Comparative Analysis Icici Bank & Hdfc Bank

Icfai national college Project Report Submitted in lieu of the partial fulfillment of the Degree of Master of Business Management

“ COMPARISION BETWEEN ;

And

Submitted by:Submitted to:•

1

Avinash kumar Mrs.Sujata sinha En no-8nblk058 Faculty of inc Batch- 2008-2010

CONTENTS Topic

(PART-A) •

Introduction

•

Company profile

•

Banking structure

•

product

•

Major components

(PART-B) •

Introduction of topic

•

Research methodology •

2

Lucknow

•

Objective

•

Data analysis

•

Recommendations

•

Conclusions

•

Bibliography

•

Questionnaire

Acknowledgement To acknowledge all the persons who had helped for the fulfillment of the project is not possible for any researcher but in spite of all that it becomes the foremost responsibility of the researcher and also the part of research ethics to acknowledge those who had played a great role for the completion of the project. The text contain in this report is the manifestation of learning Process that began for me over 1 month ago.during the intervening period I have come across some wonderful people in the form of Relatives ,friends or acquaintances from I have learnt immensely .While it is not possible to name them individually I would like to express a deep sense of gratitude towards them.

•

3

I would like to thank my colleagues who have supported me through thick and thin during the last few months.These include Mr.Dev kant, MrAjit singh. No amount of thank can ever repay the great debt that I owe My Faculty guide Mrs. Sujata sinha who has provided me constant inspiration over the past one year.In fact ,this report Would not have been possible but for the direct and indirect Support ,inspiration and guidance from Sujata mam who has been a consant mentor in my efforts over the few months. Rest all those people who helped me are not only matter of acknowledgment but also authorized for sharing my success.

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4

PREFACE Marketing is a social & managerial process by which an individual and group obtain what they need and want through creating offering and exchanging products of value with others.

Marketing is getting the right good and services to the right people to the right place, at the right time at the right place with the right •

5

communication and promotion. It is the art of creating and satisfying customer at a profit.

Advertising is one of the major tools of companies to direct pervasive communication to target buyers and publics. An identified sponsor defines it as any paid from and non personal presentation and promotion of ideas, goods or services.

Advertising is a cost effective way to disseminate message whether it is to saving account of ICICI bank and give best service in account.

INTRODUCTION Banking is the backbone of a modern economy. Health of banking industry is one of the most important pre-conditions for sustained economic progress of any country. The world of banking has assumed a new dimension at the dawn of the 21st century with the advent of tech banking, thereby lending the industry a stamp of universality. In general, banking may be •

6

classified as retail and corporate banking. Retail banking, which is designed to meet the requirements of individual customers and encourage their savings, includes payment of utility bills, consumer loans, credit cards, checking account balances, ATMs, transferring funds between accounts and the like. Corporate banking, on the other hand, caters to the needs of corporate customers like bills discounting, opening letters of credit and managing cash. The Indian banking scene has changed drastically with the private sector making inroads in an area hitherto dominated by large public sector banks. Growing disinvestment is likely to impact the banking industry as well. There is every possibility of privatization of public sector banks, leading to greater operational autonomy. The

development

of

the

Indian

banking

sector

has

been

accompanied by the introduction of new norms such as Income Recognition and Capital Adequacy, by the government. The latter implies that banks can lend on the basis of their respective capital base. These norms have caused banks to construct equity on their own, before going in for debt. Disintermediation is a real threat for banks. Of late, banks are adopting the EVA (Economic Value Added) concept wherein revenues are viewed in the context of the risk associated with them. The New World order has ensured "Survival of the Fittest". New services are the order of the day, in order to stay ahead in the rat race. Banks are now foraying into net banking, securities, consumer finance, housing finance, treasury market, merchant banking and insurance. •

7

•

8

COMPANY PROFILE ICICI Bank is India's second-largest bank with total assets of about Rs. 1 trillion and a network of about 540 branches and offices and over 1,000 ATMs. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of investment banking, life and non-Banking , venture capital, asset management and information technology. ICICI Bank's equity shares are listed in India on stock exchanges at Chennai, Muzaffarnagar, Kolkata and Vadodara, the Stock Exchange, Mumbai and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE).

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

institution,

and

was

its

wholly

owned

subsidiary.

ICICI's

shareholding in ICICI Bank was reduced to 46% through a public offering of shares in India in fiscal 1998, an equity offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001, and secondary market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at the initiative of the World Bank, the Government of •

9

India and representatives of Indian industry. The principal objective was to create a development financial institution for providing medium-term and long-term project financing to Indian businesses. In the 1990s, ICICI transformed its business from a development financial institution offering only project finance to a diversified financial services group offering a wide variety of products and services, both directly and through a number of subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. After consideration of various corporate structuring alternatives in the context of the emerging competitive scenario in the Indian banking industry, and the move towards universal banking, the managements of ICICI and ICICI Bank formed the view that the merger of ICICI with ICICI Bank would be the optimal strategic alternative for both entities, and would create the optimal legal structure for the ICICI group's universal banking strategy. The merger would enhance value for ICICI shareholders through the merged entity's access to low-cost deposits, greater opportunities for earning fee-based income and the ability to participate in the payments system and provide transaction-banking services. The merger would enhance value for ICICI Bank shareholders through a large capital base and scale of operations, seamless access to ICICI's strong corporate relationships built up over five decades, entry into new business segments, higher market share in various business segments, particularly •

10

fee-based services, and access to the vast talent pool of ICICI and its subsidiaries. In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger of ICICI and two of its wholly owned retail finances subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. The merger was approved by shareholders of ICICI and ICICI Bank in January 2002, by the High Court of Gujarat at Ahmedabad in March 2002, and by the High Court of Judicature at Mumbai and the Reserve Bank of India in April 2002. Consequent to the merger, the ICICI group's financing and banking operations, both wholesale and retail, have been integrated in a single entity.

•

11

HISTORY OF COMPANY

ICICI Bank has signed an agreement to use the NCR switch mark technology for online-networking all its ATMs, the officials said they network would come into place in September. ICICI Bank recently restructured its organizational structure by setting up strategic business units for retail banking, corporate banking and fore and treasury operations, as independent profit centers. ICICI is all set to launch a 60-second television commercial on August 15, 1999. 2000 ICICI Bank became the first Indian bank to list on the New York Stock Exchange

with

its

$175-million

American

depository

shares

issue

generating a demand book 13 times its size at $2.2 billion. The Bank proposes to bring credit cards to the "large, underserved population" in rural and semi-urban areas.

•

12

SkyCell Communications Ltd, one of the two cellular service providers in Chennai, has launched `Sky Banking', for which the company has tied up with ICICI Bank and HDFC Bank. The ICICI has announced the launch of mobile banking services for its customers, using the wireless application protocol (WAP) technology. Ford India has tied up with ICICI Bank to introduce a scheme, enabling non-resident Indians (NRIs) to purchase a Ford Ikon car for their friends and relatives in India. ICICI Bank has set up an ATM facility at an Indian Oil Corporation petrodiesel outlet at Chennai. ICICI Bank has tied up with Chennai Telephones to provide Internet bill payment facility to its customers.

BANKING STRUCTURE The Indian banking industry, which has Reserve Bank of India as its regulatory authority, is a mix of the public sector, private sector, and foreign banks. The private sector banks are again split into old banks and new banks.

•

13

SCHEDULED BANKS Scheduled commercial banks are those that come under the purview of the Second Schedule of Reserve Bank of India (RBI) Act, 1934. The banks that are included under this schedule are those that satisfy the criteria laid down vide section 42 (60 of the Act). Some co-operative banks come under the category of scheduled commercial banks though not all co-operative banks.

PUBLIC SECTOR BANKS Public sector banks are those in which the Government of India or the RBI is a majority shareholder. These banks include the State Bank of India (SBI) and its subsidiaries, other nationalized banks, and Regional Rural Banks (RRBs). Over 70% of the aggregate branches in India are those of the public sector banks. Some of the leading banks in this segment include Allahabad Bank, Canara Bank, Bank of Maharashtra, Central Bank of India, Indian Overseas Bank, State Bank of India, State Bank of Patiala, State Bank of Bikaner and Jaipur, State Bank of Travancore, Bank of Baroda, Bank of India, Oriental Bank of Commerce, UCO Bank, Union Bank of India, Dena Bank and Corporation Bank.

PRIVATE SECTOR BANKS •

14

Private banks are essentially comprised of two types: the old and the new. The old private sector banks comprise those, which were operating before Banking Nationalization Act was passed in 1969. On account of their

small

size, and

regional

operations,

these

banks

were

not

nationalized. These banks face intense rivalry from the new private banks and the foreign banks. The banks that are included in this segment include: Bank of Madura Ltd. (now a part of ICICI Bank), Bharat Overseas Bank Ltd., Bank of Rajasthan, Karnataka Bank Ltd., Lord Krishna Bank Ltd., The Catholic Syrian Bank Ltd., The Dhanalakshmi Bank Ltd., The Federal Bank Ltd., The Jammu & Kashmir Bank Ltd., The Karur Vysya Bank Ltd., The Lakshmi Vilas Bank Ltd., The Nedungadi Bank Ltd. and Vysya Bank. The new private sector banks were established when the Banking Regulation Act was amended in 1993. Financial institutions promoted several of these banks. After the initial licenses, the RBI has granted no more licenses. These banks are gearing up to face the foreign banks by focusing on service and technology. Currently, these banks are on an expansion spree, spreading into semi-urban areas and satellite towns. The leading banks that are included in this segment include Bank of Punjab Ltd., Centurion Bank Ltd., Global Trust Bank Ltd., HDFC Bank Ltd., ICICI Banking Corporation Ltd., IDBI Bank Ltd., IndusInd Bank Ltd. and UTI Bank Ltd.

•

15

FOREIGN BANKS The operations of foreign banks, though similar to that of other commercial Indian banks, are mainly confined to metropolitan areas. Foray of foreign banks depends on reciprocity, economic and political bilateral relations. An inter-departmental committee has been set up to endorse applications for entry and expansion. Foreign banks, in the wake of the liberalization era, are looking to expand and diversify. Some of the leading foreign banks that operate in India are Citibank, Standard Chartered Grindlays Bank, Hong Kong Shanghai Banking Corporation, Bank of America, Deutsche Bank, Development Bank of Singapore and Banque National De Paris. PUBLIC SECTOR BANKING – AT A DISADVANTAGE Functioning of Public Sector Banks (PSBs), which are yet to achieve computerization across the board, is at a relative disadvantage when compared to the private sector, which is offering state-of-the-art facilities such as ATMs, doorstep banking, banking on phone, and net banking. PSBs also suffer from huge costs of labor and low levels of automation. At this rate, it may not be long before new channels devised by private banks effectively surpass the number of branch networks offered by the PSBs. This apart, the problems which have assumed enormous proportion today as far as Public Sector banks are concerned are ballooning NPA •

16

levels, declining margins, poor credit off-take, high overheads, and lack of good quality assets. Banks are sticking to reliable borrowers for fear of bad debts. In fact, banks largely invest in government securities, which have zero risk. With GOI being the single largest borrower, the yields on these securities determine the interest rates. The government aims to decrease its shareholding in PSBs to 33%, however, at the same time it also wants to retain the controlling stake. This, it is feared, is not going to solve the problems which PSBs are coping with now.

•

17

PRIVATE SECTOR BLOOMS Corporate governance and self-regulation are the ground rules for the private sector. Government interference is not preferred. While some private banks such as ICICI Bank, UTI Bank and IDBI Bank have financial institutions backing them, others are opting for foreign partnerships for technology and monetary resources. Private banks have emerged relatively strong, with about 60% growth reported in net profits in the year ended March 2000. With a net profit of Rs.120 crores (+46%), HDFC was the clear leader. IDBI Bank, however took the cake by doubling its net profit, which reached Rs.60.99 crores in March 2000.The jump in profits can mainly be attributed to nontraditional sectors such as commission, exchange, brokerage, and profit on sale of investments.

•

18

PRODUCT PORTFOLIO CORPORATE BANKING

RETAIL BANKING

Corporate Solutions

Home Loans

Government Solutions

Car & Two Wheeler Loans

Capital Market Services

Consumer/Personal Loans

Agriculture Finance

Saving & Term Deposit

Structured Finance

Salary Account

Project Finance

Roaming Current Accounts

Infrastructure Finance

Investment Products

Term Loans

Private Banking

Working Capital Finance

NRI Services

Cash Management Services

Demat Services

Trade Finance Services

Credit & Debit Cards

International Banking

Smart Cards

•

19

Treasury Services

Bill Payment Services

Corporate Internet Banking

E-Cheques

Corporate Advisory

Branches

Custodial Services

ATMs

Professional Clearing

Internet Banking

Membership Services

Phone Banking

•

20

PROMOTION What's on offer Hello ICICI and HDFC brings you a host of services at your fingertips 365 days a year. A user friendly automated service menu offers you convenient access to your account coupled with security as, all your transactions are protected by a TPIN - The Personal password to your account. But if you do need any assistance our officers will be glad to help you. Whats more... this facility comes to you totally free of charge! Some of the services offered are listed below Savings account : o

Balance Enquiry Statement of account

o

Cheque status enquiry Stop Payment

o

Cheque book request

o

Dial-a- draft/payorder

o

ATM lost card reporting

o

Request for a new ATM PIN

Fixed Deposits: •

21

o

Opening a Fixed Deposit

o

Checking Fixed Deposit details

o

Request for TDS statement

Credit Cards: o

Balance and account related inquiries Statement of account

o

Dial a draft/payorder

o

Lost/Replacement card

o

ATM pin re-issue

o

Payment instructions (maybe through a letter to the Call Centre)

Others: o

Standing Instructions

o

Complaints and suggestions

o

Inquire about any ICICI retail product

•

22

RISK MANAGEMENT Risk is an integral part of the banking business and ICICI Bank aims at the delivery of superior shareholder value by achieving an appropriate trade-off between risk and returns. ICICI Bank is exposed to various risks, including credit risk, market risk and operational risk. Our risk management strategy is based on a clear understanding of various risks, disciplined risk-assessment and measurement procedures and continuous monitoring. The policies and procedures established for this purpose are continuously benchmarked with international best practices. A comprehensive range of quantitative and modelling tools developed by a dedicated risk analytics team supports the risk management function at ICICI Bank. The Risk, Compliance & Audit Group (RCAG) is responsible for assessment, management and mitigation of risk in ICICI Bank. This group, forming a part of the Corporate Centre, is completely independent of all business operations and accountable to the Risk and Audit Committees of the Board of Directors. RCAG is organised into six subgroups: Credit Risk Management Group, Market Risk Group, Credit Policies Group, Internet Audit Group, Retail Risk Group and Risk Analytics Group.

•

23

CREDIT RISK Credit risk is the risk that a borrower is unable to meet its financial obligations to the lender. ICICI Bank measures, monitors and manasgers credit risk for each borrower asnd also at the portfolio level. ICICI Bank has a standardised credit approval process, which includes a well-established procedure of comprehensive credit appraisal and rating. ICICI Bank has developed internal credit rating methodologies for rating obligors as well as for rating. ICICI Bank has developed internal credit rating methodologies for rating obligors as well as for product / facilities. The rating factors in quantitative and qualitative issues and credit enhancement features specific to the transaction. The rating serves as a key input in the sanction as well as post-sanction credit processes. Credit rating, a as concept, has been well internalised within the Bank. The rating for every borrower is reviewed as least annually and for higher risks credits and large exposures at shorter intervals. Sector knowledge has been institutionalized across ICICI Bank through the availability of sector-specific information on the Intranet. Industry knowledge is constantly updated through field visits, interactions with clients, regulatory bodies and industry experts. In respect of the retail credit business, ICICI Bank has a system of centralized approval of all products and policies and monitoring of the retail portfolio. We continuously refine our retail credit parameters based on portfolio analytics.

•

24

MARKET RISK Market risk is the risk of loss resulting from changes in interest rates, foreign currency exchange rates, equity prices and commodity prices. HDFC Bank’s exposure to market risk a function of its trading and asset and liability management activities and its role as a financial intermediary in

customer-related

transactions.

The

objective

of

market

risk

management is to minimize the impact of losses due to market risks on earning and equity capital. Market risk policies include Asset-Liability Management (ALM) policies

and

policies

for

the

trading

portfolio.

The

Asset-Liability

Management Committee (ALCO) of Board of Directors approves ALM policies. ALCO’s role encompasses stipulating liquidity and interest-rate risk limits, monitoring risk levels by adherence to set limits, articulating the organization’s interest rate view and determining business strategy in the light of the current and expected business environment. These sets of policies and processes are articulated in ALM policy. A separate set of policies for the trading portfolio address issues related to investments in various trading products and are approved by the Committee of Directors (COD) of the Board. RCAG exercises independent control over the process of market-risk management and recommends changes in processes and methodologies for measuring market risk.

•

25

MIDDLE OFFICE GROUP HDFC Bank has a separate Middle Office Group to monitor both credit and treasury-related compliance. The Credit Middle Group monitors compliance with policies and terms of sanction of credit proposals. The Treasury Middle Office Group monitors the asset-liability position under the supervision of the ALCO. It also monitors treasury activities, including determining compliance with various exposure and dealing limits, verifying the appropriateness and accuracy of various transactions, processing these transactions, tracking the daily funds position and all treasury related management and regulatory reporting. Interest rate risk is measured through the use of re-pricing gap analysis. Liquidity risk is measured through gap analysis. HDFC Bank ensures adequate liquidity at all times through systematic funds maintenance of liquid investment as well as by focusing on more stables funding sources such as retail deposits. HDFC Bank mitigates its exposure to exchange rate risk by stipulating daily stop-loss limits and position limits.

OPERATIONAL RISK Operational risk can result from a variety of factors, including failure to

obtain

proper

internal

authorization,

improperly

documented

transactions, failure of operational and information security procedures, •

26

computer systems and software or equipment, fraud, inadequate training and employee errors. We attempt operational risk by maintaining a comprehensive system of internal controls, establishing systems and procedures to monitors transactions, maintaining key back-up procedures and undertaking regular contingency planning. The Middle Office Group monitors adherence to credit procedures. The International Audit Group undertakes a comprehensive audit of all business group and other functions, in accordance with a risk-based audit plan. This plan allocates audit resources based on an assessment of the operational risks in the various businesses. ICICI Bank has been a pioneer in the implementation of a risk-based audit methodology in the Indian banking sector. The International Audit Group conceptualizes and implements improved system of internal controls to minimize operational risk.

•

27

FUTURE PROSPECTS OF ICICI AND HDFC BANK Future expectations We soon plan to introduce: •

payment services to certain standard utilities

•

Demat-related information

•

own accounts funds transfer

•

ICICI

will

also

use

WAP

technology

for

undertaking

on-line

transactions If you have an HDFC Phone Banking Relationship Number (under which your accounts are linked to the HDFC Call Centre for HDFC Phone Banking), the same accounts will be linked for Mobile Commerce. If you do not have an HDFC Phone Banking Relationship Number, you can specify the account number(s) and your HDFC Credit Card Number to be linked for SMS.

•

28

ICICI BANK NAMES CONSULTANT FOR GOVT BUSINESS ICICI Bank has appointed international consultancy major monitor group to help the bank in identification of business prospects in the government sector which has recently been identifies as a focus area. Monitor will help ICICI get business from the government sector, particularly the infrastructure sector mandates. The bank did not consider government business a focus area till sometime back. Now, Monitor Group will study investment prospect

of

tourism

in

Rajasthan,

opportunities

for

the

government of Andhra Pradesh and investment prospects for the bank through the government in cities such as Pune and Kolkata. “We are trying to find out how ICICI Bank can be a partner

to

the

government

in

development

plans

and

projects. The bank has initiated fresh focus towards the government which is a major source of business and we would like to increase relationship with government agencies,” ICICI officials said. •

29

Monitor Group will find out ways and means for ICICI Bank through which the latter “Can solve government fund flow problems and how ICICI Bank can play a role in the projects,” bank officials said.

This is a test study and if there is a positive response from the government then more such specific developmental studies

will

be

taken

up

by

the

bank

as

partners

to

development. -ECONOMICS TIMES.

1/11/03 ICICI Bank clocks 110% growth in retail portfolio in Q2 Mumbai: The retail portfolio of ICICI Bank grew by 110 per cent to Rs 25,205 crore (Rs 12,021 crore) in the second quarter. Retail assets constituted 39 per cent of the bank's customer assets. While leveraging and enhancing its position as the original lender, the bank also continued to focus on securitisation of its customer assets. This had enabled the bank to optimize resources and capital utilization and diversify the composition of its asset portfolio.

•

30

During the first half of this financial year, the total sell down and securitisation of assets was around Rs 5,300 crore. According to the bank, its net restructured loans declined to Rs 7,856 crore (Rs 10,491 crore). Net NPAs were at Rs 3,128 crore, constituting 4.8 per cent of its customer assets. Deposits grew by 18 per cent to Rs 56,880 crore (Rs 48,169 crore). As on September 30, 2006, the deposits constituted 58 per cent of the bank's funding against 42 per cent in the corresponding period of the previous year. The capital adequacy as on September 30, 2006 was at 11.5 per cent.

ACCOUNTS IN ICICI BANK ICICI Bank offers wide variety of Deposit Products to suit your requirements.Coupled with convenience of networked branches/ ATMs and facility of E-channels like Internet and Mobile Banking, ICICI Bank brings banking at your doorstep. Select any of our deposit products and provide your details online and our representative will contact you for Account Opening.

•

31

ICICI Bank offers you a power packed Savings Account with a host of convenient features and banking channels to transact through. So now you can bank at your convenience, without the stress of waiting in queues.

Senior Citizen Services We understand that as you reach the age to retire, you do have certain concerns … whether your hard earned money is safe and secure … whether your investments give you the kind of returns that you need. That's why we have an ideal Banking Service for those who are 60 years and above. The Senior Citizen Services from ICICI Bank has several advantages that are tailored to bring more convenience and enjoyment in your life. Young Stars

It's really important to help children learn the value of finances and money management at an early age. Banking is a serious business, but we make •

32

banking a pleasure and at the same time children learn how to manage their personal finances.

Fixed Deposits Safety, Flexibility, Liquidity and Returns!!!! A combination of unbeatable features of the Fixed Deposit from ICICI Bank.

When expenses are high, you may not have adequate funds to make big investments. But simply going ahead without saving for the future is not an option for you. Through ICICI Bank Recurring Deposit you can invest small amounts of money every month that ends up with a large saving on maturity. So you enjoy twin advantages- affordability and higher earnings. DOCUMENTATION Applicants must satisfy the following documentation requirements: •

Identity proof

•

33

•

Proof of communication address

•

Self cheque (if the applicant is not visiting the branch for account opening) Proof

Identity

of

communication

Proof address

(Any one of the following) (Any one of the following) Original letter of introduction from

Introduction by an existing and

existing bank along with KYC cheque of

satisfactory customer as address

the same Bank

proof

Driving License – Book type or laminated Latest Electricity Bill & embossed Voter Identity Card with KYC cheque for

Certificate from the postal office

operating accounts.

confirming address of applicant

Cash can be accepted for Term deposits. Employee Identity Card

Original Letter from Employer certifying the residential address of applicant. Signature of the employee has to be attested on the letter.

PAN Card

Telephone bills from any telephone service providers and mobile •

34

service providers (KYC cheque mandatory for mobile service providers) Defence Dependent's card

Consumer gas connection card/book/Pipe Gas bill (same as electricity bill)

Ex-Service Man Card

Certificate from the ward/equivalent rank officer, maintaining election roll, certifying address of the applicant

Bar Council/Indian Medical Association

Registered and valid Lease/ Leave

Card/Senior Citizen Card

agreement with copies of utility bills

PIO Booklet for returning NRIs

Post Office Savings Pass Book with KYC cheque

MAPIN card

Statement of account or Pass Book of a scheduled commercial bank with entries of at least last 3 months alongwith KYC cheque Premium Receipt from any Banking company Certificate by Village Extension •

35

Officer (VEO)/Village Head or equal rank officers Domicile Certificate with communication address and photograph Accepted as both Identity and Address proof (Any one of the following) Passport Arms License issued by State/Central Government of India authorities Freedom fighter's pass issued by Ministry of Home affairs, Government of India with photograph of applicant Pension payment order/book/Card issued by State/Central Government of India. Printed Ration Card with Photograph of applicant. House hold Card with photograph issued by Govt of Andhra Pradesh ID card with photograph issued by Govt of Jammu and Kashmir Bank Pass Book with photograph issued by SBI and its subsidiaries or Nationalised Banks Photo Social Security Card (Smart Card) issued by Central/State Govts or Union territories. Savings Bank Account: 3.50% •

36

Domestic term deposits (General Category) : *

Subject

to

revision

without

further

notice.

** Recurring Deposit will not be available for tenure of 390 days. Note: Rates for Deposits for Rs.1 Crore and above will be advised by treasury from time to time. INTEREST RATES FOR SENIOR CITIZENS: 1. Eligibility Criteria A person who has completed the age of 60 years may be treated as a senior citizen for getting the benefit under the special deposit scheme for senior citizens. 2. Verification of Age: Opening of New Account At the time of opening of a new deposit account of a senior citizen, the branch should satisfy about the age through verification of any of the following documents:Secondary

School

Leaving

Certificate

LIC Policy Voters Identity Card Pension Payment Order •

37

indicating

date

of

Birth

Birth Certificate issued by the competent authority Passport PANCard Interest Rates for Senior Citizens :

•

38

*Subject

to

revision

without

further

notice.

** Recurring Deposit will not be available for tenure of 390 days. Penalty on Pre-mature withdrawal (All Categories) would be applicable as below:

Features •

The ICICI Bank Ncash debit card is a debit-cum-ATM card providing you with the convenience of acceptance at merchant establishments and cash withdrawals at ATMs.Click here for details

•

Free Access to any Bank's ATM – The next time you want to withdraw cash from your ICICI Bank account, just walk into any bank's ATM and use your ICICI Bank ATM-cum-Debit card for as many as 9 free transactions (including cash withdrawal and balance enquiry) in a quarter. This offer is available to customers who maintain more than Rs.25,000 in a given quarter in their domestic Savings Account with ICICI Bank. The above benefit can be availed in the next quarter.

•

Anywhere Banking - This facility entitles the account holder to withdraw or deposit cash upto a limit of Rs.50,000 across all ICICI Bank branches. •

39

•

You can give us various types of standing instructions like transferring to fixed deposit accounts at regular intervals.

•

An average quarterly balance of Rs 5,000 only.

Minimum Balance

Type

of Balance

Account Savings Rs 5,200 Account Non-maintenance of the minimum average quarterly balance attracts a fee of Rs 750 per quarter. Nomination •

The facility of Nomination is available for relationships in the names of individuals. Unless otherwise specifically, given in writing by depositors, nomination in deposit accounts will be at Customer ID level

•

A depositor(s) however has / have the right to specify different nominations at account level by completing the appropriate forms.

•

40

•

Further, the applicant(s) is / are at liberty to change the nominee during the currency of the relationship accounts with the Bank through declaration to that effect in the appropriate form

A. Repatriable Repatriable funds (i.e. those which can be taken abroad) need to be kept in a separate bank account, i.e. NRE Bank account. Typically, funds brought in from abroad are permitted in such an account. Investments made from such funds can be repatriated, i.e. proceeds from sale or otherwise from such investments can be taken abroad. Such investments are maintained in a Repatriable Demat account. B. Non-repatriable Non-repatriable funds (i.e. those which cannot be taken abroad) need to be kept separate from repatriable funds in a separate bank account i.e. NRO Bank account. Investments made from such funds cannot be repatriated, i.e. proceeds from sale or otherwise from such investments cannot be taken abroad. Such investments are maintained in a NonRepatriable Demat account. Money once transferred from NRE account to NRO account loses its repatriability and hence, cannot be transferred back to NRE account.

Mode of Investment :

A. Portfolio Investment Scheme (PINS)

•

41

Portfolio Investment Scheme (PINS) is a scheme of the Reserve Bank of India (RBI) under which the 'Non Resident Indians (NRIs)' and 'Person of Indian Origin (PIOs )' can purchase and sell shares and convertible debentures of Indian Companies on a recognized stock exchange in India by routing all such purchase/sale transactions through their account held with a Designated Bank Branch . The Designated Bank maintains a record of all investments done under PINS (PINS portfolio). B. Non - PINS Any investment other than under PINS is Typically, this includes: 1.

Subscription to Primary market offerings (IPOs)

2.

Investments made when resident in India.

3.

Investments in Mutual funds

4.

Investments in derivatives

5.

Gifts and Inheritance

Deciding Combination : You may have to open demat accounts of a specific combination if you already hold physical shares in that combination. The physical shares can be converted into electronic form in your demat account by submitting the

•

42

certificates along with a demat request form. You should also open the required combination under the correct type of demat account : PINS NRE : For shares acquired earlier under PINS on repatriation basis. PINS NRO : For shares acquired earlier under PINS on non-repatriation basis. Non-PINS NRE : For shares acquired earlier other than under PINS on repatriation

basis.

Non-PINS NRO : For shares acquired earlier other than under PINS on non-repatriation basis and also when 'Resident' in India. I. Terms & Conditions for establishing relationship and Operating Accounts (For Resident Individuals) 1. Establishing a Relationship 1.1

Applicant(s) desiring to open a Relationship need(s) to sign a

Relationship form and declare therein that he/she/they has/have agreed to abide by the rules which are in force from time to time. 1.2 Applicant is required to furnish Identity Proof and Address proof as follows while establishing a banking relationship with the Bank : Identity Proof Verified true copy of valid passport Letter from existing bank •

43

Valid driving license Valid employee identity card Valid PAN card Valid photo credit card along with the current billing cycle (latest) statement True copy of valid arms license issued by Govt of India/State govts/Union territory with photograph Valid pension book Valid freedom fighter's pass issued Home Ministry of Government of India

•

44

MAJOR COMPETITORS

MAJOR

STATE BANK OF INDIA

COMPETITORS

It is India's largest bank with assets worth Rs.2, 615 billion. SBI also has the distinction of having the world’s largest branch network of 9,000 branches. The bank has a share of about 22% of India's loans and deposits, and is a top player in trade finance and forex. Through its subsidiaries, SBI is also a leading provider of other financial products like mutual funds, investment banking, housing finance and factoring. SBI has a market share of one-fifth of the banking sector in India. Nationalized banks and SBI and its subsidiaries form the heart of the Indian banking system. These two entities operate 70% of the total branches spread across the length and breadth of India. BANK OF INDIA As one of the leading public sector Indian banks, Bank of India has the distinction of being the first bank to open a branch outside India. The bank, which currently has overseas operations in about 10 countries, is •

45

one of the leaders in financing foreign trade. It is one of the few Indian banks that provide tele-banking facilities, Remote Access Terminals for corporate clients, and Signature Retrieval System. Some of the recent forays made by the bank in terms of its business operations include bullion business and demat services.

It is a pioneer in terms of the introduction and adoption of a model banking policy that suits India and other developing countries. The bank, which is synonymous with progressive banking in India, has a strong presence in rural India. The bank was nationalized in 1969. Syndicate Bank has correspondent relations with 400 banks from all over the globe. The bank is also one of the leading players in the foreign exchange market. Citibank, idbi, hdfc,hsbc CHALLENGE FOR THE INDIAN BANKING SECTOR Indian banks have a long way to go before they reach the size of their international counterparts. Even the biggest Indian bank, State Bank of India, is nowhere on the international scale, with assets in the range of $50billion. Absence of significant scale benefits and higher implicit costs of several services are perpetuating the poor ranking of Indian banks in the international league tables.

•

46

Shareholding structure, government regulations and sheer size of the country ensure that the existence of Indian banks is not at stake at this stage. What is at stake is the banking support that is available for Indian economic activity, and thereby the international competitiveness of various sectors. What is also at stake is the scope for the banking industry to earn superior returns through differentiated wider services. Further, it is quite conceivable that with passage of time, as government holding in banks is progressively divested, regulatory authorities will be unable to hold back the international giants from buying out Indian banks. Even economies with a "domestic mindset", such as France and Germany, have been forced to bow before the international capital market forces. It would be a shame if painstakingly built retail strength is offered on a platter to some predator. The challenge can be met through some concerted action -

Government The

Government

needs

to

do

away

with

artificial

fragmentation of the financial sector. A case in point is the segregation of banks and financial institutions induced by policy. If this is changed, we may well see mergers between the two sectors to create organizations of size. Why not a merger of Industrial •

47

Development Bank of India with Bank of Baroda, or even better with State Bank of India? This would definitely lead to a merger between ICICI and ICICI Bank and for that matter between HDFC and HDFC Bank. The possibilities are interesting and numerous.

Domestic Banks Domestic Banks - private as well as public - need to continuously explore options to acquire or merge with other institutions to enhance their size, service or skill-set. This could also mean looking beyond the national boundaries as truly global corporations do.

New Initiatives The recent crisis in the Far East has demonstrated the need for a robust banking sector. Therefore the whole structure of Regional Rural Banks (RRBs) and Urban Co-operative Banks (UCBs) needs to be strengthened. The focus that FMCG companies such as Hindustan Lever have given to the rural sector proves that private sector interest is not limited to the cities and major towns. Technological changes (such as wireless communication, net etc.) have drastically changed the communications scenario. This may be the time to come out with interesting initiatives with regard to •

48

structure of RRBs and UCBs so that private sector organizations banks as well as non-banks - play a greater role in meeting the needs and aspirations of hitherto neglected parts of the country.

Social considerations The full benefit of mergers can only be realized if they are followed up with some hard measures such as re-location / closure of branches, rationalization of employee strength etc. It would be a welcome change if the management and unions collaborate in seeking appropriate social security from the Government - financed out of the divestment of stake in these banks. Indian banking has to operate with a global mindset even while fulfilling local banking requirements. By joining in the effort to make this happen, we will get the banking service we need. Else, we will deserve the banking service we get.

•

49

(INTRODUCTION OF TOPIC)

The topic of “ COMPARISION BETWEEN ICICI AND HDFC BANK: Banking is the backbone of a modern economy. Health of banking industry is one of the most important preconditions for sustained economic progress of any country. The world of banking has assumed a new dimension at the dawn of the 21st century with the advent of tech banking, thereby lending the industry a stamp of universality. In general, banking may be classified as retail and corporate banking. Retail banking, which is designed to meet the requirements of individual customers and encourage their savings, includes payment of utility bills, consumer •

50

loans, credit cards, checking account balances, ATMs, transferring funds between accounts and the like. Corporate banking, on the other hand, caters to the needs of corporate customers like bills discounting, opening letters of credit and managing cash. The Indian banking scene has changed drastically with the private sector making inroads in an area hitherto dominated by large public sector banks. Growing disinvestment is likely to impact the banking industry as well. There is every possibility of privatization of public sector banks, leading to greater operational autonomy. The

development

of

the

Indian

banking

sector

has

been

accompanied by the introduction of new norms such as Income Recognition and Capital Adequacy, by the government. The latter implies that banks can lend on the basis of their respective capital base. These norms have caused banks to construct equity on their own, before going in for debt. Disintermediation is a real threat for banks. Of late, banks are adopting the EVA (Economic Value Added) concept wherein revenues are viewed in the context of the risk associated with them. The New World order has ensured "Survival of the Fittest". New services are the order of the day, in order to stay ahead in the rat race. Banks are now foraying into net banking, securities, consumer finance, housing finance, treasury market, merchant banking and insurance.

•

51

RESEARCH METHODOLOGY

Research methodology is a systematic way, which consists of series of action steps, necessary to effectively carry out research and the desired sequencing to these steps. The marketing research is a process of involves

•

52

a no. of inter-related activities, which overlap and do rigidly follow a particular sequence. It consists of the following steps:•

Formulating the objective of the study

•

Designing the methods of data collection

•

Selecting the sample plan

•

Collecting the data

•

Processing and analyzing the data

•

Reporting the findings

Objective of Study

Research Design

Sample Design

Data Collection

Data Analysis

Report of findings

•

53

OBJECTIVE  To stud of market share in banking sector of ICICI and HDFC.  To study the consumer satisfaction with ICICI and HDFC.  To know about the is the position of ICICI bank in market.  To analyze the decision making process of the consumers. .

•

54

RESEARCH DESIGN Research design specifies the methods and procedures for conducting a particular study.

A research design is the arrangement of conditions for collection and analysis of the data in a manner that aims to combine relevance to the research purpose with economy in procedure. Research design is broadly classified into three types as

•

Exploratory Research Design

•

Descriptive Research Design

•

Causal Research Design

I have chosen the descriptive research design.

•

55

DESCRIPTIVE RESEARCH DESIGN: Descriptive research studies are those studies which are concerned with described the characteristics of particular individual.

In descriptive as well as in diagnostic studies, the researcher must be able to define clearly, what he wants to measure and must find adequate methods for measuring it along with a clear cut definition of population he want to study. Since the aim is to obtain complete and accurate information in the said studies, the procedure to be used must be carefully planned. The research design must make enough provision for protection against bias and must maximize reliability, with due concern for the economical completion of the research study.

SAMPLE DESIGN A Sample Design is a definite plan for obtaining a sample from a given population. It refers to the technique to the procedure adopted in selecting items for the sampling designs are as below:

•

56

SAMPLE SIZE •

Sample method

•

Survey period

SAMPLE SIZE: The substantial portions of the target customer that are sampled to achieve reliable result are 50. The cost and time limitation completed me to select 50 respondents as sample size

SAMPLING METHOD: •

In this marketing research project, I am using

•

Random sampling method

SAMPLE DESIGN As complete enumeration of all the members of the population (Member and Non-member) I have understate sampling technique.

SAMPLE SIZE

200 Customers

•

57

SAMPLE TYPE AREA SAMPLING Sample area Lucknow

SAMPLE SELECTION Simple random selection sampling

SAMPLE TECHNIQUE I have taken the Statistical tool of percentage method to analysis and interpretation of the collected data.

RANDOM SAMPLING: A random sample gives every unit of the population a known and non-zero probability of being selected. Since random sampling implies equal probability to every unit in the population, it is necessary that the selection of the sample must be free from human judgment. There is some confusion between the two terms ‘random sampling’ and ‘unrestricted’ random sampling. In the latter case, each unit in the population has an equal chance of being selected in the sample. Such a sample is drawn ‘with replacement’, which means that the unit selected at each draw is replaced into the population before another draw is made •

58

from it, ‘As such, a unit can be included more than once in the sample. Most statically theory relates to ‘unrestricted random sampling. In order to distinguish between these two sample. I.e. sample, without replacement and sample with replacement, the terms ‘sample random sample’ and ‘unrestricted random sample’ are used. If the latter is devised in such a manner that no unit can be included more than once, it will then be known as the simple random sampling. It may be noted that while both sample random sampling and unrestricted random sampling give an equal probability to each unit of the population for being included in the sample, there are other sample design too which provide equal probability to the units. The process of randomness is the very core of simple and unrestricted random sampling. The selection of a sample must be free from bias, which can be ensured only when the process of selection is free from human judgment.

COLLECTION OF DATA DATA COLLECTION The study was conducted by the means of personal interview with respondents and the information given by them were directly recorded on questionnaire.

•

59

For the purpose of analyzing the data it is necessary to collect the vital information. There are two types of data, this are•

Primary Data

•

Secondary data

PRIMARY DATA:Primary data can be collected through questionnaire. The questionnaire can be classified into four main types. •

Structured non disguised questionnaire

•

Structured disguised questionnaire.

•

Non structured non disguised questionnaire

•

Non –structured disguised questionnaire.

For

my

market

study,

I

have

sleeted

structured

non-disguised

questionnaire because my questionnaire is well structured, listing of questions are in a prearranged order and where the object of enquiry is revealed to the respondents. To making a well-structured questionnaire, we have adopted three type of questions-

•

60

•

Open ended question

•

Dichotomous questions

•

Multiple choice questions

These types of questions are easy to understand and easy to give required answers. SECONDARY DATA:Secondary data means data that are already available i.e. they refer the data which have already been collected and analyzed by someone else. When the researcher utilizes secondary data, than he has to look into various sources from where h e can obtain them, in this case he is certainly not confronted with the problems that are usually associated with the collection of original data. Secondary data may either be published data or unpublished data. Usually published data are available in: •

Various publications of the central, state and local government;

•

Various publications of foreign government or of international bodies and their subsidiary organizational;

•

Technical and trade journals;

•

Books, magazines and newspapers; •

61

•

Reports and publications of various associations connected with business san industry, stock exchanges etc.;

•

Reports prepared by research scholars, universities, economists etc;

•

Public records and statistics, historical document and other source of published information.

The source of unpublished data are many; they may be found in diaries, letters, unpublished biographies and autobiographies and also may be available with scholars and research workers, trade associations, labor because and other public private individuals and organization. COLLECTION TECHNIQUE: Questionnaire method is used in collection the data.

•

62

DATA ANALYSIS DATA PROCESSING AND ANALYSIS Processing & Analysis the collected data: - once the field survey is over and questionnaire have been received, the next task is to aggregate the data in a meaningful manner. A number of tables are prepare to bring out the main characteristics of the data. The researcher should have a well thought out framework for processing and analyzing data, and this should be done prior to the collection. it includes the following activities—

(i) Editing: the first task in data processing is the editing. Editing is the process of examining errors and omissions in the collected data and making necessary corrections in the same.

(ii) Coding: coding is the procedure of classifying the answer to a question into meaningful categories. Coding is necessary to carry out the subsequent operations of tabulating and analyzing data. If coding is not done, it will not be possible to reduce a large number of heterogeneous responses into meaningful categories with the result that the analysis of data would be weak and ineffective, and without proper focus.

•

63

(iii)Tabulation: tabulation comprises sorting of the data into different categories and counting the number of cases that belong to each category. The simplest way to tabulate is to count the number of responses to one question. This is also called universal tabulation. The analysis based on just one variable is obviously meager. Where two or more variables are involved in tabulation, it is called bivariate or multivariate tabulation. (iv) Analysis: after the all three above steps, the most important step is analysis of the data. Under this step, they can use the various tools of the analysis such as Central Tendency, Dispersion, Correlation

co-efficient,

Regression

Hypothesis etc.

•

64

Analysis,

Test

of

Are you having an bank account?

70 60 50 VALUES IN 40 NUMBER 30 20

70 30

10 0 YES

NO YES OR NO

(Figure-1)

1-

70%

From which bank you have account? •

65

40 35 30 25 VALUE IN 20 NUMBERS 15 10 5 0

38 20 12 ICICI

HDFC

Other

BANK NAME

(Figure-2)

1-

38% Bank name of ICICI.

2-

12% Bank name of HDFC.

3- 20%Bank name of other.

Do you think that Bank is giving a good return?

•

66

70 60 50 VALUES IN 40 NUMBER 30 68

20 10

32

0 YES

NO YES OR NO

(Figure-3)

1- 32%Bank giving a yes return. 2-

68%Bank giving a no return.

•

67

Are you planning to get account or loan from any company?

70 60 50 VALUES IN 40 NUMBER 30

64

20 10

36

0 YES

NO YES OR NO

(Figure-4)

1-

•

68

In which company are you looking to invest?

20 18 16 14 VALUES 12 IN 10 NUMBER 8 6 4 2 0

15 20 12

ICICI

HDFC

Other

COMPANY'S NAME

(Figure-5)

1-

•

69

If get an opportunity in future would you like to be get attached with ICICI Bank?

90 80 70 60 VALUES IN 50 NUMBER 40 30 20 10 0

83

17 NO

YES YES OR NO

(Figure-6)

•

70

RECOMMENDATIONS



ICICI Bank and HDFC bank has to improve its brand image, i.e. it has to position itself in the minds of prospects in a better way in comparisons to others.

 It should provide better career opportunities for the retention of its potential advisors.

 Further it has to provide training to its recruited advisors by good and efficient training methods, which might be a little bit customized if needed.

 It should more emphasize in advertising, as it is the most powerful tool to position ant brand in the mindsets of customers.

 It should provide online training and for those who are in jobs and want to become advisors ICICI should provide evening •

71

training classes, so that they can join the training after doing there jobs.

CONCLUSION

Banking is also now being regarded as a versatile financial planning tool. Research indicates that Indians have four basic financial needs during their life asset accumulation (such as buying a house or car), protecting their family, securing their children’s education, and provision for their retirement.

India being a country having a huge population of around one billion people with only 32% of the banking population in India possessing banking the country has a vast potential, which has been left untapped till now.

For Banking company Banking

advisors are the lifeline and a very

huge asset so each company try to recruit and select a potential force of Banking

advisors because this is the advisors who generate

maximum business for the Bank . Banking advisors provide a very

•

72

strong support to the Bank

and do sall possible efforts to generate

huge amount of profit to the company and for him.

BIBLIOGRAPHY

BOOKS: 

Kothari, C.R, Research Methodology, New delhi, Vikas Publishing House PVT LTD. 2007



ICICI and HDFC brochure of advisors Recruitment.

•

73

QUESTIONNAIRE PERSONAL DETAILS: Name Mr./Mrs./Miss__________________________ Address____________________________________ ___________________________________________ Phone No. __________________________________ Email ______________________________________ Occupation a) Government Employee

b) Private Employee

c) Self Employed

d) Student

E) Housewife

Your monthly household income a) Less than 15000

b) 15001-25000 c)25001 and above

Please give some references of people who you know are trading/investing in stocks: 1.

_________________________________

2.

_________________________________

•

74

Q1.

Where do you open a account? ii.

ICICI

iii.

HDFC

iv. Q2.

Q3.

Q4.

Any other.

Which bank is more secure? i.

ICICI

ii.

HDFC

iii.

Other

Which banks give more return? i.

ICICI

ii.

HDFC

iii.

Other

Are you satisfied with services of bank?

i.

Yes

ii.

No Q5.

Your open account decisions are influenced by •

75

i.

Oneself

ii.

Broker

iii.

Market Research

iv.

Friends/Relatives

v.

An other Q6.

Are you satisfied with company services? i.

Q7.

Yes

ii.

No

What are the factors which you considered before opening account in a particular bank? i.

Financial Position

ii.

Current Market Position

iii.

Goodwill

iv.

Future Prospects

v.

Any others.

•

76