSH (R & D). The following is the survey:-
72
NICELY. NEW TECHNIQUES AND SERVICES WHICH ARE INTRODUCED
IN THE GLOBAL MARKET CAN BE UNDERSTOOD NICELY.
73
CONCLUSION
We can say that the bank has performed very well in todays business
scenario as have a good unique product and service that have make them
outperform others.
As market indicators reflect we can say ICICI Bank has been badly hit by
recession and their loss in investment outside India.
New banking reform will be a good blessing for the banking sector in
coming days and on the same hand will be creating a high competition from
foreign players who will be allowed to increase their investment share in
India.
74
BIBLIOGRAPHY
Website:-
WWW.ICICIBANK.CO.IN
WWW.GOOGLE.COM
WWW.ASK.COM
WWW.SCRIBD.COM
WWW.WIKIPEDIA.COM
WWW.MANAGEMENTARTICLE.COM
WWW.SLIDESHARE.COM
Newspaper:-
ECONOMICS TIMES
TIMES OF INDIA
Books:-
75
76