SR PARTICULARS PAGE

NO. NO.
ACKNOWLEDGEMENT 4

EXECUTIVE SUMMARY 5

1 Introduction of Indian banking industry

1.1 Indian banking industry 6
1.2 Banking structure in Indian 10
1.3 History of banking in India 24

2 Globalization
2.1 Introduction 27
2.2 Globalization in India 29
2.3 Merits and Demerits 35

3 Effects of Globalization on different

industries
3.1 Introduction 40
3.2 On Industrial sector 41
3.3 On petrol industry 42
3.4 On chemical industry 43
3.5 On social and economic life 46
4 Liberalization
4.1 Introduction 50
4.2 Advantages and disadvantages 52

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.

I would sincerely like to thank my project guide MRS. MAHEK MANSURI

who has given me utmost support and guidance throughout in making the project.
I would like to thank THE UNIVERSITY OF MUMBAI who gave me this
opportunity to work on this project and also to learn new ideas and concepts which
can be valuable for me in the future.

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

Globalization is the process by which events in distant places affect people's

lives and their opportunities. Trade and finance are among the most powerful
forces transmitting knowledge and culture. This exchange of knowledge and
culture has a much bigger effect on how people live their lives than international
trade or finance ever thought.

There ought to be positive and negative effects of globalization - it all comes

as a package. Globalization helps in creating new markets and wealth, at the same
time it is responsible for extensive suffering, disorder, and unrest. The great
financial crisis that just happened is the biggest example of how negative
globalization can turn. It clearly reveals the dangers of an unstable, deregulated,
global economy. At the same time, this gave rise to important global initiatives,
striving towards betterment. Globalization is a factor responsible for both
repression and the social boom.

ICICI Bank is India's largest private sector bank by market capitalization

and second largest overall in terms of assets. It is well know that ICICI Bank has

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 to Indian banking industry

• Introduction
• Banking structure
• History of banking
in India

5
 INDIAN BANKING INDUSTRIES

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

expected to reach US$1 trillion by 2010. An expanding economy, middle class,
and technological innovations are all contributing to this growth. 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 & affordability
of banking products are promising factors for continued expansion. Banking sector
in India is expanding at an incredibly faster pace, with more and more banks
realizing the benefits offered by globalization. Publicly owned banks handle more
than 80% of the banking business in India and the rest is in the hands of private
sector banks. However, banking in both the government and private sector is being
revolutionized by this latest phenomenon call “GLOBALIZAION”.

6
 BANKING STRUCTURE IN INDIA

SCHEDULED BANKS IN INDIA

(A) Scheduled Commercial Banks

Public sector Private sector Foreign Banks Regional Rural

Banks Banks in India Bank

(28) (27) (29) (102)

• Nationalized • Old Private
Bank Banks
• Other Public • New Private
Sector Banks Banks
(IDBI)
• SBI and its
Associates

(B) Scheduled Cooperative Banks

Scheduled Urban Cooperative Scheduled State Cooperative

Banks (55) Banks (31)

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.

New Private Sector Banks

• Superior Financial Services

• Designed Innovative Products
• Tapped new markets
• Accessed Low cost NRI funds
• Greater efficiency

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

focusing on the expansion of retail and rural banking. Players are becoming
increasingly customer - centric in their approach, which has resulted in innovative
methods of offering new banking products and services. Banks are now realizing
the importance of being a big player and are beginning to focus their attention

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.

HISTORY OF BANKING IN INDIA

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:

The history of Commercial banking in India had its origin in the

Seventeenth Century with the Establishment of trading centers by the East India
Company. Unable to depend on Indigenous bankers for trading and banking
purposes, the East India Company encouraged the Establishment of agency house,
which carried on trading and banking operations. Western Style banking in India
began with the launching of banking operation by Calcutta agency houses and

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.

The history of commercial banking in India dates back to the

Establishments of “Bank of Hindustan’, in 1770, which was a mere appendage of
the former, and it was under the directions of the Europeans. However, this bank
could not survive for long because of the failure of the parents firm in 1832.the
Sholapur bank. Ltd. Started by trading houses also went into liquidation in 1818
due to the unwise combination of banking business with trading operation by them.

PRESIDENCY BANKS:

The bank of Calcutta began its banking business in the year

June 1806. The government of India did not realize the need for banks till 1809
and in that year, a Royal Charter re-designated the ‘the bank of Calcutta’ as the
‘the Bank of Bengal’. It was the first joint stock bank of British India sponsored by
the government of Bengal. It was established with a capital of Rs.50 lakhs, one –
fifth of which was contributed by the government, which shared the privilege of
voting and directions. However, the power to issue currency notes was not given to
the bank till 1823. In 1939, the bank was given the power to open branches and to
deal in inland exchange. Two others Presidency banks namely ‘Bank of Bombay’
and bank of Madras’ were formed in April 1840 and July 1843 with a capital
outlay of Rs. 52.25 and Rs. 30 lakhs respectively. The government had subscribed

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.

SWADESHI MOVEMENT: A MOMENTUM FOR NEW BANKS:

Following the Swdeshi Movement of 1905, many Indian Entrepreneurs

banking institutions. Later many more banks sprung up like mushrooms. The
number of Indian joint stock banks also increased remarkably during the period of
1906 -21. Important banking ventures started during these periods were:

No. Name of the bank Year

1 Bank of India Ltd 1906
2 The Corporation bank Ltd 1906
3 The Indian bank Ltd 1907
4 The bank of Baroda Ltd 1908
5 The Canara bank Ltd 1910
6 The Central bank of India Ltd 1911
7 The South Indian bank Ltd 1911
8 The Karur Vysya bank Ltd 1916
9 The Union bank of India Ltd 1920
10 The Tamil Nadu Mercantile bank Ltd. 1921

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.

BANKING REGULATION ACT

After independence of the country in 1947, keeping in view the

necessity of regulating rapidly growing business of banking institutions and their
organizational problems, a separate act known as “The Banking Companies Act”
was enacted. Following which a bill was introduced in Parliament in March 1948
and was passed in February 1949. It came into force on March 19, 1949. The Act
was then called the “Banking Companies Act, 1949” , now known as the “Banking
Regulations Act 1949”. The provision of this act is in addition to the provision of
the Indian Companies’ act of 1956, which are also applicable to banking
companies. The banking regulations act was amended many times keeping in view
the new roles, which the banks were expected to play in accordance the economic
development of the country.
“ Any company which is engaged in the manufacture of goods or carries on any
trade and which accepts the deposits of money from public merely for the purpose
of financing its business as such manufacturer or trader shall not be deemed to
transact the business of banking within the meaning of this clause."

14
 SHORTCOMINGS OF INDIAN COMMERCIAL BANKS AFTER
INDEPENDENCE

Commercial banks can play an important role in directing the affairs

of the economy in various ways. There were persistent complaints that banks in
India were not discharging their functions in consonance with the objective of our
socialist democracy. The commercial banks in India during the 1960s merely acted
as financial agencies and failed to give any lead to the nation’s developments. The
economic history of many countries that both economic development and growth
of financial infrastructure go hand in hand.

One peculiarity of the banking developments in India is that majority

of the banks were launched by business houses and were closely associated with
such houses, for example. Central bank of India was associated with the house of
Tata’s; United Commercial bank was associated with house of Birla’s, Indian bank
with the Rajas of Chettind, and Punjab national bank with Janis. They were formed
with the objective of profit Maximization and were guided by their business
houses.

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

Sr. Name of Banks Amount of

no. Compensation
1 Central bank of India Ltd 1,750
2 Bank of India Ltd 1,450
3 Punjab National bank Ltd 1,020
4 Bank of Baroda Ltd 840
5 United Commercial bank Ltd 830
6 Canara bank Ltd 360
7 United bank of India Ltd 420
8 Dena bank Ltd 360
9 Syndicate bank Ltd 360
10 Union bank of India Ltd 310
11 Allahabad bank Ltd 310
12 Indian bank Ltd 230
13 Bank of Maharashtra Ltd 230
14 Indian overseas bank Ltd 250
Name of banks Nationalized and the Amount of Compensation paid (Rs. Lakhs)

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.

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 were 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 Banking Institutions in the Country:

• 1949: Enactment of Banking Regulation Act.

• 1955: Nationalization of State Bank of India.
• 1959: Nationalization of SBI Subsidiaries.
• 1961: Insurance cover extended to Deposits.
• 1969: Nationalization of 14 major banks.
• 1971: Creation of credit Guarantee Corporation.
• 1975: Creation of regional rural banks.
• 1980: Nationalization of seven banks with deposits over 200 crore.

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.

Services and products like "Anywhere Banking" "Tele-Banking" "Internet

banking" "Web Banking”, e-banking, e-commerce, e-business etc. have become
the buzzwords of the day and the Banks are trying to cope with the competition by
offering innovative and attractively packaged technology-based services to their
customers.

In recognition of the need to introduce greater competition with a view to

achieving higher productivity & efficiency of the banking system, RBI issued few
guidelines in January 1993 for the entry of private sector banking. These guidelines
are as follows:

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.

2. Private sector banks are required to be registered as public limited companies in

India.

3. The authority to grant a license lies with the RBI.

4. The shares of banks are required to be listed on stock exchanges.

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.

6. Maximum voting rights of an individual shareholder would be limited to 1% of

total voting rights.

7. The new bank would not be allowed to have as its director any person who is
already a director in a banking company.

8. The bank will be subject to prudential norms in respect of banking operations,

accounting policies and other policies, as laid down by RBI. The bank will be
required to stick to the following: Minimum paid up share capital of Rs. 1 bln.
Promoters' contribution as determined by the RBI Capital adequacy of 8% of the
risk weighted assets Single borrower and group borrower exposure limits in force
Priority sector lending Export credit Loan policy within overall policy guidelines
laid down by the RBI.

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.

Private Banks have played a major role in the development of Indian

banking industry. They have made banking more efficient and customer friendly.
Private bankers are very aggressive and going desperately for higher exposure to
micro finance portfolio. In a move to give freedom in the functioning of private
banks, RBI has withdrawn its nominee directors from almost all the private sector
banks.

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

Globalization is a term that includes a wide range of social and

economic variations. It can encompass topics like the cultural changes, economics,
finance trends, and global market expansion. There ought to be positive and
negative effects of globalization - it all comes as a package. Globalization helps in
creating new markets and wealth, at the same time it is responsible for extensive
suffering, disorder, and unrest. The great financial crisis that just happened is the
biggest example of how negative globalization can turn. It clearly reveals the
dangers of an unstable, deregulated, global economy. At the same time, this gave
rise to important global initiatives, striving towards betterment. Globalization is a
factor responsible for both repression and the social boom.

What happens when there is a growing integration of economies

across the globe? Majorly there have been positive impacts of this global
phenomenon - through liberalization, privatization and globalization (LPG). Due to
globalization, there has been significant flow of inward foreign direct investment.
MNCs are getting a chance to explore various different markets across economies
and explore the untapped potential.

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.

Laws, economies and social movements have become international in nature

and not only the Globalization of the Economy but also the Globalization of
Politics, Culture and Law is the order of the day. The formation of General
Agreement on Tariffs and Trade (GATT), International Monetary Fund and the
concept of free trade has boosted globalization.

Broadly speaking, the term ‘globalization’ means integration of economies

& societies through cross country flows of information, ideas, technologies, goods,
services, capital, finance and people. Cross border integration can have several
dimensions – cultural, social, political and economic. In fact, some people fear
cultural and social integration even more than economic integration. The fear of
“cultural hegemony” haunts many. Limiting ourselves to economic integration,
one can see this happen through the three channels of

(a) Trade in goods and services

(b) Movement of capital

(c) Flow of finance

Besides, there is also the channel through movement of people.

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

moment there was an announcement of devaluating the Indian currency by a

hoping 18-19% against all the major global currencies. This was a major
initiative in the international foreign exchange arena. The Balance of
payment crisis could also be resolved by this measure.

2. Disinvestment: The core elements of globalization are privatization and

liberalization. Under the privatization scheme, bulk of the public sector

undertakings have been/ and are still being sold to the private sector. Thus
the concept of PPP (public private partnership) came up.

29
 3. Allowing Foreign Direct Investment (FDI): Allowing FDI inflows is a major

step of globalization. The foreign investment regime has been quite

transparent and thus the economy is getting boosted up. Various sectors
were opened up for liberalizing the FDI regime.

Is globalization delivering all the desired results to the masses? Or only a

few can feel the benefits of globalization? Figures have out rightly proved that the
global average per capita income showed a strong surge throughout the 20th
century but the income gap between rich and poor countries have not been bridged
for many decades now. The ultimate inference being that globalization hasn't
shown positive results.

30
 MERITS & DEMRITS OF GLOBALIZATION

The Merits of Globalization are as follows:

• There is an International market for companies and for consumers there is a

wider range of products to choose from.

• Increase in flow of investments from developed countries to developing

countries, which can be used for economic reconstruction.

• Greater and faster flow of information between countries and greater cultural
interaction has helped to overcome cultural barriers.

• Technological development has resulted in reverse brain drain in developing

countries.

• With globalization, there is a global market for companies to trade their

products and a wider range of options for people, to choose from among the
products of different nations.

31
• Developing countries benefit a lot from globalization, as there is a sound
flow of money and thus, a decrease in the currency difference.

• To meet the increasing demands that follow globalization, there is an

increase in the production sector. This gives loads of options to the
manufacturers as well.

• Competition keeps prices relatively low, and as a result, inflation is less

likely to occur.

• 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.

• As communication increases amongst two countries, there is interchange of

cultures as well. We get to know more about the other's cultural preferences.

• As we feed to each other's financial needs, the ecological imbalance is also

meted out. Governments of countries show concern about each other.

32
The Demerits of Globalization are as follows

• The outsourcing of jobs to developing countries has resulted in loss of jobs

in developed countries.

• There is a greater threat of spread of communicable diseases.

• There is an underlying threat of multinational corporations with immense

power ruling the globe.

• For smaller developing nations at the receiving end, it could indirectly lead
to a subtle form of colonization.

• Globalization is causing Europeans to lose their jobs as work is being

outsourced to the Asian countries. The cost of labor in the Asian countries is
low as compared to other countries.

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.

• Companies are as opening their counterparts in other countries. This results

in transferring the quality of their product to other countries, thereby
increasing the chances of depreciation in terms of quality.

• 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

Effects of Globalization on different industries

• On Industrial
sector
• On Petrol sector
• On Chemical
sector
• On social Life &
economic Life

35
EFFECTS OF GLOBALIZATION ON DIFFERENT INDUSTRIES

Effects of Globalization on Indian Industry

Effects of Globalization on Indian Industry started when the government

opened the country's markets to foreign investments in the early 1990s.
Globalization of the Indian Industry took place in its various sectors such as steel,
pharmaceutical, petroleum, chemical, textile, cement, retail, and BPO.

Globalization means the dismantling of trade barriers between

nations and the integration of the nations economies through financial flow,
trade in goods and services, and corporate investments between nations.
Globalization has increased across the world in recent years due to the fast
progress that has been made in the field of technology especially in
communications and transport. The government of India made changes in
its economic policy in 1991 by which it allowed direct foreign investments in
the country. As a result of this, globalization of the Indian Industry took
place on a major scale.

The various negative Effects of Globalization on Indian Industry are

that it increased competition in the Indian market between the foreign companies
and domestic companies. With the foreign goods being better than the Indian
goods, the consumer preferred to buy the foreign goods. This reduced the amount
of profit of the Indian Industry companies.

This happened mainly in the pharmaceutical, manufacturing,

chemical, and steel industries. The negative Effects of Globalization on Indian

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.

The effects of globalization on Indian Industry have proved to be positive as

well as negative. The government of India must try to make such economic
policies with regard to Indian Industry's Globalization that are beneficial and not
harmful.

 Globalization and Structural Changes  Globalization and the Indian

in the Indian Industrial Sector Petroleum Industry
 Globalization of Indian  Globalization and Indian
Pharmaceutical Industry Chemical Industry
 Globalization and Indian Textile  Globalization and the Indian
Industry Manufacturing Sector
 Small Scale Industries in India in The  Effects of Globalization on Indian
Globalization Era Steel Industry
 Globalization and Indian Cement  Globalization and Indian Retail
Industry Industry
 Globalization and SMEs

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.

Structural Changes in the Indian Industrial Sector and Globalization

were initiated because the government wanted to encourage growth by doing away
with supply bottlenecks that stopped efficiency and competitiveness.

Globalization implies the dismantling of trade barriers between nations and

the integration of the economies of the nations through financial flow; trade in
services and goods, and corporate investments between nations. Globalization has
increased in the recent years due to the rapid progress that has been made in the
area of technology especially in communications and transport. The Indian policies
with regard to the industrial sector before globalization had imposed many
restrictions on the sector with regard to the use and procurement of capital and raw
material, type and nature of industry where the entry of private sector was allowed,
the operation scale, and the various markets where they could supply. The Indian
industrial policies favored firms of small size that were labor intensive.

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.

The various disadvantages of Globalization and Structural Changes in the

Indian Industrial Sector are that with many foreign companies entering the sector
increased the competition for the domestic companies. With foreign goods being
better then the Indian products, the consumer in the country preferred to buy the
foreign goods. This reduced the profit levels of the Indian companies and they had
to resort to lowering the prices of their products which in turn further lowered their
levels of profit. With highly advanced technology entering the Indian Industrial
Sector, the number of labor required in the sector reduced. The number of labor in
the Indian Industrial Sector in 1990-1991 was 81, 62,504 and in 2003-2004, the
figure has decreased to 78, 70,081. Thus, Globalization and Structural Changes in
the Indian Industrial Sector poses advantages and disadvantages for the country. So
the government of India must take steps in order to ensure that the changes in the
structure of the Indian Industrial Sector are such that it facilitates globalization in a
manner that is gainful and constructive for a country like India.

39
Globalization and the Indian Petroleum Industry

Globalization and the Indian Petroleum Industry go hand in hand

since Globalization of the Indian Petroleum Industry started soon after the
independence of the country. The Indian Petroleum Industry was dependent from
the very beginning on foreign capital, expert personnel, and technology, which led
to the industry's globalization. Globalization entails the integration of the nations'
economies through corporate investments, financial flow, and trade in goods and
services between nations. Globalization also means the dismantling of trade
barriers between nations and it has increased in the last few years due to the
massive progress that has been made in the area of technology, especially in
transport and communications. The Indian Petroleum Industry's Globalization took
place since foreign involvement in the various important stages such as production,
refining, exploration, and transportation increased over the years. In order to
further encourage the Globalization of the Indian Petroleum Industry, the
government of India took certain measures in the early 1990s when the country
opened its markets to foreign investments.

Globalization and the Indian Petroleum Industry has-been going together as

has been seen for the past many years. The government of India has taken several
measures in order to ensure that the Globalization of the Indian Petroleum Industry
is successful for the industry. In the future, the government is likely to ensure that

40
Indian Petroleum Industry's Globalization is beneficial for the industry and not
harmful.

Effects of globalization In Indian chemical industry

Effects of globalization In Indian chemical industry the process of

globalization of Indian chemical industry was initiated in the early 1990s. The
erstwhile Indian chemical industry suffered due to the absolute monopoly of the
Government of India enterprises.

But with the opening of the Indian markets to Foreign Institutional

Investors (FII) and Foreign Direct Investments (FDI) the monopoly of these
Government institutions were curtailed substantially. This gave rise to the opening
up of the Indian chemical industry to host of untapped opportunities. With the
introduction of the open-market economic policy by the Government of India the
process of globalization of Indian chemical industry took a steady rise. The
Department of Chemicals & Petrochemicals under Government of India is the
concerned highest authority that regulates the Indian chemical industry and the
allied areas of environmental concern. The chemical Industry of India is at par with
world standard and it shares a good portion of chemical business in world market.
Asian countries, African countries and even Arab world buys Indian chemical
products. The demand for Indian chemical products is high across the world. The
reason for this popularity is its high quality and competitive pricing. India's low
cost and high end chemical products manufacturing expertise coupled with world

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.

Impact of Globalization on Employment in India

Globalization has played an important role in the generation of employment

in India. Since the economic liberalization policies in the 1990s, the employment
scenario in the country has significantly improved. An analysis of the impact of
globalization on employment in India will bring out a number of factors in this
regard.

Growth of new segments in the market

Due to globalization and the growth of the consumer market, a number of

segments in various sectors of the industry have grown over the years. This has led
to the significant rise in the rate of demand and supply. In the recent years, a
number of industry segments such as information technology, agro products,
personal and beauty care, health care and other sectors have come into the market.

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.

Improvement in the standard of living

As globalization has put a favorable impact in the economy of the country,

there has been an improvement in the standard of living of the people. The
favorable economic growth has led to the development of infrastructure, health
care facilities and services, per capita income and other factors which have really
led to the high growth rate. It has been expected that the economy in India will
grow by around 6-7% yearly. This growth rate is expected to improve the overall
employment situation more and the per capita income will also increase
significantly.

Development of other sectors

Globalization has positively affected the growth of various sectors in India.

These have opened up new employment opportunities for the people. The service
industry has a share of around 54% of the yearly Gross Domestic Product (GDP).
From this figure itself, it is understood that the service industries are doing very
well in the market and as such, plenty of employment opportunities are taking

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%.

Growth of new segments in the market

Due to globalization and the growth of the consumer market, a number of

segments in various sectors of the industry have grown over the years. This has led
to the significant rise in the rate of demand and supply. In the recent years, a
number of industry segments such as information technology, agro products,
personal and beauty care, health care and other sectors have come into the market.
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.

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

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.

Development of other sectors

Globalization has positively affected the growth of various sectors in India.

These have opened up new employment opportunities for the people. The service
industry has a share of around 54% of the yearly Gross Domestic Product (GDP).
From this figure itself, it is understood that the service industries are doing very
well in the market and as such, plenty of employment opportunities are taking
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%.

45
 Chapter.4

Liberalization in India

• Introduction
• Liberalization in
India
• Merits & Demarits

46
LIBERALIZATION

The Government of India started the economic liberalization policy in 1991.

Even though the power at the center has changed hands, the pace of the reforms
has never slackened till date. Before 1991, changes within the industrial sector in
the country were modest to say the least. The sector accounted for just one-fifth of
the total economic activity within the country. The sectoral structure of the
industry has changed, albeit gradually. Most of the industrial sector was dominated
by a select band of family-based conglomerates that had been dominant
historically. Post 1991, a major restructuring has taken place with the emergence of
more technologically advanced segments among industrial companies. Nowadays,
more small and medium scale enterprises contribute significantly to the economy.

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.

2. Cheaper Products for Consumer: Trainers are Cheap.

3. Leads to Outsourcing in some cases which can lead to job loses: Moving call
centers to India.

4. Lowering of international Bariers: Now European Union can Trade with

ASEAN and NAFTA.

5. Providing jobs in LEDC's and help develop economy (less Economically

Developed Countries)

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

2. Widening of Gap between rich and poor countries

3. Harder for Smaller businesses to establish themselves

4. Exploitation of workers: Paying the workers in LEDC's a fraction of what would

be paid in to workers in LEDCs.

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

Transfer of government services or assets to the private sector. State-owned

assets may be sold to private owners, or statutory restrictions on competition
between privately and publicly owned enterprises may be lifted. Services formerly
provided by government may be contracted out. The objective is often to increase
government efficiency; implementation may affect government revenue either
positively or negatively. Privatization is the opposite of nationalization; a policy
resorted to by governments that want to keep the revenues from major industries,
especially those that might otherwise be controlled by foreign interests.

ADVANTAGES OF PRIVATIZATION

• ·Privatization places the risk in the hands of business or Private Enterprise.

• ·Private enterprise is more responsive to customer complaints and
innovation.
• ·The Govt. should not be a player and an umpire.
• ·Privatization provides a one off cash boost for Govt. This can be spent on
Hospitals etc...
• ·Privatization leads to lower prices and greater supply.
• ·Competition in privatization increases differentiation.

53
DISADVANTAGES OF PRIVATIZATION

• Privatization is expensive and generates a lot of income in fees for

specialist advisers such as banks.
• Public monopolies have been turned into private monopolies with too
little competition, so consumers have not benefited as much as had
been hoped. This is the main reason why it has been necessary to
create regulators (OFWAT, OFGAS etc). This is an important point. It
partly depends on how the privatization took place. For example, the
railways were privatized in bit of a rush and there might have been
other ways to do it so that more competition was created. It partly
depends on the market. Some markets are 'natural monopolies'
where competition is difficult. For example, it would be very wasteful
and expensive to build two sets of track into Liverpool Street just to
create some competition. Natural monopolies create a special
justification for public ownership in the general public interest.
• The nationalized industries were sold off too quickly and too cheaply.
With patience a better price could have been had with more beneficial
results on the government's revenue. In almost all cases the share
prices rose sharply as soon as dealing began after privatization.
• The privatized businesses have sold off or closed down unprofitable
parts of the business (as businesses normally do) and so services
e.g. transport in rural areas have got worse.
• Wider share ownership did not really happen as many small investors
took their profits and didn't buy anything else.

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:-

• Royal Bank of Scotland

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

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.

Abn Amro Bank HDFC Bank

Allahabad Bank HSBC Bank
American Express Bank ICICI Bank
Andhra Bank IDBI
Axis bank Indian Overseas Bank
Bank of India Oriental Bank of Commerce
Canara Bank Punjab National Bank

Central Bank of India State Bank Of India (SBI)

Citibank Standard Chartered Bank

56
 Chapter.6

ICICI Bank and studies

• Introduction
• Product & services
• SWOT Analysis

57
 INTRODUCTION OF ICICI BANK

ICICI Bank (formerly Industrial Credit and Investment Corporation of India)

is India's largest PRIVATE SECTOR BANK by market capitalization and second
largest overall in terms of assets. Bank has total assets of about USD 77 billion.
ICICI Bank offers a wide range of banking products and financial services to
corporate and retail customers through a variety of delivery channels and
specialized subsidiaries and affiliates in the areas of investment banking, life and
non-life insurance, venture capital and asset management. (These data are
dynamic.) ICICI Bank is also the largest issuer of credit cards in India. ICICI Bank
has got its equity shares listed on the stock exchanges at Kolkata and Baroda,
Mumbai and the National Stock Exchange of India Limited, and its ADRs on the
New York Stock Exchange (NYSE).

The Bank is expanding in overseas markets and has the largest

international balance sheet among Indian banks. ICICI Bank now has wholly-
owned subsidiaries, branches and representatives offices in 18 countries, including
an offshore unit in Mumbai. This includes wholly owned subsidiaries in Canada,

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

STRONG NATIONAL NETWORK

59
 ICICI BANK

FIGURES STATING THE NUMBER OF BRANCHES AND ATMS OF

ICICI BANK

ICICI March 2008

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

K V Kamath Non Executive Chairman

Chanda D Kochhar Managing Director & CEO

Sandeep Bakhshi Deputy Managing Director

N S Kannan Executive Director & CFO

Sonjoy Chatterjee Executive Director

M S Ramachandran Non Executive Director

K Ramkumar Executive Director

MISSION

• To identify and support initiatives which are designed to improve the

capacity of the poorest of the poor to participate in the larger economy.

• These initiatives must be cost effective, capable of large-scale replication

and should have the potential for both near and long-term impact.

To leverage technology in order to overcome constraints and

enhance the effectiveness of various social initiatives

PRODUCTS AND SERVICES OF ICICI BANK

62
ICICI BANK PRODUCT

OFFERS SERVICE SUCH AS

1. Personal banking
2. Wholesale banking
3. NRI banking

PERSONAL BANKING

63
 Loan Product Deposit Product Investment & Insurance

• Auto Loan • Saving a/c • Mutual Fund

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

CARDS

64
 Cards Payment Services Access To Bank Forex Services

• Credit Card • Net Safe • Net Banking • Product

• Debit Card • Merchant • One View &

• Prepaid Card • Prepaid Refill • Instant Alert Services

• Bill pay Mobile Banking • Trade

• Visa Bill pay • ATM 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

Corporate Small and Medium Financial Institutions and

Enterprises Trusts

• Funded • Funded Services BANKS

Services • Non Funded • Clearing Sub-
• Non Funded Services Membership
Services • Specialized Services • RTGS –
• Value Added • Value added submembership
Services services • Fund Transfer
• Internet • Internet Banking • ATM Tie-ups
Banking • Corporate Salary a/c
• Tax Collection
Financial Institutions
Mutual Funds
Stock Brokers
Insurance Companies
Commodities Business
Trusts

66
 Accounts & Deposits

• Rupee Saving a/c

• Rupee Current a/c
• Rupee Fixed Deposits
• Foreign Currency Deposits
• Accounts for Returning
Indians

Investment & Insurances Loans

• Mutual Funds • Home Loans

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

Payment Services Access To Bank

67
 BUSINESS STRETEGY

1. Identify and support projects and programmed that are within its focus areas and,

• have a large- scale and measurable- impact;

• Are replicable in a cost effective manner; and
• Are time-bound.

2. Identify and support pilot projects within its focus areas.

3. Contribute towards improving the efficacy of assisted organizations through:

• 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).

2. LOW OPERATING COST:

ICICI Bank is not only known for large capital but also for

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.

2. NOT EQUAL TO INTERNATIONAL STANDARDS:

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.

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.

2. ENTRY OF MANY FOREIGN BANKS:

In recent times, India has witnessed entry of many
international banks like CITI Bank, YES Bank etc which posses an external
entrant threat to ICICI Bank – as this Banks are known for their art of working
and maintain high standards of customer service.

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:-

ICICI BANK IS THE LARGEST PRIVATE SECTOR BANK IN INDIA.

BANK WAS INTRODUCED IN VERY LATE AS COMPARED TO OTHER
BANKS BUT IT TOOK VERY FAST GROWTH IN THE SECTOR.
MAINTAINING RELATIONSHIP AND SERVICE PROVIDEING IS THE
MAIL OBJECTIVE OF THE BANK. THIS MAKES THEM NO.1 IN THEIR
BUSINESS. HDFC BANK AND SBI BANKS ARE THE MAIN
COMPITITORS OF ICICI BANK. PROFESSIONAL APPROACH AND
EDUCATED AND EFFICIENT HUMAN RESOURCE MADE THEM THE 1ST
CHOICE OF THE CUSTOMER.

AS COMPARED TO OTHER BANKS ICICI BANK CHARGES HIGHER

FEES BUT AS PER THE NEW ERA CUSTOMER COMES FOR THE
SERVICE AND SPECIAL TREATMENT. THIS WAS STARTED BY ICICI
BANK. BECAUSE OF GLOBALIZED MARKET THE NEEDS &
REQIREMENTS OF THE CUSTOMER CAN BE UNDERSTOOD MORE

72
NICELY. NEW TECHNIQUES AND SERVICES WHICH ARE INTRODUCED
IN THE GLOBAL MARKET CAN BE UNDERSTOOD NICELY.

OTHER BAD ASPECT OF GLOBALIZATION WAS FACED BY ICICI

BANK WAS IN THE YEAR OF 2008. US CRISES AND BANKRUPCY OF
FAMOUS GLOBALIZED BANK LEHMEN BROTHERS ICICI LOST HUGE
CAPITAL AND MONEY. BUT BECAUSE OF THEIR CUSTOMER
RELARIONSHIP AND SERVICE DELIEVERY IN A SHORT TIME THEY
MANAGED THE WHOLE SCENARIO.

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 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.

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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:-

GLOBALIZATOIN AND INDIA

INDIAN BANKING INDUSTRY

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