banking project

A PROJECT REPORTON

FINANCIAL SERVICESOF

BANKS

Submitted to University of Mumbai in

Partial fulfillment

Of the requirement of the

Degree of B.Com

“BANKING & INSURANCE”

Under guidance of

PROF. RUEEN PATEL

VPM’SK.G Joshi College of Arts

N.G Bedekar College of Commerce

Thane (E)

Academic Year: 2010-11

BY-

JEMINI.J.PATIL

ACKNOWLEDGEMENT

In completing this project I am deeply conscious of my debt to all

those, without whose warm support, enragement & guidance this project was

not possible to complete. I am specially greatful to Prof Rueen Patel my

guide to this project, She actually gave the life to this project and guidance

of my parents & friends this project took shape. They also provided me

much needed criticism & encouragement.

Jemini Patil

DECLARATIONDECLARATION

I am Jemini J. Patil studying in T.Y.Banking & Insurance hereby

declare that I have done a project on “Financial Services provided by

Banks”. As required by the university rules, I state that the work presented in

this thesis is original in nature and to the best my knowledge, has not been

submitted so far to any other university.

Whenever references have been made to the work of others, it is

clearly indicated in the sources of information in references.

Student (Jemini. J. Patil)

Place: Thane

Date: October, 2010

EXECUTIVE SUMMARY

Banks are the Financial Institution which satisfies the individual & group

goals with proper systems of rules, regulations, policies, services, procedures

& strategies. To achieve the goals and objectives the main component of the

banks are the customers.

Banks are the diversified financial services company that provide a range of

services to customer including retail banking, venture capital, private equity,

working capital finance etc.

The aim of the banks is to provide state-of-the-art, low cost and efficient

banking services, with a focus on increasing fee-based income. New

innovative products are been offered, even a small investor is able to invest

in such products.

India’s financial services sector is expected enjoy generally strong growth

during coming years, driven by rising personal incomes, financial sector

liberalization and the growth of a more consumer oriented, credit-oriented

culture. This is expected to lead to increasing demand for financial products,

including consumer loans as well as investment products.

INDEX

SR NO PARTICULARS PG NO

1 Overview of Banking

1.1 Introduction to Banks1.2 History of Banks1.3 Functions of Banks1.4 Banking Products1.5 Introduction to Financial Services1.6 Features of Financial Services1.7 Importance of Financial Services1.8 Sources of Revenue1.9 Objectives of Financial Services1.10 Causes of Financial Innovation1.11 Present Scenario of Financial Services

2 Channels through which Products & Services are offered

2.1 Branches2.2 Mobile Banking2.3 Telephone Banking2.4 Internet Banking2.5 ATM

3 Products & Services of Banks

3.1 Deposits3.2 Credit Cards3.3 Loans3.4 Investments

4 Innovative Financial Products & Services

5 Overview of ICICI Bank

5.1 History of ICICI Bank5.2 Introduction of ICICI Bank5.3 Products and Services5.4 Awards and Recognitions

6 Data Analysis & Interpretation

7 Conclusion

8 Suggestion

9 Bibliography

10 Annexure

LIST OF DIAGRAM’S

SR.NO PARTICULARS PG.NO

1 1.3 Functions of Banks 1.8 Classification of Financial Services

2 Various Channels of Services

3 3.1 Types of Deposits 3.2 Types of Credit Cards 3.3 Various types of Loans 3.4 Alternative Avenues for Investment

CHAPTER- 1

OVERVIEW OF BANKING

CHAPTER – 1

OVERVIEW OF BANKING

1.1 INTRODUCTION TO BANK

A bank has been described as an institution engaged in accepting deposits

and granting loans. It is the institution which deals in money and credit. It

can also be described as an institution which borrows idle resources, makes

fund available to those who need it and helps in cheap remittance of money

from one place to another. In the modern time term bank is used in wider

term. Now it does not refer only to particular place of lending and depositing

money but it also acts as an agent which looks after the various financial

problems of its customers.

1.2 HISTORY OF BANKS:

The banking system in India is based on British banking company which is

largely branch banking. Commercial banks in India were started during the

latter half of 19th century Bank of Bengal, Bank of Bombay and Bank of

Madras were later amalgamated to form one bank called as Imperial bank of

India under the Imperial bank of India Act 1920. The Imperial bank carried

with business of commercial bank manages the public debt office of central

and state government. The second half of 19th century saw establishment of

Bank of Baroda, Allahabad bank, and Punjab National Bank. These banks

were set up by merchants and traders to combined trading with banking.

These led to the series if failures of banks. The strengthening of banking

system took place after the establishment of Reserve Bank of India, 1939 as

is empowers to regulate the banking money, inspection of mergers and

acquisition in terms of Banking Companies Act 1949 which later came to be

known as Banking Regulation Act 1949.

1.3 FUNCTIONS OF BANKS

Though borrowing and lending constitute the main functions of banking, yet

they are not only functions of commercial banks. Commercial banks are

involved in diversified activities and perform varieties of function. The

functions of a modern bank are classified under the following heads:

‘

CHART: FUNCTION OF BANKS

FUNCTIONOF BANKS

1.4 BANKING PRODUCTS

Banks in India have traditionally offered mass banking products. Most

common deposit products being Savings Bank, Current Account, Term

deposit Account and lending products being Cash Credit and Term Loans.

Due to Reserve Bank of India guidelines, Banks have had little to do besides

accepting deposits at rates fixed by Reserve Bank of India and lend amount

arrived by the formula stipulated by Reserve Bank of India at rates

prescribed by the latter. PLR (Prime lending rate) was the benchmark for

interest on the lending products. But PLR itself was, more often than not,

dictated by RBI. Further, remittance products were limited to issuance of

Drafts, Telegraphic Transfers, and Bankers Cheque and Internal transfer of

funds.

In view of several developments in the 1990s, the entire banking products

structure has undergone a major change. As part of the economic reforms,

banking industry has been deregulated and made competitive. New players

have added to the competition. IT revolution has made it possible to provide

ease and flexibility in operations to customers. Rapid strides in information

technology have, in fact, redefined the role and structure of banking in India.

Further, due to exposure to global trends after Information explosion led by

Internet, customers - both Individuals and Corporate - are now demanding

better services with more products from their banks. Financial market has

turned into a buyer's market. Banks are also changing with time and are

trying to become one-stop financial supermarkets.

A few foreign & private sector banks have already introduced customized

banking products like Investment Advisory Services, SGL II accounts,

Photo-credit cards, Cash Management services, Investment products and

Tax Advisory services. A few banks have gone in to market mutual fund

schemes. Eventually, the Banks plan to market bonds and debentures, when

allowed. Insurance peddling by Banks will be a reality soon. The recent

Credit Policy of RBI announced on 27.4.2000 has further facilitated the

entry of banks in this sector. Banks also offer advisory services termed as

'private banking' - to "high relationship - value" clients.

1.5 INTRODUCTION TO FINANCIAL SERVICES

The Indian financial services industry has undergone a metamorphosis since

1990. During the late seventies & eighties, the Indian financial services

industry was dominated by commercial banks and other financial institution

which cater to the requirements of the Indian industry. The economic

liberalization has brought in a complete transformation in the Indian

financial services industry.

The term “Financial Services” in a broad sense means “mobilizing and

allocating savings”. Thus it includes all activities involved in the

transformation of savings into investment. The ‘financial service’ can also

be called ‘financial intermediation’. Financial intermediation is a process by

which funds are mobilized from a large number of savers and make them

available to all those who are in need of it and particularly to corporate

customers. Thus, financial service sector is a key area and it is very vital for

industrial developments. A well developed financial services industry is

absolutely necessary to mobilize the savings and to allocate them to various

investable channels and thereby to promote industrial development in a

country. Financial services, through network of elements such as financial

institution, financial markets and financial instruments, serve the needs of

individuals, institutions and corporate. It is through these elements that the

functioning of the financial system is facilitated. Considering its nature and

importance, financial services are regarded as the fourth element of the

financial system.

1.6 FEATURES OF FINANCIAL SERVICE

Customer-Oriented: Like any other service industry financial service

industry is also a customer-oriented one. That customer is the king

and his requirements must be satisfied in full should be the basic

tenent of any financial service industry. It calls for designing

innovative financial products suitable to varied risk-return

requirements of customer.

Intangibility: Financial services are intangible and therefore, they

cannot be standardized or reproduced in the same form. Hence, there

is a need to have a track record of integrity, reputation, good corporate

image and timely delivery of services.

Simultaneous Performance: Yet another feature is that both

production and supply of financial services have to be performed

simultaneously. Therefore, both suppliers of services and consumers

should have a good rapport, clear-cut perception and effective

communication.

Dominance of Human Element: Financial services are dominated by

human element and thus, they are people-intensive. It calls for

competent and skilled personnel to market the quality financial

products. But, quality cannot be homogenized since it varies with

time, place and customer to customer.

Perishability: Financial services are immediately consumed and

hence inventories cannot be created. There is a greater need for

balancing demand and supply properly. In other words, marketing and

operations should be closely inter-linked..

1.7 IMPORTANCE OF FINANCIAL SERVICES

Economic Growth: The financial service industry mobilizes the

savings of the people and channels them into productive investment

by providing various services to the people. In fact, the economic

development of a nation depends upon these savings and investment.

Promotion of Savings: The financial service industry promotes

savings in the country by providing transformation services. It

provides liability, asset and size transformation service by providing

large loans on the basis of numerous small deposits. It also provides

maturity transformation services by offering short-term claim to

savers on their liquid deposit and providing long-term loans to

borrowers.

Capital Formation: The financial service industry facilitates capital

formation by rendering various capital market intermediary services –

capital formation in the very basis for economic growth. It is the

principal mobilizer, of surplus funds to finance productive activities

and thus it promotes capital accumulation.

Provision of Liquidity: The financial service industry promotes

liquidity in the system by allocating and reallocating savings and

investment into various avenues of economic activity. It facilitates

easy conversion of financial asset into liquid cash at the discretion of

the holder of such assets.

Financial Intermediation: The financial service industry facilitates

the function of intermediation between savers and investors by

providing a means and a medium of exchange and by undertaking

innumerable services.

Contribution to GNP: The contribution of financial services to GNP

has been going on increasing year after year in almost all countries in

recent times.

Creation of Employment Opportunities: The financial service

industry creates and provides employment opportunities to millions of

people all over the world.

1.8 SOURCES OF REVENUE

Accordingly, there are two categories of sources of income for a financial

service company namely: fund based &fee- based. Fund-based income

comes mainly from interest spread, lease rentals, income from investments

in capital market and real estate. On the other hand, fee based income has its

sources in merchant banking, advisory services, custodial services, loan

syndication etc. income has its sources in merchant banking, advisory

services, custodial services, loan syndication etc. A major part of income is

earned through fund-based activities. At the same time, it involves a large

share of expenditure in the form of interest & brokerage. It means that such

companies should have to compromise the quality of its investment. On the

other hand fee-based income does not involve much risk.

CLASSIFICATION OF FINANCIAL SERVICES

Fund-based Activities Fee-based Activities

1 .Leasing

2 .Hire Purchase

3 .Discounting

4 .Loans

5 .Venture Capital

6 .Housing Finance

7 .Factoring

1.9 OBJECTIVES OF FINANCIAL SERVICES

Fund raising: Financial services help to raise the required funds from

a host of investors, individuals, institution and corporate. For this

purpose, various instruments of finance are used.

Funds deployment: An array of financial services is available in the

financial markets which help the players to ensure an effective

deployment of funds raised. Services such as bill discounting, parking

of short-term funds in the money market,

credit rating &securitization of debts are

provided by financial services firms in order

to ensure efficient management of funds.

Specialized services: The financial service

sector provides specialized services such as

credit rating, venture capital financing, lease

financing, mutual funds, credit cards, housing finance, etc besides

banking and insurance. Institutions and agencies such as stock

1 .Issue Management

2 .Portfolio Management

3 .Capital Restructuring

4 .Loan Syndication

5 .Merger & Acquisition

6 .Corporate Councelling

7 .Foreign Collaborations

exchanges, non-banking finance companies, subsidiaries of financial

institutions, banks & insurance companies also provide these services.

Regulation: There are agencies that are involved in the regulation of

the financial services activities. In India, agencies such as the

Securities and Exchange Board of India (SEBI), Reserve Bank of

India (RBI) and the Department of Banking and Insurance of the

Government of India, regulate the functioning of the financial service

institutions.

Economic growth: Financial services contribute, in good measure, to

speeding up the process of economic growth & development.

1.10 CAUSES OF FINANCIAL INNOVATION

Financial intermediaries have to perform the task of financial innovation to

meet the dynamically changing needs of the economy. There is a dire

necessity for the financial intermediaries to go for innovation due to

following reasons:

Low profitability: The profitability of the major financial

intermediary, namely banks has been very much affected in recent

times. There is a decline in the profitability of traditional banking

products. So, they have compelled to seek out new products which

may fetch high returns.

Keen competition: The entry of many financial intermediaries in the

financial sector market has led to severe competition among

themselves. This keen competition has paved the way for the entry of

varied nature of innovative financial products so as to meet the varied

requirements of the investors.

Economic liberalization: Reform of the financial sector constitutes

the most important component of India’s programme towards

economic liberalization. The recent economic liberalization measures

have opened the door to foreign competitors to enter into our domestic

market. Deregulation in the form of elimination of exchange controls

and interest rate ceilings have made the market more competitive.

Innovation has become a must for survival.

Improved communication technology: The communication

technology has become so advanced that even the world’s issuers can

be linked with the investors in the global financial market without any

difficulty by means of offering so many options and opportunities.

Hence, innovative products are brought into the domestic market in no

time.

Customer service: Nowadays, the customer’s expectations are very

great. They want newer products at lower cost or at lower credit risk

to replace the existing ones. To meet this increased customer

sophistication, the financial intermediaries are constantly undertaking

research in order to invent a new product which may suit to the

requirement of the investing public. Innovations thus help them in

soliciting new business.

Global impact: Many of the providers and users of capital have

changed their roles all over the world. Financial intermediaries have

come out of their traditional approach and they are ready to assume

more credit risks. As a consequence, many innovations have taken

place in the global financial sector which has its own impact on the

domestic sector also.

Investor awareness: With a growing awareness amongst the

investing public, there has been a distinct shift from investing the

savings in physical assets like gold, silver, land etc. to financial assets

like shares, debentures, mutual funds etc. To meet the growing

awareness of the public, innovation has become the need of the hour.

1.11 PRESENT SCENARIO OF FINANCIAL SERVICES

Conservatism to dynamism:

At present, the financial system in India is in a process of rapid

transformation, particularly after the introduction of reforms in the

financial sector. The main objective of the financial sector reforms is

to promote an efficient, competitive and diversified financial system

in the country. This is essential to raise the allocative efficiency of

available savings and to promote the accelerated growth of the

economy as a whole. The emergence of various financial institution

and regulatory bodies has transformed the financial services sector

from being a conservative industry to a very dynamic one.

Emergence of Primary Equity Market: The capital markets have

become a popular source of raising finance. The aggregate funds

raised by the industries have gone from Rs. 5976 crore in 1991-92 to

Rs. 32382 crore in 2006-07. Thus the primary market has emerged as

an important vehicle to channelize the savings of the individuals and

corporates for productive purposes and thus to promote the industrial

& economic growth of our nation.

Concept of Credit Rating: The investment decisions of the investors

have been based on factors like name recognition of the company,

reputation of promoters etc. now, grading from an independent agency

would help the investor in his portfolio management and thus, equity

grading is going to play a significant role in investment decision

making.

Now it is mandatory for non-banking financial companies to get

credit rating for their debt instruments. The major credit rating

agencies functioning in India are:

i. Credit Rating Information Services of India Ltd.

ii. Credit Analysis and Research Ltd.

iii. Investment Information and Credit Rating Agency.

iv. Duff Phelps Credit Rating Pvt. Ltd.

Process of Globalization: The process of globalization ha paved the

way for the entry of innovative financial products into our country.

The government is very keen in removing all obstacles that stand in

the way of inflow of foreign capital. India is likely to enter the full

convertibility era soon. Hence, there is every possibility of

introduction of more and more innovative financial services in our

country.

Process of Liberalization: The government of India has initiated

many steps to reform the financial services industry. The Government

has already switched over to free pricing of issues from pricing issues

by the Controller of capital issues. The interest rates have been

deregulated. The private sector has been permitted to participate in

banking and mutual funds and the public sector undertakings are

being privatized. The financial service industry in India has to play a

positive and dynamic role in the years5 India has to play a positive

and dynamic role in the years to come by offering many innovative

products to suit to the varied requirements of the millions of

prospective investors spread throughout the country.

CHAPTER- 2

VARIOUS CHANNELS THROUGH

WHICH SERVICES & PRODUCTS ARE

OFFERED

CHAPTER-2

VARIOUS CHANNELS THROUGH WHICH PRODUCTS &

SERVICES ARE OFFERED BY BANKS

CHARTS: VARIOUS CHANNELS OF SERVICES

2.1 BRANCHES

A branch, banking center or financial center is a retail location where a bank,

credit union, or other financial institution offers a wide array of face-to-face

and automated services to its customers.

In the period from 1100-1300 banking started to expand across Europe and

banks began opening ‘branches’ in remote, foreign locations to support

international trade. Historically, branches were housed in imposing

BRANCHES

INTERNET BANKING

MOBILE BANKING

TELEPHONE BANKING

ATM

buildings, often in a neo-classical architecture style. Today, branches may

also take the form of smaller offices within a larger complex, such as a

shopping mall.

Traditionally, the branch was the only channel of access to a financial

institution’s services. Services provided by a branch include cash

withdrawals and deposits from a demand account with a bank teller,

financial advice through a specialist, safe deposit box rentals, bureau de

change, insurance sales, etc. As of the early 21st Century, features such as

Automated Teller Machine (ATM), telephone and online banking, allow

customers to bank from remote locations and after business hours. This has

caused financial institution to reduce their branch business hours and to

merge smaller branches into larger ones. They converted some into mini-

branches with only ATMs for cash withdrawal and depositing; computer

terminals for online banking and cheque depositing machines.

Some financial institutions, to show a friendlier image, offer a boutique or

coffee house-like environment in their branches, with sit-down counters,

refreshments, interactive displays. Some branches also have drive-through

teller windows or ATMs.

2.2 MOBILE BANKING

Mobile banking also known as M-Banking, SMS Banking is a term used for

performing balance checks, account transactions, payment etc. Over the last

few years, the mobile and wireless market has been one of the fastest

growing markets in the world and it is still growing at a rapid pace. With

mobile technology, banks can offer services to their customers such as doing

funds transfer while travelling, receiving online updates of stock price or

even performing stock trading while being stuck in traffic.

A specific sequence of SMS messages will enable the system to verify if the

client has sufficient funds in his or her wallet and authorize a deposit or

withdrawal transaction at the agent.

Many believe that mobile users have just started to fully utilize the data

capabilities in their mobile phones. In Asian countries like India, China,

where mobile infrastructure is comparatively better than the fixed-line

infrastructure, and in European countries, where mobile phone penetration is

very high, mobile banking is likely to appeal even more.

Mobile Banking Services

Account Information

1) Mini-statement and checking of account history

2) Alerts on account activity

3) Monitoring of term deposits

4) Access to loan statements

5) Access to card statements

6) Mutual fund/ equity statements

7) Pension plan management

8) Insurance policy management

9) Status on cheque, stop payment on cheque

10) Ordering cheque books

11) Balance checking in the account

12) Recent transactions

13) Due date of payment

14) PIN provision

15) Blocking of cards

Payments, Deposits, Withdrawals and Transfers

1) Domestics and international fund transfers

2) Micro-payment handling

3) Mobile recharging

4) Commercial payment processing

5) Bill payment processing

6) Peer to Peer payments

7) Withdrawal at banking agent

8) Deposit at banking agent

2.3 TELEPHONE BANKING

Telephone banking is a service provided by a financial institution , which

allows its customers to perform transactions over the telephone. Most

telephone banking services use an automated phone answering system with

phone keypad response or voice recognition capability. To guarantee

security, the customer must first authenticate through a numeric or verbal

password or through security questions asked by a live representative.

With the obvious exception of cash withdrawals & deposits, it offers

virtually all the features of an automated teller machine: account balance

information and list of latest transactions, electronic bill payments, funds

transfers between a customer’s accounts.etc

Usually, customers can also speak to alive representative located in a call

centre or a branch, although this feature is not always guaranteed to be

offered 24/7. In addition to the self-service transactions listed earlier,

telephone banking representatives are usually trained to do what was

traditionally available only at the branch: loan applications, investments

purchases and redemptions, cheque book orders, debit card replacements,

change of address, etc

Banks which operate mostly or exclusively by telephone are known as phone

banks. They also help modernize the user by using special technology.

2.4 INTERNET BANKING

Internet banking or E-banking means any user with a personal computer and

a browser can get connected to his bank -s website to perform any of the

virtual banking functions. In internet banking system the bank has a

centralized database that is web-enabled. All the services that the bank has

permitted on the internet are displayed in menu. Any service can be selected

and further interaction is dictated by the nature of service. The traditional

branch model of bank is now giving place to an alternative delivery channels

with ATM network. Once the branch offices of bank are interconnected

through terrestrial or satellite links, there would be no physical identity for

any branch. It would a borderless entity permitting anytime, anywhere and

any how banking

INTERNET BANKING SERVICES

1) Bill Payment Service: You can facilitate payment of electricity and

telephone bills, mobile phone, credit card and insurance premium bills

as each bank has tie-ups with various utility companies, service

providers and insurance companies, across the country. To pay your

bills, all you need to do is complete a simple one-time registration for

each biller. You can also set up standing instructions online to pay

your recurring bills, automatically. Generally, the bank does not

charge customer for online bill payment.

2) Fund Transfer: You can transfer any amount from one account to

another of the same or any another bank. Customers can send money

anywhere in India. Once you login to your account, you need to

mention the payee’s account number, his bank and the branch. The

transfer will take place in a day or so, whereas in a traditional method,

it takes about three working days.

3) Credit Card Customers:    With Internet banking, customers can not

only pay their credit card bills online but also get a loan on their cards.

If you lose your credit card, you can report lost card online.

4) Investment: You can now open an FD online through funds transfer.

Now investors with interlinked demat account and bank account can

easily trade in the stock market and the amount will be automatically

debited from their respective bank accounts and the shares will be

credited in their demat account. Moreover, some banks even give you

the facility to purchase mutual funds directly from the online banking

system.

5) Recharging your Prepaid Phone: Now just top-up your prepaid

mobile cards by logging in to Internet banking. By just selecting your

operator's name, entering your mobile number and the amount for

recharge, your phone is in action within no time.

6) Shopping: With a range of all kind of products, you can shop online

and the payment is also made conveniently through your account. You

can also buy railway and air tickets through Internet banking.

2.5 AUTOMATED TELLER MACHINE (ATM)

Automated Teller Machine is a mechanism which enables the customer to

withdraw money from his account without visiting the bank branch. An

ATM card is issued to the customer by the bank in order to make cash

withdrawals at cash machine. This service helps the ATM customer to

withdraw money even when the banks are closed. This can be done by

inserting the card in the ATM and entering the Personal Identification

Number & secret password.

ATMs act as off-site branches of banks and provide almost all services that

are available from a manually operated branch. The customer can, not only

withdraw cash, but also deposit money, get account statements, enable

transfer of funds etc. The customer who wants to deposit cash should put the

notes in the pouch available at the ATM counter close it, seal it by signing &

put it in the slot provided for this purpose. The bank staff will collect the

packet when they come for loading cash in the machine & credit the amount

to the account. However, the customer has to sign an undertaking with the

bank that he would not dispute on the amount credited. ATM has gained

prominence as a delivery channel for banking transactions in India. Now

customers will not be levied any fee on cash withdrawals using ATM &

debit cards issued by other banks. This will in turn increase usage of ATMs

in India. ATM allows customers:

To view account information

To deposit cheques or cash

To order cheques and receive cash.

Benefits of ATM:

To the ATM Customer

1) ATM customer can utilize any possible facility availed from the ATM

e.g. balance enquiry, withdrawal, deposits, etc

2) Anytime banking, 24 hours a day, 7 days a week has become a main

service to the ATM customers who cannot manage to visit bank

during banking hours

3) Convenience acts as a tremendous psychological benefit all the time

4) Cash withdrawal from any branch through ATM

To the Bank

1) Innovative, secure, competitive and presents the bank as technology

driven in the banking sector market.

2) Reduces customer visits to the branch & thereby human intervention.

3) Inter-branch reconciliation is immediate thereby reducing chances of

fraud.

4) It acts as a value added product to the bank so that the banks can

attract more new generation customers.

CHAPTER- 3

VARIOUS PRODUCTS &

SERVICES OF BANKS

CHAPTER-3

VARIOUS PRODUCTS & SERVICES OF BANKS

3.1 Deposits

Banks provide various deposit schemes for keeping the savings of people.

Some of these schemes are common in nature. Banks have to comply with

the ‘Know Your Customer’ (KYC) norms introduced by the Reserve Bank

of India while opening & allowing operations in the accounts. A few deposit

schemes offered by banks are as follows:

CHART: TYPES OF DEPOSITS

1) Current Account:

Current account is primarily meant for businessmen, firms, companies

and public enterprises etc. that have numerous daily banking

Current Account

Fixed Deposit

Savings Account

Reccuring Deposit

Demat Account

Safe-Deposits Lockers

transactions. Individuals generally do not open this account. Current

accounts are meant neither for the purpose of earning interest nor for

the purpose of savings but only for convenience of business hence

they are non-interest bearing accounts. In a current account, a

customer can deposit & withdraw any amount of money any number

of times, as long as he has funds to his credit.

As per RBI directive, banks are not allowed to pay any interest on the

balances maintained in Current Accounts. However, in case of death

of the account holder his legal heirs are paid interest at the rates

applicable to Savings bank deposit from the date of death till the date

of settlement. Because of the large number of transactions in the

account and volatile nature of balances maintained, banks usually levy

certain service charges for opening a Current Account.

2) Fixed Deposits:

Bank Fixed Deposits are also known as Term Deposits. In a Fixed

Deposit Account, a certain sum of money is deposited in the bank for

a specified time period with a fixed rate of interest. The rate of interest

for Bank Fixed Deposits depends on the maturity period. It is higher

in case of longer maturity period. There is great flexibility in maturity

period & it ranges from 15 days to 5 years. The interest can be

compounded quarterly, half-yearly or annually and varies from bank

to bank. Loan facility is available against bank fixed deposits upto 75-

90 % Premature withdrawal is permissible but it involves loss of

interest.

Fixed deposits with banks are nearly 100% safe as all the banks

operating in the country, irrespective of whether they are nationalized,

private or foreign are governed by the RBI’s rules & regulations and

give due weightage to the interest of the investors.

3) Savings Bank Account:

Savings Bank accounts are meant to promote the habit of saving

among the citizens while allowing them to use their funds when

required. The main advantage of Savings Bank Account is its high

liquidity and safety. Savings Bank Account earn moderate interest.

The rate of interest is decided and periodically reviewed by the

government of India. Savings Bank Account can be opened in the

name of an individual or in joint name of the depositors.

The minimum balance to be maintained in an ordinary savings bank

account varies from bank to bank. It is less in case of public sector

banks and comparatively higher in case of private banks. Savings

Bank Account can now be accessed through ATM’s & internet.

4) Recurring Deposit Account:

Under recurring deposit account, a specific amount is invested in bank

on monthly basis for a fixed rate of return. The deposit has a fixed

tenure, at the end of which the principal sum as well as the interest

earned during that period is returned to the investor. Recurring Bank

Account provides the element of compulsion to save at high rates of

interest applicable to Term Deposits along with liquidity to access

those savings any time. Loan/ Overdraft facility is also available

against Recurring Bank Deposits.

The deposit for RD account is paid in monthly installments and each

subsequent monthly installment has to be made before the end of the

month and is equal to the first deposit. In case of default in payment,

penalty is levied for the delayed deposit.

5) Demat account:

Some banks are depository participants. These banks offer demat

accounts to their corporate clients. Demat account is just like a bank

account where actual money is replaced by shares. Just as a bank

account is required if we want to save money or make cheque

payments, we need to open a demat account in order to buy or sell

shares. A Demat Account holds portfolio of shares in electronic form

and obviates the need to hold shares in physical form. The account

offers a secure and convenient way to keep track of shares and

investment without the hassle of handling physical documents that get

mutilated or lost in transit. The Securities and Exchange Board of

India (SEBI) mandates a demat account for share trading involving

more than 500 countries.

Benefits of Demat Account

Protection against loss, theft, mutilation etc

Transfer of shares immediately

Shorter settlement cycles

Protection against bad deliveries.

6) Safe-Deposit Lockers:

Safe deposit locker is a facility provided by banks to their customers

to keep their valuables like jewellery, title deeds etc. Safe deposit

locker is a steel cabinet having multiple cubicles. The safe deposit

locker is kept inside the safe room and can be accessed only with the

permission of the bank officials. A customer who is in need of a

locker has to approach the bank. Customer has to mention a password

in the application form for identification purpose when he comes for

operating the locker. The customer has to remit annual rent for using

the locker facility. The customer has full privacy in operating the

locker.

As per RBI guidelines, the place where the locker is kept should be

segregated from the place where cash and valuables are stored using

iron grill. When the customer wants to open the locker, he has to

identify himself by telling the password and sign in a register noting

the date and time of opening the locker which will be countersigned

by the bank officials. The agreement of locker is a contract of

bailment and the bank can terminate the agreement and demand the

customer to vacate locker if any of the terms and conditions in the

agreement are violated or the annual rent is not remitted for a long

period. At present all the banks are having safe deposit locker facility.

3.2 CREDIT CARDS:

Credit cards are innovative ones in the line of financial services offered by

commercial banks. Credit card culture is a old hat in the western countries.

In India, it is relatively a new concept that is fast catching on. Since the

plastic money has today become as good as legal tender more people are

using them in their day-to-day activities. A credit card is a card or

mechanism which enables cardholders to purchase goods, travel and dine in

a hotel without making immediate payments. It is a convenience of extended

credit without formality. Credit cards can be classified as follows:

CHART: TYPES OF CREDIT CARDS

s

Old types of Credit Cards:

Credit Card

Charge Card

In-store Card

Corporate Credit Card

Business Card

Smart Card

Debit Card

ATM Card

Virtual Card

OLD CREDIT CARDS NEW CREDIT CARDS

1) Credit Card:

It is a normal card whereby a holder is able to purchase without

having to pay cash immediately. Generally, a limit is set to the amount

of money a cardholder can spend a month using the card. At the end

of every month, the holder has to pay a percentage of outstanding.

Interest is charged for the outstanding amount which varies from 30 to

36 per cent per annum. An average consumer prefers this type of card

for his personal purchase.

2) Charge Card:

A charge card is intended to serve as a convenient means of payment

for goods purchased at Member Establishments rather than a credit

facility. Instead of paying cash or cheque every time the credit card

holder makes a purchase, this facility gives a consolidated bill for a

specified period, usually one month. There are no interest charges and

no spending limits either. The charge card is useful during business

trips and for entertainment expenses which are usually borne by the

company. Andhra Bank card, BOB cards, Can card, Diner’s Club card

etc. belong to this category.

3) In-Store Card:

The in-store cards are issued by retailers or companies. These cards

have currency only at the issuer’s outlets for purchasing products of

the issuer company. Payment can be on monthly or extended credit

basis. For extended credit facility interest is charged. In India, such

cards are normally issued by Five Star Hotels, resorts and big hotels.

NEW TYPES OF CREDIT CARDS

1) Corporate Credit Cards:

Corporate cards are issued to private and public limited companies

and public sector units. Depending upon the requirements of each

company, operative Add-on cards will be issued to the persons

authorized by the company. The name of the company will be

embossed on Add-on cardholder. The transactions made by Add-on

cardholders are billed to the main card and debits are made to the

Company’s Account.

2) Business Card:

A business card is similar to a corporate card.it is meant for the use of

proprietary concerns, firms, firms of Chartered Accountants etc. This

card helps to avail of certain facilities for reimbursement and makes

their business trip convenient.

3) Smart Card:

It is a new generation card. When a transaction is made using the card,

the value is debited and the balance comes down automatically. Once

the monetary value comes down to nil, the balance is to be restored all

over again for the card to become operational. The primary feature of

smart card is security. It prevents card related frauds & crimes.

4) Debit Cards:

Debit card is popularly known as ATM card on the move. The debit

card gives the freedom to access savings or current account through

ATM’s at merchant locations. Debit cards are also issued independent

of ATM in which case the card is presented to the merchant

establishment at the time of purchase as in a case of credit card.

However, the account of the card holder will be debited instantly

when the charge slip is presented by the merchant establishment

instead of the card holder remitting the money as is being done in the

case of credit card. Therefore, the card holder has to keep sufficient

balance in his account before he uses the card. The debit card does

have a daily limit which could be somewhere around Rs 15000 at

ATMs and Rs 10000 at merchant locations. This again is subject to

the balance available in the account.

5) ATM Card:

An ATM (Automated Teller Machine) card is useful to a card holder

as it helps him to withdraw cash from banks even when they are

closed. This can be done by inserting the card in the ATM installed at

various bank location.

6) Virtual Card:

A virtual card is a card that can be generated by anybody at any time

provided he has already registered his name in the Bank’s website.

One can also set monetary limits for each card, usually limited to the

value of the item he intends to purchase and the value should be

limited to his bank balance or the credit limit. This completely

prevents misuse. It is a kind of facility offered to existing cardholders

at free of cost.

3.3 LOANS

It is an arrangement by which a bank advance loans against any security like

jewels, shares or debentures or insurance policy or personal security of the

borrower. The interest is payable on the entire loan amount as decided by the

bank. Loans can be classified as follows:

CHART: VARIOUS TYPES OF LOANS

1) Personal loans:

Personal Loans

Housing Loans

Educational Loans

Automobile Loans

Mortgage Loans

The personal loans are granted to any customer or the non-custome if

the bank is satisfied with the repayment capacity of the borrower. The

borrower should have a steady income. Installment can be paid by

depositing post dated cheques, authorization to debit the amount to the

borrower’s savings or current account, authorization to transfer

interest on term deposit to the loan account, authorization to deduct

the installment from the salary by the employer and remit to the bank

etc. The interest varies from bank to bank. Normally banks allow 12

months to 60 months for repayment.

Banks also charge time processing fee ranging from 1 to 3 percent per

annum. Personal loans are generally unsecured because in most cases

there is no primary security. Therefore, many banks demand collateral

security in the form of landed property, gold ornaments, third party

guarantee etc. Some banks instead of third party guarantee insist that

another person should join as co-obligant. Many banks prefer co-

obligant as a guarantor because a co-obligant signs the original loan

documents along with the borrower & therefore has a joint liability.

The documentation is quite simple because there will be only a

promissory note.

2) Housing Loans:

Housing loans are given as direct loans and indirect loans. Direct

loans are those loans given to the individuals or group of individuals

including co-operative societies. The indirect loans are the term loans

granted to housing finance institution, housing boards etc primarily

engaged in the business of supplying serviced land and constructed

house units. Banks are permitted to extend term loans to private

builders. Banks are also granting loans under priority sector for

housing purpose.

Eligibility:

Any person above 21 years but below the age of 65 years having

sufficient disposable income, can avail housing loan from a bank.

Some banks permit even upto 70 years if the borrower can produce

proof of sufficient income to repay the loan. A self-employed person

can also avail of housing loan, subject to compliance of the income

criteria.

Amount of Loan:

The loan amount starts from Rs 2 lakh. However for weaker sections

the loan can be availed even for a small amount. The maximum

amount of loan is decided after considering the disposable income of

the borrower. While calculating the income eligibility spouse’s

income can also be considered. The other factors considered for

deciding the repayment capacity are age, qualification, status of

assets, liabilities, stability and continuity of occupation and savings

history etc.

3) Educational Loans:

Educational loans are extended with the aim to provide financial

support from the banking system to deserving students for pursuing

higher education in India & abroad. The main emphasis is that every

student should get an opportunity to pursue education with financial

support from the banking system on affordable terms and conditions.

All banks are offering educational loans, but the schemes differs from

bank to bank. The scheme aims at providing financial assistance on

reasonable terms to the poor and needy to undertake basic education.

Student Eligibility:

The student should be an Indian national and should have secured

admission to professional courses through entrance test process or

should have secured admission to foreign university. The student have

scored minimum 60 percent in the qualifying examination for

admission to graduation courses.

Repayment:

Course period + 1 year or 6 months after getting job, whichever is

earlier. The loan has to be repaid in five to seven years from

commencement of repayment. If the student is not able to complete

the course for the reasons beyond his control, sanctioning authority

may at his discretion consider such extensions as may be deemed

necessary to complete the course.

Security:

Up to Rs 2 lakh:- no security

Above Rs 2 lakh:- collateral security equal to 100 % of the loan.

Amount of guarantee of third person known to bank for 100% of the

loan amount.

4) Automobile Loans:

Banks are extending credit for purchase of new two or four wheeler

for personal or professional use. Bank finance is also available for

purchase of used cars less than 3 years old. Each bank has formulated

their own schemes. Vehicle finance has now become one of the highly

profitable area and therefore banks and other financial institutions are

competing with each other for attracting the customers, even by

offering some concessions. As a result, the margin, interest rate &

eligibility criteria differ from one bank to the other. The loans are to

be repaid in 36 to 60 equated monthly instalments. The maximum

amount of loan is limited to 3 times of net income annual salary

subject to a maximum of Rs 10 lakh.

Security:

Hypothecation of vehicle financed by the bank.

Bank’s lien to be noted with the transport authorities.

Guarantee of the spouse

In case of unmarried, third party guarantee of sufficient means

or other collateral securities acceptable to the bank.

5) Mortgage Loans:

Mortgage loan is a financing arrangement in which a lender extends

finance for acquisition of real estate against the security of the real

estate purchased out of the loan. The borrower executes a mortgage

deed which registers a lien on the property in favour of the lender. The

title will be re-transferred when the borrower repays the loan in full

with interest. Banks provide loan/overdraft facility against mortgage

of property at low rate of interest to people engaged in trade,

commerce and business and also to professionals and self employed,

partnership firms, companies, NRI’s and individuals with high net

worth including salaried people. The product provides an opportunity

to customers to borrow against a fixed asset at short notice.

Repayment:

The loan has to be repaid within a period of eight years by way of

equated monthly installments. The repayment shall commence from

the month subsequent to the month in which final disbursement is

made or 6 months from the first disbursement, whichever is earlier. In

case of agriculturists the repayment is related to the generation of

farm income from crops & other subsidiary activities.

3.4 INVESTMENT

Investment is the employment of funds with the aim of getting return on it. It

is the commitment of funds which have been saved from current

consumption with the hope that some benefits will receive in future. Thus, it

is a reward for waiting for money. Savings of the people are invested in

assets depending on their risk and return. Investment avenues are the outlets

of funds. In India, investment alternatives are continuously increasing along

with new developments in the financial market. An investor can himself

select the best avenue after studying the merits and demerits of different

avenues. Even financial advertising, newspapers supplements on financial

matters and investment journals offer guidance to investors in the selection

of suitable investment avenues.

CHART: ALTERNATIVES AVENUES FOR INVESTMENT

Investment Avenues

Real Estates

Bonds & Debenture

s

Gold & Silver

Public Provident

Fund

GOI Savings

Bond

1) Public Provident Fund (PPF):

Public Provident Fund is one attractive tax sheltered investment

scheme for middle class and salaried persons. It is even useful to

businessmen and higher income earning people. The PPF scheme is

very popular among the marginal income tax payers.

Features of PPF scheme

The PPF scheme is for a period of 15 years but can be extended

at the desire of the depositor

The depositor is expected to make a minimum deposit of Rs

100 every year

The PPF account is not transferable, but nomination facility is

available

Tax exemption on investment is made.

A compound interest at 8% per annum is paid

2) Government of India Savings Bond:

The GOI has recently started issuing 6.50% bonds which are

reasonably attractive and secured investment for individuals and

institutions.

Features of Savings Bonds

Interest 6.50%. Interest is payable half yearly or cumulative.

Interest payment is exempted from income tax.

Maturity period of 5 years

Cumulative facility available. Rs 1000 become Rs 1377 after 5

years.

Nomination facility is available

3) Real Estate Properties:

Investment in the real estate is popular due to high saleable value after

some years. Such properties include buildings, commercial premises,

industrial land, plantations, farmhouses, agricultural land etc. They

purchase such properties at low prices and do not sale them unless

there is substantial increase in the market price. The resale price will

be attractive in due course when they can recover 4 times the price

paid. This is one attractive as well as profitable avenue for investment.

4) Investment in Gold, Silver:

In India, there is attraction for gold and silver since the early historical

period. These two precious metals are used for making ornaments and

also for investment of surplus funds over a long period. The prices of

both the metals are continuously increasing. These metals are highly

liquid, also provides a sense of security to the investors. The benefit of

capital appreciation is also available. As a result, investment in gold

and silver is one avenue for investment.

5) Bonds & Debentures:

It is possible to purchase bonds and debentures of joint stock

companies for investment purpose. Debenture indicates loan given to

the company at a specific rate of interest. Debentures are more

popular than shares due to the safety and security available. Easy

transferability by endorsement and delivery. Investment exempted

from wealth-tax. Maturity period from 5-25 years.

CHAPTER- 4

INNOVATIVE FINANCIAL

PRODUCTS & SERVICES

CHAPTER- 4

INNOVATIVE FINANCIAL PRODUCTS AND

SERVICES

1) Merchant Banking:

A merchant banker is a financial intermediary who helps to transfer

capital from those who possess it to those who need it. Merchant

banking includes a wide range of activities such as management of

customer securities, portfolio management, project counseling and

appraisal, underwriting of shares and debentures, loan syndication,

acting as banker for the refund orders, handling interest and dividend

warrants etc. Thus, a merchant banker renders a host of services to

corporate and thus promotes industrial development in the country.

2) Loan Syndication:

This is more or less similar to ‘consortium financing’. But, this work is

taken up by the merchant banker as a lead manager. It refers to a loan

arranged by a bank called lead manager for a borrower who is usually

a large corporate customer or a Government Department. The other

banks who are willing to lend can participate in the loan by

contributing an amount suitable to their own lending policies. Since a

single bank cannot provide such a huge sum of loan, a number of

banks join together and form a syndicate.

3) Leasing:

A lease is an agreement which a company or a firm acquires a right to

make use of capital asset like machinery, on payment of a prescribed

fee called “rental charges”. The lessee cannot acquire any ownership to

the asset, but he can use it and have full control over it. He is expected

to pay for all maintenance charges and repairing and operating cost. In

countries like the U.S.A., the U.K. and Japan equipment leasing is very

popular and nearly 25% of plant and equipment is being financed by

leasing companies. In India also, many financial companies have

started equipment leasing business by forming subsidiary companies.

4) Mutual Funds:

A mutual fund refers to a fund raised by a financial service company

by pooling the savings of the public. It is invested in a diversified

portfolio with a view to spreading and minimizing risk. The fund

provides Investment Avenue for all small investors who cannot

participate in the equities of big companies. It ensures low risk, steady

returns, high liquidity and better capital appreciation in the long run.

5) Factoring:

Factoring refers to the process of managing the sales ledger of a client

by a financial service company. In other words, it is an arrangement

under which a financial intermediary assumes the credit risk in the

collection of book debts for its clients. The entire responsibility of

collecting the book debts passes on to the factor. His services can be

compared to del credre agent who undertakes to collect debts. But, a

factor provides credit information, collects debts, monitors the sales

ledger and provides finance against debts. Thus, he provides a number

of services apart from financing.

6) Forfeiting:

Forfeiting is a technique by which a forfeitor (financing agency)

discounts an export bill and pay ready cash to the exporter who can

concentrate on the export front without bothering about collection of

export bills. The forfeitor does so without any recourse to the exporter

and the exporter is protected against the risk of non-payment of debts

by the importers.

7) Venture Capital:

A venture capital is another method of financing in the form of equity

participation. A venture capitalist finances a project based on the

potentialities of a new innovative project. It is in contrast to the

conventional “security based financing”. Much thrust is given to new

ideas or technological innovations. Finance is being provided not only

for ‘start-up capital’ but also for ‘development capital’ by the financial

intermediary.

8) Reverse Mortgage:

In 2007-08, the National Housing Bank and commercial banks have

introduced an innovative product viz., reverse mortgage to enable the

senior citizens to fetch value out of their property without selling it. In

normal mortgage, a home buyer borrows money to finance his home.

In a Reverse Mortgage (RM) the owner of a house property surrenders

the title of his property to a lender and raises money. Again, in normal

mortgage the borrower gets 60-70% of the money upfront. But, in a

RM generally the lender does not pay the entire amount. On the other

hand, he pays out a regular sum each month for the agreed time. The

owner, normally a senior citizen, can use the property and stay with his

spouse for the rest of their lives. Thus, the owner can ensure a regular

cash flow in times of need and enjoy the benefit of using the property.

Usually, after the death of the owner, the spouse can continue to use

the property. In case, both die during the period of the RM scheme the

lender will sell the property, take his share and distribute the rest

among the heirs. It is called reverse mortgage because the payment

steam is “reversed.” Instead of making monthly payments to the

lender, as in the case of a regular mortgage, a lender makes regular

payments to the senior citizen. A RM facilitates to convert an

immovable asset into an income generating one

9) New Products in Forex Market:

New products have also emerged in the forex markets of developed

countries. Some of these products are yet to make full entry in Indian

markets. Among them, the following are the important ones:

i. Forward Contracts:

A forward transaction is one where the delivery of a foreign

currency takes place at a specified future date for a specified

price. It may have a fixed maturity for, e.g., 31st May or a

flexible maturity for, e.g., 1st to 31st May. There is an obligation

to honour this contract at any cost, failing which, there will be

some penalty. Forward contracts are permitted only for

genuine business transactions. It can be extended to other

transactions like interest payments.

ii. Options:

As the very name implies, it is a contract wherein the buyer of

the option has a right to buy or sell a fixed amount of currency

against another currency at a fixed rate on a future date

according to his option. There is no obligation to buy or sell,

but namely call options and put options. Under call options, the

customer has an option to buy and it is the option to sell under

put option. Option trading would lead to speculation and hence

there are much restrictions in India.

iii. Futures:

It is a contract wherein there is a agreement to buy or sell a

stated quantity of foreign currency at a future date at a price

agreed to between the parties on the stated exchange. Unlike

options, there is an obligation to buy or sell foreign exchange

on a future date at a specified rate. It can be dealt only in a

stock exchange.

iv. Swaps:

A swap refers to transaction wherein a financial intermediary

buys and sells a specified foreign currency simultaneously for

different maturity dates-say, for instance, purchase of spot and

sale of forward or vice versa with different maturities. Thus,

swaps would result in simultaneous buying and selling of the

same foreign currency of the same value for different

maturities to eliminate exposure of risk. It can also be used as a

toll to enter arbitrage operations, if any, between two countries.

CHAPTER 5

OVERVIEW OF ICICI BANK

CHAPTER 5

OVERVIEW OF ICICI BANK

5.1 HISTORY OF ICICI BANK

ICICI Bank was originally promoted in1994 by ICICI Limited, an Indian

financial institution, and was its wholly owned subsidiary. ICICI’s

shareholding in ICICI Bank was reduced to 46% through a public offering of

shares in India in India in fiscal 1998. ICICI Bank was formed in1995 at the

initiative of the World Bank, the Government of India and representatives of

Indian industry. The principal objective was to create a development

financial institution for providing medium-term and long-term project

financing to Indian businesses. In the 1990s, ICICI transformed its business

from a development financial institution offering only project finance to a

diversified financial services group offering a wide variety of products and

services, both directly and through a number of subsidiaries and affiliates

like ICICI Bank. In 1999, ICICI become the first Indian company and the

first bank or financial institution from non-Japan Asia to be listed on the

NYSE.

After consideration of various corporate structuring alternatives in the

context of the emerging competitive scenario in the Indian banking industry,

the management of ICICI & ICICI Bank formed the view that the merger of

ICICI with ICICI Bank would be optimal strategic alternative for both

entities and would create the optimal legal structure for the ICICI group’s

universal banking strategy.

5.2 INTRODUCTION OF ICICI BANK

ICICI Bank is the largest private sector bank in India in terms of market

capitalization. It is also the second largest bank in India in terms of assets

with a total asset of Rs. 3,674.19 billion (US$ 77 billion) as on June 30,

2009, the total profit after tax has been Rs. 8.78 billion. Formerly known as

Industrial Credit and Investment Corporation of India, ICICI Bank has an

extensive network of 1,544 branches with about 4,816 ATMS located across

India and in 18 other countries. ICICI Bank serves about 24 Million

customers throughout the world. It is considered as one of the ‘Big Four

Banks’ in India along with State Bank of India, HDFC Bank and Axis Bank.

ICICI Bank provides a wide range of banking products and financial

services to its retail and corporate customers. It has a wide variety of

delivery channels and specialized affiliates and subsidiaries that ensure the

flow of its offerings in the areas like investment banking, venture capital,

life and non-life insurance and asset management. This bank is also India’s

largest credit card issuer. The equity share of ICICI Bank is listed on various

stock exchanges like NSE, BSE, Calcutta Stock Exchange and Vadodara

Stock Exchange etc. Its ADRs are also listed on the New York Stock

Exchange.

ICICI Bank also has the largest international balance sheet among all the

banks in India. It is also expanding its business in the overseas market at an

enviable pace. In Q2 September 2008, ICICI Bank recorded a 1.15% growth

in net profit over Q2 September 2007 to reach at Rs 1,014.21crores. The

current and savings account (CASA) ratio of bank also went up from 25% in

2007 to 30% in 2008

Vision

Our vision is a world free of poverty in which every individual has the freedom and power to create and sustain a just society in which to live.

Mission

Our mission is to create and support strong independent organisations which work towards empowering the poor to participate in and benefit from the Indian growth process.

5.3 PRODUCTS & SERVICES:

ICICI Bank offers a host of products and services to its clients. The various

types of services are as follows:

1) Deposits

Savings Account

Advantage Deposit

Special Savings Account

Life Plus Senior Citizens Savings Account

Fixed Deposits

Security Deposits

Recurring Deposits

Young Stars Savings Account

Advantage Woman Savings Account

Self Help Group Accounts

Family banking

2) Cards

ICICI Bank is India’s largest issuer of credit cards. It also offers other

types of card. The various cards offered by ICICI bank are as

follows:

Consumer Cards

Credit Cards

Travel Cards

Debit Cards

Commercial Cards

Corporate Cards

Prepaid Cards

Purchase Cards

Distribution Cards

Business Cards

3) Loans

Home Loans

Loan against Property

Personal Loans

Car Loans

Two Wheeler Loans

Commercial Vehicle Loans

Loans against Securities

Loan against Gold Ornaments

Pre-approved Loans

4) Investments

ICICI Bank Tax Saving Bonds

Mutual Funds

Government of India Bonds

Initial Public Offers by Corporate

Foreign Exchange Services

ICICI Bank Pure Gold

Senior Citizens Savings Scheme

5) NRI Services

Money Transfer

Bank Accounts

Investments

Home Loans

Insurance

Loan against

6) Insurance

ICICI Bank offers various types of insurance.

Home Insurance

Health Insurance

Health Advantage Plus

Family Floater

Personal Accident

Travel Insurance

Individual Overseas Travel Insurance

Student Medical Insurance

Motor Insurance

Car Insurance

Two Wheeler Insurance

Life Insurance

ICICI Pru Life Time Gold

5.4 Awards and Recognitions

ICICI Bank was voted as the Most Trusted Brand among private

sector banks in the 2010 Economic Times – Brand Equity Most

Trusted Brands Awards and ranked 7th in the list of the Top 50 service

brands.

ICICI Bank received the 2010 World Finance UK award for:

i. Excellence in Remittance Business, Worldwide

ii. Excellence in NRI Services, Worldwide

iii. Excellence in Private Banking Business, APAC Region

For a sixth time in a row, ICICI Bank has received the Most Preferred

Auto Loan Brand in the Financial Services category at the CNBC

Consumer Awards.

ICICI Bank has won Gold in the Readers Digest Trusted Brands 2010

Consumer award in the Finance category for.

i. Best Bank

ii. Best Credit Card Issuing Bank

ICICI Bank amongst the top 3 to receive the FE-EVI Green Business

Leaders Award, in the banking industry.

ICICI Bank wins the Asian Banker Award for Best Banking Security

System.

Forbes 2000 most powerful listed companies survey ranked ICICI

Bank 4th among the Indian companies and 282nd globally.

ICICI Bank wins the Asian Banker Award for Excellence in SME

Banking 2009.

Mr. N. Vaghul, Former Chairman, ICICI Bank was awarded the

“Padma Bhushan”.

CHAPTER- 6

DATA ANALYSIS &

INTERPRETATION

CHAPTER- 6

DATA ANALYSIS AND INTERPRETATION

Q1) Awareness of people regarding various types of financial services

provided by the banks

1st Qtr37%

2nd Qtr46%

3rd Qtr17%

4th Qtr100%

Awareness about financial services

Fully aware Had an idea No idea Total

Interpretation

From the above chart we came to know that, overall percentage of service

class people having complete knowledge about different types of services

provided by the bank is 37%, those having some idea about it is 46% and the

percentage of people having no awareness of various services provided by

the bank is 17%. It can reasonably, be concluded that nearly 85% of the

population is having awareness about newly introduced services.

Q2 Awareness of various banking services provided by banks

ATM Debit Card

Credit Card

Phone Banking

Mobile Banking

Internet Banking

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

Awareness about different Banking Services

Percentage

Interpretation

Banks constitute various channels through which services are provided in

terms of ATMs, Debit Card, Credit Card, Phone Banking, Mobile Banking,

Internet Banking etc, of which the first six have been covered. Amongst

these ATM scores the largest used service status (26.03%) as indicated by

above figures. Close on the heels is Debit card (17.75%), Credit card

(14.79%), while phone banking lags behind by scoring the least (11.83 %.)

Q 3) Sources from which the respondents get the knowledge about the

innovative financial services.

15%

21%

34%

26%

4%

Sources of Awareness about various innovative financial products

Personal VisitExecutive from BankAdvertisementsFriends/RelativesOthers

Interpretation

The above table indicates the percentage distribution of awareness avenues,

the major are in favour of advertisements, which score 34% among different

avenues such as personal visit, executives of the banks, advertisements and

friend/relatives. While the least score is for personal visit and that of other

sources.

Q4) Is your Bank following the Know Your Customer (KYC) norms in

providing services.

10%

5%

Formulation of KYC norms

Yes No

Interpretation

The above table indicates the KYC norms followed by the banks. The

banks are providing the customer with proper information about

various banking services. The banks are trying to find the expected

service of the customer.

Q5) Growth rate of credit cards

2007 2008 2009

(0.2)

0.0

0.3

0.5

0.8

0.3

0.6

Number of credit cards

Interpretation

The above table indicates the growth rate of credit cards, which scores

0.3 million in the year 2008 and it has grown upto 0.6 million in

2009.The growth rate is 100%. This indicates that the distribution of

credit cards is on large scale. The ICICI Bank is considered as largest

issuer of credit cards.

2007 2008 2009

(0.2)

0.0

0.3

0.5

0.8

0.3

0.6

Number of credit cards

CONCLUSION

CONCLUSION

The project of Financial Services of Banks was undertaken at ICICI Bank

Ltd. Working under this project I learned various services in detail which

banks generally follow.

It also helped in gaining knowledge about different concepts provided under

different services .

The Financial Services of the Banks has become very vital in the smooth

operation of the banking activities. The Project work has certainly enriched

the knowledge about the effective management of the various services in

Banking Sector.

Lastly as according to data collection we conclude that given findings and

suggestions need to be considered which can prove to be effective to the

Banks.

SUGGESTIONS

SUGGESTIONS

Prevention against frauds of Credit Cards

To take necessary action against defaulters

Providing with proper information relating to various services

Guidance for investment in various securities in order to protect the

interest of investors.

Approaching the customers for investment in innovative financial

services.

Special schemes to be provided on some types of services

BIBLIOGRAPHY

BIBLIOGRAPHY

BOOKS:

Financial Services & Systems

- K.K. Sasidharan

- Alex Mathews

Financial Markets & Services

- Gordon

- Natarajan

Web Sites:

www.wikipedia.com

www.icici bank.com

www.google.com

www.ask.com

ANNEXURE

ANNEXURE

1) Which type of financial services are offered by Banks?

2) Which types of Credit Cards are provided to the customers?

3) What kind of actions are taken by the banks against defaulters?

4) Is the bank following RBI guidelines from time to time?

5) What are the steps taken by the bank to settle the claims?

6) Which type of innovative financial services are provided by the

bank after LPG?

7) Are the new customers attracted by the physical environment of

the bank?

8) What are the future plans of the bank?